Document:

exv4w7

 

Execution Copy

EXHIBIT
4.7 and 10.36

AMENDED AND RESTATED

CREDIT AGREEMENT

Among

TANDY BRANDS ACCESSORIES, INC.

as the Borrower,

WELLS FARGO HSBC TRADE BANK, N.A.

as Administrative Agent and as a Lender,

and

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders

and

WELLS FARGO BANK, N.A.

as Arranger

As of

September 7, 2006

$75,000,000.00

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 
	SECTION 1 DEFINITION OF TERMS	 	 	1	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	1.1	 	 	Definitions

	 	 	1	 
	 	 	 	1.2	 	 	Accounting Terms

	 	 	15	 
	 	 	 	1.3	 	 	Rules of Construction

	 	 	15	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 2 THE REVOLVING CREDIT LOAN	 	 	16	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	2.1	 	 	Revolving Credit Commitments and Total Revolving Credit Commitment

	 	 	16	 
	 	 	 	2.2	 	 	Revolving Credit Loans

	 	 	16	 
	 	 	 	2.3	 	 	Notice of Borrowing

	 	 	17	 
	 	 	 	2.4	 	 	Commitment Fees

	 	 	17	 
	 	 	 	2.5	 	 	Revolving Credit Note and Note Payments

	 	 	17	 
	 	 	 	2.6	 	 	Mandatory Prepayments

	 	 	18	 
	 	 	 	2.7	 	 	Manner and Application of Payments

	 	 	18	 
	 	 	 	2.8	 	 	Interest Options

	 	 	19	 
	 	 	 	2.9	 	 	Quotation of Rates

	 	 	19	 
	 	 	 	2.10	 	 	Default Rate

	 	 	19	 
	 	 	 	2.11	 	 	Interest Recapture

	 	 	19	 
	 	 	 	2.12	 	 	Interest Calculations

	 	 	20	 
	 	 	 	2.13	 	 	Selection of Interest Option

	 	 	20	 
	 	 	 	2.14	 	 	Rollovers and Conversions

	 	 	20	 
	 	 	 	2.15	 	 	Booking Borrowings

	 	 	21	 
	 	 	 	2.16	 	 	Special Provisions for Eurodollar Borrowings

	 	 	21	 
	 	 	 	2.17	 	 	Capital Adequacy

	 	 	23	 
	 	 	 	2.18	 	 	Taxes

	 	 	24	 
	 	 	 	2.19	 	 	Increases in Total Revolving Credit Commitment

	 	 	25	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 3 SWINGLINE ADVANCES	 	 	26	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	3.1	 	 	Swingline Advances

	 	 	26	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 4 LETTERS OF CREDIT	 	 	27	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	4.1	 	 	Letters of Credit

	 	 	27	 
	 	 	 	4.2	 	 	Letter of Credit Requests

	 	 	28	 
	 	 	 	4.3	 	 	Letter of Credit Participations

	 	 	29	 
	 	 	 	4.4	 	 	Increased Costs

	 	 	30	 
	 	 	 	4.5	 	 	Conflict Between Applications and Agreement

	 	 	31	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 5 BANKERS ACCEPTANCES	 	 	31	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	5.1	 	 	Bankers Acceptances

	 	 	31	 
	 	 	 	5.2	 	 	Procedures for Purchase of Bankers Acceptances

	 	 	32	 
	 	 	 	5.3	 	 	Replacement/Renewal/Conversion of Bankers Acceptances

	 	 	32	 
	 	 	 	5.4	 	 	Payment of Bankers Acceptances

	 	 	33	 
	 	 	 	5.5	 	 	Acceptance Exposure

	 	 	33	 
	 	 	 	5.6	 	 	Miscellaneous Bankers Acceptance Provisions

	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 6 GUARANTEES	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	6.1	 	 	Guarantees

	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 7 CONDITIONS PRECEDENT	 	 	34	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	7.1	 	 	Effectiveness of Agreement

	 	 	34	 
	 	 	 	7.2	 	 	All Advances

	 	 	35	 

A&R Credit Agreement — Tandy Brands

i

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	SECTION 8 REPRESENTATIONS AND WARRANTIES	 	 	36	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	8.1	 	 	Organization and Good Standing

	 	 	36	 
	 	 	 	8.2	 	 	Authorization and Power

	 	 	36	 
	 	 	 	8.3	 	 	No Conflicts or Consents

	 	 	36	 
	 	 	 	8.4	 	 	Enforceable Obligations

	 	 	36	 
	 	 	 	8.5	 	 	No Liens

	 	 	36	 
	 	 	 	8.6	 	 	Financial Condition

	 	 	36	 
	 	 	 	8.7	 	 	Full Disclosure

	 	 	36	 
	 	 	 	8.8	 	 	No Potential Default

	 	 	37	 
	 	 	 	8.9	 	 	Material Agreements

	 	 	37	 
	 	 	 	8.10	 	 	No Litigation

	 	 	37	 
	 	 	 	8.11	 	 	Use of Proceeds; Margin Stock

	 	 	37	 
	 	 	 	8.12	 	 	Taxes

	 	 	37	 
	 	 	 	8.13	 	 	Principal Office, Etc.

	 	 	37	 
	 	 	 	8.14	 	 	Compliance with Law

	 	 	37	 
	 	 	 	8.15	 	 	Subsidiaries

	 	 	38	 
	 	 	 	8.16	 	 	Casualties

	 	 	38	 
	 	 	 	8.17	 	 	Corporate Name

	 	 	38	 
	 	 	 	8.18	 	 	Intellectual Property Rights

	 	 	38	 
	 	 	 	8.19	 	 	ERISA

	 	 	39	 
	 	 	 	8.20	 	 	Labor Matters

	 	 	39	 
	 	 	 	8.21	 	 	Material Contracts

	 	 	39	 
	 	 	 	8.22	 	 	Representations and Warranties

	 	 	39	 
	 	 	 	8.23	 	 	Survival of Representations and Warranties in All Material Respects

	 	 	39	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 9 AFFIRMATIVE COVENANTS	 	 	39	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	9.1	 	 	Financial Statements, Reports, and Documents

	 	 	39	 
	 	 	 	9.2	 	 	Payment of Taxes and Other Liabilities

	 	 	40	 
	 	 	 	9.3	 	 	Maintenance of Existence and Rights; Conduct of Business

	 	 	40	 
	 	 	 	9.4	 	 	Notice of Default

	 	 	41	 
	 	 	 	9.5	 	 	Other Notices

	 	 	41	 
	 	 	 	9.6	 	 	Operations and Properties

	 	 	41	 
	 	 	 	9.7	 	 	Books and Records; Access

	 	 	41	 
	 	 	 	9.8	 	 	Field Examination

	 	 	41	 
	 	 	 	9.9	 	 	Compliance with Law

	 	 	41	 
	 	 	 	9.10	 	 	Insurance

	 	 	41	 
	 	 	 	9.11	 	 	Authorizations and Approvals

	 	 	42	 
	 	 	 	9.12	 	 	Further Assurances

	 	 	42	 
	 	 	 	9.13	 	 	Indemnity by Borrower

	 	 	42	 
	 	 	 	9.14	 	 	After-Acquired Subsidiaries

	 	 	42	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 10 NEGATIVE COVENANTS	 	 	43	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	10.1	 	 	Negative Pledge

	 	 	43	 
	 	 	 	10.2	 	 	Negative Pledge Agreements

	 	 	43	 
	 	 	 	10.3	 	 	Limitations on Indebtedness

	 	 	43	 
	 	 	 	10.4	 	 	Certain Transactions

	 	 	44	 
	 	 	 	10.5	 	 	Limitation on Sale of Assets

	 	 	44	 
	 	 	 	10.6	 	 	Liquidation, Mergers, Consolidations, Recapitalizations,
Reorganizations, and Dispositions of Substantial Assets

	 	 	44	 
	 	 	 	10.7	 	 	Lines of Business; Receivables Policy

	 	 	44	 
	 	 	 	10.8	 	 	Acquisition

	 	 	44	 
	 	 	 	10.9	 	 	Restricted Payments

	 	 	44	 
	 	 	 	10.10	 	 	Prepayment of Other Indebtedness

	 	 	44	 
	 	 	 	10.11	 	 	Limitation on Investments

	 	 	45	 
	 	 	 	10.12	 	 	Sale and Leaseback Transactions

	 	 	45	 

 A&R Credit Agreement — Tandy Brands

ii

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	10.13	 	 	Leverage Ratio

	 	 	45	 
	 	 	 	10.14	 	 	Fixed Charge Coverage Ratio

	 	 	45	 
	 	 	 	10.15	 	 	Tangible Net Worth

	 	 	45	 
	 	 	 	10.16	 	 	Trading Asset Coverage Ratio

	 	 	46	 
	 	 	 	10.17	 	 	ERISA

	 	 	46	 
	 	 	 	10.18	 	 	Fiscal Year

	 	 	46	 
	 	 	 	10.19	 	 	Trademark License Agreements

	 	 	46	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 11 EVENTS OF DEFAULT	 	 	46	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	11.1	 	 	Events of Default

	 	 	46	 
	 	 	 	11.2	 	 	Remedies Upon Event of Default

	 	 	48	 
	 	 	 	11.3	 	 	Performance by Agent or Lenders

	 	 	48	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 12 AGENT	 	 	49	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	12.1	 	 	Appointment

	 	 	49	 
	 	 	 	12.2	 	 	Responsibilities

	 	 	49	 
	 	 	 	12.3	 	 	Indemnity

	 	 	51	 
	 	 	 	12.4	 	 	Credit Decisions

	 	 	51	 
	 	 	 	12.5	 	 	Resignation

	 	 	51	 
	 	 	 	 	 	 	 
	 	 	 	 
	SECTION 13 MISCELLANEOUS	 	 	52	 
	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	13.1	 	 	Accounting Reports

	 	 	52	 
	 	 	 	13.2	 	 	Waivers and Amendments

	 	 	52	 
	 	 	 	13.3	 	 	Payment of Expenses

	 	 	53	 
	 	 	 	13.4	 	 	Notices

	 	 	53	 
	 	 	 	13.5	 	 	Governing Law

	 	 	54	 
	 	 	 	13.6	 	 	Choice of Forum; Consent to Service of Process and Jurisdiction

	 	 	54	 
	 	 	 	13.7	 	 	Invalid Provisions

	 	 	54	 
	 	 	 	13.8	 	 	Maximum Interest

	 	 	54	 
	 	 	 	13.9	 	 	Non-liability of Lender

	 	 	55	 
	 	 	 	13.10	 	 	Offset

	 	 	55	 
	 	 	 	13.11	 	 	Successors and Assigns

	 	 	56	 
	 	 	 	13.12	 	 	Successors and Assigns; Participations

	 	 	56	 
	 	 	 	13.13	 	 	Headings

	 	 	59	 
	 	 	 	13.14	 	 	Survival

	 	 	59	 
	 	 	 	13.15	 	 	No Third Party Beneficiary

	 	 	59	 
	 	 	 	13.16	 	 	Multiple Counterparts

	 	 	59	 
	 	 	 	13.17	 	 	Entirety

	 	 	59	 
	 	 	 	13.18	 	 	USA PATRIOT Act Notice

	 	 	59	 
	 	 	 	13.19	 	 	Amendment and Restatement

	 	 	60	 

A&R Credit Agreement — Tandy Brands

iii

 

Exhibits:

Exhibit A – Revolving Credit Note

Exhibit B – Notice of Borrowing

Exhibit C – Closing Documents

Exhibit D – Subsidiaries

Exhibit E – Amended and Restated Subsidiary Guaranty

Exhibit F – Swingline Note

Exhibit G – Letter of Credit Request

Exhibit H – Assignment and Acceptance

Schedules:

Schedule 1.1(a) – Existing Liens

Schedule 2.1 – Lenders; Revolving Credit Commitments

Schedule 2.2(a) – Domestic Lending Offices

Schedule 2.2(b) – Eurodollar Lending Offices

Schedule 8.14(a) – Compliance with Law

Schedule 8.14(b) – Compliance with Governmental Authorization

Schedule 8.18 – Patents, Trademarks and Copyrights

Schedule 8.19 – ERISA

Schedule 8.21 – Material Contracts

Schedule 10.11 – Investments

Schedule 13.4 – Notices/Credit Matters

A&R Credit Agreement — Tandy Brands

iv

 

AMENDED AND RESTATED

CREDIT AGREEMENT

     THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of the 7th day of
September, 2006 by and among TANDY BRANDS ACCESSORIES, INC., a Delaware corporation (the
“Borrower”), WELLS FARGO HSBC TRADE BANK, N.A., a national banking association (the
“Trade Bank”), as administrative agent for the Lenders (the “Agent”), WELLS FARGO
BANK, N.A., a national banking association (“WFB”), as arranger and in the capacities set
forth herein, and the lenders named in Schedule 2.1 hereto (collectively, together with all
successors and assigns, the “Lenders”).

WITNESSETH:

     WHEREAS, Borrower, Agent, WFB and certain Lenders entered into a Credit Agreement dated
as of June 27, 2001 (as amended, the “Existing Credit Agreement”) to fund general corporate
and working capital needs of Borrower and its Subsidiaries.

     WHEREAS, Borrower, Agent, WFB and the Lenders wish to amend and restate the Existing Credit
Agreement on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises herein contained and for other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

SECTION 1

DEFINITION OF TERMS

          1.1 Definitions. As used in this Agreement, all exhibits and schedules hereto and in any
note, certificate, report, or other Loan Documents made or delivered pursuant to this Agreement,
the following terms shall have the respective meanings assigned to them in this Section 1 or in the
Section or recital referred to below:

     “Acceptance Date” means any Business Day on which a Bankers Acceptance is issued and accepted
by an Accepting Bank.

     “Acceptance Exposure” means, at any time, the aggregate face amount of all Bankers Acceptances
outstanding at such time for which the Borrower has not yet repaid an Accepting Bank.

     “Accepting Bank” means the Agent or WFB, or collectively the Accepting Banks.

     “Adjusted Eurodollar Rate” means, with respect to any Interest Period, an interest rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the quotient of (a) the
Eurodollar Rate with respect to such Interest Period, divided by (b) the remainder of 1.00 minus
the Eurodollar Reserve Requirement in effect on such date.

     “Advance” means (a) the disbursement by the Lenders of a sum or sums lent to the Borrower
pursuant to this Agreement (including, without limitation, Swingline Advances), (b)

A&R Credit Agreement — Tandy Brands

1

 

the conversion
of a Borrowing from one type of Borrowing to another type of Borrowing pursuant to Section
2.14, and (c) the continuation of a Eurodollar Borrowing to a new Interest Period pursuant to
Section 2.14.

     “Advance Date” has the meaning set forth in Section 2.3.

     “Affiliate” of any Person means any other Person directly or indirectly, controlling,
controlled by, or under common control with, such Person.

     “Agreement” means this Credit Agreement, including the schedules and exhibits hereto, as the
same may be modified, amended, renewed, extended or restated from time to time.

     “Alternate Base Borrowing” means a borrowing bearing interest with reference to the Alternate
Base Rate.

     “Alternate Base Rate” means, for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/100 of one percent (1%)) equal to the greater of (a) the Prime Rate in effect on such
day, or (b) the sum of the Federal Funds Effective Rate in effect on such day plus one-half
of one percent (0.5%). For purposes hereof, “Prime Rate” means at any time the rate of
interest most recently announced within WFB at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of WFB’s base rates and serves as the basis upon which
effective WFB rates of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal publication or
publications as WFB may designate. Such rate of interest is a fluctuating reference rate and may
or may not at any time be the best or lowest rate charged by WFB on any loan. WFB may make loans at
rates of interest at, above or below the Prime Rate. “Federal Funds Effective Rate” shall
mean, for any day, the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for the day of such
transactions received by the Agent from three (3) Federal funds brokers of recognized standing
selected by it. If for any reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate,
for any reason, including, the inability or failure of the Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate
due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

     “Applicable Commitment Fee Percentage” means, at any time the Commitment Fee described in
Section 2.4 hereof is to be paid, the following percentages per annum which shall be
determined as a function of the Total Funded Indebtedness to EBITDA Ratio, as set forth on the
most recent certificate showing compliance delivered to the Agent by the Borrower pursuant to
Section 9.1(b):

A&R Credit Agreement — Tandy Brands

2

 

	 	 	 	 	 
	 	 	APPLICABLE
	 	 	COMMITMENT
	TOTAL FUNDED INDEBTEDNESS	 	FEE
	           TO EBITDA RATIO*	 	PERCENTAGE
	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	%

 

			
	*	 	In calculating this Ratio for purposes of determining the Applicable Commitment Fee
Percentage, EBITDA shall not include the one-time charge described in clause (g) of the
definition of EBITDA.

     “Applicable Lending Office” means, with respect to each Lender, such Lender’s Domestic Lending
Office in the case of an Alternate Base Borrowing and such Lender’s Eurodollar Lending Office in
the case of a Eurodollar Borrowing.

     “Applicable Margin” means, the following percentages per annum, which percentages shall be
added to the applicable interest rates for purposes of calculating the interest rates payable to
the Lenders, as more fully described by Section 2.8:

     (a) The Applicable Margin for Alternate Base Borrowings shall be 0.0%.

     (b) The following Applicable Margins per annum for Eurodollar Borrowings shall apply,
which shall be determined as a function of the Total Funded Indebtedness to EBITDA Ratio, as
set forth on the most recent certificate showing compliance delivered to the Agent by the
Borrower pursuant to Section 9.1(b):

A&R Credit Agreement — Tandy Brands

3

 

	 	 	 	 	 
	 	 	APPLICABLE
	 	 	MARGIN FOR
	TOTAL FUNDED INDEBTEDNESS	 	EURODOLLAR
	           TO EBITDA RATIO*	 	BORROWINGS
	Less than 1.00 to 1.00
	 	 	0.75	%
	Greater than or equal to 1.00 to 1.00 but
less than 1.50 to 1.00
	 	 	1.00	%
	Greater than or equal to 1.50 to 1.00 but
less than 2.00 to 1.00
	 	 	1.25	%
	Greater than or equal to 2.00 to 1.00, but
less than 2.50 to 1.00
	 	 	1.50	%
	Greater than or equal to 2.50 to 1.00
	 	 	1.75	%

 

			
	*	 	In calculating this Ratio for purposes of determining the Applicable Margin, EBITDA
shall not include the one-time charge described in clause (g) of the definition of
EBITDA.

     “Application for Letter of Credit” means the application for a Letter of Credit in the form
provided by the Issuing Bank.

     “Asset Sale” means a sale of assets, properties, rights or business now owned or hereafter
acquired (other than a sale or other disposition of (i) obsolete or assets no longer in use, (ii)
inventory, or (iii) the equity securities of any Subsidiary) by the Borrower or any of its
Subsidiaries outside the ordinary course of business.

     “Asset Sale Limit” has the meaning given such term in Section 2.6 hereof.

     “Assignment and Acceptance” means the assignment and acceptance in the form of Exhibit
H attached hereto and provided for in Section 13.12.

     “Bank” or “Banks” means any Lender (or the Lenders) and WFB.

     “Bankers Acceptance” means a bill of exchange drawn by the Borrower on Agent, duly completed
and accepted by the Agent, in a form customarily used by the Agent in creating bankers’ acceptances
and which meets the eligibility requirements provided for herein and any reasonable requirements of
the Agent.

     “Borrowing” means a Eurodollar Borrowing, an Alternate Base Borrowing or a Swingline Advance.

     “Business Day” means (a) for all purposes, any day other than a Saturday, Sunday, or day on
which national banks are authorized to be closed under the laws of the States of Texas,

A&R Credit Agreement — Tandy Brands

4

 

California, and Colorado, and (b) for purposes of any Eurodollar Borrowing, a day that
satisfies the requirements of clause (a) and is a day when commercial banks are open for domestic
or international business in London.

     “Capital Expenditures” means, for any period, the aggregate of all expenditures and costs of
the Borrower (whether paid in cash or accrued as liabilities during that period and including that
portion of Capital Lease Obligations of the Borrower) during such period that, in conformity with
GAAP, are required to be included in or classified as property, plant or equipment or another
similar fixed asset account reflected on the balance sheet of the Borrower, but not including the
expenditures and costs of a Permitted Acquisition.

     “Capital Lease Obligations” means, as to any Person, the obligations of such Person to pay
rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or
personal property, which obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof, as determined in accordance
with GAAP.

     “Closing Date” means the date of this Agreement.

     “Code” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated
and rulings issued thereunder.

     “Collateral” means all assets, tangible or intangible, personal or mixed, including, without
limitation, all accounts receivable, patents, trademarks, service marks, all other intellectual
property, all software whether purchased by or developed by the Borrower or any of its
Subsidiaries, general intangibles, furniture and equipment of the Borrower and its Subsidiaries,
and all partnership interests, capital stock or equity securities of each Subsidiary of the
Borrower.

     “Commercial Letter of Credit” means a commercial letter of credit as that term is commonly
referred to within the banking industry.

     “Commitment Fee” has the meaning given such term in Section 2.4 hereof.

     “Consolidated Net Income” means consolidated net earnings (after income taxes) of Borrower and
its Subsidiaries, but excluding (a) extraordinary gains, (b) gains due to sales or write-up of
assets, (c) earnings of any Person newly acquired, if earned prior to acquisition, or (d) gains due
to acquisitions of any securities of Borrower or any of its Subsidiaries.

     “Contract Rate” means (a) with respect to an Alternate Base Borrowing, the Alternate Base Rate
plus the Applicable Margin, and (b) with respect to a Eurodollar Borrowing, the Adjusted Eurodollar
Rate plus the Applicable Margin.

     “Current Liabilities” means current liabilities determined in accordance with GAAP.

A&R Credit Agreement — Tandy Brands

5

 

     “Debtor Laws” means all applicable liquidation, conservatorship, bankruptcy, moratorium,
arrangement, receivership, insolvency, reorganization, or similar laws from time to time in effect
affecting the rights of creditors generally.

     “Discount Rate” means the rate, determined by the Agent, calculated on the basis of a year of
360 days, which is the Agent’s current discount rate for bankers’ acceptances having a term and
face amount equal to the term and face amount of the Bankers Acceptance which Borrower has
requested Agent to purchase.

     “Dividends” in respect of any corporation, means (a) cash distributions or other distributions
on, or in respect of, any class of capital stock of such corporation, except for distributions made
solely in shares of stock of the same class, and (b) other payments or transfers made in respect of
the redemption, repurchase, or acquisition of such stock.

     “Dollar” means lawful money of the United States of America.

     “Domestic Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” opposite its name in Schedule 2.2(a) annexed
hereto, or such other office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.

     “EBITDA” means, for any period comprising the most recent four quarterly periods, the sum of
(a) Consolidated Net Income for such period, plus (b) Interest Expense paid during such
period which was deducted in determining such Consolidated Net Income, plus (c) all income
taxes which were deducted in determining such Consolidated Net Income, plus (d) all
depreciation and amortization which were deducted in determining such Consolidated Net Income,
plus (e) add-backs allowed pursuant to Article 11, Regulation S-X, of the Securities Act of
1933, plus (f) non-cash losses arising from the impairment of goodwill or intangibles under
FASB 142; plus (g) a one-time charge of $7,100,000 attributable to the women’s segment
inventory write-offs subsequent to February 28, 2006. Upon consummation of a Permitted
Acquisition, EBITDA may be adjusted to include the financial results of the acquired entity or
assets for the period comprising the four quarterly periods prior to the Permitted Acquisition,
including any period of less than a full quarter, provided that the Borrower shall have provided
Agent with (i) audited financial statements prepared not more than fifteen (15) months prior to the
closing date of the Permitted Acquisition, or (ii) if such audited financial statements are not
available, verification of the adjustments for such acquisition prepared by an accounting firm
acceptable to Agent, such statements or verification, as the case may be, to be satisfactory to the
Agent in its sole discretion.

     “Environmental Laws” means any Legal Requirements pertaining to air, emissions, water
discharge, noise emissions, solid or liquid waste disposal, hazardous waste or materials,
industrial hygiene, or other environmental, health, or safety matters or conditions on, under or
about real property or any portion thereof, and similar laws of any Governmental Authority having
jurisdiction over real property as such Legal Requirements may be amended or supplemented from time
to time, and regulations promulgated and rulings issued pursuant to such laws.

A&R Credit Agreement — Tandy Brands

6

 

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder.

     “ERISA Affiliate” means any Subsidiary or trade or business (whether or not incorporated)
which is a member of a group of which Borrower is a member and which is under common control with
Borrower within the meaning of Section 414 of the Code.

     “Eurodollar Borrowing” means a borrowing bearing interest with reference to the Adjusted
Eurodollar Rate.

     “Eurodollar Lending Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Lending Office” opposite its name in Schedule 2.2(b) annexed
hereto (or, if no such office is specified, its Domestic Lending Office), or such other office of
such Lender as such Lender may from time to time specify to the Borrower and the Agent.

     “Eurodollar Rate” means, for any Eurodollar Rate Borrowing for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow
Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for any reason such rate
is not available, then the term “Eurodollar Rate” shall mean, for any Eurodollar Rate Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period; provided however,
if more than one rate is specified on Reuters Screen LEBO Page, then the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).

     “Eurodollar Reserve Requirement” means, on any day, that percentage (expressed as a decimal
fraction) that is in effect on such day, as provided by the Board of Governors of the Federal
Reserve System (or any successor governmental body) applied for determining the maximum reserve
requirements (including, without limitation, basic, supplemental, marginal, and emergency reserves)
under Regulation D with respect to “Eurocurrency liabilities” as currently defined in Regulation D
or under any similar or successor regulation with respect to Eurocurrency liabilities or
Eurocurrency funding. Each determination by Lender of the Eurodollar Reserve Requirement shall, in
the absence of manifest error, be conclusive and binding.

     “Event of Default” has the meaning set forth in Section 11.1.

     “Financial Statement Delivery Date” shall mean (i) if the Borrower delivers the quarterly or
annual financial statements before 12:00 noon Dallas, Texas time on a Business Day, then the day on
which the quarterly or annual financial statements are delivered to the Agent and/or Lenders
pursuant to Section 9.1, and (ii) if the Borrower delivers the quarterly or annual
financial statements on a day which is not a Business Day or on or after 12:00 noon

A&R Credit Agreement — Tandy Brands

7

 

Dallas, Texas time on a Business Day, then the Business Day after the day on which the
quarterly or annual financial statements are delivered to the Agent and/or Lenders pursuant to
Section 9.1.

     “Fiscal Quarter” means the quarterly periods ending September 30, December 31, March 31, and
June 30.

     “Fiscal Year” means the fiscal year of the Borrower and its Subsidiaries for accounting
purposes as designated by the Borrower to the Agent from time to time. The present Fiscal Year of
the Borrower and its Subsidiaries is July 1 to June 30, which Fiscal Year may not be changed
without the consent of the Agent.

     “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 Capital 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 of Borrower’s capital stock, or any
other equity interest during the term of this Agreement, plus any cash Investments in
Sheldon following the Closing Date.

     “Funding Loss” has the meaning set forth in Section 2.16(e).

     “GAAP” means those generally accepted accounting principles and practices, applied on a
consistent basis, which are recognized as such by the American Institute of Certified Public
Accountants acting through its Accounting Principles Board and the Financial Accounting Standards
Board and/or their respective successors and which are applicable in the circumstances as of the
date in question.

     “Governmental Authority” means, with respect to any Person, any government (or any political
subdivision or jurisdiction thereof),court, bureau, agency, or other governmental authority having
jurisdiction over such Person or any of its business, operations, or properties.

     “Governmental Authorization” means any approval, consent, license, permit, waiver, or other
authorization issued, granted, given, or otherwise made available by or under the authority of any
Governmental Authority or pursuant to any Legal Requirement.

     “Guarantors” means each of the Subsidiaries of Borrower listed on Exhibit D attached
hereto as well as any After-Acquired Subsidiary as defined in Section 9.14.

     “Guaranty” of any Person means any contract or understanding of such Person pursuant to which
such Person guarantees, or in effect guarantees, any Indebtedness of any other Person in any
manner, whether directly or indirectly, including agreements to assure the holder of the
Indebtedness of the primary obligor against loss in respect thereof; except that “Guaranty” shall
not include endorsements, in the ordinary course of business, of negotiable instruments or
documents for deposit or collection.

A&R Credit Agreement — Tandy Brands

8

 

     “Hazardous Materials” means any hazardous, toxic, or dangerous waste, substance, or material
defined as such in or for the purpose of any Environmental Law.

     “Hedge Agreement” means any agreement between the Borrower and any Bank now existing or
hereafter entered into, which provides for an interest rate or commodity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross-currency rate swap, currency option, or
any combination of, or option with respect to, these or similar transactions, for the purpose of
hedging Borrower’s exposure to fluctuations in interest rates, currency valuations or commodity
prices.

     “HSBC” means Hong Kong Shanghai Banking Corporation Limited.

     “Indebtedness” means, with respect to any Person, all indebtedness, obligations, and
liabilities of such Person, contingent or otherwise, including without limitation (a) all
“liabilities” which would be reflected on a balance sheet of such Person, (b) all obligations of
such Person in respect of any Guaranty, letter of credit, or bankers’ acceptance, (c) all
obligations of such Person in respect of any lease, which in conformity with GAAP, is required to
be capitalized for balance sheet purposes, (d) all obligations, indebtedness, and liabilities
secured by any lien or any security interest on any property or assets of such Person, and (e) any
obligations to redeem or repurchase any of such Person’s capital stock, warrants, or stock
equivalents.

     “Intangible Assets” of any Person means those assets of such Person which are (a) deferred
assets, other than prepaid insurance and prepaid taxes, (b) patents, copyrights, trademarks, trade
names, franchises, goodwill, experimental expenses, and other similar assets which would be
classified as intangible assets on a balance sheet of such Person, (c) unamortized debt discount
and expense, and (d) assets located, and notes and receivables due from obligors domiciled, outside
of the United States of America.

     “Interest Expense” means, for Borrower and its Subsidiaries for any period, total interest
expense in respect of Indebtedness actually paid or that is payable during such period, as
determined in accordance with GAAP.

     “Interest Period” means, with respect to a Eurodollar Borrowing, a period commencing:

     (a) on the Advance Date thereof; or

     (b) on the conversion date pertaining to such Eurodollar Borrowing, if such Eurodollar
Borrowing is made pursuant to a conversion as described in Section 2.14; or

     (c) on the last day of the preceding Interest Period in the case of a rollover to a
successive Interest Period;

and ending 1, 2, 3, or 6 months thereafter, as Borrower shall elect in accordance with Section
2.13 or Section 2.14, provided that:

     (i) any Interest Period that would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day, unless such

A&R Credit Agreement — Tandy Brands

9

 

Business Day falls in another calendar month in which case such Interest Period shall
end on the next preceding Business Day;

     (ii) any Interest Period that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar month or at the
end of such Interest Period) shall, subject to clause (i) above, end on the last Business
Day of a calendar month; and

     (iii) if the Interest Period for any Eurodollar Borrowing would otherwise end after the
final maturity date of the Loan, then such Interest Period shall end on the final maturity
date of the Loan.

     “Investment” in any Person means any investment, whether by means of share purchase, loan,
advance, extension of credit, capital contribution, or otherwise, in or to such Person, the
Guaranty of any Indebtedness of such Person, or the subordination of any claim against such Person
to other Indebtedness of such Person.

     “Issuing Bank” means (i) in the case of the issuance of Commercial Letters of Credit, the
Trade Bank or HSBC or any of its Affiliates, and (ii) in the case of the issuance of Standby
Letters of Credit, WFB.

     “Legal Requirement” means any federal, state, local, municipal, foreign, international,
multi-national, or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute, or treaty as in effect on the date in question.

     “Letter of Credit” has the meaning given such term in Section 4.1.

     “Letter of Credit Obligations” mean at any time the sum of (a) the aggregate then undrawn and
unexpired amount of outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit not reimbursed.

     “Letter of Credit Request” has the meaning specified in Section 4.2(a).

     “Lien” means any lien, mortgage, security interest, tax lien, pledge, encumbrance, conditional
sale or title retention arrangement, or any other interest in property designed to secure the
repayment of indebtedness, whether arising by agreement or under any statute or law, or otherwise.

     “Liquid Investments” means:

     (a) direct obligations of, or obligations the principal of and interest on which are
guaranteed or insured by, the United States of America or any agency or instrumentality
thereof;

     (b) (i) negotiable or nonnegotiable certificates of deposit, time deposits, bankers’
acceptances or other similar banking arrangements maturing within twelve (12) months from
the date of acquisition thereof (“bank debt securities”), issued by (A) any Lender or any
Affiliate of Lender or (B) any other domestic bank, trust company or

A&R Credit Agreement — Tandy Brands

10

 

financial institution which has a combined capital surplus and undivided profit of not
less than $100,000,000 or the dollar equivalent thereof, if at the time of deposit or
purchase, such bank debt securities are rated not less than “BB” (or the then equivalent) by
the rating service of Standard & Poor’s Corporation or of Moody’s Investors Service, (ii)
commercial paper issued by any Person if at the time of purchase such commercial paper is
rated not less than “A-2” (or the then equivalent) by the rating service of Standard &
Poor’s Corporation or not less than “P-2” (or the then equivalent) by the rating service of
Moody’s Investors Service, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall be selected
by the Borrower, (iii) debt or other securities issued by (A) any Lender or Affiliate of any
Lender or (B) or any other Person, if at the time of purchase such Person’s debt or equity
securities are rated not less than “BB” (or the then equivalent) by the rating service of
Standard & Poor’s Corporation or of Moody’s Investors Service, or upon the discontinuance of
both such services, such other nationally recognized rating service or services, as the case
may be, as shall be selected by the Borrower and (iv) marketable securities of a class
registered pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934, as
amended;

     (c) repurchase agreements relating to investments described in clauses (a) and
(b) above with a market value at least equal to the consideration paid in connection
therewith, with any Person who has a combined capital surplus and undivided profit of not
less than $100,000,000 or the dollar equivalent thereof, if at the time of entering into
such agreement the debt securities of such Person are rated not less than “BBB” (or the then
equivalent) by the rating service of Standard & Poor’s Corporation or of Moody’s Investors
Service, or upon the discontinuance of both such services, such other nationally recognized
rating service or services, as the case may be, as shall be selected by the Borrower; and

     (d) shares of any mutual fund registered under the Investment Company Act of 1940, as
amended, which invests solely in underlying securities of the types described in clauses
(a), (b) and (c) above.

     “Loan” means the Revolving Credit Loans.

     “Loan Documents” means this Agreement, the Notes, the Subsidiary Guaranty, and any agreements,
documents (and with respect to this Agreement, and such other agreements and documents, any
renewals, extensions, amendments, or supplements thereto), or certificates at any time executed or
delivered pursuant to the terms of this Agreement.

     “Material Adverse Change” means any material adverse changes in, or effect upon, (a) the
validity, performance, or enforceability of any Loan Documents, (b) the financial condition or
business operations of Borrower and the Guarantors taken as a whole, or (c) the ability of Borrower
to fulfill its obligations under the Loan Documents.

     “Maximum Rate” has the meaning given such term in Section 13.8 hereof.

A&R Credit Agreement — Tandy Brands

11

 

     “Net Worth” means, with respect to any Person and as of the date of its determination, the
excess of the assets of such Person over the sum of the liabilities of such Person and the minority
interests of such Person, as determined in accordance with GAAP.

     “Notes” means the Revolving Credit Notes and the Swingline Note.

     “Notice of Borrowing” means a notice in the form of Exhibit B attached hereto.

     “Obligations” means all present and future indebtedness, obligations, and liabilities, and all
renewals and extensions thereof, or any part thereof, now or hereafter owed to any Bank by
Borrower, pursuant to this Agreement, the Notes and any of the Loan Documents, or any other
financial arrangements between Borrower and any Bank, and all renewals and extensions thereof
(including, but not limited to, all obligations to a Bank under letters of credit), together with
all interest accruing thereon and costs, expenses, and attorneys’ fees incurred in the enforcement
or collection thereof.

     “Obligors” means Borrower and each of the Guarantors, and “Obligor” means any one of the
Obligors.

     “Other Taxes” has the meaning set forth in Section 2.18.

     “Permitted Acquisition” means an acquisition of a business entity or assets:

     (a) (i) if after giving effect to such acquisition the Total Funded Indebtedness on a
consolidated basis to EBITDA Ratio is less than 2.00 to 1.00 and the Borrower is in
compliance with Sections 10.13, 10.14, 10.15 and 10.16, and
(ii) the consideration for such acquisition does not exceed $20,000,000.00; or

     (b) the consideration for such acquisition does not exceed ten percent (10%) of the
Borrower’s consolidated Tangible Net Worth as of the Borrower’s most recent Fiscal Quarter;
or

     (c) for which Borrower has received the prior written consent of the Required Lenders.

     “Permitted Liens” means (a) inchoate liens for taxes, assessments or governmental charges or
levies not yet due or liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate reserves have been
established in accordance with GAAP, (b) Liens in respect to property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business, and
do not secure mechanics’ liens and other similar liens arising in the ordinary course of business,
and which do not in the aggregate materially detract from the value of the Borrower’s or such
Subsidiary’s property or assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary, or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of
property or assets subject to any such lien, (c) Liens in existence on the date of this Agreement
as set forth on Schedule 1.1(a), plus renewals and extensions of such liens to the extent
that the aggregate principal amount of the Indebtedness, if any, secured by such liens

A&R Credit Agreement — Tandy Brands

12

 

is not increased from the amount outstanding at the time of any such renewal or
extension, and any such renewals or extensions do not encumber any additional assets or properties
of the Borrower or any of its subsidiaries, (d) Liens placed on equipment or machinery or other
property used in the ordinary course of business of Borrower or any of its Subsidiaries, at the
time of acquisition thereof by the Borrower or any such Subsidiary or within sixty days thereafter
to secure Indebtedness incurred to pay all or a portion of the purchase price thereof, provided
that the lien encumbering the equipment or machinery so acquired does not encumber any other asset
of the Borrower or such Subsidiary, and provided further that such Indebtedness is permitted under
Section 10.3(c), (e) easements, right-of-way restrictions, encroachments and other similar
charges or encumbrances and minor title deficiencies in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries,
(f) statutory and common law landlord’s liens under leases to which the Borrower or any of its
Subsidiaries is a party, (g) Liens resulting from pledges or deposits to secure payments of
workmen’s compensation, unemployment insurance or other social security programs or securing the
performance of surety and bid and performance bonds, tenders, leases and other obligations of
similar nature, in each case incurred in the ordinary course of business (exclusive of obligations
in respect to the payment for borrowed money), and (h) Liens granted by Borrower to secure its
obligations under a Hedge Agreement.

     “Person” includes an individual, corporation, limited liability company, joint venture,
general or limited partnership, trust, unincorporated organization, or government, or any agency or
political subdivision thereof.

     “Plan” means an employee benefit plan or other plan maintained by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code, as amended.

     “Potential Default” means the occurrence of any event which, with the passage of time or the
giving of notice, or both, could become an Event of Default.

     “Principal Debt” means, as of any date, the sum of the outstanding principal balance of all
outstanding Borrowings hereunder as of such date.

     “Receivables” means all present and future (a) accounts, receivables, contract rights, chattel
paper, documents, tax refunds, or payments of, or owned by, Borrower or its Subsidiaries, (b)
insurance proceeds, patent rights, license rights, rights to refunds or indemnification, and other
general intangibles of every kind or nature of, or owned by, Borrower or its Subsidiaries, and (c)
all forms of obligations whatsoever owing to Borrower or its Subsidiaries together with all
instruments and all documents of title representing any of the foregoing and all right, title, and
interest in, and all securities and guaranties with respect to, each Receivable.

     “Required Lenders” means at any time (a) two (2) or more Lenders holding at least sixty-six
and two-thirds percent
(662/3%) of the then aggregate unpaid principal amount of the Advances, or (b)
if no such principal amount is then outstanding, two (2) or more Lenders having at least sixty-six
and two-thirds percent (662/3%) of the Total Revolving Credit Commitment.

A&R
Credit Agreement — Tandy Brands

13

 

     “Revolving Credit Commitment” means, with respect to any Lender, the Revolving Credit
Commitment of such Lender as set forth in Schedule 2.1 annexed hereto, as the same may be
terminated or reduced from time to time in accordance with the provisions of this Agreement.

     “Revolving Credit Loan” is defined in the recitals hereof.

     “Revolving Credit Notes” means those certain Revolving Credit Promissory Notes dated as of the
date hereof 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
$75,000,000.00, together with any renewals, extensions, or modifications thereof.”

     “Sheldon” means H. A. Sheldon Canada, Ltd.

     “Standby Letter of Credit” means a standby letter of credit as that term is commonly referred
to within the banking industry.

     “Subordinated Debt” has the meaning given such term in Section 10.3 hereof.

     “Subsidiary” means any corporation or other business entity owned or controlled directly or
indirectly, by Borrower, any Subsidiary, or any combination thereof. For this purpose, “ownership”
means 50% or more of the equity interest in such corporation or other business entity.

     “Subsidiary Guaranty” means the Amended and Restated Subsidiary Guaranty in the form of
Exhibit E attached hereto to be executed by each Guarantor whereby each of the Guarantors
guarantees on a joint and several basis the Obligations of Borrower to Lender under this Agreement
and the Notes.

     “Swingline Advance” means any Advance made to Borrower pursuant to Section 3.1 of this
Agreement.

     “Swingline Lender” means the Trade Bank.

     “Swingline Note” means any Swingline Note of the Borrower, executed and delivered as provided
in Section 3.1 hereof, in substantially the form of Exhibit F hereto, as amended,
modified or supplemented from time to time.

     “Tangible Net Worth” means, with respect to any Person at any date of determination, the sum
of (a) the total amount of capital stock, including preferred stock, of such Person, plus
(b) the paid-in-capital of such Person, plus (c) the retained earnings of such Person,
minus (d) the treasury stock of such Person, minus (e) any Intangible Assets of
such Person, and minus (f) any obligations due from stockholders, employees or Affiliates.

     “Taxes” has the meaning set forth in Section 2.18.

     “Termination Date” means the earliest of (a) June 30, 2009, (b) the date that the Lenders’
commitment to fund Advances hereunder is terminated pursuant to Section 11.2, or (c)

A&R Credit Agreement — Tandy Brands

14

 

the date that the Lenders’ commitment to fund Advances hereunder is reduced to zero pursuant
to Section 2.1.

     “Total Funded Indebtedness” means, as of any date, the sum of the following (without
duplication): (i) all Indebtedness of Borrower as of such date, other than consolidated Current
Liabilities, plus (ii) all Indebtedness which would be classified as “funded indebtedness”
or “long-term indebtedness” on a consolidated balance sheet of Borrower prepared as of such date in
accordance with GAAP, plus (iii) all Indebtedness, whether secured or unsecured, of
Borrower having a final maturity or which is renewable or extendible at the option of the Obligor
for a period ending more than one year after the date of creation thereof, notwithstanding the fact
that payments made by the Obligor less than one year after the date of creation thereof and
notwithstanding the fact that any amount thereof is at the time included also in consolidated
Current Liabilities of such Obligor, plus (iv) all Indebtedness of Borrower outstanding
under a revolving credit or similar agreement providing for borrowings (and renewals and extensions
thereof) over a period of more than one year, notwithstanding the fact that any such Indebtedness
is created within one year of the expiration of such agreement, plus (v) all Obligations
arising under this Agreement, minus (vi) Indebtedness or obligations to a Bank under
letters of credit.

     “Total Revolving Credit Commitment” means 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 this Agreement, the Total Revolving Credit
Commitment is $75,000,000.00.

     “Unused Commitment” means, as of any date, (a) the Total Revolving Credit Commitment, minus
(b)(i) outstanding Advances under the Revolving Credit Commitment (but not outstanding Swingline
Advances), (ii) Letter of Credit Obligations, and (iii) the Acceptance Exposure.

          1.2 Accounting Terms. As used in this Agreement, in the Notes, and in any certificate,
report, or other document made or delivered pursuant to this Agreement, accounting terms not
defined in Section 1.1, and accounting terms partly defined in Section 1.1 to the
extent not defined, shall have, as of any date, the respective meanings given to them under GAAP
and all references to balance sheets or other financial statements means such statements, prepared
in accordance with GAAP as of such date.

          1.3 Rules of Construction. When used in this Agreement: (a) “or” is not exclusive; (b) a
reference to a law includes any amendment or modification to such law; (c) a reference to a Person
includes its permitted successors and permitted assigns; (d) except as provided otherwise, all
references to the singular shall include the plural, and vice versa; (e) except as provided in this
Agreement, a reference to an agreement, instrument, or document shall include such agreement,
instrument, or document as the same may be amended, modified, or supplemented from time to time in
accordance with its terms and as permitted by the Loan Documents; (f) all references to Sections,
Schedules, or
Exhibits shall be to Sections, Schedules, or Exhibits of this Agreement, unless otherwise
indicated; (g) all Exhibits to this Agreement shall be incorporated into this Agreement; (h) the
words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without
limitation”; and (i) except as otherwise

A&R Credit Agreement — Tandy Brands

15

 

provided herein, in the computation of time from a
specified date to a later specified date, the word “from” means “from and including” and words “to”
and “until” each mean “to but excluding.”

SECTION 2

THE REVOLVING CREDIT LOAN

          2.1 Revolving Credit Commitments and Total Revolving Credit Commitment. Subject to the terms
and conditions of this Agreement, each Lender agrees to extend to the Borrower from the date hereof
through the Termination Date, a revolving line of credit which shall not exceed the Total Revolving
Credit Commitment less (a) outstanding Advances (including Swingline Advances), (b) Letter of
Credit Obligations, and (c) the Acceptance Exposure. Within the limits of this Section
2.1, during such period, Borrower may borrow, repay, and reborrow under the Total Revolving
Credit Commitment in accordance with this Agreement. Borrower shall have the right, upon three (3)
Business Days’ prior written notice to the Agent, to permanently reduce the unutilized portion of
the Total Revolving Credit Commitment ratably among the Lenders; provided that any partial
reduction shall be in the minimum amount of $2,000,000.00 or a greater integral multiple thereof;
and further provided that the Total Revolving Credit Commitment shall not at any time be reduced to
an amount less than the sum of the Borrowings, Letter of Credit Obligations, and the Acceptance
Exposure then outstanding.

          2.2 Revolving Credit Loans.

      (a) Amounts of Advances. Each Advance which is an Alternate Base Borrowing
shall be in an amount of $500,000.00 or a greater integral multiple of $100,000.00,
and each Advance which is a Eurodollar Borrowing shall be in an amount of
$1,000,000.00 or a greater integral multiple of $500,000.00. Subject to the terms
and conditions in this Agreement, but not later than 10:00 a.m., San Francisco,
California time, on the date specified, the Agent shall make available to Borrower,
at Agent’s offices in San Francisco, California, the amount of a requested Advance
under the Total Revolving Credit Commitment in immediately available funds.

      (b) Loans shall be made ratably by the Lenders in accordance with their
respective Revolving Credit Commitments set forth opposite their names on
Schedule 2.1 hereto; provided, however, that the failure of
any Lender to make any Advance shall not in itself relieve any other Lender of its
obligation to lend hereunder. All Advances shall be made by the Lenders against
delivery to each Lender of one (1) Revolving Credit Note, payable to the order of
such Lender, as referred to in Section 2.5 hereof.

      (c) Each Borrowing shall be either an Alternate Base Borrowing or a Eurodollar
Borrowing as the Borrower may request in accordance with the provisions of this
Agreement. Each Lender may fulfill its obligations under this Agreement by causing
its Applicable Lending Office to make such Borrowing.

A&R Credit Agreement — Tandy Brands

16

 

      (d) Each Lender shall make its Advance on the proposed dates thereof by paying
the amount required to the Agent at its principal office in Dallas, Texas in
immediately available funds not later than 10:00 a.m., San Francisco, California
time, and the Agent shall promptly credit the amounts so received to the general
deposit account of the Borrower with the Agent in immediately available funds or, if
Borrowings are not to be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so received to the
respective Lenders.

          2.3 Notice of Borrowing. Borrower may request an Advance under the Total Revolving Credit
Commitment by submitting to the Agent a Notice of Borrowing, which is irrevocable and binding on
the Borrower. Each Notice of Borrowing must be received by the Agent no later than 10 a.m. (San
Francisco, California time) on the third (3rd) Business Day before the date on which funds are
requested (the “Advance Date”) for any Advance that will be a Eurodollar Borrowing or no
later than 10 a.m. (San Francisco, California time) on the Business Day before the Advance Date for
any Advance that will be an Alternate Base Borrowing.

          2.4 Commitment Fees.

      (a) Commitment Fee. Borrower agrees to pay to each Lender a commitment fee
(the “Commitment Fee”) on the daily Unused Commitment. The Commitment Fee
shall be payable quarterly in arrears on the first day of January, April, July and
October during the term hereof, commencing on the first day of October, 2006, and
continuing regularly thereafter so long as the Revolving Credit Commitments are in
effect, and on the Termination Date. The Commitment Fee payable to each Lender
shall be in an amount equal to such Lender’s pro rata share of: (i) the average
daily Unused Commitment applicable to the Total Revolving Credit Commitment during
such quarter (or shorter period commencing on the Closing Date or ending with the
Termination Date), multiplied by (ii) the Applicable Commitment Fee
Percentage then in effect.

      (b) Generally. Borrower acknowledges that the Commitment Fees payable
hereunder are bona fide commitment fees and are intended as reasonable compensation
to the Lenders for committing to make funds available to the Borrower as described
herein and for no other purposes.

          2.5 Revolving Credit Note and Note Payments.

      (a) Revolving Credit Note. The Advances made under Section 2.1 by each
Lender shall be evidenced by the Revolving Credit Notes in substantially the
form of Exhibit A hereto, each of which shall be (i) executed by the
Borrower, (ii) dated the date hereof, (iii) in a principal amount equal to such
respective Lender’s Revolving Credit Commitment, and (iv) payable to the order of
such Lender.

      (b) Payments.

A&R Credit Agreement — Tandy Brands

17

 

      (i) Interest Payments. Accrued interest on each Eurodollar Borrowing
and on each Alternate Base Borrowing under the Revolving Credit Loan shall
be due and payable on the first day of each month commencing on the first
day of September, 2006, with a final scheduled interest payment on all such
Borrowings on the Termination Date.

      (ii) Principal Payments. The unpaid Principal Debt shall be due and
payable on the Termination Date.

      (iii) Optional Prepayments. The Borrower shall have the right, from
time to time, to prepay the unpaid Principal Debt, in whole or in part,
without premium or penalty (except for any Funding Loss), upon the payment
of accrued interest on the amount prepaid to and including the date of
payment; provided, however, that partial prepayments of the Principal Debt
shall be in an amount equal to at least $100,000.00 or a greater integral
multiple of (or, if less, the unpaid Principal Debt), and provided further
that the Agent receive notice of any prepayment of an Alternate Base
Borrowing at least one (1) Business Day before the date of such prepayment
and that the Agent receive notice of any prepayment of a Eurodollar
Borrowing at least three (3) Business Days before the date of such
prepayment.

          2.6 Mandatory Prepayments.

      (a) Within ten (10) days after the Borrower’s receipt thereof, the Borrower
shall prepay a portion of the Principal Debt equal to one hundred percent (100%) of
the net cash proceeds from any Asset Sale; provided, however, that
the Borrower shall have no obligation to make any such prepayment pursuant to this
Section 2.6(a) until the Borrower has received, with respect to any Fiscal
Year, aggregate net cash proceeds from Asset Sales in excess of one million dollars
($1,000,000) (the “Asset Sale Limit”). With respect to any particular Asset
Sale which causes the Borrower to exceed the Asset Sale Limit, the Borrower shall
prepay to the Lenders only the amount equal to (i) the net aggregate amount of net
cash proceeds received from all Asset Sales for the Fiscal Year in question after
giving effect to such Asset Sale minus (ii) the Asset Sale Limit.

      (b) Within ten (10) days after the Borrower’s receipt of cash proceeds from the
issuance by the Borrower or any of its Subsidiaries of Subordinated Debt or any of
the Borrower’s or any such Subsidiary’s equity securities (and regardless of whether
such equity securities are issued in a public or private sale),
the Borrower shall prepay a portion of the Principal Debt equal to one hundred
percent (100%) of the net cash proceeds from such Subordinated Debt or any such sale
of equity securities.

          2.7 Manner and Application of Payments.

A&R Credit Agreement — Tandy Brands

18

 

      (a) All payments and prepayments by the Borrower on account of principal,
interest, and fees hereunder shall be made in immediately available funds without
set-off, deduction or counterclaim. All such payments shall be made to the Agent at
its principal office in San Francisco, California, not later than 10 a.m., San
Francisco, California time, on the date due and funds received after that hour shall
be deemed to have been received by the Agent on the next following Business Day. If
any payment is scheduled to become due and payable on a day which is not a Business
Day, then such payment shall instead become due and payable on the immediately
following Business Day and interest on the principal portion of such payment shall
be payable at the then applicable rate during such extension. All payments made on
the Revolving Credit Loan shall be applied first to unpaid fees and expenses, then
to accrued interest and then to principal.

      (b) All principal, interest and any fees and expenses due to the Agent and the
Lenders by Borrower under this Agreement, the Notes, or any Note, may, at the sole
discretion of the Agent, be paid by the Agent having WFB debit any of Borrower’s
accounts with WFB and forwarding such amount debited to the Agent and/or the
Lenders, without presentment, protest, demand for reimbursement or payment, notice
of dishonor or any other notice whatsoever, all of which are hereby expressly waived
by Borrower. Such debit may be made at the time principal, interest or any fees and
expenses is due to the Agent and/or the Lenders pursuant to this Agreement, the
Notes, or any collateral document or any Note.

          2.8 Interest Options. Except where specifically otherwise provided, Borrowings under the
Revolving Credit Loan shall bear interest at an annual rate equal to the lesser of either (a) the
sum of (i) the Alternate Base Rate, or (ii) the Adjusted Eurodollar Rate (in each case as
designated by the Borrower in the Notice of Borrowing or deemed designated by Borrower), as the
case may be, plus (iii) the Applicable Margin, or (b) the Maximum Rate. Each change in the
Alternate Base Rate and the Maximum Rate is effective, without notice to the Borrower or any other
Person, upon the effective date of change.

          2.9 Quotation of Rates. A responsible officer of the Borrower may call the Agent before
delivering a Notice of Borrowing to receive an indication of the interest rates then in effect, but
the indicated rates do not bind the Agent or the Lenders or affect the interest rate that is
actually in effect when the Borrower delivers its Notice of Borrowing.

          2.10 Default Rate. If an Event of Default has occurred and is continuing, all Borrowings hereunder shall bear
interest on each day outstanding at the lesser of (a) the Contract Rate plus three percent (3.0%),
or (b) the Maximum Rate, or if there is no Maximum Rate in effect, then at the Contract Rate plus
three percent (3.0%) per annum.

          2.11 Interest Recapture. If the Contract Rate applicable to any Borrowing exceeds the Maximum
Rate, then the interest rate on that Borrowing is limited to the Maximum Rate, but any subsequent
reductions in the Contract Rate shall not reduce the interest rate thereon below the Maximum Rate
until the total amount of accrued interest equals the amount of interest that would have accrued if
Contract Rate had always been in effect. If at the due date (stated or

A&R Credit Agreement — Tandy Brands

19

 

by acceleration) the total
interest paid or accrued is less than the interest that would have accrued if the Contract Rate had
always been in effect, then, at that time and to the extent permitted by law, Borrower shall pay an
amount equal to the difference between (a) the lesser of the amount of interest that would have
accrued if the Contract Rate had always been in effect and the amount of interest that would have
accrued if the Maximum Rate had always been in effect, and (b) the amount of interest actually paid
or accrued on the Borrowings.

          2.12 Interest Calculations.

      (a) Interest on all Borrowings will be calculated on the basis of actual number
of days (including the first day but excluding the last day) elapsed but computed as
if each calendar year consisted of 360 days (unless the calculation would result in
an interest rate greater than the Maximum Rate, in which event interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be). All
interest rate determinations and calculations by Lender are conclusive and binding
absent manifest error.

      (b) The provisions of this Agreement relating to calculation of the Alternate
Base Rate and the Eurodollar Rate are included only for the purpose of determining
the rate of interest or other amounts to be paid under the Agreement that are based
upon those rates. The Agent may fund and maintain its funding of all or any part of
each Borrowing as it selects.

          2.13 Selection of Interest Option. On making a Notice of Borrowing under Section 2.3,
the Borrower shall advise the Agent as to whether the Advance shall be (a) a Eurodollar Borrowing,
in which case the Borrower shall specify the applicable Interest Period therefor or (b) an
Alternate Base Borrowing. Notwithstanding anything to the contrary contained herein, no more than
seven (7) Interest Periods shall be in effect at any one time with respect to Eurodollar
Borrowings.

          2.14 Rollovers and Conversions. Subject to the dollar limits of Section 2.2, the
Borrower may (a) convert a Eurodollar Borrowing under the Revolving Credit Loan on the last day of
the applicable Interest Period to an Alternate Base Borrowing, (b) convert an Alternate Base
Borrowing under the Revolving
Credit Loan at any time to a Eurodollar Borrowing (subject to the Interest Period limitations
contained in Section 2.13), and (c) elect a new Interest Period for a Eurodollar Borrowing,
by giving a Notice of Borrowing to the Agent no later than 10 a.m. San Francisco, California time
on the third (3rd) Business Day before the conversion date or the last day of the Interest Period,
as the case may be (for conversion to a Eurodollar Borrowing or election of a new Interest Period),
and no later than 10 a.m. San Francisco, California time one (1) Business Day before the last day
of the Interest Period (for conversion to an Alternate Base Borrowing). Absent the Borrower’s
Notice of Borrowing, a Eurodollar Borrowing shall be deemed converted to an Alternate Base
Borrowing effective when the applicable Interest Period expires. During the existence and
continuation of an Event of Default hereunder, the Borrower may not make an election to convert an
Alternate Base Borrowing to a Eurodollar Borrowing, or continue a Eurodollar Borrowing as such by
electing a new Interest Period.

A&R Credit Agreement — Tandy Brands

20

 

          2.15 Booking Borrowings. To the extent permitted by law, any Lender may make, carry, or
transfer its Borrowings at, to, or for the account of any of its branch offices or the office of
any of its Affiliates. However, no Affiliate is entitled to receive any greater payment under
Section 2.16 than such Lender would have been entitled to receive with respect to those
Borrowings. Each Lender agrees that it will use its reasonable efforts (consistent with its
internal policies and applicable law) to make, carry, maintain, or transfer its Borrowings with its
Affiliates or branch offices in an effort to eliminate or reduce to the extent possible the
aggregate amounts due to it under Sections 2.16 if, in its reasonable judgment, such
efforts will not be disadvantageous to it.

          2.16 Special Provisions for Eurodollar Borrowings.

      (a) Basis Unavailable or Inadequacy of Eurodollar Loan Pricing. If with respect
to an Interest Period for any Eurodollar Borrowing, (a) any Lender determines that,
by reason of circumstances affecting the interbank Eurodollar market generally,
deposits in Dollars (in the applicable amounts) are not being offered to or by such
Lender in the interbank Eurodollar market for such Interest Period, or (b) any
Lender determines that the Eurodollar Rate as determined by such Lender will not
adequately and fairly reflect the cost to such Lender of maintaining or funding the
Eurodollar Borrowing for such Interest Period, then the Agent shall forthwith give
notice thereof to Borrower, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the obligation of
the Lenders to make Eurodollar Borrowings shall be suspended and (ii) the Borrower
shall either (A) repay in full the then-outstanding principal amount of the
Eurodollar Borrowings, together with accrued interest thereon by the last day of the
then current Interest Period applicable to such Eurodollar Borrowings, or (B)
convert such Eurodollar Borrowings to Alternate Base Borrowings on the last day of
the then current Interest Period applicable to each such Eurodollar Borrowing.

      (b) Illegality. If, after the date of this Agreement, the adoption of any
applicable law, rule, or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender with any request or directive (whether or not
having the force of law) of any such authority, central bank, or comparable agency,
shall make it unlawful or impossible for such Lender to make, maintain or fund
Eurodollar Borrowings, then the Agent shall so notify the Borrower. Before giving
any notice pursuant to this Section, such Lender shall designate a different
Eurodollar Lending Office if such designation will avoid the need for giving such
notice and will not be otherwise disadvantageous to such Lender (as determined in
good faith by such Lender). Upon receipt of such notice, the Borrower shall either
(i) repay in full the then outstanding principal amount of all Eurodollar
Borrowings, together with accrued interest thereon, or (ii) convert each Eurodollar
Borrowing to an Alternate Base Borrowing, on either (A) the last day of the
then-current Interest Period applicable to such Eurodollar Borrowing if such Lender
may lawfully continue to maintain and fund such Eurodollar

A&R Credit Agreement — Tandy Brands

21

 

Borrowing to such day or
(B) immediately if such Lender may not lawfully continue to fund and maintain such
Eurodollar Borrowing to such day, provided that the Borrower shall be liable for any
Funding Loss arising pursuant to such conversion.

      (c) Increased Costs for Eurodollar Borrowings. If any Governmental Authority,
central bank, or other comparable authority, shall at any time impose, modify, or
deem applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System but excluding any reserve requirement
included in the Eurodollar Reserve Requirement), special deposit, or similar
requirement against assets of, deposits with, or for the account of, or credit
extended by any Lender, or shall impose on any Lender (or its Eurodollar Lending
Office) or the interbank Eurodollar market any other condition affecting its
Eurodollar Borrowings, the Note issued to such Lender, or its obligations to make
Eurodollar Borrowings; and the result of any of the foregoing is to increase the
cost to such Lender of making or maintaining Eurodollar Borrowings, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement, or
under the Note issued to such Lender, by an amount deemed by such Lender to be
material, then, within five (5) Business Days’ after demand by such Lender, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased cost or reduction. Such Lender will
promptly notify Borrower of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section. No failure by any Lender to immediately demand payment of any additional
amounts payable hereunder shall constitute a waiver of such Lender’s right to demand
payment of such amounts at any subsequent time. A certificate of a Lender claiming
compensation under this Section and setting forth the additional amount or amounts
to be paid to it hereunder, together with a description in reasonable detail of the
manner in which such amounts have been calculated, shall be conclusive in the
absence of manifest error. If any Lender demands compensation under this Section,
then the Borrower may at any time, upon at least five (5) Business Days’ prior
notice to the Agent, either (i) repay in full the then outstanding principal
amount of all Eurodollar Borrowings, together with accrued interest thereon, or
(ii) convert such Eurodollar Borrowings to Alternate Base Borrowings in accordance
with the provisions of this Agreement; provided, however, that the
Borrower shall be liable for any Funding Loss arising pursuant to such actions.

      (d) Effect on Subsequent Borrowings. If notice has been given pursuant to
Section 2.16(a) or Section 2.16(b) requiring that Eurodollar
Borrowings to be repaid or converted, then unless and until the Agent notifies the
Borrower that the circumstances giving rise to such repayment no longer apply, all
subsequent Borrowings shall be Alternate Base Borrowings. If the Agent notifies the
Borrower that the circumstances giving rise to such repayment no longer apply, then
the Borrower may thereafter select Borrowings to be Eurodollar Borrowings in
accordance with Section 2.13 and Section 2.14.

A&R Credit Agreement — Tandy Brands

22

 

      (e) Funding Losses. Borrower shall indemnify the Agent and the Lenders against
any loss or reasonable expense (such loss or expense is referred to herein as a
“Funding Loss” such term including, but not limited to, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or redeploying deposits from third parties acquired to effect or
maintain such Borrowing or any part thereof as a Eurodollar Borrowing) which Lender
may sustain or incur as a consequence of (i) any failure by Borrower to fulfill on
the date of any Borrowing hereunder the applicable conditions set forth in
Section 7, (ii) any failure by Borrower to borrow hereunder or to convert
Borrowings hereunder after a Notice of Borrowing has been given, (iii) any payment,
prepayment, or conversion of a Eurodollar Borrowing required or permitted by any
other provisions of this Agreement, including, without limitation, payments made due
to the acceleration of the maturity of the Borrowings pursuant to Section
11.2, or otherwise made on a date other than the last day of the applicable
Interest Period, (iv) any default in the payment or prepayment of the principal
amount of any Borrowing or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, by notice of prepayment or otherwise), or
(v) the occurrence of an Event of Default. The term “Funding Loss” includes,
without limitation, an amount equal to the excess, if any, as determined by such
Lender of (A) its cost of obtaining the funds for the Borrowing being paid, prepaid
or converted or not borrowed or converted (based on the Adjusted Eurodollar Rate
applicable thereto) for the period from the date of such payment, prepayment or
conversion or failure to borrow or convert to the last day of the Interest Period
for such Borrowing (or, in the case of a failure to borrow or convert, the Interest
Period for the Borrowing which would have commenced on the date of such failure to
borrow or convert) over (B) the amount of interest (as estimated by such Lender)
that would be realized by such Lender in reemploying the funds so paid, prepaid or
converted or not borrowed or converted for such period or Interest Period, as the
case may be. A certificate of Lender setting forth any amount or amounts which such
Lender is entitled to receive pursuant to this Section 2.16(e), together
with a description in reasonable detail of the manner in which such amounts have
been calculated, shall be delivered to Borrower and shall be conclusive, absent
manifest error. Borrower shall pay to
such Lender the amount shown as due on any certificate within five (5) Business
Days after its receipt of the same. Notwithstanding the foregoing, in no event shall
Lender be permitted to receive any compensation hereunder constituting interest in
excess of the Maximum Rate. Without prejudice to the survival of any other
obligations of Borrower hereunder, the obligations of Borrower under this
Section 2.16(e) shall survive the termination of this Agreement and/or the
payment of the Notes.

          2.17 Capital Adequacy. If, after the date hereof, the Agent or any Lender shall have
determined that either (a) the adoption of any applicable law, rule, regulation, or guideline
regarding capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank, or comparable agency charged
with, the interpretation or administration thereof, or (b) compliance by the Agent or such Lender
(or any lending office of such Lender) with any request or directive regarding capital

A&R Credit Agreement — Tandy Brands

23

 

adequacy
(whether or not having the force of law) of any such authority, central bank, or comparable agency,
has or would have the effect of reducing the rate of return on such Lender’s capital as a
consequence of its or Borrower’s obligations hereunder to a level below that which such Lender
could have achieved but for such adoption, change, or compliance (taking into consideration such
Lender’s policies with respect to capital adequacy) by an amount deemed by such Lender to be
material, then from time to time, within fifteen (15) days after demand by Lender, Borrower shall
pay to such Lender such additional amount or amounts as will adequately compensate such Lender for
such reduction. Such Lender or the Agent will promptly notify Borrower of any event of which it
has actual knowledge, occurring after the date thereof, which will entitle such Lender to
compensation pursuant to this Section 2.17. A certificate of such Lender claiming
compensation under this Section 2.17 and setting forth the additional amount or amounts to
be paid to it hereunder, together with the description of the manner in which such amounts have
been calculated, shall be conclusive in the absence of manifest error. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.

          2.18 Taxes.

      (a) Any and all payments by Borrower hereunder or under the Notes shall be made
free and clear of and without deduction for any and all present or fixture taxes,
levies, imposts, deductions, charges, or withholdings, and all liabilities with
respect thereto (hereinafter referred to as “Taxes”, excluding taxes imposed
on any Lender’s income, and franchise taxes imposed on any Lender, by the
jurisdiction under the laws of which any Lender is organized or is or should be
qualified to do business or any political subdivision thereof and, taxes imposed on
any Lender’s income, and franchise taxes imposed on any Lender by the jurisdiction
of such Lender’s lending office or any political subdivision thereof.) If the
Borrower shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the Notes to any Lender, then (i) the sum payable to such
Lender shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under this
Section 2.18), such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall pay the full
amount deducted by the relevant taxation authority or other authority in accordance
with applicable law

      (b) In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or under the Loan Documents or from the
execution, delivery, or registration of, or otherwise with respect to, this
Agreement or the other Loan Documents (hereinafter referred to as “Other
Taxes”).

      (c) The Borrower will indemnify the Agent and any Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section

A&R Credit Agreement — Tandy Brands

24

 

2.18) paid
by the Agent or any such Lender or any liability (including penalties and interest)
arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be made within five
(5) Business Days from the date the Agent or any such Lender makes written demand
therefor.

      (d) Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.18 shall survive the payment in full of principal and interest
hereunder and under the other Loan Documents.

     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.

A&R Credit Agreement — Tandy Brands

25

 

      (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
non-ratable increase in 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.

SECTION 3

SWINGLINE ADVANCES

     3.1 Swingline Advances. Subject to the terms and conditions of this Agreement, the Swingline
Lender agrees to make, from time to time, Swingline Advances to the Borrower from the Closing Date
to the Termination Date, in an aggregate principal amount at any time outstanding not to exceed ten
million dollars ($10,000,000). In addition to the other terms and conditions of this Agreement,
such Swingline Advances shall be subject to the following conditions: (i) At any time when the
Swingline Lender has made Swingline Advances to the Borrower, such outstanding Swingline Advances
shall be included in calculating the amounts outstanding under the Swingline Lender’s Revolving
Credit Commitment; (ii) the obligation of the Borrower to repay the Swingline Advances shall be
evidenced by a Swingline Note prepared by the Borrower, duly executed on behalf of the Borrower,
dated even date herewith, substantially in the form of Exhibit F hereto, delivered by the
Borrower and payable to the Swingline Lender in a principal amount equal of $10,000,000; (iii)
subject to the provisions of Section 13.8 hereof, each Swingline Advance shall
bear interest at a rate per annum equal to the Alternate Base Rate then in effect, which
interest shall be payable on the first day of each month a Swingline Advance is outstanding; (iv)
Swingline Advances shall be considered Alternate Base Borrowings for purposes of Section
2.2(a) hereof; (v) the Borrower shall request a Swingline Advance by submitting a Notice of
Borrowing, which is irrevocable and binding on the Borrower, and which must be received by the
Swingline Lender no later than 10:00 a.m. (San Francisco, California time) on the Business Day on
which funds are requested; (vi) any Swingline Advances made to the Borrower must be repaid in full
to the Swingline Lender within ten (10) Business Days after the date such Swingline Advance is
made; (vii) Swingline Advances shall not be made if such Swingline Advances would cause the unpaid
amount of the Advances, including all Swingline Advances outstanding, together with Letter of
Credit Obligations and the Acceptance Exposure, to exceed the Total Revolving Credit Commitment;
and (viii) any payments made by the Borrower to the Agent during a period when a Swingline Advance
is outstanding shall be applied first to the unpaid interest on such Swingline Advance, secondly to
the unpaid principal of such Swingline Advance, and thereafter in accordance with the terms of this
Agreement. Swingline Advances shall reduce the available amount of the Total Revolving Credit
Commitment, as provided in Section 2.1, but shall not be taken into account as an Advance
in calculating the Unused Commitment for purposes of assessing the Commitment Fee under Section
2.4.

A&R Credit Agreement — Tandy Brands

26

 

SECTION 4

LETTERS OF CREDIT

     4.1 Letters of Credit.

      (a) Subject to and upon the terms and conditions herein set forth, the Issuing
Bank agrees that it will at any time and from time to time on or after the Closing
Date and prior to the Termination Date, following its receipt of a Letter of Credit
Request and Application for Letter of Credit, issue for the account of the Borrower
and in support of the obligations of the Borrower or any of its Subsidiaries, one or
more Commercial Letters of Credit and Standby Letters of Credit (collectively, the
“Letters of Credit”), up to a maximum amount outstanding at any one time for
all Letters of Credit of $20,000,000, provided that the Issuing Bank shall not issue
any Letter of Credit if at the time of such issuance: (i) Letter of Credit
Obligations (including such Letter of Credit) shall be greater than an amount which,
when added to all Advances then outstanding and the Acceptance Exposure, would
exceed the Total Revolving Credit Commitment or (ii) the expiry date or, in the case
of any Letter of Credit containing an expiration date that is extendible at the
option of the Issuing Bank, the initial expiry date, of such Letter of Credit is a
date that is later than the Termination Date. In addition to the restrictions
described above, the following shall apply:

      (i) For each Commercial Letter of Credit issued on behalf of the
Borrower:

         (A) the expiry date shall not be longer than one hundred
eighty (180) days from the date of issuance;

         (B) at the time of issuance, the Borrower shall pay to the Agent
for the benefit of the Lenders an issuance fee equal to the greater
of (x) 0.125% of the amount of the Commercial Letter of Credit
issued, or (y) $150; and

         (C) within ten (10) days of issuance, the Borrower shall pay to
the Issuing Bank, such other fronting, amendment, transfer,
negotiation and other fees as determined in accordance with the
Issuing Bank’s then current fee policy regarding Commercial Letters
of Credit;

      (ii) For each Standby Letter of Credit issued on behalf of the
Borrower:

         (D) the expiry date shall not be longer than one (1) year
from the date of issuance;

         (E)
the Borrower shall pay to the Agent for the
benefit of the Lenders a quarterly letter of credit fee equal to (x)
the average daily undrawn amount of such Standby Letter of Credit
during such quarter (or shorter period commencing on the Closing Date
or ending with the Termination Date), multiplied by (y) the

A&R Credit Agreement — Tandy Brands

27

 

Applicable Margin per annum for Eurodollar Borrowings, which fees
shall be payable quarterly in arrears on the first day of January,
April, July and October during the term hereof, commencing on the
Closing Date, and continuing regularly thereafter so long as the
Revolving Credit Commitments are in effect, and on the Termination
Date; and

         (F) within ten (10) days of issuance, the Borrower shall pay to
the Issuing Bank such other fronting, amendment, transfer,
negotiation and other fees as determined in accordance with the
Issuing Bank’s then current fee policy regarding Standby Letters of
Credit;

     (b) The Issuing Bank shall neither renew or extend nor permit the renewal or extension
of any Letter of Credit if any of the conditions precedent to such renewal set forth in
Section 7.2 are not satisfied or waived or, after giving effect to such renewal, the
expiry date of such Letter of Credit would be a date that is later than the Termination
Date.

     4.2 Letter of Credit Requests.

      (a) Whenever the Borrower desires that a Letter of Credit be issued for its
account or that the existing expiration date shall be extended, it shall give the
Issuing Bank (and the Issuing Bank shall send copies to the Agent and each other
Lender) (i) in the case of a Letter of Credit to be issued, at least three (3)
Business Days’ prior written request therefor and (ii) in the case of the extension
of the existing expiry date of any Letter of Credit, at least three (3) Business
Days prior
to the date on which the Issuing Bank must notify the beneficiary thereof that
the Issuing Bank does not intend to extend such existing expiry date. Each such
request shall be executed by the Borrower and shall be in the form of Exhibit
G attached hereto (each a “Letter of Credit Request”) and shall be
accompanied by an Application for Letter of Credit therefor, completed to the
satisfaction of the Issuing Bank, and such other certificates, documents and other
papers and information as the Issuing Bank or the Agent may reasonably request.
Each Letter of Credit shall be denominated in U.S. dollars, shall expire no later
than the date specified in Section 4.1, shall not be in an amount greater
than is permitted under Section 4.1(a) and shall be in such form as may be
reasonably approved from time to time by the Issuing Bank and the Borrower.

      (b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be issued
in accordance with, and will not violate the requirements of, this Agreement.
Unless the Issuing Bank has determined that or has received notice from any Lender
before it issues the respective Letter of Credit or extends the existing expiry date
of a Letter of Credit that one or more of the conditions specified in Section
7 are not then satisfied, or that the issuance of such Letter of Credit would
violate this Agreement, then the Issuing Bank shall issue the

A&R Credit Agreement — Tandy Brands

28

 

requested Letter of
Credit for the account of the Borrower in accordance with the Issuing Bank’s usual
and customary practices. Upon its issuance of any Letter of Credit or the extension
of the existing expiry date of any Letter of Credit, as the case may be, the Issuing
Bank shall promptly notify the Borrower and the Agent and the Agent shall notify
each Lender of such issuance or extension, which notices shall be accompanied by a
copy of the Letter of Credit actually issued or a copy of any amendment extending
the existing expiry date of any Letter of Credit, as the case may be.

     4.3 Letter of Credit Participations.

      (a) All Letters of Credit issued subsequent hereto shall be deemed to have been
sold and transferred by the Issuing Bank to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from the
Issuing Bank, without recourse or warranty, an undivided interest and participation,
(to the extent of such Lender’s percentage participation in the Revolving Credit
Commitments) in each such Letter of Credit (including extensions of the expiry date
thereof), each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement and the other Loan Documents with
respect thereto, and any security therefor or guaranty pertaining thereto.

      (b) In determining whether to pay under any Letter of Credit, the Issuing Bank
shall have no obligation relative to the Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the requirements of such
Letter of Credit.

      (c) In the event that the Issuing Bank makes any payment under any Letter of
Credit, the same shall be considered an Alternate Base Borrowing without further
action by any Person. The Issuing Bank shall promptly notify the Agent, which shall
promptly notify each Lender and the Borrower thereof. Each Lender shall immediately
pay to the Agent for the account of the Issuing Bank the amount of such Lender’s
percentage participation of such Advance. If any Lender shall not have so made its
percentage participation available to the Agent, such Lender agrees to pay interest
thereon, for each day from such date until the date such amount is paid at the
lesser of (i) the Federal Funds Effective Rate and (ii) the Maximum Rate.

      (d) The Issuing Bank shall not be liable for, and the obligations of the
Borrower and the Lenders to make payments to the Agent for the account of the
Issuing Bank with respect to Letters of Credit shall not be subject to, any
qualification or exception whatsoever, including any of the following circumstances:

      (i) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;

A&R Credit Agreement — Tandy Brands

29

 

      (ii) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit, the Agent, any Issuing Bank,
any Lender, or any other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower and
the beneficiary named in any such Letter of Credit);

      (iii) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

      (iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or

      (v) the occurrence of any Event of Default.

      (e) The Issuing Bank shall not be liable for any error, omission, interruption
or delay in transmission, dispatch or delivery of any message or advice, however
transmitted in connection with any Letter of Credit, except for errors or omissions
caused by such Issuing Bank’s gross negligence or willful misconduct. It is the
express intention of the parties hereto that such Issuing Bank, its officers,
directors, employees and agents (other than with respect to any claims by the
Issuing Bank against any such officer, director, employee
or agent thereof) shall be indemnified and held harmless from, subject to the
same type of protections set forth in Section 9.12, any action taken or
omitted by such Person under or in connection with any Letter of Credit or any
related draft or document arising out of or resulting from such Person’s sole or
contributory negligence, but not from the gross negligence or willful misconduct of
such Person. The Borrower agrees that any action taken or omitted by the Issuing
Bank under or in connection with any Letter of Credit or the related drafts or
documents, if done in accordance with the standards of care specified in the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International Chamber
of Commerce, Publication No. 500 (and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the Issuing
Bank) and, to the extent not inconsistent therewith, the Uniform Commercial Code of
the State of Texas, shall not result in any liability of the Issuing Bank to the
Borrower.

     4.4 Increased Costs.

      (a) Notwithstanding any other provision herein, but subject to Section
13.8, if any Lender (including for purposes of this Section 4.4 the Issuing
Bank) shall have determined in good faith that any change after the Closing Date of
any

A&R Credit Agreement — Tandy Brands

30

 

law, rule, regulation or guideline or the application or effectiveness of any
applicable law or regulation or any change after the Closing Date in the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) with any applicable guideline or request from any
central bank or governmental authority (whether or not having the force of law)
issued after the Closing Date either (i) shall impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of Credit
issued, or participated in, by any Lender or (ii) shall impose on any Lender any
other conditions affecting this Agreement or any Letter of Credit; and the result of
any of the foregoing is to increase the cost to any Lender of issuing, maintaining
or participating in any Letter of Credit, or reduce the amount received or
receivable by any Lender hereunder with respect to Letters of Credit, by an amount
deemed by such Lender to be material, then, from time to time, the Borrower shall
pay to the Agent for the account of such Lender such additional amount or amounts as
will reasonably compensate such Lender for such increased cost or reduction by such
Lender.

      (b) Each Lender will notify the Borrower through the Agent of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to subsection (a) above, as promptly as practicable. A
certificate of such Lender (i) stating that the compensation sought to be recovered
pursuant to this Section 4.4 is generally being charged to other similarly
situated customers and (ii) setting forth in reasonable detail such amount or
amounts as shall be necessary to compensate such Lender as specified in subsection
(a) above may be delivered to the Borrower (with a copy to the Agent) and shall be
conclusive absent manifest error. The Borrower shall pay to the Agent for the
account of such Lender the amount shown as due on any such certificate upon
demand; provided that with respect to events occurring prior to any notice
given under this Section 4.4(b), such Lender shall only be entitled to
recover compensation for such events occurring over a period of 120 days.

      (c) Except as expressly provided in Section 4.4(b), failure on the part
of any Lender to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to any Letter
of Credit shall not constitute a waiver of such Lender’s rights to demand
compensation for any increased costs or reduction in amounts received or receivable
or reduction in return on capital with respect to such Letter of Credit.

     4.5 Conflict Between Applications and Agreement. To the extent that any provision of any
application related to any Letter of Credit is inconsistent with the provisions of this Agreement,
the provisions of this Agreement shall control.

SECTION 5

BANKERS ACCEPTANCES

     5.1 Bankers Acceptances.

A&R Credit Agreement — Tandy Brands

31

 

      (a) The Accepting Banks agree, on the terms and conditions of this Agreement,
to accept and, immediately thereafter, purchase Bankers Acceptances from the
Borrower from and after the Closing Date in an aggregate amount at any one time
outstanding up to, but not exceeding $20,000,000; provided, that the sum of:
(i) the Acceptance Exposure at any one time outstanding, (ii) the outstanding
Advances (including Swingline Advances), and (iii) the Letter of Credit Obligations
at such time shall not exceed the Total Revolving Credit Commitment.

      (b) The purchase price of each Bankers Acceptance presented to the Accepting
Bank for acceptance and purchase will be the face amount of the Bankers Acceptance
less (i) a discount calculated at the Discount Rate, less (ii) an acceptance
commission equal to the Applicable Margin for Eurodollar Borrowings prevailing at
the time the Request for Acceptance and Purchase is received by the Agent
minus 0.125%, less (iii) an administrative fee equal to 0.05% of the face
amount of the Bankers Acceptance.

      (c) To be eligible for acceptance and purchase hereunder, a Bankers’ Acceptance
must meet the following requirements:

      (i) the face amount must be at least $1,000,000 and may not exceed
$5,000,000;

      (ii) The maturity must be 30, 60, 90 or 180 days, and such maturity may
not exceed the Termination Date; and

      (iii) Any additional requirement reasonably imposed by the Accepting
Bank and notified to the Borrower.

     5.2 Procedures for Purchase of Bankers Acceptances. In order to request acceptance and
purchase of a Bankers Acceptance, the Borrower shall give the Accepting Bank a Request for
Acceptance and Purchase (“Request”) not later than 10 a.m. (San Francisco, California time) one (1)
Business Day prior thereto of each request, which Request shall specify (i) the aggregate amount of
Bankers Acceptances to be accepted and purchased by the Accepting Bank, (ii) the maturity of the
Bankers Acceptance, and (iii) the proposed Acceptance Date. Promptly following the receipt of such
Request the Accepting Banks will notify the Borrower of the Discount Rate for the specified
Acceptance Date. The Accepting Banks may at any time and from time to time hold, sell, rediscount
or otherwise dispose of any or all Bankers Acceptances purchased by it.

     5.3 Replacement/Renewal/Conversion of Bankers Acceptances. Subject to the terms of this
Agreement, the Borrower may elect to cause a replacement Bankers Acceptance to be issued, accepted
and purchased to replace all or any part of any Bankers Acceptance at the maturity thereof by
giving a notice of such election to be received by the Accepting Banks not later than 10 a.m. San
Francisco, California time one (1) Business Day prior thereto, specifying the amount of such new
Bankers Acceptance and the maturity date thereof. In the absence of such a timely and proper
election for renewal, if the Borrower does not make payment to the

A&R Credit Agreement — Tandy Brands

32

 

Accepting Banks on maturity as
provided in Section 5.4, the Borrower shall be deemed to have elected to convert such
Bankers Acceptance to an Alternate Base Borrowing. All or any part of any Bankers Acceptance may
be renewed as provided herein, provided that (i) any renewal Bankers Acceptance shall meet all
requirements for Bankers Acceptances hereunder, (ii) no Event of Default shall have occurred and be
continuing and (iii) the Borrower shall have paid to the Accepting Banks an amount equal to the
difference, if any, between the amount due on the maturing Bankers Acceptance and the face amount
of the new Bankers’ Acceptance. If an Event of Default shall have occurred and be continuing, each
Bankers Acceptance shall be paid by Borrower at maturity as provided in Section 5.4 and may
not be renewed or converted into an Alternate Base Borrowing.

     5.4 Payment of Bankers Acceptances. Bankers Acceptances shall be payable in accordance with
the following provisions:

      (a) If the Borrower elects not to renew a Bankers Acceptance on maturity as
provided in Section 5.3 or to convert such Bankers Acceptance to an
Alternate Base Borrowing pursuant to Section 5.4(b), the Borrower shall pay
the face amount of the Bankers Acceptance to the Accepting Banks on maturity.

      (b) In the event the Borrower fails to notify the Accepting Banks in writing,
not later than 10 a.m. San Francisco, California time, one (1) Business Day prior to
any maturity date of a Bankers Acceptance, that the Borrower intends to pay with its
own funds the amount of the Bankers Acceptances due on such maturity date, the
Borrower shall be deemed, for all purposes, to have given
the Accepting Banks notice to convert the amount of such Bankers Acceptances
into an Alternate Base Borrowing, except that:

      (i) such maturity date shall be considered to be the borrowing date of
such Alternate Base Borrowing; and

      (ii) the proceeds of such Alternate Base Borrowing shall be used to pay
the amount of the Bankers Acceptance due on such maturity date.

     5.5 Acceptance Exposure. In the event of the occurrence of any Event of Default, the
Accepting Banks may notify the Borrower that an amount equal to the Acceptance Exposure is deemed
to be forthwith due and owing by the Borrower to the Accepting Banks as of the date of any such
occurrence; and upon receipt of such notice the Borrower’s obligation to pay such amount shall be
absolute and unconditional, without regard to maturity dates of the outstanding Bankers
Acceptances, and, to the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which the Borrower may now
or hereafter have against the Accepting Banks or the Lenders or any other Person for any reason
whatsoever. Payments received by the Accepting Banks shall be held by the Accepting Banks as cash
collateral securing the Acceptance Exposure in an account or accounts at the Accepting Banks’
principal office in San Francisco, California ; and the Borrower hereby, and by its deposit with
the Accepting Banks, grants to the Accepting Banks a security interest in such cash collateral.
In the event of any payments hereunder by the Borrower

A&R Credit Agreement — Tandy Brands

33

 

of amounts owing under any Bankers
Acceptances, the Accepting Banks agree, if the Event of Default has been cured or waived or if no
other amounts are then due and payable under this Agreement, the Notes or any other Loan Document,
to remit to the Borrower amounts held hereunder as cash collateral.

     5.6 Miscellaneous Bankers Acceptance Provisions.

      (a) The Borrower waives presentment for payment and, except to the extent of
the gross negligence or willful misconduct of the Accepting Banks, any other defense
to payment of any amounts due to the Accepting Banks in respect of a Bankers
Acceptance accepted and purchased by it pursuant to this Agreement which might exist
solely by reason of such Bankers Acceptance being held, at the maturity thereof, by
the Accepting Banks in its own right and the Borrower agrees not to claim any days
of grace if the Accepting Banks as holder sues the Borrower on the Bankers
Acceptance for payment of the amount payable by the Borrower thereunder. On the
specified maturity date of a Bankers Acceptance, or such earlier date as may be
required or permitted pursuant to the provisions of this Agreement, the Borrower
shall pay the Agent the full face amount of such Bankers Acceptance.

      (b) The Borrower shall pay on demand to the Accepting Banks at the face amount
of any Bankers Acceptance presented to the Accepting Banks for payment and paid by
the Accepting Banks that has been unlawfully issued or used
or put into circulation fraudulently or without authority, and shall indemnify
the Accepting Banks against any loss, cost, damage, expense or claim regardless of
by whomsoever made that the Accepting Banks may suffer or incur by reason of any
fraudulent, unauthorized or unlawful issue or use of any such Bankers Acceptance,
other than as is caused by the gross negligence or willful act or omission of the
Accepting Banks or any of its officers, employees, agents or representatives failing
to use the same standard of care in the custody of such Bankers Acceptance as it
uses in the custody of its own property of a similar nature.

SECTION 6

GUARANTEES

     6.1 Guarantees. Payment of the Borrower’s Obligations shall be guaranteed by each of the
Guarantors pursuant to the Subsidiary Guaranty to be executed by each Guarantor and delivered to
the Agent pursuant to Section 7.1.

SECTION 7

CONDITIONS PRECEDENT

     7.1 Effectiveness of Agreement. The effectiveness of this Agreement and the Agent and
Lenders’ obligations hereunder are subject to the conditions precedent that:

      (a) the Agent and the Lenders shall have received duly executed copies of each
of the documents listed on Exhibit C, each dated as of the date of

A&R Credit Agreement — Tandy Brands

34

 

the initial Advance, and each in form and substance reasonably satisfactory to the
Agent;

      (b) the Agent and the Lenders shall have performed a due diligence examination
reasonably satisfactory in all respects to the Agent and the Lenders;

      (c) no Material Adverse Change shall have occurred prior to the Closing Date;

      (d) Borrower shall have paid to the Agent and the Lenders (i) all fees to be
received by the Agent and the Lenders pursuant to this Agreement or any other Loan
Document and (ii) an amount disclosed to the Borrower prior to the Closing Date,
approved by the Borrower, and equal to the estimated costs and out-of-pocket
expenses of the Agent’s counsel incurred in connection with the preparation,
execution, and delivery of the Loan Documents and the consummation of the
transactions contemplated thereby; and

      (e) all other matters and conditions relating to the Borrower and the
transactions contemplated hereby shall be reasonably satisfactory to the Agent and
the Lenders.

     7.2 All Advances. The obligations of the Lenders to make any Advance, the Issuing Bank to
issue any Letter of Credit or the Agent to accept and purchase Bankers Acceptances under this
Agreement (including the initial Advance under the Revolving Credit Loan) shall be subject to the
conditions precedent that as of the date of such Advance, Letter of Credit or acceptance of a
Bankers Acceptance and after giving effect thereto:

      (a) there exists no Potential Default or Event of Default;

      (b) no Material Adverse Change has occurred since the date of the financial
statements referenced in Section 8.6;

      (c) the Agent shall have received from Borrower a Notice of Borrowing or a
request for the issuance of a Letter of Credit or acceptance of a Bankers Acceptance
dated as of the date of such Advance, Letter of Credit or acceptance, and all of the
statements contained in such Notice of Borrowing or request for the issuance of a
Letter of Credit or acceptance of a Bankers Acceptance shall be true and correct;
and

      (d) the representations and warranties contained in each of the Loan Documents
shall be true in all material respects as though made on the date of such Advance
except those representations and warranties that specifically relate to a particular
date.

A&R Credit Agreement — Tandy Brands

35

 

SECTION 8

REPRESENTATIONS AND WARRANTIES

     To induce the Lenders to make the Advances hereunder, Borrower represents and warrants to the
Agent and the Lenders that:

     8.1 Organization and Good Standing. Each of Borrower and the Guarantors is a corporation duly
organized and in good standing under the laws of the state of its incorporation or organization is
duly qualified as a foreign corporation or other business entity and in good standing in all states
in which Borrower or the Guarantors maintain an office, has the corporate and legal power and
authority to own its properties and assess and to transact the business in which it is engaged in
each jurisdiction in which it operates, and is or will be qualified in those states wherein it
proposes to transact business in the future.

     8.2 Authorization and Power. Each Obligor has full power and authority to execute, deliver, and perform the Loan
Documents to be executed by such Person, all of which has been duly authorized by all proper and
necessary corporate or legal action.

     8.3 No Conflicts or Consents. Neither the execution and delivery of the Loan Documents, nor
the consummation of any of the transactions therein contemplated, nor compliance with the terms and
provisions thereof, will contravene or materially conflict with any Legal Requirement to which any
Obligor is subject, any Governmental Authorization applicable to any Obligor, any indenture, loan
agreement, mortgage, deed of trust, or other agreement or instrument binding on any Obligor, or any
provision of the articles of incorporation, certificate of incorporation, bylaws, certificate of
limited partnership, partnership agreement, or other constituent documents of any Obligor. No
consent, approval, authorization, or order of any court, Governmental Authority, stockholder, or
third party is required in connection with the execution, delivery, or performance by any Obligor
of any of the Loan Documents.

     8.4 Enforceable Obligations. The Loan Documents have been duly executed and delivered by each
Obligor and are the legal and binding obligations of each Obligor, enforceable in accordance with
their respective terms, except as limited by Debtor Laws.

     8.5 No Liens. Except for the Permitted Liens, all of the properties and assets of Borrower
and the Guarantors are free and clear of all Liens and other adverse claims of any nature, and such
Persons have good and marketable title to such properties and assets.

     8.6 Financial Condition. The Borrower has delivered to the Agent and the Lenders copies of
the financial statements of (a) Borrower and its Subsidiaries as of March 31, 2006 which are true
and correct in all material respects, fairly represent the financial condition of Obligors, as of
such date, and have been prepared in all material respects in accordance with GAAP; as of the date
hereof, there are no obligations, liabilities, or Indebtedness (including contingent and indirect
liabilities) of any Obligor which are material and are not reflected in such financial statements;
no Material Adverse Change has occurred since the date of such financial statements.

     8.7 Full Disclosure. There is no material fact known to the Borrower that the Borrower has
not disclosed to the Agent and the Lenders. No certificate or statement delivered

A&R Credit Agreement — Tandy Brands

36

 

by any Obligor
to the Agent or the Lenders in connection with this Agreement contains any untrue statement of a
material fact or omits to state any material fact necessary to keep the statements contained herein
or therein from being misleading.

     8.8 No Potential Default. No event has occurred and is continuing which constitutes a Potential Default or an Event
of Default.

     8.9 Material Agreements. No Obligor is in default in any material respect under any contract
or agreement to which it is a party or by which any of its properties is bound.

     8.10 No Litigation. There are no actions, suits, or legal, equitable, arbitration, or
administrative proceedings pending, or to the knowledge of any Obligor threatened, against any
Obligor that could, if adversely determined, reasonably be expected to have a material effect on
the financial condition of such Obligor.

     8.11 Use of Proceeds; Margin Stock. The proceeds of the Advances will be used by the Borrower
solely for the purposes specified in the recitals. None of such proceeds will be used for the
purpose of purchasing or carrying any “margin stock” as defined in Regulations T, U or X of
the Board of Governors of the Federal Reserve System or for any other purpose which might
constitute this transaction a “purpose credit” within the meaning of such Regulations. If requested
by any Lender, then Borrower will furnish to such Lender a statement in conformity with the
requirements of the Federal Reserve Form U-1 referred to in said Regulation U to the
foregoing effect. No part of the proceeds of the Advances will be used for any purpose which
violates, or is inconsistent with, the provisions of Regulation X.

     8.12 Taxes. All material tax returns required to be filed by each Obligor in any jurisdiction
have been filed and all taxes (including mortgage recording taxes), assessments, fees, and other
governmental charges upon each Obligor or upon any of its or their properties, income, or
franchises have been paid, except for taxes being contested in good faith by appropriate
proceedings diligently projected and as to which adequate reserves have been established in
accordance with GAAP. To the best of the Borrower’s knowledge, there is no proposed tax assessment
against any Obligor, and all tax liabilities of each Obligor are adequately provided for. No
income tax liability of any Obligor has been asserted by the Internal Revenue Service for taxes in
excess of those already paid.

     8.13 Principal Office, Etc. The principal office, chief executive office, and principal place
of business of the Borrower is at 690 East Lamar, Suite 200, Arlington, Texas 76011.

     8.14 Compliance with Law.

      (a) Except as disclosed on Schedule 8.14(a): (i) each of Borrower and
its Subsidiaries is in compliance with its respective articles of incorporation,
charter, bylaws, certificate of limited partnership, partnership agreement, and
other constituent documents, and all Legal Requirements which are applicable to it
or to the conduct or operation of its business or the ownership or use of any of its
assets; and (ii) none of Borrower or any of its Subsidiaries has received any notice
or other communication from any Governmental Authority or other Person

A&R Credit Agreement — Tandy Brands

37

 

of any event
or circumstance that could reasonably be expected to constitute a violation of, or
failure to comply with, any Legal Requirement.

      (b) Except as disclosed on Schedule 8.14(b): (i) each of Borrower and
its Subsidiaries is in material compliance with all of the terms and requirements of
each Governmental Authorization held by such Person; (ii) none of Borrower or any of
its Subsidiaries has received any notice or other communication from any
Governmental Authority or other Person of any event or circumstance which could
reasonably be expected to constitute a violation of, or failure to comply with, any
term or requirement of any Governmental Authorization, or of any actual or potential
revocation, withdrawal, cancellation, or termination of, or material modification
to, any Governmental Authorization; (iii) all applications required to have been
filed for the renewal of any required Governmental Authorizations have been duly
filed on a timely basis with the appropriate Governmental Authorities, and all other
filings required to have been made with respect to such Governmental Authorizations
have been duly made on a timely basis with the appropriate Governmental Authorities;
(iv) upon consummation of the transactions contemplated hereby, Borrower and its
Subsidiaries will lawfully hold all such Governmental Authorizations; and (v) none
of the Governmental Authorizations of Borrower and its Subsidiaries will terminate
upon consummation of the transactions contemplated hereby.

     8.15 Subsidiaries. Set forth on Exhibit D hereto is a complete and accurate list of
all Subsidiaries of Borrower as of the date hereof, showing as of such date (as to each such
Subsidiary) the jurisdiction of its incorporation or organization, the number of shares of each
class of capital stock or partnership interest outstanding on the date hereof, the owner of the
outstanding shares or partnership interest of each such class owned and the jurisdictions in which
such Subsidiary is qualified to do business as a foreign corporation or partnership. All of the
outstanding capital stock or partnership interests of all Subsidiaries have been validly issued, is
fully paid and nonassessable, and is owned by Borrower or a Subsidiary free and clear of all Liens.

     8.16 Casualties. Neither the business nor the properties of Borrower or any Subsidiary are
affected by any environmental hazard, fire, explosion, accident, strike, lockout, or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God, or other casualty (whether or not
covered by insurance), which could reasonably be expected to cause a Material Adverse Change.

     8.17 Corporate Name. Borrower, during the preceding five (5) years, has not used any other corporate name or
trade name.

     8.18 Intellectual Property Rights. All of the patents, trademarks and copyrights owned by the
Borrower and its Subsidiaries as of the Closing Date or used in the business of the Borrower and
its Subsidiaries under license as of the Closing Date are disclosed on Schedule 8.18
attached hereto.

A&R Credit Agreement — Tandy Brands

38

 

     8.19 ERISA. Except as disclosed on Schedule 8.19 attached hereto, neither Borrower
nor any ERISA Affiliate has any Plans.

     8.20 Labor Matters. There are no controversies pending between Borrower or any Subsidiary and
any of their employees which could reasonably be expected to have a Material Adverse Change.

     8.21 Material Contracts. As of the date hereof, except as disclosed on Schedule 8.22
attached hereto neither Borrower nor any Subsidiary is party to any contract, the breach,
violation, or termination of which could reasonably be expected to result in a Material Adverse
Change.

     8.22 Representations and Warranties. Each Notice of Borrowing shall constitute, without the
necessity of specifically containing a written statement, a representation and warranty by Borrower
that no Potential Default or Event of Default exists and that all representations and warranties
contained in this Section 8 or in any other Loan Document are true and correct in all
material respects on and as of the date the requested Advance is to be made except those
representations and warranties that specifically relate only to a stated date.

     8.23 Survival of Representations and Warranties in All Material Respects. All representations
and warranties by Borrower herein shall survive delivery of the Notes and the making of the Loan,
and any investigation at any time made by or on behalf of the Agent or the Lenders shall not
diminish the Agent’s or the Lenders’ rights to rely thereon.

SECTION 9

AFFIRMATIVE COVENANTS

     So long as any Lender has any commitment to make Advances hereunder, and until payment in full
of Obligations, the Borrower agrees that (unless the Required Lenders shall otherwise consent in
writing):

     9.1 Financial Statements, Reports, and Documents. The Borrower shall deliver to the Agent and to each Lender each of the following:

      (a) Annual Statements. As soon as available and in any event within the
earlier of (i) one-hundred twenty (120) days after the last day of each Fiscal Year
of Borrower or (ii) any requirement of the Securities and Exchange Commision as to
furnishing annual financial statements, copies of the audited consolidated and
consolidating balance sheet of Borrower and its Subsidiaries as of the close of such
Fiscal Year end, statements of income, retained earnings, and changes in cash flow
of Borrower and its Subsidiaries for such Fiscal Year, all in reasonable detail and
accompanied by an opinion thereon (which shall not be qualified by reason of any
limitation imposed by Borrower) of independent public accountants of recognized
national standing selected by Borrower and reasonably satisfactory to the Agent, to
the effect that (i) such consolidated financial statements have been prepared in
accordance with GAAP (except for changes in which such accountants concur), and (ii)
the examination of such accounts in connection with such financial statements has
been made in accordance with

A&R Credit Agreement — Tandy Brands

39

 

generally accepted auditing standards and, accordingly,
includes such tests of the accounting records and such other auditing procedures as
were considered necessary under the circumstances, accompanied by a certification by
the chief financial officer of the Borrower that the Borrower is in compliance with
each of the covenants set forth in this Agreement;

      (b) Quarterly Statements. As soon as available, and in any event within the
earlier of (i) forty-five (45) days after the last day of each quarterly fiscal
period of each Fiscal Year of Borrower or (ii) any requirement of the Securities and
Exchange Commission as to furnishing quarterly financial statements, copies of the
consolidated balance sheet of Borrower and its Subsidiaries as of the end of such
quarterly fiscal period, and statements of income, retained earnings, and changes in
cash flow of Borrower and its Subsidiaries for that quarterly fiscal period and for
the portion of the Fiscal Year ending with such period, all in reasonable detail,
and certified by the chief financial officer of Borrower as being true and correct
and as having been prepared in accordance with GAAP, subject to year end audit
adjustments, accompanied by a certification by the chief financial officer of the
Borrower that the Borrower is in compliance with each of the covenants set forth in
this Agreement;

      (c) Projections. No later than fifteen (15) days before the beginning of each
Fiscal Year, consolidated, financial operation projections for the Borrower and its
Subsidiaries for such Fiscal Year on a quarterly basis prepared by management and in
form consistent with the financial projections provided prior to the Closing Date;

      (d) Other Information. Such other information concerning the business,
properties, or financial condition of any Obligor as the Agent or any Lender shall
reasonably request including audit reports, registration statements, or other
reports or notices provided to shareholders of the Borrower.

     9.2 Payment of Taxes and Other Liabilities. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge (a) all taxes, assessments, and governmental charges or levies
imposed upon it or upon its income or profits, or upon any property belonging to it, before
delinquent, (b) all lawful claims (including claims for labor, materials and supplies), which, if
unpaid, might give rise to a Lien upon any of its property, and (c) all of its other liabilities,
except as prohibited under the Loan Documents; provided, however, that the Borrower
and each of its Subsidiaries shall not be required to pay any such tax, assessment, charge, or levy
if and so long as the amount, applicability, or validity thereof shall currently be contested in
good faith by appropriate proceedings and appropriate accruals and cash reserves therefor have been
established in accordance with GAAP.

     9.3 Maintenance of Existence and Rights; Conduct of Business. The Borrower shall, and shall
cause each of its Subsidiaries to, preserve and maintain its corporate or legal existence and all
of its rights, privileges, and franchises necessary or desirable in the normal conduct of its
business, and conduct its business in an orderly and efficient manner consistent

A&R Credit Agreement — Tandy Brands

40

 

with good business
practices and in accordance with all material Legal Requirements of any Governmental Authority.

     9.4 Notice of Default. The Borrower shall furnish to the Agent, promptly upon becoming aware
of the existence of any condition or event which constitutes a Potential Default or an Event of
Default, written notice specifying the nature and period of existence thereof and the action which
Borrower is taking or proposes to take with respect thereto.

     9.5 Other Notices. The Borrower shall, and shall cause each of its Subsidiaries to, promptly
notify the Agent of (a) any Material Adverse Change in its financial condition or its business, (b)
any default under any material agreement, contract, or other instrument to which it is a party or
by which any of its properties are bound, or any acceleration of the maturity of any material
liabilities owing by the Borrower or any Subsidiary, (c) any material adverse claim against or
affecting any Obligor or any of its properties, and (d) the commencement of, and any material
determination in, any litigation with any third party or any proceeding before any Governmental
Authority affecting any Obligor.

     9.6 Operations and Properties. The Borrower shall, and shall cause each of its Subsidiaries
to, (a) act prudently and in accordance with customary industry standards in managing and operating
its assets and properties, and (b) keep in good working order and condition, ordinary wear and tear
excepted, all of its assets and properties which are necessary to the conduct of its business.

     9.7 Books and Records; Access. The Borrower shall give any representative of the Agent and any Lender access during all
business hours to, and permit such representative to examine, copy, or make excerpts from, any and
all books, records, and documents in the possession of Borrower, and to inspect any of the
properties of Borrower. Borrower shall, and shall cause each of its Subsidiaries to, maintain
complete and accurate books and records of its transactions in accordance with good accounting
practices.

     9.8 Field Examination. The Agent shall be entitled, upon reasonable notice to Borrower, to
conduct a semi-annual field examination of the Borrower’s assets on the premises of the Borrower
and the Subsidiaries at the expense of the Borrower. If an Event of Default has occurred, the
Agent shall be entitled, upon reasonable notice to Borrower, to make an additional examination of
the Borrower’s assets.

     9.9 Compliance with Law. The Borrower shall, and shall cause each of its Subsidiaries to,
comply with all applicable Legal Requirements of any Governmental Authority, a breach of which
could reasonably be expected to cause a Material Adverse Change.

     9.10 Insurance. The Borrower shall, and shall cause each of its Subsidiaries to, keep all
insurable property, real and personal, adequately insured at all times in such amounts and against
such risks as are customary for Persons in similar businesses operating in the same vicinity,
specifically to include a policy of hazard, casualty, fire, and extended coverage insurance
covering all assets, business interruption insurance (where feasible), liability insurance, and
worker’s compensation insurance, in every case under a policy with a financially

A&R Credit Agreement — Tandy Brands

41

 

sound and
reputable insurance company and with only such deductibles as are customary, and naming Agent as
loss payee and additional insured.

     9.11 Authorizations and Approvals. The Borrower shall, and shall cause each of its
Subsidiaries to, promptly obtain, from time to time at its own expense, all Governmental
Authorizations as may be required to enable it to comply with its obligations hereunder and under
the other Loan Documents.

     9.12 Further Assurances. The Borrower shall, and shall cause each of its Subsidiaries to,
make, execute, and deliver or file, or cause the same to be done, all such notices, additional
agreements or other assurances, and take any and all such other action, as the Agent or any Lender
may, from time to time, reasonably deem necessary or proper in connection with any of the Loan
Documents, or the obligations of the Borrower or any Subsidiary thereunder.

     9.13 Indemnity by Borrower. The Borrower shall indemnify, defend, and hold harmless the Agent, the Banks and their
directors, officers, agents, attorneys, and employees (each, an “Indemnitee” and
collectively, the “Indemnitees”) from and against any and all loss, liability, obligation,
damage, penalty, judgment, claim, deficiency, and expense(including interest, penalties, attorneys’
fees, and amounts paid in settlement) to which the Indemnitees may become subject arising out of
this Agreement and the other Loan Documents, other than those which arise by reason of the gross
negligence or willful misconduct of the Agent or the Banks, BUT SPECIFICALLY INCLUDING ANY LOSS,
LIABILITY, OBLIGATION, DAMAGE, PENALTY, JUDGMENT, CLAIM, DEFICIENCY, OR EXPENSE ARISING OUT OF THE
SOLE OR CONCURRENT NEGLIGENCE OF THE AGENT OR THE BANKS. The Borrower shall also indemnify,
protect, and hold each Indemnitee harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, proceedings, costs, expenses
(including without limitation all reasonable attorneys’ fees and legal expenses whether or not suit
is brought), and disbursements of any kind or nature whatsoever which may at any time be imposed
on, incurred by, or asserted against such Indemnitees, with respect to or as a direct or indirect
result of the violation by Borrower of any Environmental Law, or with respect to or as a direct or
indirect result of Borrower’s use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence of a Hazardous Material on, under, from, or
about real property. The provisions of and undertakings and indemnifications set forth in this
Section 9.12 shall survive the satisfaction and payment of the Obligations and termination
of this Agreement, but only as to losses, liabilities, obligations, damages, penalties, judgments,
claims, deficiencies, or expenses arising prior to the satisfaction and payment of the Obligations
and termination of this Agreement.

     9.14 After-Acquired Subsidiaries. Concurrently upon the formation or acquisition by the
Borrower or any Subsidiary of any domestic Subsidiary after the date hereof (an “After-Acquired
Subsidiary”), the Borrower shall cause the After-Acquired Subsidiary to deliver articles of
incorporation, bylaws, other organizational documents, and resolutions and such opinions as the
Agent shall reasonably require and to execute a Subsidiary Guaranty in favor of the Agent for the
benefit of the Lenders.

A&R Credit Agreement — Tandy Brands

42

 

SECTION 10

NEGATIVE COVENANTS

     So long as any Lender has any commitment to make Advances hereunder, and until payment in full
of the Obligations, the Borrower agrees that (unless the Required Lenders shall otherwise consent
in writing):

     10.1 Negative Pledge. The Borrower shall not, and shall not permit any of its Subsidiaries
to, create, incur, permit, or suffer to exist any Lien upon any of its property or assets,
including its real property, now owned or hereafter acquired, except for Permitted Liens.

     10.2 Negative Pledge Agreements. The Borrower shall not, and shall not permit any of its domestic Subsidiaries to, enter
into any agreement (excluding this Agreement or any other Loan Documents) prohibiting the creation
or assumption of any Lien upon any of its property, revenues, or assets, whether now owned or
hereafter acquired, or the ability of any Subsidiary to make any payments, directly or indirectly,
to the Borrower by way of dividends, advances, repayments of loans, repayments of expenses,
accruals, or otherwise.

     10.3 Limitations on Indebtedness. The Borrower shall not, and shall not permit any of its
Subsidiaries to create, incur, assume or permit to exist any Indebtedness except:

      (a) Indebtedness existing hereunder;

      (b) Indebtedness of the Borrower or any of its Subsidiaries which is expressly
subordinated to the Obligations pursuant to terms and conditions reasonably
satisfactory to the Agent and the Required Lenders (the “Subordinated
Debt”);

      (c) Purchase money financing not to exceed in the aggregate outstanding at any
time 3.5% of the Borrower’s consolidated Net Worth;

      (d) Indebtedness that constitutes a renewal, refinancing or extension of any
Indebtedness referred to in this Section 10.3; provided, that (i) no Lien
existing at the time of such renewal reflecting an extension shall be extended to
cover any property not already subject to such Lien and (ii) the principal amount of
any Indebtedness renewed, refinanced or extended shall not exceed the amount of such
Indebtedness outstanding immediately prior to such renewal, refinancing or
extension;

      (e) Capital Lease Obligations not to exceed $500,000 in the aggregate
outstanding at any time;

      (f) Indebtedness owing by H.A. Sheldon Canada, Ltd. not to exceed one million
Dollars (US $1,000,000) in the aggregate outstanding at any time; and

      (g) Indebtedness incurred by Borrower under a Hedge Agreement.

A&R Credit Agreement — Tandy Brands

43

 

      (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.

     10.4 Certain Transactions. The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction with, or pay any management fees to, any Affiliate
except on terms not less favorable
to Borrower and its Subsidiaries than would be obtainable at the time in comparable, arms
length transactions with Persons other than Affiliates.

     10.5 Limitation on Sale of Assets. The Borrower shall not, and shall not permit any of its
Subsidiaries to (a) enter into or consummate an Asset Sale for proceeds in excess of $5,000,000 in
the aggregate in any Fiscal Year provided that any net cash proceeds in excess of $1,000,000 during
such Fiscal Year must be applied to prepay outstanding Advances pursuant to Section 2.6(a),
or (b) sell, assign, or discount any Receivables.

     10.6 Liquidation, Mergers, Consolidations, Recapitalizations, Reorganizations, and
Dispositions of Substantial Assets. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (a) dissolve or liquidate, (b) become a party to any merger or consolidation
unless the Borrower or the particular Subsidiary is the surviving corporation, (c) become a party
to a recapitalization or reorganization, or (d) change its place of incorporation or organization.

     10.7 Lines of Business; Receivables Policy. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, engage in any business other than those in which it
is presently engaged, or discontinue any of its material existing lines of business. The Borrower
shall not, and shall not permit any of its Subsidiaries to, make any material change in its credit
and collection policy, which change would materially impair the collectibility of its Receivables,
or rescind, cancel, or modify any Receivables, except in the ordinary course of business.

     10.8 Acquisition. The Borrower shall not, and shall not permit any of its Subsidiaries to
make any acquisition for cash, securities or other consideration of a business entity or the assets
of a business other than Permitted Acquisitions

     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.

     10.10 Prepayment of Other Indebtedness. The Borrower shall not, and shall not permit any of
its Subsidiaries to, (a) make any voluntary prepayments or defeasements of principal or interest on
any other Indebtedness of the
Borrower and (b) amend any material term (including interest, payment or subordination terms)
of any other Indebtedness including the Subordinated Debt without the prior written consent of the
Required Lenders except such

A&R Credit Agreement — Tandy Brands

44

 

amendments of Indebtedness other than Subordinated Debt which do not
make any material term less favorable to the Borrower or the Lenders.

     10.11 Limitation on Investments. The Borrower shall not make or permit to exist any capital
contributions to, or make any advance or loan to, or make any investment in, or purchase or commit
to purchase any stock or other securities or evidences of indebtedness of or interests in any
Person (“Investments”), except the following:

      (a) Liquid Investments;

      (b) Trade and customer accounts receivable which are for goods furnished or
services rendered in the ordinary course of business and are payable in accordance
with customary trade terms;

      (c) Investments existing on the date hereof and described on Schedule
10.11;

      (d) Investments made in connection with Borrower’s Benefit Restoration Plan and
Supplemental Employee Retirement Plan;

      (e) Investments in Subsidiaries which are Guarantors;

      (f) Investments made in connection with Borrower’s Benefit Restoration Plan;
and

      (g) Investments not described in clauses (a) through (f) above in an aggregate
amount not to exceed $750,000.00 per annum.

     10.12 Sale and Leaseback Transactions. The Borrower shall not, and shall not permit any of
its Subsidiaries, to enter into any arrangement, directly or indirectly, with any Person whereby it
shall sell or transfer any property, real or personal, and used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or other property which
it intends to use for substantially the same purpose or purposes as the property being sold or
transferred, except for any such arrangements that are entered into in the Borrower’s ordinary
course of business.

     10.13 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 to (b) EBITDA, on a
consolidated basis, for the four (4) Fiscal Quarters ending on such day to exceed 3:00 to 1:00.

     10.14 Fixed Charge Coverage Ratio. Borrower shall not permit the Fixed Charge Coverage Ratio as of the last day of each Fiscal
Quarter of Borrower to be less than 1.25 to 1.00.

     10.15 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-five percent (85%) of Tangible Net
Worth as of the Closing Date, plus (a) seventy-five percent (75%) of Consolidated Net
Income earned after June 30, 2006 during any Fiscal Quarter, provided,

A&R Credit Agreement — Tandy Brands

45

 

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, 2006, 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 the date of this Agreement.

     10.16 Trading Asset Coverage Ratio. Borrower shall not permit the ratio of (a) Trading Assets
to (b) Total Funded Indebtedness plus outstanding Commercial Letters of Credit, as of the
last date of each Fiscal Quarter of Borrower beginning June 30, 2006, to be 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.

     10.17 ERISA. Neither Borrower nor any ERISA Affiliate will create any Plan.

     10.18 Fiscal Year. Borrower shall not, and shall not permit any of its Subsidiaries to,
change its Fiscal Year or method of accounting.

     10.19 Trademark License Agreements. The Borrower and its Subsidiaries shall not conclude any
trademark license agreement which is expected to generate sales revenue in excess of $500,000 per
annum, without the prior consent of the Agent (which consent shall not be unreasonably withheld)
unless (a) the Borrower’s or the Subsidiary’s interest in such trademark license agreement
is assignable to the Agent and (b) the Agent receives a consent from the licensor
acceptable to the Agent. If the conditions set forth in (a) and (b) are satisfied, the Borrower or
the Subsidiary is not required to obtain the consent of the Agent to enter into the trademark
license agreement, although such Borrower or Subsidiary shall notify Agent within a reasonable
period of time of the execution of such agreement.

SECTION 11

EVENTS OF DEFAULT

     11.1 Events of Default. An “Event of Default” shall exist if any one or more of the following events
(herein collectively called “Events of Default”) shall occur and be continuing:

      (a) Borrower shall fail to pay when due any principal of any Note or of any
principal amount payable hereunder or in connection with any Letter of Credit,
Acceptance Exposure or Hedge Agreement when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment thereof
or by acceleration thereof or otherwise; or

      (b) Borrower shall fail to pay when due any interest on any Note, any
Commitment Fee, or any other interest payment or fee hereunder or in connection with
any Letter of Credit, Acceptance Exposure or Hedge Agreement when and as the same
shall become due and payable, and the Borrower fails to cure such default within two
(2) Business Days of such due date; or

      (c) any representation or warranty made under this Agreement, or any of the
other Loan Documents, shall prove to be untrue or inaccurate in any

A&R Credit Agreement — Tandy Brands

46

 

material respect
as of the date on which such representation or warranty is made or deemed to have
been made; or

      (d) The Borrower or its Subsidiaries shall fail to perform any of the covenants
set forth in Section 9.10 and Section 10; or

      (e) default shall occur in the performance of any of the covenants or
agreements of any Obligor contained herein or in any of the other Loan Documents
(other than the covenants set forth in Section 9.10 and Section 10)
and the continuance thereof for a period of at least thirty (30) days; or

      (f) default shall occur in the payment of any other Indebtedness of any Obligor
in excess of $1,000,000 or default shall occur in respect of any note or credit
agreement relating to any such Indebtedness and such default allows the creditor of
such Indebtedness to accelerate the maturity of such Indebtedness; or

      (g) any of the Loan Documents shall cease to be legal, valid, and binding
agreements enforceable against the Person executing the same in accordance with its
terms, shall be terminated, become or be declared ineffective or inoperative or
cease to provide the respective remedies, powers, or privileges intended to be
provided thereby; or any Obligor shall deny that such Person has any further
liability or obligation under any of the Loan Documents; or

      (h) any Obligor shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian, intervenor, or liquidator of itself or of all or a
substantial part of such Person’s assets, (ii) file a voluntary petition in
bankruptcy, admit in writing that such Person is unable to pay such Person’s debts
as they become due, or generally not pay such Person’s debts as they become due,
(iii) make a general assignment for the benefit of creditors, (iv) file a petition
or answer seeking reorganization of an arrangement with creditors or to take
advantage of any bankruptcy or insolvency laws, (v) file an answer admitting the
material allegations of, or consent to, or default in answering, a petition
filed against such Person in any bankruptcy, reorganization, or insolvency
proceeding, or (vi) take corporate, partnership, or other action for the purpose of
effecting any of the foregoing; or

      (i) an involuntary proceeding shall be commenced against any Obligor seeking
bankruptcy or reorganization of such Person or the appointment of a receiver,
custodian, trustee, liquidator, or other similar official of such Person, or all or
substantially all of such Person’s assets, and such proceeding shall not have been
dismissed within sixty (60) days of the filing thereof; or an order, order for
relief, judgment, or decree shall be entered by any court of competent jurisdiction
or other competent authority approving a petition or complaint seeking
reorganization of any Obligor or appointing a receiver, custodian, trustee,
liquidator, or other similar official of such Person, or of all or substantially all
of such Person’s assets;

A&R Credit Agreement — Tandy Brands

47

 

      (j) any final judgment(s) for the payment of money in excess of the sum of
$1,000,000.00 in the aggregate shall be rendered against any Obligor and such
judgment(s) shall not be satisfied or discharged or bonded at least five (5)
business days prior to the date on which any of such Person’s assets could be
lawfully sold to satisfy such judgment; or

      (k) a Material Adverse Change shall have occurred.

     11.2 Remedies Upon Event of Default. If any Event of Default shall occur and is continuing,
then the Agent may, or upon the written consent of the Required Lenders shall, without notice,
exercise any one or more of the following rights and remedies, and any other remedies provided in
any of the Loan Documents: (a) terminate the Banks’ commitment to make Advances, arrange for the
issuance of Letters of Credit, and accept and purchase Bankers Acceptances hereunder; (b) declare
the Obligations or any part thereof to be forthwith due and payable, whereupon the same shall
forthwith become due and payable without presentment, demand, protest, notice of default, notice of
acceleration or of intention to accelerate, or other notice of any kind, all of which Borrower
hereby expressly waives, anything contained herein or in the Notes to the contrary notwithstanding;
(c) reduce any claim to judgment; or (d) pursue and enforce any of the Agent’s and the Banks’
rights and remedies under the Loan Documents, including, without limitation, a demand for payment
from or enforcement action against the Guarantors under the Subsidiary Guaranty, or otherwise
provided under or pursuant to any applicable law or agreement; provided, however, that if any Event
of Default specified in Sections 11.1(h) or (i) shall occur, then the Obligations shall
thereupon become due and payable concurrently therewith, and the Banks’ obligations to make
Advances, arrange for the issuance of Letters of Credit, and accept and purchase Bankers
Acceptances shall immediately terminate hereunder, without any further action by the Agent or the
Banks and without presentment, demand, protest, notice of default, notice of acceleration or of
intention to accelerate, or other notice of any kind, all of which Borrower hereby expressly
waives.

     11.3 Performance by Agent or Lenders. If Borrower fails to perform any covenant, duty, or
agreement contained in any of the Loan Documents, then the Agent and/or the Lenders may perform or
attempt to perform such covenant, duty, or agreement on behalf of Borrower. In such event, Borrower
shall, at the request of the Agent, promptly pay any amount expended by the Agent and/or the
Lenders in such performance or attempted performance to the Agent at its principal office in San
Francisco, California together with interest thereon at the lesser of (a) the Contract Rate for
Eurodollar Borrowing, plus three percent (3%) or (b) Maximum Rate, from the date of such
expenditure until paid. Notwithstanding the foregoing, it is expressly understood that the Agent
and/or the Lenders shall not assume any liability or responsibility for the performance of any
duties of Borrower hereunder or under any of the Loan Documents and none of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give the Agent and/or the
Lenders the right or power to exercise control over the management and affairs of Borrower.

A&R Credit Agreement — Tandy Brands

48

 

SECTION 12

AGENT

     12.1 Appointment. The Trade Bank is hereby appointed to act as Agent on behalf of the
Lenders. Each of the Lenders and each subsequent holder of any Note by its acceptance thereof,
irrevocably authorizes the Agent to take such action on its behalf and to exercise such powers
hereunder as are specifically delegated to or required of the Agent by the terms hereof and the
terms thereof together with such powers as are reasonably incidental thereto. The Trade Bank
hereby accepts its appointment to act as Agent on behalf of the Lenders and the authorizations set
forth herein. Neither the Agent nor any of its directors, officers, employees or agents shall be
liable as such for any action taken or omitted to be taken by it or them hereunder or in connection
herewith or therewith (a) at the request or with the approval of the Required Lenders (or, if
otherwise specifically required hereunder or thereunder, the consent of all the Lenders) or (b) in
the absence of its or their own gross negligence (but not ordinary negligence) or willful
misconduct.

     12.2 Responsibilities.

      (a) The Agent is hereby expressly authorized on behalf of the Lenders, without
hereby limiting any implied authority, (i) to receive on behalf of each of the
Lenders any payment of principal of or interest hereunder or on the Notes and all
other amounts due hereunder paid to the Agent, and promptly to distribute to each
Lender its proper share of all payments so received, (ii) to distribute to each
Lender copies of all notices, agreements and other material as provided for in this
Agreement as received by the Agent and (iii) to take all actions with respect to
this Agreement and the Loan Documents as are specifically delegated to the Agent.
The Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by the Agent pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in writing
to do so by the Required Lenders.

      (b) In the event that (i) the Borrower fails to pay when due the principal of
or interest on any Note or any fee payable hereunder or any amount payable under or
in connection with any Letter of Credit or (ii) the Agent receives written notice of
the occurrence of an Event of Default, the Agent within a reasonable time shall give
written notice thereof to the Lenders, and shall take such action with respect to
such Event of Default or other condition or event as it shall be directed to take by
the Required Lenders; provided, however, that, unless and until the
Agent shall have received such directions, the Agent may take such action or refrain
from taking such action hereunder with respect to an Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only with
the consent or upon the authorization of the Required Lenders or all of the Lenders.

      (c) The Agent shall not be responsible in any manner to any of the Lenders for
the effectiveness, enforceability, perfection, priority, value,

A&R Credit Agreement — Tandy Brands

49

 

genuineness,
validity or due execution of this Agreement or the other Loan Documents with respect
thereto or any other agreements or certificates, requests, financial statements,
notices or opinions of counsel or for any recitals, statements, warranties or
representations contained herein or in any such instrument or be under any
obligation to ascertain or inquire as to the performance or observance of any of the
terms, provisions, covenants, conditions, agreements or obligations of this
Agreement or any of the other Loan Documents or any other agreements on the part of
the Borrower and, without limiting the generality of the foregoing, the Agent shall,
in the absence of knowledge to the contrary, be entitled to accept any certificate
furnished pursuant to this Agreement as conclusive evidence of the facts stated
therein and shall be entitled to rely on any note, notice, consent, certificate,
affidavit, letter, telegram, teletype message, statement, order or other document
which it believes in good faith to be genuine and correct and to have been signed or
sent by the proper Person or Persons. It is understood and agreed that the Agent
may exercise its rights and powers under other agreements and instruments to which
it is or may be a party, and engage in other transactions with the Borrower, as
though it were not Agent of the Lenders hereunder.

      (d) The Agent shall promptly give notice to the Lenders of the receipt or
sending of any notice, schedule, report, projection, financial statement or other
document or information pursuant to this Agreement and shall promptly forward a copy
thereof to each Lender.

      (e) Neither the Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure or delay in
performance or breach by any Lender other than the Agent of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance or
breach by any other Lender or the Borrower of any of their respective obligations
hereunder or in connection herewith.

      (f) The Agent may consult with legal counsel selected by it in connection with
matters arising under this Agreement or any other Loan Document and any action taken
or suffered in good faith by it in accordance with the opinion of such counsel shall
be full justification and protection to it. The Agent may exercise any of its
powers and rights and perform any duty under this Agreement or any other Loan
Documents through agents or attorneys.

      (g) The Agent and the Borrower may deem and treat the payee of any Note as the
holder thereof until written notice of transfer shall have been delivered as
provided herein by such payee to the Agent and the Borrower.

      (h) With respect to the Loans, the Notes and the Letters of Credit issued to or
by it, and the Bankers Acceptances accepted and paid by it, the Agent in its
individual capacity and not as an Agent shall have the same rights, powers and
duties hereunder and under any other agreement executed in connection herewith as
any other Lender and may exercise the same as though it were not the Agent, and the
Agent and its affiliates may accept deposits from, lend money to

A&R Credit Agreement — Tandy Brands

50

 

      and generally
engage in any kind of business with the Borrower or other affiliate thereof as if it
were not the Agent.

     12.3 Indemnity. EACH LENDER AGREES (A) TO REIMBURSE THE AGENT IN THE AMOUNT OF SUCH LENDER’S
PRO RATA SHARE (BASED ON ITS TOTAL COMMITMENT HEREUNDER) OF ANY EXPENSES INCURRED FOR THE BENEFIT
OF THE LENDERS BY THE AGENT, INCLUDING COUNSEL FEES AND COMPENSATION OF AGENTS AND EMPLOYEES PAID
FOR SERVICES RENDERED ON BEHALF OF THE LENDERS, NOT REIMBURSED BY THE BORROWER AND (B) TO INDEMNIFY
AND HOLD HARMLESS THE AGENT AND ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, ON DEMAND, IN
THE AMOUNT OF ITS PRO RATA SHARE, FROM AND AGAINST ALL LIABILITIES, ACTIONS, AGREEMENTS, JUDGMENTS,
SUITS, COSTS, DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY
OR ASSERTED AGAINST IT IN ITS CAPACITY AS THE AGENT OR ANY OF THEM IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTION TAKEN OR OMITTED BY IT OR
ANY OF THEM UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, TO THE EXTENT NOT REIMBURSED BY THE
BORROWER; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE TO THE AGENT FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENT, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE (BUT NOT ORDINARY NEGLIGENCE)
OR WILLFUL MISCONDUCT OF THE AGENT OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS.

     12.4 Credit Decisions. Each Lender acknowledges that it has, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that
it will, independently and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under or based upon this Agreement, any related agreement
or any document furnished hereunder.

     12.5 Resignation. Subject to the appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving the Lenders and the Borrower at least thirty (30)
days prior notice of such resignation and specifying the day on which such resignation will become
effective, and the Agent may be removed at any time by the Required Lenders if it has breached its
obligations under the Loan Documents. Upon the giving of such notice of resignation by the Agent
or upon the removal of the Agent by the Required Lenders, the Required Lenders shall have the right
to appoint a successor Agent; provided, that so long as no Default or Event of
Default then exists the appointment of such successor Agent shall be subject to the approval of the
Borrower, which approval shall not be withheld or delayed unreasonably. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent gives notice of its resignation or the removal of
the Agent, then the retiring or removed Agent may, on behalf of the Required Lenders, appoint a
successor Agent which shall be a Lender which is a

A&R Credit Agreement — Tandy Brands

51

 

commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor bank,
such successor shall thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent and the retiring or removed Agent shall be discharged
from its duties and obligations hereunder. After any Agent’s resignation or removal hereunder, the
provisions of this Article shall continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as Agent.

SECTION 13

MISCELLANEOUS

     13.1 Accounting Reports. All financial reports or projections furnished by any Person to the
Agent or the Lenders pursuant to this Agreement shall be prepared in such form and such detail as
shall be satisfactory to the Agent and Lenders, shall be prepared on the same basis as those
prepared by such Person in prior years, and, where applicable, shall be the same financial reports
and projections as those furnished to such Person’s officers and directors.

     13.2 Waivers and Amendments.

      (a) No failure or delay of any Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise
of any such right or power, or any abandonment or discontinuance of steps to
enforce such right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Lenders
hereunder are cumulative and not exclusive of any rights or remedies which they may
otherwise have. No waiver of any provision of this Agreement or the Notes nor
consent to any departure by the Borrower therefrom shall in any event be effective
unless the same shall be authorized as provided in paragraph (b) below, and
then such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the Borrower in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not such
Note shall have been marked to indicate such amendment, modification, waiver or
consent.

      (b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into by
the Borrower and the Required Lenders, and then such waiver or modification shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no such agreement shall, unless in
writing and signed by all the Lenders, do any of the following: (i) increase the
Revolving Credit Commitments of the Lenders or subject the Lenders to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, (iii) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts

A&R Credit Agreement — Tandy Brands

52

 

payable
hereunder, (iv) take action which requires the signing of all the Lenders pursuant
to the terms of this Agreement, (v) change the percentage of the Revolving Credit
Commitments or of the aggregate unpaid principal amount of the Notes, or the number
of Lenders which shall be required for the Lenders or any of them to take any action
under this Agreement or any other Loan Document, (vi) release any Guarantor or
otherwise change any obligation of any Guarantor to pay any amount payable by such
Guarantor hereunder or under the other Loan Documents, or (vii) amend this
Section 13.2(b); provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition to
the Lenders required above to take such action, affect the rights or duties of the
Agent under any Loan Document. Each Lender and holder of any Note shall be bound by
any modification or amendment authorized by this Section 13.2 regardless of
whether its Notes shall be marked to make reference thereto, and any consent by any
Lender or holder of a Note pursuant to this Section 13.2 shall bind any
Person subsequently acquiring a Note from it, whether or not such Note shall be so
marked.

     13.3 Payment of Expenses. Whether or not the transactions contemplated by this Agreement are
consummated, Borrower will promptly (and in any event, within 30 days after any invoice or other
statement or notice) pay: (a) all transfer, stamp, mortgage, documentary or other similar taxes,
assessments or
charges levied by any Governmental Authority in respect of this Agreement or any of the other
Loan Documents or any other document referred to herein or therein; (b) all reasonable costs and
expenses incurred by or on behalf of Agent (including reasonable attorneys’ fees, consultants’ fees
and engineering fees, travel costs and miscellaneous expenses) in connection with: (i) the
negotiation, preparation, execution and delivery of the Loan Documents, and any and all consents,
waivers or other documents or instruments relating thereto; (ii) the filing, recording, refiling
and re-recording of any Loan Documents and any other documents or instruments or further assurances
required to be filed or recorded or refiled or re-recorded by the terms of any Loan Document; (iii)
other action reasonably required in the course of administration hereof; and (iv) monitoring or
confirming (or preparation or negotiation of any document related to) Borrower’s compliance with
any covenants or conditions contained in this Agreement or in any Loan Document, and (c) all
reasonable costs and expenses incurred by or on behalf of any Bank (including reasonable attorneys’
fees, and accounting fees) in connection with the defense or enforcement of any of the Loan
Documents (including this Section) or the defense of any Banks’ exercise or its rights thereunder.
In addition to the foregoing, until all Obligations have been paid in full, Borrower will also pay
or reimburse Agent for all reasonable out-of-pocket costs and expenses of Agent or its agents or
employees in connection with the continuing administration of the Loans and the related due
diligence of Agent, including reasonable travel and miscellaneous expenses and reasonable fees and
expenses of Agent’s outside counsel and consultants engaged in connection with the Loan Documents.

     13.4 Notices. Any communications required or permitted to be given by any of the Loan
Documents must be (a) in writing and personally delivered or mailed by prepaid certified or
registered mail, or (b) made by facsimile transmission delivered or transmitted, to the party to
whom such notice of communication is directed, to the address of such party shown on Schedule 13.4
hereof. Any such communication shall be deemed to have been given (whether actually received or
not) on the day it is personally delivered or, if transmitted by facsimile transmission,

A&R Credit Agreement — Tandy Brands

53

 

on the day
that such communication is transmitted as aforesaid subject to telephone confirmation of receipt;
provided, however, that any notice received by Lender after 10 a.m. San Francisco, California time
on any day from Borrower pursuant to Section 2.3 (with respect to a Notice of Borrowing)
shall be deemed for the purposes of such Section to have been given by Borrower on the next
succeeding day, or if mailed, on the third (3rd) day after it is marked as aforesaid. Any party may
change its address for purposes of this Agreement by giving notice of such change to the other
parties pursuant to this Section 13.4.

     13.5 Governing Law. This Agreement has been prepared, is being executed and delivered, and is
intended to be performed in the State of Texas and the substantive laws of such state and the
applicable federal laws of the United States of America shall govern the validity, construction,
enforcement, and interpretation of this Agreement and all of the other Loan Documents.

     13.6 Choice of Forum; Consent to Service of Process and Jurisdiction
.. Any suit, action, or proceeding against Borrower with respect to this Agreement, the Note,
or other Loan Documents, or any judgment entered by any court in respect thereof, may be brought in
the courts of the State of Texas, County of Dallas, or in the United States courts located in the
State of Texas as the Agent in its sole discretion may elect and Borrower hereby irrevocably
submits to the nonexclusive jurisdiction of such courts for the purpose of any such suit, action,
or proceeding. Borrower hereby irrevocably consents to the service of process in any suit, action,
or proceeding in said court by the mailing thereof by the Agent by registered or certified mail,
postage prepaid, to Borrower’s address shown opposite its name on the signature pages hereof.
Nothing herein or in any of the other Loan Documents shall affect the right of the Agent or any
Lender to serve process in any other manner permitted by law or shall limit the right of the Agent
or any Lender to bring any action or proceeding against Borrower or with respect to any of its
property in courts in other jurisdiction. Borrower hereby irrevocably waives any objections which
it may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out
of or relating to this Agreement, the Note, or any other Loan Documents brought in the courts
located in the State of Texas, County of Dallas, and hereby further irrevocably waives any claim
that any such suit, action, or proceeding brought in any such court has been brought in any
inconvenient forum.

     13.7 Invalid Provisions. Any provision of any Loan Document held by a court of competent
jurisdiction to be illegal, invalid or unenforceable and shall not invalidate the remaining
provisions of such Loan Document which shall remain in full force and the effect thereof shall be
confined to the provision held invalid or illegal.

     13.8 Maximum Interest. It is the intention of the parties to comply strictly with applicable
usury laws. Accordingly, notwithstanding any provision to the contrary in this Agreement, or in any
contract, instrument or document evidencing or securing the payment hereof or otherwise relating
hereto (each, a “Related Document”), in no event shall this Agreement or any Related
Document require the payment or permit the payment, taking, reserving, receiving, collection or
charging of any sums constituting interest under applicable laws that exceed the maximum amount of
interest permitted by such laws, as the same may be amended or modified from time to time (the
“Maximum Rate”). If any such excess interest is called for, contracted for, charged,
taken, reserved or received in connection with this Agreement

A&R Credit Agreement — Tandy Brands

54

 

or any Related Document, or in any
communication by the Agent, the Lenders or any other Person to Borrower or any other Person, or in
the event that all or part of the principal or interest hereof or thereof shall be prepaid or
accelerated, so that under any of such circumstances or under any other circumstance whatsoever the
amount of interest contracted for, charged, taken, reserved or received on the amount of principal
actually outstanding from time to time under this Agreement or Related Document shall exceed the
Maximum Rate, then in such event it is agreed that: (i) the provisions of this paragraph shall
govern and control; (ii) neither Borrower nor any other person or entity now or hereafter liable
for the payment of the Obligations under this Agreement or any Related Document shall be obligated
to pay the amount of such interest to the extent it is in excess of the Maximum Rate; (iii) any
such excess interest which is or has been received by the Lenders shall be credited against the
then unpaid principal balance hereof or thereof, or if the Obligations or
any Related Document has been or would be paid in full by such credit, refunded to Borrower;
(iv) all sums paid, or agreed to be paid, to the Agent for the benefit of the Lenders for the use,
forbearance and detention of the amounts owed under this Agreement by Borrower hereunder shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the
full term of the Obligations, including all prior and subsequent renewals and extensions, owed
under this Agreement and the Related Documents until payment in full so that the actual rate of
interest is uniform throughout the full term thereof; and (v) the provisions of this Agreement and
each Related Document, and any other communication to Borrower, shall immediately be deemed
reformed and such excess interest reduced, without the necessity of executing any other document,
to the Maximum Rate. The right to accelerate the maturity of the Obligations or any Related
Document does not include the right to accelerate, collect or charge unearned interest, but only
such interest that has otherwise accrued as of the date of acceleration. Without limiting the
foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or
received in connection with this Agreement and any Related Document which are made for the purpose
of determining whether such rate exceeds the Maximum Rate shall be made to the extent permitted by
applicable laws by amortizing, prorating, allocating and spreading during the period of the full
term of this Agreement or such Related Document, including all prior and subsequent renewals and
extensions hereof or thereof, all interest at any time contracted for, charged, taken, reserved or
received by any Lender. To the extent that the interest rate laws of the State of Texas are
applicable to this Agreement, any Note or any other Loan Document, the applicable interest rate
ceiling is the indicated (weekly) ceiling determined in accordance with Chapter 303 of the Texas
Finance Code, as amended, and, to the extent that any Obligation under this Agreement, any Note or
any other Loan Document is deemed an open end account as such term is defined in Chapter 302 of the
Texas Finance Code, as amended, the Agent retains the right to modify the interest rate in
accordance with applicable law. The terms of this paragraph shall be deemed to be incorporated
into each Related Document.

     13.9 Non-liability of Lender. The relationship between Borrower and the Lenders is, and shall
at all times remain, solely that of borrower and lender, and the Agent and the Lenders have no
fiduciary or other special relationship with Borrower.

     13.10 Offset. Borrower hereby grants to the Agent and the Lenders the right of offset, to
secure repayment of the Obligations, upon any and all moneys, securities, or other property of
Borrower and the proceeds therefrom, now or hereafter held or received by or in transit to the
Agent or its agents, from or for the account of Borrower or any Guarantor, whether for safe

A&R Credit Agreement — Tandy Brands

55

 

keeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all
deposits (general or special) and credits of Borrower, and any and all claims of Borrower against
the Agent and/or the Lenders at any time existing.

     13.11 Successors and Assigns. The Loan Documents shall be binding upon and inure to the
benefit of Borrower, the Agent and the Lenders and their respective successors, assigns, and legal
representatives;
provided, however, that Borrower may not, without the prior written consent of all Lenders,
assign any rights, powers, duties, or obligations/hereunder. The Lenders reserve the right to sell
all or a portion of its interest in the Loan, and any Lender shall have the right to disclose any
information in its possession regarding any Obligor in connection herewith to any potential
transferee of the Loans or any part thereof.

     13.12 Successors and Assigns; Participations.

      (a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party; and
all covenants, promises and agreements by or on behalf of the Borrower, its
Subsidiaries, the Agent or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns. Without
limiting the generality of the foregoing, the Borrower specifically confirms that
any Lender may at any time and from time to time pledge or otherwise grant a
security interest in any Loan or any Note (or any part thereof) to any entity as
collateral security in accordance with applicable law, including without limitation,
to any Federal Reserve Bank (and its transferees).

      (b) Each Lender, without the consent of the Borrower, may sell participations
to one or more banks or other entities in all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Revolving Credit Commitment, the Loans owing to
it and the Notes held by it); provided, that, (i) such Lender’s
obligations under this Agreement and the other Loan Documents (including, without
limitation, its Revolving Credit Commitment and to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, and (iii) the Borrower, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this Agreement;
and provided, further, that each Lender shall retain the sole right
and responsibility to enforce the obligations of the Borrower and the Guarantors
relating to the Loans and the Loan Documents, including, without limitation, the
right to approve any amendment, modification or waiver of any provision of this
Agreement or the other Loan Documents.

      (c) With the prior written consent of (i) the Borrower (which consent (x) shall
not be withheld or delayed unreasonably and (y) shall not be required if any Event
of Default has occurred and is continuing) and (ii) the Agent (which consent shall
not be withheld or delayed unreasonably), each Lender may assign by novation, to any
one or more banks or other entities, all or a portion of its

A&R Credit Agreement — Tandy Brands

56

 

interests, rights and
obligations under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Revolving Credit Commitment and the same portion
of the Loans, the participations in outstanding Letters of Credit at the time held
by it and the Note or Notes held by it), provided, that (A) each
such assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender’s rights and obligations under this
Agreement, which shall include the same percentage interest in the Loans,
Letters of Credit and Notes, (B) the amount of the Revolving Credit Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent) shall be in a minimum principal amount equal to three
million dollars ($3,000,000) in the aggregate for the Revolving Credit Commitment of
such Lender; provided, however, notwithstanding such minimum, such
Lender may in any event assign all of the Revolving Credit Commitment of such
Lender, and (C) the parties to each such assignment shall execute and deliver to the
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Notes subject to such assignment and a processing and
recordation fee of three thousand five hundred dollars ($3,500) paid by assignee or
assignor. Upon such execution, delivery, acceptance and recording and after receipt
of the written consent of the Agent, from and after the effective date specified in
each Assignment and Acceptance, which effective date shall be at least five (5)
Business Days after the execution thereof, (x) the assignee thereunder shall be a
party hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender under the Loan Documents and (y) the Lender which
is assignor thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender shall
cease to be a party hereto). Notwithstanding anything to the contrary contained in
this subsection (c), each Lender may assign by novation all or a portion of its
interests, rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Revolving Credit Commitment
and the same portion of the Loans, the participations in outstanding Letters of
Credit at the time held by it and the Note or Notes held by it) to an Affiliate
without the consent of the Borrower or the Agent and without having to pay the
processing and recordation fee specified above.

      (d) By executing and delivering an Assignment and Acceptance, the Lender which
is assignor thereunder and the assignee thereunder confirm to, and agree with, each
other and the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being assigned
thereunder free and clear of any adverse claim, such Lender makes no representation
or warranty and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with this Agreement, the other Loan
Documents or the execution, legality, validity, enforceability, perfection,
priority, genuineness, sufficiency or value of this

A&R Credit Agreement — Tandy Brands

57

 

Agreement or the other Loan
Documents; (ii) such Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of the
Guarantors or the performance or observance by the Borrower or any of the Guarantors
of any of their respective obligations under this Agreement or the other Loan
Documents; (iii) such assignee confirms that it has received a copy of this
Agreement and the other
Loan Documents, together with copies of financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement or the other Loan Documents; (v) such assignee
appoints and authorizes the Agent to take such action as the Agent on its behalf and
to exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be performed by
it as a Lender.

      (e) The Agent shall maintain at its principal office in San Francisco,
California a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders and the Revolving
Credit Commitment and principal amount of the Loans held by each Lender from time to
time (the “Register”). The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon reasonable
prior notice.

      (f) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee and consented to by the Borrower together with any Note or
Notes subject to such assignment and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is precisely
in the form of Exhibit H hereto, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders and the Borrower. Within three (3) Business Days
after receipt of such notice, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for each surrendered Note or Notes a new Note or
Notes to the order of such assignee in an amount equal to its portion of the
Revolving Credit Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained any Revolving Credit Commitment hereunder,
a new Note or Notes to the order of the assigning Lender in an amount equal to the
Revolving Credit Commitment retained by it hereunder. Such new Note or Notes shall
be in an aggregate principal amount equal to the aggregate principal amount of such

A&R Credit Agreement — Tandy Brands

58

 

surrendered Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A
hereto. Notes surrendered to the Borrower shall be canceled by the Borrower.

      (g) Notwithstanding any other provision herein, any Lender may, in connection
with any assignment or participation or proposed assignment or
participation pursuant to this Section 13.13, disclose to the assignee
or participant or proposed assignee or participant, any information, including,
without limitation, any Information, relating to the Borrower furnished to such
Lender by or on behalf of the Borrower in connection with this Agreement;
provided, however, that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall agree in writing
to preserve the confidentiality of any confidential Information relating to the
Borrower received from such Lender.

     13.13 Headings. Section headings are for convenience of reference only and shall in no way
affect the interpretation of this Agreement.

     13.14 Survival. All representations and warranties made by Borrower herein shall survive
delivery of the Notes and the making of the Loans.

     13.15 No Third Party Beneficiary. The parties do not intend the benefits of this Agreement to
inure to any third party, nor shall any Loan Document or any course of conduct by any party hereto
be construed to make or render the Agent or any Lender or any of its officers, directors, agents,
or employees liable (a) to any materialman, supplier, contractor, subcontractor, purchaser, or
lessee of any property owned by Borrower, or (b) for debts or claims accruing to any such Persons
against Borrower.

     13.16 Multiple Counterparts. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

     13.17 Entirety. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN
EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO
THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. THE PROVISIONS OF THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH BORROWER IS A PARTY MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT IN
WRITING SIGNED BY THE PARTIES HERETO.

     13.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative
Agent (for itself and not on behalf of any Lender)

A&R Credit Agreement — Tandy Brands

59

 

hereby notifies Borrower that pursuant to the
requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name, address and tax identification number of Borrower
and other information regarding Borrower that will allow such Lender or the Agent, as applicable,
to identify Borrower in accordance with the Act. This notice is given in accordance with the
requirements of the Act and is effective as to the Lenders and the Agent.

     13.19 Amendment and Restatement. As of the Closing Date, this Agreement amends and restates
in its entirety the Existing Credit Agreement, provided that such amendment and
restatement shall operate to renew, amend and modify the rights and obligations of the parties
under the Existing Credit Agreement as provided herein, but shall not act as a novation thereof.
The Borrower hereby agrees that (i) the Loans outstanding under the Existing Credit Agreement and
all accrued and unpaid interest thereon, (ii) all Letters of Credit issued and outstanding under
the Existing Credit Agreement, and (iii) all accrued and unpaid fees under the Existing Credit
Agreement shall be deemed to be outstanding under and payable by this Agreement.

A&R Credit Agreement — Tandy Brands

60

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement 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
	 
	 	 	 	 
	 	 	Tandy Brands Accessories, Inc.
	 	 	690 E. Lamar Boulevard, Suite 200
	 	 	Arlington, TX 76011
	 	 	Telephone: (817) 548-0090
	 	 	Facsimile: (817) 274-7346
	 	 	Email:
mark_flaherty@tandybrands.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE

BANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 

	 	Name:
	 	John R. Peloubet
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Wells Fargo HSBC Trade Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1585
	 	 	Facsimile: (682) 225-3523
	 	 	Email:
peloubj@wellsfargo.com
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John W. Johnson
	 

	 	 	 	 
	 

	 	Name:
	 	John W. Johnson
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 	 	Wells Fargo Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1517
	 	 	Facsimile: (682) 220-2166
	 	 	Email:
john.w.johnson@wellsfargo.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 
	 	 	WELLS FARGO HSBC TRADE BANK, N. A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John R. Peloubet
	 

	 	 	 	 
	 

	 	Name:
	 	John R. Peloubet
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Wells Fargo HSBC Trade Bank, N.A.
	 	 	1445 Ross Avenue, Suite 450
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 740-1585
	 	 	Facsimile: (682) 225-3523
	 	 	Email:
peloubj@wellsfargo.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	COMERICA BANK
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Donald P. Hellman
	 

	 	 	 	 
	 

	 	Name:
	 	Donald P. Hellman
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 	 	Comerica Bank — Texas
	 	 	8828 Stemmons Freeway, Suite 441
	 	 	Dallas, TX 75247
	 	 	Telephone: (214) 589-4419
	 	 	Facsimile: (214) 589-1360
	 	 	Email:
dphellman@comerica.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Allison W. Connally
	 

	 	 	 	 
	 

	 	Name:
	 	Allison W. Connally
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 	 	Bank of America, N.A.
	 	 	901 Main Street, 68th Floor
	 	 	Dallas, TX 75202
	 	 	Telephone: (214) 209-1425
	 	 	Facsimile: (214) 209-9560
	 	 	Email:
allison.connally@bankofamerica.com

A&R Credit Agreement — Tandy Brands

 

 

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jerry Petrey
	 

	 	 	 	 
	 

	 	Name:
	 	Jerry Petrey
	 

	 	Title:
	 	 Vice President
	 
	 	 	 	 
	 	 	JPMorgan Chase Bank
	 	 	500 E. Border
	 	 	Arlington, TX 76004-0250
	 	 	Telephone: (817) 856-3125
	 	 	Facsimile: (817) 856-3183
	 	 	Email:
jerry.petrey@chase.com

A&R Credit Agreement — Tandy Brands

 

 

EXHIBIT A

FORM OF REVOLVING CREDIT PROMISSORY NOTE

			
	 	 	 
	U.S. $                    
	 	September 7, 2006

     FOR VALUE RECEIVED, the undersigned, TANDY BRANDS ACCESSORIES, INC., a Delaware corporation
(the “Borrower”), HEREBY PROMISES TO PAY to the order of                                         , a
                                         (the “Lender”), for the account of its Applicable Lending Office (as
defined in that certain Amended and Restated Credit Agreement, dated as of September 7, 2006, 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                                          DOLLARS ($                    ), 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.

Exhibit A-1

 

     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:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit A-2

 

EXHIBIT B

FORM OF NOTICE OF BORROWING

                                        , 200   

Wells Fargo HSBC Trade Bank, N.A., as Agent

for the Lenders parties

to the Credit Agreement

referred to below

201 3rd Avenue, 8th floor

San Francisco, California 94103

Attention:                                         

Ladies and Gentlemen:

     1. Submission Pursuant to Credit Agreement. The undersigned, Tandy Brands Accessories, Inc.,
a Delaware corporation (the “Borrower”), refers to the Amended and Restated Credit
Agreement, dated as of September 7, 2006 (as amended from time to time in accordance with its
terms, the “Credit Agreement”; capitalized terms defined therein and not defined herein
being used herein as therein defined), among the undersigned, certain Lenders parties thereto,
Wells Fargo HSBC Trade Bank, N.A., a national banking association, as Agent for such Lenders, and
Wells Fargo Bank, N.A., a national banking association, and hereby gives you notice, irrevocably
pursuant to Section 2.3 of the Credit Agreement, that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing as required by the Credit Agreement.

     2. Request For Advance. Borrower hereby requests that the Lenders or the Swingline Lender, as
applicable, make an Advance or a Swingline Advance to Borrower pursuant to the Credit Agreement as
follows:

	 	 	 	 	 
	 

	 	A.
	 	Advance Under Revolving Credit Commitment or Swingline Advance?

	 	 	 	 	 	 	 
	 

	 	 	 	                    
	 	Advance under Revolving Credit Commitment
	 
	 	 	 	 	 	 
	 

	 	 	 	                    
	 	Swingline Advance (if Swingline Advance, go
to Section 2(D) of this Notice of Borrowing)

	 	 	 	 	 
	 

	 	B.
	 	Alternate Base Borrowing.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Alternate Base Borrowing: $                                        
(Minimum of $500,000.00 or a greater integral multiple of
$100,000.00).

	 	 	 
	 

	 	                     New Advance
	 
	 	 
	 

	 	                     Rollover/conversion of existing Advance

Exhibit B-1

 

	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Advance or rollover/conversion of existing Advance:                                         
                                             

	 	 	 	 	 
	 

	 	C.
	 	Eurodollar Borrowing.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Eurodollar Borrowing: $                                                            
(Minimum of $1,000,000.00, or a greater integral multiple of
$500,000.00).

	 	 	 
	 

	 	                     New Advance
	 
	 	 
	 

	 	                     Rollover/conversion of existing Advance

	 	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Advance or rollover/conversion of existing Advance:
	 
	 	 	 	 	 	 
	 

	 	 	 	(iii)
	 	Interest Period:                      months

(one, two, three, or six months).

	 	 	 	 	 
	 

	 	D.
	 	Swingline Advance.

	 	 	 	 	 	 	 
	 

	 	 	 	(i)
	 	Amount of Swingline Advance (which must be an
Alternate Base Borrowing): $                                                            

(Minimum of $500,000.00 or a greater integral multiple of
$100,000.00).
	 
	 	 	 	 	 	 
	 

	 	 	 	(ii)
	 	Date of Swingline Advance:                                                                     
            

     3. Representations, Warranties, and Certifications. Borrower hereby represents, warrants, and
certifies to the Agent and the Lenders that, as of the date of the Advance or Swingline Advance
requested herein:

     (a) No Potential Default or Event of Default exists.

     (b) The representations and warranties of a continuing nature contained in the Credit
Agreement and each of the other Loan Documents are true and correct in all material
respects, with the same force and effect as though made on and as of the date of the Advance
or Swingline Advance except those representations and warranties that relate only to a
particular date.

     4. Proceeds of Borrowing. The Agent is authorized to deposit the proceeds of the Advance or
Swingline Advance requested hereby, other than an Advance constituting a rollover or conversion of
an existing Advance, into the general deposit account of the Borrower with the Agent pursuant to
Section 2.2(d) of the Credit Agreement.

     5. Execution Authorized. This Notice of Borrowing is executed on                                                     
        , 200    by
an authorized officer of Borrower. The undersigned, in such capacity, hereby certifies each and
every matter contained herein to be true and correct.

Exhibit B-2

 

     Executed as of the date first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit B-3

 

EXHIBIT C

CLOSING DOCUMENTS

     1. Credit Agreement.

     2. Revolving Credit Notes and Swingline Note.

     3. Subsidiary Guaranty

     4. Notice of Borrowing with respect to the initial Advance meeting the requirements of
Exhibit B.

     5. A Certificate of Solvency executed by the chief financial officer of the Company that,
after giving effect to the transactions contemplated hereby, (i) the aggregate fair value and
present fair salable value of the Borrower’s and each Subsidiary’s assets would exceed the
Borrower’s and each Subsidiary’s total liabilities, including identified contingent liabilities;
(ii) the Borrower and each Subsidiary should be able to pay its debts as they become due in the
ordinary course of business; and (iii) the Borrower and each Subsidiary does not have an
unreasonably small amount of capital to engage in its business as management has indicated it is
now conducted and is proposed to be conducted following the consummation of the transaction
contemplated hereby.

     6. Officer’s Certificate of the Borrower certifying (a) the truth and accuracy, in all
material respects, of all of the representations and warranties contained in the Loan Documents,
(b) compliance with the conditions set forth in Section 7.1 of the Agreement, (c) that no
event has occurred and is continuing, which constitutes a Potential Default or an Event of Default,
(d) the resolutions of Borrower approving the execution, delivery and performance of the Loan
Documents delivered at closing and the transactions contemplated therein, duly adopted by
Borrower’s Board of Directors, (e) the names of the officers of Borrower authorized to sign each of
the Loan Documents delivered at closing, and (f) a copy of the Articles of Incorporation of
Borrower, and all amendments thereto, and a copy of the Bylaws of Borrower, and all amendments
thereto.

     7. Officer’s Certificates of each Guarantor certifying (a) the truth and accuracy, in all
material respects, of all of the representations and warranties contained in the Subsidiary
Guaranty, (b) the resolutions of such Guarantor approving the execution, delivery, and performance
of the Subsidiary Guaranty delivered at closing to which such Guarantor is a party, and the
transactions contemplated therein, duly adopted by such Guarantor’s Boards of Directors, (c) the
names of the officers of such Guarantor authorized to sign the Subsidiary Guaranty delivered at
closing to which such Guarantor is a party, and (d) copies of the Articles of Incorporation of such
Guarantor, and all amendments thereto, and copies of the Bylaws of such Guarantor, and all
amendments thereto.

Exhibit C-1

 

     8. Certificates of existence and good standing for Borrower and the Guarantors issued by the
state of incorporation and in each other state in which the Borrower and/or any Guarantor is
required to be qualified to do business as a foreign corporation.

     9. Opinion from Borrower’s counsel in form and substance reasonably acceptable to the Agent.

     10. Certificates of insurance evidencing the existence of all insurance required to be
maintained pursuant to Section 9.10, hereof along with originally executed loss payee
endorsements and additional insured endorsements, all in favor of the Agent.

     11. Such other documents or information as may be reasonably required by the Agent.

Exhibit C-2

 

EXHIBIT D

SUBSIDIARIES — TANDY BRANDS ACCESSORIES, INC.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	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
	TBAC-Prince Gardner,
Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Amity/Rolfs, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas, Wisconsin
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC Investments, Inc.

	 	Nevada
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC General 

Management Company

	 	Nevada
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Accessory Design
Group, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC — Torel, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Tandy Brands
Accessories Handbags,
Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas, Hong Kong
	 
	 	 	 	 	 	 	 	 	 	 
	Stagg Industries, Inc.

	 	Alabama
	 		4,700 Class A common

4,700 Class B common
		 	Tandy Brands
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 Control, Inc.

	 	Delaware
	 	 	1,000	 	 	Accessory Design
Group, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	TBAC-Acquisition, Inc.

	 	Delaware
	 	 	1,000	 	 	Tandy Brands
Accessories, Inc.
	 	Texas
	 
	 	 	 	 	 	 	 	 	 	 
	Superior Merchandise 

Company

	 	Louisiana
	 	 	250	 	 	TBAC-Acquisition,
Inc.	 	 

Exhibit D

 

 

EXHIBIT E

FORM OF

AMENDED AND RESTATED SUBSIDIARY GUARANTY

     This AMENDED AND RESTATED SUBSIDIARY GUARANTY, dated as of the 7th day of
September, 2006 (this “Guaranty”), is made by TBAC PRINCE GARDNER, INC., a Delaware
corporation (“Prince Gardner”), AMITY/ROLFS, INC., a Delaware corporation
(“Amity/Rolfs”), TBAC INVESTMENTS, INC., a Nevada corporation (“Investments”), TBAC
GENERAL MANAGEMENT COMPANY, a Nevada corporation (“Management Co.”), ACCESSORY DESIGN
GROUP, INC., a Delaware corporation (“Accessory Design”), TBAC-TOREL, INC., a Delaware
corporation (“Torel”), TANDY BRANDS ACCESSORIES HANDBAGS, INC., a Delaware corporation
(“Handbags”), STAGG INDUSTRIES, INC., an Alabama corporation (“Stagg”), TBAC
INVESTMENT TRUST (“Trust”), a Pennsylvania trust, TBAC MANAGEMENT COMPANY L.P., a Delaware
limited partnership (“Management LP”), TBAC-MASS MERCHANT QUALITY CONTROL, INC., a Delaware
corporation (“Mass Merchant”), TBAC-ACQUISITION, INC., a Delaware corporation
(“Acquisition”), and SUPERIOR MERCHANDISE COMPANY, a Louisiana corporation
(“Superior”), (Prince Gardner, Amity/Rolfs, Investments, Management Co., Accessory Design,
Torel, Handbags, Stagg, Trust, Management LP, Mass Merchant, Acquisition and Superior each a
“Guarantor” and collectively, the “Guarantors”), 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 and Wells Fargo Bank, N. A. (“WFB”), together
with the Lenders, the “Banks”).

RECITALS:

     WHEREAS, Tandy Brands Accessories, Inc., a Delaware corporation (“Borrower”) is
the legal and beneficial owner of all of the issued and outstanding capital stock of the
Guarantors, with the exception of: (i) Trust which is a wholly owned subsidiary of Investments,
(ii) Management LP, of which Investments owns a 99% limited partnership interest and Management Co.
owns a 1% general partnership interest, (iii) Mass Merchant which is a wholly owned subsidiary of
Accessory Design, and (iv) Superior which is a wholly owned subsidiary of Acquisition;

     WHEREAS, Borrower, Agent and certain of the Banks entered into a Credit Agreement dated as of
June 27, 2001 (as amended, the “Existing Credit Agreement”);

     WHEREAS, Borrower, Agent and the Banks have agreed to amend and restate the Existing Credit
Agreement by entering into an Amended and Restated Credit Agreement dated as of September 7, 2006
(the “Credit Agreement”);

     WHEREAS, certain of the Guarantors and Agent entered into a Subsidiary Guaranty dated as of
June 27, 2001 (the “Existing Guaranty”);

Exhibit E-1

 

     WHEREAS, the Guarantors and Agent wish to amend and restate the Existing Guaranty to guaranty
the payment and performance of Borrower’s indebtedness and obligations to Agent and Banks under the
Credit Agreement; and

     WHEREAS, the Guarantors acknowledge that each, as a direct or indirect wholly owned subsidiary
of Borrower, will receive substantial direct and indirect benefits by reason of the making of loans
to Borrower as provided in the Credit Agreement;

     NOW, THEREFORE, in consideration of the premises and in order to induce Banks to make the
loans and extend other financial accommodations to Borrower under the Credit Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantors hereby agree with Agent, on behalf of and for the benefit of Agent and
Banks, as follows:

     1. Incorporation of Recitals; Defined Terms. The foregoing recitals are incorporated
herein by this reference. Capitalized terms used in this Guaranty without definition shall have the
respective meanings ascribed to such terms in the Credit Agreement.

     2. Guaranty of Payment and Performance. The Guarantors hereby unconditionally and
irrevocably guaranty to Agent and Banks the punctual payment and performance when due, whether at
stated maturity, by acceleration or otherwise, of the Obligations. Without limitation of the
foregoing, the Obligations shall include (a) all costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by Agent and Banks in collecting any amount due Agent and
Banks under this Guaranty or in prosecuting any action against Borrower, any Guarantor or any other
guarantor with respect to all or any part of the Obligations (collectively, the “Enforcement
Costs”), and (b) all interest, fees, costs and expenses due Agent and Banks after the filing of
a bankruptcy petition by or against any Guarantor or Borrower regardless of whether such amounts
can be collected during the pendency of the bankruptcy proceedings. The Guarantors agree that this
Guaranty is a present and continuing guaranty of payment and not of collectibility, and that Banks
shall not be required to prosecute collection, enforcement or other remedies against Borrower, any
other guarantor of the Obligations or any other Person before calling on the Guarantors for
payment. The Guarantors agree that if, for any reason, Borrower or any other guarantor of the
Obligations shall fail or be unable to pay, punctually and fully, any of the Obligations, the
Guarantors shall pay such obligations to Banks in full immediately upon demand. The Guarantors
agree that one or more successive actions may be brought against the Guarantors or any Guarantor as
often as Banks deem advisable, until all of the Obligations are paid and performed in full.
Anything contained in this Guaranty to the contrary notwithstanding, the obligations of the
Guarantors hereunder shall be limited to a maximum aggregate amount equal to the greatest amount
that would not render the Guarantors’ obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of
applicable state law (collectively, the “Fraudulent Transfer Laws”), in each case after
giving effect to all other liabilities of the Guarantors, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
the Guarantors in respect of intercompany indebtedness to Borrower or Affiliates of Borrower to the
extent such indebtedness would be discharged in an amount equal to the amount paid by the
Guarantors hereunder) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any

Exhibit E-2

 

rights of subrogation, contribution, reimbursement, indemnity or similar rights of the
Guarantors pursuant to applicable law or any agreement providing for an equitable allocation among
the Guarantors and other Affiliates of Borrower of obligations arising under guarantees by such
parties.

     3. Continuing Guaranty. The Guarantors agree that the obligations of the Guarantors
pursuant to Section 2 above and any other provision of any of the Loan Documents to which
the Guarantors are a party shall be primary obligations, shall not be subject to any counterclaim,
set-off, abatement, deferment or defense based upon any claim that the Guarantors may have against
Agent, Banks, Borrower, any other guarantor of the Obligations or any other Person, and shall
remain in full force and effect without regard to, and shall not be released, discharged or
affected in any way by any circumstance or condition (whether or not the Guarantors shall have any
knowledge thereof), including without limitation:

     (a) any lack of validity or enforceability of any of the Loan Documents;

     (b) any termination, amendment, modification or other change in any of the Loan
Documents;

     (c) any furnishing, exchange, substitution or release of any collateral, or any failure
to perfect any Lien in any of collateral;

     (d) any failure, omission or delay on the part of Borrower, the Guarantors, any other
guarantor of the Obligations, Agent or Banks to conform or comply with any term of any of
the Loan Documents or any failure of Agent or Banks to give notice of any Event of Default
or of any disposition or intended disposition of any collateral securing the Obligations;

     (e) any waiver, compromise, release, settlement or extension of time of payment or
performance or observance of any of the obligations or agreements contained in any of the
Loan Documents;

     (f) any action or inaction by Agent or Banks under or in respect of any of the Loan
Documents, any failure, lack of diligence, omission or delay on the part of Agent or Banks
to enforce, assert or exercise any right, power or remedy conferred on them in any of the
Loan Documents, or any other action or inaction on the part of Agent or Banks;

     (g) any dissolution of any of the Guarantors or any voluntary or involuntary
bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the
benefit of creditors, composition, receivership, liquidation, marshaling of assets and
liabilities or similar events or proceedings with respect to Borrower, any Guarantor or any
other guarantor of the Obligations, as applicable, or any of their respective property or
creditors, or any action taken by any trustee or receiver or by any court in any such
proceeding including, without limitation, any proceeding under Title 11 of the United States
Code (11 U.S.C. Section 101 et seq.), as amended (the “Bankruptcy Code”);

     (h) any merger or consolidation of Borrower, any of the Guarantors or any other
guarantor of the Obligations into or with any Person, or any sale, lease or transfer of

Exhibit E-3

 

any of the assets of Borrower, any of the Guarantors or any other guarantor of the
Obligations to any other Person;

     (i) any change in the ownership of the capital stock of any of the Guarantors, Borrower
or any other guarantor of the Obligations or any change in the relationship between
Borrower, any of the Guarantors or any other guarantor of the Obligations, or any
termination of any such relationship;

     (j) any release or discharge by operation of law of Borrower, any of the Guarantors or
any other guarantor of the Obligations from any obligation or agreement contained in any of
the Loan Documents;

     (k) Agent’s or any Bank’s election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b)(2) of the Bankruptcy Code;

     (l) any borrowing or grant of a security interest by Borrower as debtor-in-possession
under Section 364 of the Bankruptcy Code;

     (m) the inability of Agent or any Bank to enforce the Obligations of Borrower as a
result of the automatic stay provisions of Section 362 of the Bankruptcy Code;

     (n) the disallowance, under Section 502 of the Bankruptcy Code;

of all or any portion of Agent’s or any Bank’s claim or claims for repayment of the Obligations; or

     (o) any other occurrence, circumstance, happening or event, whether similar or
dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might
constitute a legal or equitable defense or discharge of the liabilities of a guarantor or
surety or which otherwise might limit recourse against Borrower or the Guarantors.

     (4) Waivers. The Guarantors unconditionally waive, to the extent permitted by law,
(i) notice of any of the matters referred to in Section 3 above, (ii) all notices which may
be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact
any rights against the Guarantors, including, without limitation, any demand, presentment and
protest, proof of notice of non-payment under any of the Loan Documents and notice of any Default
or any Event of Default or any failure on the part of Borrower, the Guarantors or any other
guarantor of the Obligations to perform or comply with any covenant, agreement, term or condition
of any of the Loan Documents, (iii) any right to the enforcement, assertion or exercise against
Borrower, the Guarantors or any other guarantor of the Obligations of any right or remedy conferred
under any of the Loan Documents, (iv) any requirement of diligence on the part of any Person, (v)
any requirement to exhaust any remedies or to mitigate the damages resulting from any default under
any of the Loan Documents, and (vi) any notice of any sale, transfer or other disposition of any
right, title or interest of Agent or Banks under any of the Loan Documents.

     (5) Representations and Warranties. Each Guarantor represents and warrants to
Agent and Banks as follows:

Exhibit E-4

 

     (a) Organization and Qualification. Each Guarantor is a corporation (with the
exception of Trust, which is a trust and Management LP, which is a limited partnership) duly
organized and in good standing under the laws of the jurisdiction of its incorporation or
organization, has all requisite corporate, trust or partnership power and authority to own
its property and to carry on its business as now conducted and as proposed to be conducted,
and is in good standing and authorized to do business in each jurisdiction in which the
failure so to qualify would have a material adverse effect upon the business, operations,
properties, assets or condition (financial or otherwise) of such Guarantor.

     (b) Power and Authority. Each Guarantor has the corporate power and authority
to enter into, execute, deliver and carry out the terms of this Guaranty and the other Loan
Documents to which it is a party and to incur the obligations provided for herein and
therein, all of which have been duly authorized by all proper and necessary action and are
not prohibited by the organizational instruments of such Guarantor.

     (c) Binding Obligation. This Guaranty and the other Loan Documents to which
the Guarantors are a party, when executed and delivered, will constitute the valid and
legally binding obligations of the Guarantors, enforceable against the Guarantors in
accordance with their respective terms.

     (d) No Conflict. The execution, delivery and performance by the
Guarantors of this Guaranty and each of the other Loan Documents to which they are a party
and the consummation of the transactions contemplated thereby do not and will not: (1)
violate any provision of law applicable to the Guarantors, the certificate of incorporation,
bylaws, trust agreement, limited partnership agreement, or articles of incorporation or
organization of each Guarantor, or any order, judgment or decree of any court or other
agency of government binding on any Guarantor; (2) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any contract or
agreement to which any Guarantor is a party or by which any Guarantor or its property is
bound; (3) result in or require the creation or imposition of any material Lien upon any of
the properties or assets of any Guarantor (other than Liens in favor of Agent); or (4)
require any approval or consent of any Person under any contract or agreement to which any
Guarantor is a party or by which any Guarantor or its property is bound.

     (e) Governmental Consents. The execution, delivery and performance by the
Guarantors of this Guaranty and each of the other Loan Documents to which they are a party,
and the consummation of the transactions contemplated thereby do not and will not require
any registration with, consent or approval of, or notice to, or other action to, with or by,
any federal, state, provincial or other governmental authority or regulatory body except
filings required in connection with the perfection of security interests granted pursuant to
the Loan Documents.

     (f) Burdensome Obligations; Solvency. After giving effect to the transactions
contemplated by this Guaranty and the other Loan Documents to which the Guarantors are a
party, the Guarantors (i) do not intend to incur, and do not believe that they will incur,
debts beyond their ability to pay such debts as they become due, (ii) own and will own
property, the fair salable value of which is (1) greater than the total amount of their

Exhibit E-5

 

liabilities (including contingent liabilities) and (2) greater than the amount that
will be required to pay the probable liabilities of their then existing debts as they become
absolute and matured, and (iii) have and will have capital that is not unreasonably small in
relation to their business as presently conducted and as proposed to be conducted.

     6. Reinstatement. The obligations of the Guarantors pursuant to this Guaranty shall
continue to be effective or automatically be reinstated, as the case may be, if at any time payment
of any of the Obligations is rescinded or otherwise must be restored or returned by Agent or Banks
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Guarantor,
Borrower or any other guarantor of the Obligations or otherwise, all as though such payment had not
been made.

     7. Successors and Assigns. This Guaranty shall inure to the benefit of Agent and
Banks, and their respective successors and assigns. This Guaranty shall be binding on the
Guarantors, their successors and assigns, and shall continue in full force and effect until all of
the Obligations are paid and performed in full.

     8. No Waiver of Rights. No delay or failure on the part of Agent or Banks to exercise
any right, power or privilege under this Guaranty or any of the other Loan Documents shall
operate as a waiver thereof, and no single or partial exercise of any right, power or privilege
shall preclude any other or further exercise thereof or the exercise of any other power or right,
or be deemed to establish a custom or course of dealing or performance between the parties hereto.
The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies
provided by law. No notice to or demand on the Guarantors in any case shall entitle the Guarantors
to any other or further notice or demand in the same, similar or other circumstance.

     9. Modification. The terms of this Guaranty may be waived, discharged, or terminated
only by an instrument in writing signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No amendment, modification, waiver or other change of
any of the terms of this Guaranty shall be effective without the prior written consent of Agent and
Banks.

     10. Costs and Expenses. The Guarantors agree to pay on demand all costs and expenses
incurred by or on behalf of Agent and Banks (including, without limitation, attorneys’ fees and
expenses) in enforcing the obligations of the Guarantors under this Guaranty.

     11. Joinder. The Guarantors agree that any action to enforce this Guaranty may be
brought against the Guarantors without any joinder of Borrower or any other guarantor of the
Obligations in such action.

     12. Joint and Several Liability. Each Guarantor agrees that its shall be held jointly
and severally liable under this Guaranty.

     13. Severability. If any provision of this Guaranty is deemed to be invalid by reason
of the operation of any law, or by reason of the interpretation placed thereon by any court or
other governmental authority, this Guaranty shall be construed as not containing such provision and
the invalidity of such provision shall not affect the validity of any other provision hereof,

Exhibit E-6

 

and any and all other provisions hereof which otherwise are lawful and valid shall remain in
full force and effect.

     14. Notices. Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given shall be in writing addressed to the respective
party as set forth below and may be personally served, telecopied, telexed or sent by overnight
courier service or United States mail and shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by telecopy or telex, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. (Dallas time) or, if not, on the next succeeding
Business Day; (c) if delivered by overnight courier, two days after delivery to such courier
properly addressed; or (d) if by U.S. Mail, three Business Days after depositing in the United
States mail, with postage prepaid and properly addressed.

     Notices shall be addressed as follows:

	 	 	 	 	 
	 

	 	If to any Guarantor:
	 	c/o Tandy Brands Accessories, Inc.
	 

	 	 	 	690 E. Lamar, Suite 200
	 

	 	 	 	Arlington, Texas 76011-3862
	 

	 	 	 	Attn: Mr. Mark Flaherty
	 

	 	 	 	Fax: 817/274-7346
	 
	 	 	 	 
	 

	 	If to Agent:
	 	Wells Fargo HSBC Trade Bank, N.A.
	 

	 	 	 	1445 Ross Avenue, Suite 450
	 

	 	 	 	Dallas, Texas 75202
	 

	 	 	 	Attn: Mr. John R. Peloubet
	 

	 	 	 	Fax: 214/740-1585

or to such other address as the party addressed shall have previously designated by written notice
to the serving party given in accordance with this Section 14. A notice not given as
provided above shall, if it is in writing, be deemed given if and when actually received by the
party to whom given.

     15. Additional Guarantors. Any Person that becomes a Subsidiary of Borrower
subsequent to the date hereof and that was not a “Guarantor” under this Guaranty at the time of
initial execution hereof shall become a “Guarantor” hereunder by executing and delivering to Agent
an Additional Subsidiaries Supplement in the form attached hereto as Exhibit A. Any such
Subsidiary shall thereafter be deemed a “Guarantor” for all purposes under this Guaranty.

     16. Foreign Currency Obligations. Each Guarantor will make payment relative to each
Obligation in the currency (the “Original Currency”) in which Borrower is required to pay such
Obligation. If a Guarantor makes payment relative to any Obligation in a currency (the “Other
Currency”) other than the Original Currency (whether voluntarily or pursuant to an order or
judgment of a court or tribunal of any jurisdiction), such payment will constitute a discharge of
the liability of such Guarantor hereunder in respect of such Obligation only to the extent of the
amount of the Original Currency which the Agent is able to purchase at Toronto, Ontario with the
amount it receives on the date of receipt. If the amount of the Original Currency which the Agent
is able to purchase is less than the amount of such currency originally due to it in respect

Exhibit E-7

 

to the relevant Obligation, such Guarantor will indemnify and save the Agent and the Lenders
harmless from and against any loss or damage arising as a result of such deficiency. This
indemnity will constitute an obligation separate and independent from the other obligations
contained in this Guaranty, will give rise to a separate and independent cause of action, will
apply irrespective of any indulgence granted by the Agent or any Lender and will continue in full
force and effect notwithstanding any judgment or order in respect of any amount due hereunder or
under any judgment or order.

     17. Taxes and Set-off by Guarantors. All payments to be made by any Guarantor
hereunder will be made without set-off or counterclaim and without deduction for any taxes, levies,
duties, fees, deductions, withholdings, restrictions or conditions of any nature whatsoever. If at
any time any applicable law, regulation or international agreement requires a Guarantor to make any
such deduction or withholding from any such payment, the sum due from such Guarantor with respect
to such payment will be increased to the same extent, and subject to the same conditions, as
provided in Section 2.18 of the Credit Agreement.

     18. APPLICABLE LAW. THIS GUARANTY 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 PRINCIPLES.

     19. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE GUARANTORS HEREBY CONSENT TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS
AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS. THE GUARANTORS EXPRESSLY SUBMIT
AND CONSENT TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON
CONVENIENS. THE GUARANTORS HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE UPON THE GUARANTORS BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO THE GUARANTORS, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY LITIGATION,
TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS GUARANTY OR ANY OF THE
OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF EACH GUARANTOR OR OF ANY OF
THEIR AFFILIATES SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF SUCH GUARANTOR FOR PURPOSES
OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY
(WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). THE GUARANTORS AGREE THAT AGENT’S OR ANY BANK’S
COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER
CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING
AS IF IT WERE AN EVIDENCE DEPOSITION. THE GUARANTORS IN ANY EVENT WILL USE ALL COMMERCIALLY
REASONABLE

Exhibit E-8

 

EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER
REQUESTED BY AGENT OR ANY BANK, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER
FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE DISPUTE.

     20. WAIVER OF JURY TRIAL. THE GUARANTORS, AGENT AND BANKS HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
GUARANTY. THE GUARANTORS, AGENT AND BANKS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
GUARANTY AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE
GUARANTORS, AGENT AND BANKS WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.

     21. Amendment and Restatement. This Guaranty amends and restates in its entirety the
Existing Guaranty, provided that such amendment and restatement shall operate to renew, amend and
modify the rights and obligations of the parties under the Existing Guaranty as provided herein,
but shall not act as a novation thereof. The Guarantors hereby agree that the Obligations
guaranteed hereunder include (i) the Loans outstanding under the Existing Credit Agreement and all
accrued and unpaid interest thereon, (ii) all Letters of Credit issued and outstanding under the
Existing Credit Agreement, and (iii) all accrued and unpaid fees under the Existing Credit
Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

Exhibit E-9

 

     IN WITNESS WHEREOF, the Guarantors have executed this Guaranty as of the date first above
written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-PRINCE GARDNER, INC.,
	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AMITY/ROLFS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC INVESTMENTS, INC.,	 	 
	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC GENERAL MANAGEMENT COMPANY,	 	 
	 	 	a Nevada corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ACCESSORY DESIGN GROUP, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-10

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-TOREL, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES HANDBAGS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	STAGG INDUSTRIES, INC.,	 	 
	 	 	an Alabama corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC INVESTMENT TRUST,	 	 
	 	 	a Pennsylvania trust	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC MANAGEMENT COMPANY, L.P.,	 	 
	 	 	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-11

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TBAC-MASS MERCHANT QUALITY CONTROL, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TBAC-ACQUISITION, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	SUPERIOR MERCHANDISE COMPANY,	 	 
	 	 	a Louisiana corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-12

 

EXHIBIT A

ADDITIONAL SUBSIDIARIES SUPPLEMENT

     This ADDITIONAL SUBSIDIARIES SUPPLEMENT, dated                                         , 200    to the Amended and Restated
Subsidiary Guaranty, dated as of September 7, 2006 (as amended, supplemented and otherwise
modified, the “Guaranty”), made by certain Subsidiaries of Tandy Brands Accessories, Inc.,
a Delaware corporation (“Borrower”), from time to time parties hereto (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.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	[NAME OF SUBSIDIARY]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit E-13

 

EXHIBIT F

FORM OF SWINGLINE NOTE

			
	 	 	 
	U.S. $10,000,000.00
	 	September 7, 2006

     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 Domestic Lending
Office (as defined in that certain Amended and Restated Credit Agreement, dated as of September 7,
2006 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, and Wells Fargo Bank, N.A., a national banking association,
(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 Lender, the lesser of (i) the principal sum
of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), or (ii) the aggregate unpaid principal amount
of all Swingline Advances made by the Lender to the Borrower.

     The Borrower promises to pay the entire unpaid principal balance hereof at such time as
specified in the Credit Agreement. In addition, the Borrower promises to pay interest on the
unpaid principal balance hereof from and after the date hereof 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. at San Francisco Loan Center, 201 3rd Street,
8th floor, San Francisco, California 94103, in same day funds. 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 Swingline 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 Swingline Advances in accordance
with the terms of this Swingline Note.

     This Swingline Note is one of the Swingline 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 Swingline Advances by the Lender to the Borrower from time to time
pursuant to Section 3.1 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 Swingline Advance being evidenced by this Swingline Note, and (ii)
contains provisions for acceleration of the maturity hereof upon the happening of certain stated
events.

     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.

Exhibit F-1

 

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

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit F-2

 

LOANS, MATURITIES

AND PAYMENTS OF PRINCIPAL AND INTEREST

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Rate of	 	 	 	 	 	 	 	 
	 	 	 	 	Interest	 	Amount of	 	Amount of	 	Unpaid	 	 
	Borrowing	 	Amount and	 	Applicable to	 	Principal Paid	 	Interest Paid	 	Principal	 	Notation
	Date	 	Type of Loan	 	Loan	 	or Prepaid	 	or Prepaid	 	Balance	 	Made By
	 
	 	 	 	 	 	 	 	 	 	 	 	 

Exhibit F-3

 

EXHIBIT G

FORM OF LETTER OF CREDIT REQUEST

                                        , 200   

	 	 
	(Address to Issuing Bank)
	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 

Attention:                                                             

Ladies and Gentlemen:

     Reference is made to the Amended and Restated Credit Agreement dated as of September 7, 2006
(as amended from time to time, the “Credit Agreement”) among the undersigned, certain
Lenders parties thereto, Wells Fargo HSBC Trade Bank, N.A., a national banking association, as
Agent for such Lenders, and Wells Fargo Bank, N.A., a national banking association. Capitalized
terms used herein not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.

     The Borrower hereby requests the issuance of a [Standby] [Commercial] Letter of Credit under
the Credit Agreement, and in that connection sets forth below the information relating to such
Letter of Credit (“Proposed Letter of Credit”) as required by Section 4.2 of the
Credit Agreement. The Proposed Letter of Credit must be issued:

	 	(a)	 	on or before                                         , 200  1
	 
	 	(b)	 	for the benefit of                                         
	 
	 	(c)	 	in the amount of $                                        
	 
	 	(d)	 	having an expiry date of                                         , 200  2
	 
	 	(e)	 	subject to the conditions set forth in the
Application for Letter of Credit submitted herewith.

 

			
	1	 	Must be not less than three (3) Business Days
after notice is given to the Issuing Bank.
	 
	2	 	Must be not later than the earlier of (A) the
Termination Date or (B) (i) one hundred eighty (180) days from the date of
issuance for a Commercial Letter of Credit or (ii) one (1) year from the date
of issuance for a Standby Letter of Credit.

Exhibit G-1

 

     [The Borrower hereby refers to Letter of Credit Number                      (the “Expiring
Letter of Credit”) which has an existing expiry date of                     . The Borrower
hereby requests that the expiry date of the Expiring Letter of Credit be extended to
                    .]

     The Borrower hereby certifies that after giving effect to the [issuance of the Proposed Letter
of Credit] or [the extension of the Expiring Letter of Credit] (a) the maximum amount outstanding
under all Letters of Credit does not exceed $20,000,000 and (b) the sum of the Letter of Credit
Obligations plus all Advances under the Revolving Credit Commitment plus all Swingline Advances
plus the Acceptance Exposure do not exceed $75,000,000. The Borrower hereby certifies that on the
date hereof all applicable conditions to the issuance of the Proposed Letter of Credit set forth in
Section 7 of the Credit Agreement have been satisfied and that the Proposed Letter of
Credit complies with the terms of the Credit Agreement, and upon the issuance of the Proposed
Letter of Credit, the Borrower will be deemed to have recertified the foregoing on such issuance
date.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Sincerely,	 	 
	 
	 	 	 	 	 	 
	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

Exhibit G-2

 

EXHIBIT H

FORM OF ASSIGNMENT AND ACCEPTANCE

     Reference is made to the Amended and Restated Credit Agreement, dated as of September 7, 2006
(as amended, supplemented, waived or otherwise modified from time to time, the “Credit
Agreement”), among Tandy Brands Accessories, Inc., a Delaware corporation (the
“Borrower”), the lenders named in Schedule 2.1 thereto (the “Lenders”),
Wells Fargo HSBC Trade Bank, N.A., as Agent (in such capacity, the “Agent”), and Wells
Fargo Bank, N.A..

     Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.

     The Assignor named on Schedule I (the “Assignor”) and the Assignee named on
Schedule I (the “Assignee”) agree as follows:

     1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the
Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without
recourse to the Assignor, as of the Transfer Effective Date (as defined in Section 4
below), an interest (the “Assigned Interest”) as specified in Schedule I in and to
the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents with
respect to the Total Revolving Credit Commitment provided for in the Credit Agreement as set forth
on Schedule I (the “Assigned Facility”), in a principal amount for the Assigned
Facility as set forth on Schedule I.

     2. The Assignor (a) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with the Credit
Agreement or any other Loan Document or the execution, legality, validity, enforceability,
perfection, priority, genuineness, sufficiency or value of the Credit Agreement, any other Loan
Document or any other instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned thereunder free and clear of any adverse
claim upon the interest being assigned by it hereunder; (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Borrower, any of the
Guarantors or any other obligor or the performance or observance by the Borrower, any of the
Guarantors or any other obligor of any of their respective obligations under the Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant hereto or thereto;
and (c) attaches the Note(s), if any, held by it evidencing the Assigned Facility and requests that
the Borrower exchange such Note(s) for a new Note or Notes payable to the Assignee and (if the
Assignor has retained any interest in the Assigned Facility) a new Note or Notes payable to the
Assignor in the respective amounts which reflect the assignment being made hereby (and after giving
effect to any other assignments which have become effective on the Transfer Effective Date).

     3. The Assignee (a) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement and the
other Loan Documents, together with copies of the financial statements and

Exhibit H-1

 

such other documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms thereof, together
with such powers as are incidental thereto; (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender; (f) specifies as its
Domestic Lending Office (and address for notices) and Eurodollar Lending Office the offices set
forth beneath its name on Schedule I; and (g) attaches the forms prescribed by the Internal
Revenue Service of the United States of America certifying as to the Assignee’s status for purposes
of determining exemption from United States of America withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and its Note(s) or such other
documents as are necessary to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty.

     4. The Transfer Effective Date of this Assignment and Acceptance shall be as specified on
Schedule I. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant to Section
13.12 of the Credit Agreement, and it shall be effective as of the Transfer Effective Date
(which shall not, unless otherwise agreed to by the Agent, be earlier than five (5) Business Days
after the date of such acceptance and recording by the Agent). The Agent shall give prompt notice
of any such Assignment and Acceptance to the Borrower and the Lenders.

     5. Upon such acceptance and recording, from and after the Transfer Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the
Transfer Effective Date or accrue subsequent to the Transfer Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for periods prior to the
Transfer Effective Date or with respect to the making of this assignment directly between
themselves.

     6. From and after the Transfer Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement,
(and, in case of an Assignment and Acceptance covering all or the remaining portion of an
Assignor’s rights and obligations under this Agreement, such Lender shall cease to be a party to
the Loan Documents), but shall nevertheless continue to be entitled to the benefits of Sections
2.18 and 9.13 thereof.

Exhibit H-2

 

     7. Notwithstanding any other provision hereof, if the consents of the Borrower and the Agent
hereto are required under Section 13.12 of the Credit Agreement, this Assignment and
Acceptance shall not be effective unless such consents shall have been obtained as evidenced by
Schedule I attached hereto.

     8. This Assignment and Acceptance shall be governed by and construed in accordance with the
laws of the State of Texas without regard to the principles of conflict of laws thereof.

     9. This Assignment and Acceptance may be executed by one or more of the parties to this
Assignment and Acceptance on any number of separate counterparts (including by facsimile
transmission), and all of said counterparts taken together shall be deemed to constitute one and
the same instrument.

     IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be
executed as of the date indicated by the signatures of their respective duly authorized officers on
Schedule I hereto.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

Exhibit H-3

 

SCHEDULE I TO

Assignment and Acceptance

Re: Amended and Restated Credit Agreement, dated as of September 7, 2006, among
Tandy Brands Accessories, Inc., the Lenders named in Schedule 2.1 thereto,
Wells Fargo HSBC Trade Bank, N.A., as Agent, and Wells Fargo Bank, N.A..

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name of Assignor:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Name of Assignee:
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Transfer Effective Date of Assignment:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 
	Credit Principal	 	Commitment	 	 
	Facility Assigned	 	Amount Assigned	 	Percentage Assigned
	Revolving Credit Commitment
	 	$                    	 	                    %

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	[NAME OF ASSIGNEE]	 	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Domestic Lending Office:	 	 	 	Eurodollar Lending Office:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

Exhibit H-4

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Accepted for recording in the Register:	 	 	 	Consented to:	 	 
	WELLS FARGO HSBC TRADE BANK,	 	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	N.A., as Agent	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Exhibit H-5

 

Schedule 1.1(a)

Existing Liens

None

Schedule 1.1(a)

 

Schedule 2.1

Revolving Credit Commitments

	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	Percentage of
	 	 	Commitment	 	Commitment
	Wells Fargo HSBC Trade Bank, N. A.
	 	$	30,500,000.00	 	 	 	40.666666666	%
	 
	 	 	 	 	 	 	 	 
	Comerica Bank
	 	$	19,500,000.00	 	 	 	26.000000000	%
	 
	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	$	12,500,000.00	 	 	 	16.666666667	%
	 
	 	 	 	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
	 	$	12,500,000.00	 	 	 	16.666666667	%
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total:
	 	$	75,000,000.00	 	 	 	100.00	%

Schedule 2.1

 

Schedule 2.2(a)

Domestic Lending Office

Wells Fargo HSBC Trade Bank, N.A.

San Francisco Loan Center

201 3rd Street, 8th Floor

San Francisco, California

Attn: Paul Miyashiro

Phone: (415) 477-5422

Facsimile: (415) 512-9408

Wells Fargo Bank, N.A.

1445 Ross Avenue, Suite 450

MAC 5301-044

Dallas, Texas 75202

Attn: John R. Peloubet

Phone: (214) 740-1585

Facsimile: (682) 225-3523

Comerica Bank

8828 Stemmons Frwy., Suite 441

Dallas, Texas 75247

Attn: Corey Bailey

Phone: (214) 589-1314

Facsimile: (214) 589-1360

Bank of America, N.A.

1201 Main St., 6th Fl.

Dallas, TX 75202

Attn: Stacia Morgan

Phone: (214) 508-8317

Facsimile: (214) 508-8419

JPMorgan Chase Bank, N.A.

500 E. Border

Arlington, TX 76004-0250

Attn: Jerry Petrey

Phone: (817) 856-3125

Facsimile: (817) 856-3183

Schedule 2.2(a)

 

Schedule 2.2(b)

Eurodollar Lending Office

Wells Fargo HSBC Trade Bank, N.A.

San Francisco Loan Center

201 3rd Street, 8th Floor

San Francisco, California

Attn: Paul Miyashiro

Phone: (415) 477-5422

Facsimile: (415) 512-9408

Wells Fargo Bank, N.A.

1445 Ross Avenue, Suite 450

MAC 5301-044

Dallas, Texas 75202

Attn: John R. Peloubet

Phone: (214) 740-1585

Facsimile: (682) 225-3523

Comerica Bank

8828 Stemmons Frwy., Suite 441

Dallas, Texas 75247

Attn: Corey Bailey

Phone: (214) 589-1314

Facsimile: (214) 589-1360

Bank of America, N.A.

1201 Main St., 6th Fl.

Dallas, TX 75202

Attn: Stacia Morgan

Phone: (214) 508-8317

Facsimile: (214) 508-8419

JPMorgan Chase, N.A.

500 E. Border

Arlington, TX 76004-0250

Attn: Jerry Petrey

Phone: (817) 856-3125

Facsimile: (817) 856-3183

Schedule 2.2(b)

 

Schedule 8.14(a)

Compliance with Law

None.

Schedule 8.14(a)

 

 

Schedule 8.14(b)

Compliance with Governmental Authorization

None.

Schedule 8.14(b)

 

 

Schedule 8.18

Patents, Trademarks and Copyrights

TRADEMARK SCHEDULE

	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Argentina
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2277331	 	1837127
	Australia
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	892927	 	892927
	PRINCE GARDNER
	 	 	 	 
	 
	 	231794	 	B231794
	AMITY
	 	 	 	 
	 
	 	278248	 	B278248
	ROLFS
	 	 	 	 
	 
	 	278246	 	B278246
	ROLFS
	 	 	 	 
	 
	 	278245	 	B278245
	AMITY
	 	 	 	 
	 
	 	278247	 	B278247
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	860134	 	860134
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113576	 	A113576
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113575	 	A113575
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A113386	 	A113386
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A210910	 	A210910
	HICKOK & Crest Design
	 	 	 	 
	 
	 	A212122	 	A212122
	Austria
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	AM5103/89	 	129593
	Benelux
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	736275	 	466944
	CANTERBURY
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	034040	 	034040
	AMITY
	 	 	 	 
	 
	 	42874	 	364305
	Brazil
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	818058536	 	818058536
	AMITY
	 	 	 	 
	 
	 	818058544	 	818058544
	Canada
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	277400	 	140458
	CREDIT GUARD
	 	 	 	 
	 
	 	732321	 	429760
	ROLFS RESERVE
	 	 	 	 
	 
	 	1232446	 	 
	DIRECTOR
	 	 	 	 
	 
	 	8814	 	8814
	HICKOK
	 	 	 	 
	 
	 	122845	 	TMDA37290
	ROLFS RESERVE
	 	 	 	 
	 
	 	1232447	 	 
	CANTERBURY (and Design)
	 	 	 	 
	 
	 	373967	 	214806
	KEY KADDY
	 	 	 	 
	 
	 	283761	 	187501
	PROTECTA-CARD
	 	 	 	 
	 
	 	395665	 	230689
	ROYAL CREST
	 	 	 	 
	 
	 	345828	 	TMA189656
	AMITY
	 	 	 	 
	 
	 	0167700	 	UCA007845
	BARRY WELLS & Design
	 	 	 	 
	 
	 	664310	 	TMA402798
	PRINCE GARDNER
	 	 	 	 
	 
	 	325290	 	170954
	Chile
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	178555	 	622848
	PRINCESS GARDNER
	 	 	 	 
	 
	 	332000	 	332000

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	94013987	 	1082193
	PRINCESS GARDNER (and Design)
	 	 	 	 
	 
	 	5251145	 	 
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1057358	 	1057358
	CANTERBURY
	 	 	 	 
	 
	 	95082437	 	960353
	HICKOK & Design
	 	 	 	 
	 
	 	1057357	 	1057357
	PRINCE GARDNER
	 	 	 	 
	 
	 	200213563	 	1082380
	HICKOK & Wreath with Banner Design
	 	 	 	 
	 
	 	1070730	 	1070730
	HICKOK & Wreath with Banner Design
	 	 	 	 
	 
	 	1057356	 	1057356
	CANTERBURY
	 	 	 	 
	 
	 	95083548	 	936939
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	3012389	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2001120783	 	1923543
	ROLFS
	 	 	 	 
	 
	 	2001042288	 	1927338
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000198556	 	1927045
	Columbia
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	20358A	 	20358A
	HICKOK
	 	 	 	 
	 
	 	421511	 	158155
	HICKOK
	 	 	 	 
	 
	 	20358	 	20358
	HICKOK
	 	 	 	 
	 
	 	93421510	 	158156
	HICKOK
	 	 	 	 
	 
	 	20358B	 	20358B
	Community Trademark
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	002441327	 	002441327
	AMITY
	 	 	 	 
	 
	 	216556	 	216556

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	216325	 	216325
	BRACETAC
	 	 	 	 
	 
	 	37887	 	37887
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	001993443	 	001993443
	Costa Rica
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	75033	 	75033
	PRINCE GARDNER
	 	 	 	 
	 
	 	73691	 	73691
	Dominican Republic
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	48334	 	48334
	PRINCE GARDNER
	 	 	 	 
	 
	 	48277	 	48277
	France
	 	 	 	 
	 
	 	 	 	 
	AMITY
	 	 	 	 
	 
	 	531993	 	1557347
	PRINCE GARDNER
	 	 	 	 
	 
	 	1560673	 	1560673
	Germany
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	92409	 	692409
	AMITY
	 	 	 	 
	 
	 	8453/18WZ	 	1182263
	BRACETAC
	 	 	 	 
	 
	 	1867/26	 	1152740
	AMITY
	 	 	 	 
	 
	 	2695/18	 	1008037
	PRINCE GARDNER
	 	 	 	 
	 
	 	522366/18 WZ	 	875811
	ROLFS
	 	 	 	 
	 
	 	48452/18	 	1177058
	Great Britain
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	59312	 	659312
	AMITY
	 	 	 	 
	 
	 	857839	 	857839
	PRINCESS GARDNER
	 	 	 	 
	 
	 	1024369	 	1024369

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	59311	 	659311
	Greece
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	146.134	 	146.134
	Hong Kong
	 	 	 	 
	 
	 	 	 	 
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	93/1978
	HICKOK
	 	 	 	 
	 
	 	291/47	 	19490461
	LA GARDE
	 	 	 	 
	 
	 	1562/87	 	B2458/1989
	CANTERBURY BELTS LTD. & Design
	 	 	 	 
	 
	 	2035/1981	 	2035/1981
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	94/78
	AMITY & DESIGN
	 	 	 	 
	 
	 	591/1977	 	95/1978
	PRINCE GARDNER
	 	 	 	 
	 
	 	B660/1972	 	B660/1972
	HICKOK
	 	 	 	 
	 
	 	291/47	 	19490462
	AMITY & DESIGN
	 	 	 	 
	 
	 	512/78	 	442/1979
	AMITY & Design
	 	 	 	 
	 
	 	591/1977	 	1829/1977
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000/26720	 	03341/2003
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	19212/2001	 	03487/2003
	Italy
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	MI2001C002290	 	 
	Japan
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	34973/93	 	3241945
	HICKOK
	 	 	 	 
	 
	 	34974/93	 	3134459
	AMITY
	 	 	 	 
	 
	 	74855/76	 	1802179
	ROLFS
	 	 	 	 
	 
	 	66290/74	 	1375473
	HICKOK
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	120705/87	 	2255925
	HICKOK
	 	 	 	 
	 
	 	2240798	 	2240798
	HICKOK
	 	 	 	 
	 
	 	510326	 	510326
	HICKOK A MAN’S COMPANY & Wreath Design
	 	 	 	 
	 
	 	211570/81	 	925996
	HICKOK
	 	 	 	 
	 
	 	220134/77	 	509870
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000-140180	 	4560009
	HICKOK
	 	 	 	 
	 
	 	200015/88	 	518159
	Malaysia
	 	 	 	 
	 
	 	 	 	 
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	2000/18726	 	 
	ROLFS
	 	 	 	 
	 
	 	90/07467	 	90/07467
	P G PRINCESS GARDNER (and Design)
	 	 	 	 
	 
	 	2002/00157	 	02000157
	Mexico
	 	 	 	 
	 
	 	 	 	 
	PRINCESS GARDNER
	 	 	 	 
	 
	 	298962	 	588202
	AMITY
	 	 	 	 
	 
	 	106318	 	 
	HICKOK
	 	 	 	 
	 
	 	53764	 	53764
	HICKOK
	 	 	 	 
	 
	 	165074	 	471497
	ROLFS
	 	 	 	 
	 
	 	559221	 	820343
	ROLFS
	 	 	 	 
	 
	 	559222	 	 
	HICKOK
	 	 	 	 
	 
	 	275362	 	275362
	HICKOK
	 	 	 	 
	 
	 	564949	 	 
	ROYALLE BY PRINCESS GARDNER
	 	 	 	 
	 
	 	298964	 	585568
	DL (Stylized)
	 	 	 	 
	 
	 	794849	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794855	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794854	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794853	 	 
	DL (Stylized)
	 	 	 	 
	 
	 	794851	 	 
	DON LOPER
	 	 	 	 
	 
	 	746340	 	 
	DON LOPER
	 	 	 	 
	 
	 	746341	 	 
	DON LOPER
	 	 	 	 
	 
	 	746343	 	 
	DON LOPER
	 	 	 	 
	 
	 	746345	 	 
	HICKOK
	 	 	 	 
	 
	 	179484	 	179484
	DL (Stylized)
	 	 	 	 
	 
	 	794857	 	 
	DON LOPER
	 	 	 	 
	 
	 	794856	 	 
	WILD HICKOK
	 	 	 	 
	 
	 	212168	 	538846
	DON LOPER
	 	 	 	 
	 
	 	746347	 	 
	HICKOK
	 	 	 	 
	 
	 	635269	 	822611
	CANTERBURY
	 	 	 	 
	 
	 	242853	 	579135
	WILD HICKOK
	 	 	 	 
	 
	 	212171	 	495299
	WILD HICKOK
	 	 	 	 
	 
	 	212170	 	538848
	HICKOK
	 	 	 	 
	 
	 	241858	 	241858
	HICKOK
	 	 	 	 
	 
	 	242036	 	242036
	HICKOK
	 	 	 	 
	 
	 	178896	 	178896
	WILD HICKOK
	 	 	 	 
	 
	 	212169	 	538847
	New Zealand
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	44877	 	44877

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55920	 	55920
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	647954	 	647954
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55921	 	55921
	HICKOK
	 	 	 	 
	 
	 	44878	 	44878
	AMITY
	 	 	 	 
	 
	 	108198	 	108198
	HICKOK & Crest Design
	 	 	 	 
	 
	 	55919	 	55919
	AMITY
	 	 	 	 
	 
	 	108197	 	108197
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	628836	 	628836
	Norway
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	895378	 	148313
	Panama
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	4838	 	4838
	AMITY
	 	 	 	 
	 
	 	285184	 	21974
	AMITY
	 	 	 	 
	 
	 	285183	 	21904
	Philippines
	 	 	 	 
	 
	 	 	 	 
	LIFESTYLES UNLIMITED
	 	 	 	 
	 
	 	83199	 	60218
	PG PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	4-2004-05184	 	 
	HICKOK
	 	 	 	 
	 
	 	89847	 	21170
	HICKOK LIFESTYLES UNLIMITED & Design
	 	 	 	 
	 
	 	50901	 	38774
	HICKOK LIFESTYLES UNLIMITED & design
	 	 	 	 
	 
	 	50898	 	38806
	PRINCE GARDNER
	 	 	 	 
	 
	 	101958	 	4-1995-104229
	HICKOK LIFESTYLES UNLIMITED (and Design)
	 	 	 	 
	 
	 	27420	 	29785
	HICKOK (and Design)
	 	 	 	 
	 
	 	27421	 	29666

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Puerto Rico
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	16141	 	16141
	CANTERBURY & Design
	 	 	 	 
	 
	 	23268	 	23268
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	52386	 	52386
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	56494	 	56494
	CANTERBURY
	 	 	 	 
	 
	 	23269	 	23269
	Singapore
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	S/1286/89	 	1286/89
	ROLFS
	 	 	 	 
	 
	 	S/6675/89	 	T89/06675B
	ROLFS
	 	 	 	 
	 
	 	S/6874/90	 	6874/90
	HICKOK
	 	 	 	 
	 
	 	9509	 	9509
	HICKOK
	 	 	 	 
	 
	 	9508	 	9508
	AMITY & Design
	 	 	 	 
	 
	 	S/71692	 	71692
	AMITY & Design
	 	 	 	 
	 
	 	S/71693	 	71693
	AMITY
	 	 	 	 
	 
	 	S/6872/90	 	6872/90
	South Africa
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	69/3118	 	1969/03118
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1861/54	 	1859-1861/
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1859-1861/	 	1859-1861/
	HICKOK & Crest Design
	 	 	 	 
	 
	 	1859-1861/	 	1859-1861/
	Spain
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2381921	 	2381921
	Switzerland
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	8120	 	337176

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Taiwan
	 	 	 	 
	 
	 	 	 	 
	ROLFS
	 	 	 	 
	 
	 	77-48206	 	439075
	CANTERBURY
	 	 	 	 
	 
	 	43233	 	141167
	ROLFS
	 	 	 	 
	 
	 	77-48205	 	438955
	ROLFS
	 	 	 	 
	 
	 	77-48207	 	441247
	AMITY
	 	 	 	 
	 
	 	77-48204	 	441246
	AMITY
	 	 	 	 
	 
	 	77-48203	 	439074
	Turkey
	 	 	 	 
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	2001/12185	 	2001/12185
	United States
	 	 	 	 
	 
	 	 	 	 
	CANTERBURY
	 	 	 	 
	 
	 	72/327445	 	0911958
	PRINCESS
	 	 	 	 
	 
	 	72/265332	 	0844803
	PRINCESS GARDNER
	 	 	 	 
	 
	 	74/556406	 	2187999
	BRACETAC
	 	 	 	 
	 
	 	73/731419	 	1550618
	CANTERBURY
	 	 	 	 
	 
	 	74/693222	 	2049808
	THE PRINCESS GARDNER & design
	 	 	 	 
	 
	 	71/414102	 	367247
	SPOKES (and Design)
	 	 	 	 
	 
	 	75/874966	 	2393745
	ROYALLE BY PRINCE GARDNER
	 	 	 	 
	 
	 	75/453145	 	2319811
	CARLOS TOMASINI
	 	 	 	 
	 
	 	75/035106	 	2035301
	CANTERBURY & design
	 	 	 	 
	 
	 	72/201369	 	0791884
	CANTERBURY & design
	 	 	 	 
	 
	 	73/009645	 	0998500
	PRINCE GARDNER ACCESSORIES & design
	 	 	 	 
	 
	 	74/713656	 	2041364
	ROLFS
	 	 	 	 
	 
	 	73/170121	 	1118634

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	IDENTIFIER
	 	 	 	 
	 
	 	72/096178	 	710096
	PRINCE GARDNER (stylized)
	 	 	 	 
	 
	 	71/542652	 	0516773
	TOWNSMAN
	 	 	 	 
	 
	 	72/045442	 	669459
	CREDIT GUARD
	 	 	 	 
	 
	 	73/075924	 	1050073
	DIRECTOR
	 	 	 	 
	 
	 	71/394447	 	351388
	PRINCESS GARDNER ACCESSORIES (and Design)
	 	 	 	 
	 
	 	74/713654	 	2082144
	CANTERBURY
	 	 	 	 
	 
	 	72/037631	 	0674224
	PRINCE GARDNER
	 	 	 	 
	 
	 	74/040455	 	1638232
	PROTECTA-CARD
	 	 	 	 
	 
	 	73/075927	 	1050074
	ROYAL CREST
	 	 	 	 
	 
	 	73/679465	 	1485277
	CREDENTIAL
	 	 	 	 
	 
	 	72/096179	 	731338
	DL (Stylized)
	 	 	 	 
	 
	 	76/429184	 	 
	SURPLUS (and Design) (Left of Circle)
	 	 	 	 
	 
	 	76/269006	 	2897619
	COLLAR-EASE
	 	 	 	 
	 
	 	75/054062	 	2095928
	INSIDE-OUT
	 	 	 	 
	 
	 	76/647976	 	 
	ACE BY CANTERBURY (and Design)
	 	 	 	 
	 
	 	76/662159	 	 
	ACE BY CANTERBURY (and Design)
	 	 	 	 
	 
	 	76/662158	 	 
	ROLFS WEEKENDER
	 	 	 	 
	 
	 	76/657177	 	 
	ACTIVE ESSENTIALS BY ROLFS and Design
	 	 	 	 
	 
	 	76/603551	 	 
	ACTIVE ESSENTIALS BY ROLFS
	 	 	 	 
	 
	 	76/603550	 	 
	ROLFS RESERVE
	 	 	 	 
	 
	 	76/585642	 	3066421
	ROLFS RESERVE
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	 
	 	76/585633	 	2956784
	ETON
	 	 	 	 
	 
	 	75/143036	 	2404968
	TANDY BRANDS ACCESSORIES, INC. OUTLET STORE
	 	 	 	 
	 
	 	76/497225	 	2812643
	ETON
	 	 	 	 
	 
	 	74/125681	 	1721441
	DL Stylized
	 	 	 	 
	 
	 	76/433943	 	2763803
	DON LOPER
	 	 	 	 
	 
	 	76/433633	 	2823928
	DON LOPER
	 	 	 	 
	 
	 	76/429247	 	2752354
	AMITY LIFESTYLE ACCESSORIES
	 	 	 	 
	 
	 	76/386026	 	2686096
	CROSS IN CIRCLE AND DOTS Design (Right)
	 	 	 	 
	 
	 	76/975185	 	2714536
	CROSS IN CIRCLE Design
	 	 	 	 
	 
	 	76/320961	 	2798556
	CROSS IN CIRCLE AND DOTS Design (RIGHT)
	 	 	 	 
	 
	 	76/320962	 	2685683
	CROSS IN CIRCLE Design
	 	 	 	 
	 
	 	76/320731	 	2594330
	TOREL
	 	 	 	 
	 
	 	76/379875	 	2659342
	SPOKES
	 	 	 	 
	 
	 	75/590226	 	2425629
	COLETTA
	 	 	 	 
	 
	 	76/568946	 	2917096
	DON LOPER
	 	 	 	 
	 
	 	257209	 	842497
	TANDY BRANDS ACCESSORIES
	 	 	 	 
	 
	 	73/756261	 	1752430
	LE-BIL’S (stylized)
	 	 	 	 
	 
	 	73/605579	 	1433020
	LUCARELLI
	 	 	 	 
	 
	 	596787	 	1421197
	LUCARELLI
	 	 	 	 
	 
	 	73/477534	 	1399411
	LUCARELLI
	 	 	 	 
	 
	 	477532	 	1396878
	HICKOK
	 	 	 	 
	 
	 	543425	 	1381527

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	ORLEANS
	 	 	 	 
	 
	 	500683	 	1348132
	HICKOK
	 	 	 	 
	 
	 	72/082979	 	700221
	HICKOK
	 	 	 	 
	 
	 	65361	 	0684952
	HICKOK
	 	 	 	 
	 
	 	71/595957	 	0548994
	STAYS ‘N CASE
	 	 	 	 
	 
	 	76/440003	 	2724002
	BARRY WELLS (stylized)
	 	 	 	 
	 
	 	74/029450	 	1630139
	BACK TO SCHOOL
	 	 	 	 
	 
	 	76/232341	 	 
	DON LOPER
	 	 	 	 
	 
	 	73/707382	 	1552433
	HICKOK
	 	 	 	 
	 
	 	373338	 	0338625
	HICKOK
	 	 	 	 
	 
	 	373339	 	0337194
	ALOTTA WALLET
	 	 	 	 
	 
	 	76/632709	 	 
	FISHMASTER
	 	 	 	 
	 
	 	75/825665	 	 
	SNAPS
	 	 	 	 
	 
	 	78/807711	 	 
	STAYS ‘N CASE
	 	 	 	 
	 
	 	75/064244	 	2028047
	SPORTS PLAY
	 	 	 	 
	 
	 	76/292027	 	2792151
	MARDIGRASBEADS.COM
	 	 	 	 
	 
	 	76/337840	 	2650875
	CORKY
	 	 	 	 
	 
	 	76/345269	 	2698645
	HICKOK
	 	 	 	 
	 
	 	76/379885	 	2962740
	ESSENTIALS BY ROLFS
	 	 	 	 
	 
	 	75/279231	 	2352242
	THEFT-GUARD
	 	 	 	 
	 
	 	73/749693	 	1541535
	TOREL
	 	 	 	 
	 
	 	76/268901	 	2642164
	SPORTA BOUT
	 	 	 	 
	 
	 	73/114498	 	1081722

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	SNAP HAPPY
	 	 	 	 
	 
	 	72/221333	 	817206
	SHOP & GO
	 	 	 	 
	 
	 	73/674394	 	1478676
	SIDEKICK
	 	 	 	 
	 
	 	72/418486	 	961820
	ROLFS ROYAL CREST
	 	 	 	 
	 
	 	73/681589	 	1485278
	POP TOP
	 	 	 	 
	 
	 	73/114499	 	1081043
	NOSTALGIA
	 	 	 	 
	 
	 	74/396910	 	1821361
	AMITY & Design
	 	 	 	 
	 
	 	73/125993	 	1105460
	GLO-GETTER
	 	 	 	 
	 
	 	73/749770	 	1541147
	TRAVEL LITE
	 	 	 	 
	 
	 	73/683149	 	1623664
	COURIER
	 	 	 	 
	 
	 	72/237072	 	829612
	CHANGEABLE
	 	 	 	 
	 
	 	74/189236	 	1745862
	CAR CADDY
	 	 	 	 
	 
	 	72/056291	 	682112
	CACHE
	 	 	 	 
	 
	 	73/815513	 	1585671
	BRACELINC
	 	 	 	 
	 
	 	73/755691	 	1552060
	BODY BILLFOLD
	 	 	 	 
	 
	 	72/454486	 	988166
	AMITY & Thick Line Design
	 	 	 	 
	 
	 	71/091140	 	110105
	AMITY CLASSIC
	 	 	 	 
	 
	 	74/199601	 	1708196
	AMERICAN CLASSIC & eagle design
	 	 	 	 
	 
	 	73/386959	 	1301680
	LA GARDE
	 	 	 	 
	 
	 	71/158540	 	163698
	NITE & DAY
	 	 	 	 
	 
	 	73/822549	 	1588883
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/975051	 	2678999
	DANIEL ADAM
	 	 	 	 
	 
	 	76/362819	 	2736047

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	STACY RYAN
	 	 	 	 
	 
	 	76/223824	 	2653563
	BEACH BUNDLE
	 	 	 	 
	 
	 	75/982154	 	2595287
	NECESSITIES BY ROLFS
	 	 	 	 
	 
	 	76/059964	 	2782299
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	76/976720	 	2921373
	P G PRINCESS GARDNER & Design
	 	 	 	 
	 
	 	76/975574	 	2760187
	PRINCE GARDNER
	 	 	 	 
	 
	 	74/556405	 	2187998
	JAMES B. FAIRCHILD
	 	 	 	 
	 
	 	74/021220	 	1829864
	SPRINTKIT
	 	 	 	 
	 
	 	73/308133	 	1228487
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/975428	 	2733308
	TUCK-N-TAKE
	 	 	 	 
	 
	 	73/093705	 	1067699
	SPOKES
	 	 	 	 
	 
	 	75/874968	 	2393746
	TANDY BRANDS
	 	 	 	 
	 
	 	73/756262	 	1751187
	ROSE IN TRIANGLE design
	 	 	 	 
	 
	 	75/603133	 	2511417
	DESIGNED AND CRAFTED FOR LIFE ON THE ROAD
	 	 	 	 
	 
	 	76/975578	 	2760189
	SPOKES
	 	 	 	 
	 
	 	75/591789	 	2559269
	SPOKES & Design
	 	 	 	 
	 
	 	75/590228	 	2579134
	LA GARDE
	 	 	 	 
	 
	 	73/652855	 	1485246
	ROLFS
	 	 	 	 
	 
	 	71/656539	 	604067
	ROLFS
	 	 	 	 
	 
	 	76/405168	 	2777432
	ROLFS
	 	 	 	 
	 
	 	74/662841	 	2032901
	DESIGNED AND CRAFTED FOR LIFE
	 	 	 	 
	 
	 	76/976166	 	2818258
	 
	 	 	 	 
	Uruguay
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Mark	 	Application Number	 	Registration Number
	 
	 	 	 	 
	PRINCE GARDNER
	 	 	 	 
	 
	 	233808	 	323810
	 
	 	 	 	 
	Venezuela
	 	 	 	 
	 
	 	 	 	 
	HICKOK
	 	 	 	 
	 
	 	F-019787	 	19787
	AMITY
	 	 	 	 
	 
	 	1424	 	92.249-F
	AMITY
	 	 	 	 
	 
	 	1425	 	90.419-F

PATENT SCHEDULE

	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	Canada
	 	 	 	 
	 
	 	 	 	 
	Releasably Locking Button Pin
	 	 	 	 
	 
	 	1997-1959	 	84068
	Personal Accessory with Quick-Access
	 	 	 	 
	 
	 	2471793	 	 
	 
	 	 	 	 
	China P.R.
	 	 	 	 
	 
	 	 	 	 
	Carrier for Digital Player and Headphones
	 	 	 	 
	 
	 	ZL200530124574.1	 	 
	 
	 	 	 	 
	European Community
	 	 	 	 
	 
	 	 	 	 
	Carrier for Digital Player and Headphones (design)
	 	 	 	 
	 
	 	000399423	 	000399423-0001
	 
	 	 	 	 
	Germany
	 	 	 	 
	 
	 	 	 	 
	Suspender Button
	 	 	 	 
	 
	 	M8801493.2	 	M8801493.2
	 
	 	 	 	 
	Great Britian
	 	 	 	 
	 
	 	 	 	 
	SUSPENDER BUTTON
	 	 	 	 
	 
	 	1052949	 	1052949
	 
	 	 	 	 
	Mexico
	 	 	 	 
	 
	 	 	 	 
	PERSONAL ACCESSORY WITH QUICK-ACCESS
	 	 	 	 
	 
	 	PA/a/2004/006813	 	 
	 
	 	 	 	 
	Philippines
	 	 	 	 
	 
	 	 	 	 
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	32005000896	 	 
	 
	 	 	 	 
	Taiwan
	 	 	 	 

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	 
	 	 	 	 
	 
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	94305410	 	 
	 
	 	 	 	 
	United States
	 	 	 	 
	 
	 	 	 	 
	TRAVEL BAG WITH MULTIPLE COMPARTMENTS
	 	 	 	 
	 
	 	07/324296	 	4966260
	TRAVEL BAG WITH MULTIPLE COMPARTMENT
	 	 	 	 
	 
	 	07/060723	 	4821853
	CELL PHONE PURSE
	 	 	 	 
	 
	 	29/214830	 	D512560
	GUN PROTECTOR
	 	 	 	 
	 
	 	29/213233	 	D520235
	DISPLAY FIXTURE WITH BUILT-IN SIGN HOLDER
	 	 	 	 
	 
	 	29/137335	 	D451703
	POCKET BOOK FASTENER
	 	 	 	 
	 
	 	29/005208	 	DES. 355767
	NECKTIE LABEL
	 	 	 	 
	 
	 	29/003513	 	D350370
	METHOD AND APPARATUS FOR MANUFACTURING COIN POUCH
	 	 	 	 
	 
	 	08/228698	 	5480605
	WALLET WITH CARRYING STRAP
	 	 	 	 
	 
	 	07/012492	 	DES.343951
	PORTFOLIO
	 	 	 	 
	 
	 	07/175852	 	DES.322628
	AUTOMOBILE ACCESSORY
	 	 	 	 
	 
	 	29/032392	 	DES.366356
	TRAVEL KIT
	 	 	 	 
	 
	 	07/414075	 	DES.325124
	EXPANDABLE CUP HOLDER
	 	 	 	 
	 
	 	29/087911	 	D407951
	POINT OF SALE DISPLAY BOX AND UNIT
	 	 	 	 
	 
	 	09/288857	 	6070717
	HELMET BEAD
	 	 	 	 
	 
	 	29/176075	 	D487409
	ELECTRIC ICE SCRAPER
	 	 	 	 
	 
	 	29/136973	 	D456576
	DOG LEASH AND LIGHT COMBINATION
	 	 	 	 
	 
	 	29/137093	 	D453386

Schedule 8.18

 

	 	 	 	 	 
	 	 	 	 	 
	Title	 	Application Number	 	Patent Number
	 
	 	 	 	 
	BOTTLE CADDY
	 	 	 	 
	 
	 	29/127089	 	D450445
	GOLF BAG PORTABLE COOLER
	 	 	 	 
	 
	 	29/110050	 	D425761
	RICE AND BEAN BEADS
	 	 	 	 
	 
	 	29/102111	 	D420931
	SET OF GUMBO BEADS
	 	 	 	 
	 
	 	29/092837	 	D412680
	 
	 	 	 	 
	COMBINATION SUSPENDERS FOR USE WITH BUTTON AND BUTTONLESS TROUSERS
	 
	 	 	 	 
	 
	 	07/714496                   517	 	2429
	SET OF JAZZ BEADS
	 	 	 	 
	 
	 	29/092377	 	D410866
	MULTI-CARD ELEMENT FOR A BILLFOLD
	 	 	 	 
	 
	 	07/906549	 	5263523
	DECORATIVE BEAD
	 	 	 	 
	 
	 	29/075162	 	D398879
	DRINK HOLDER
	 	 	 	 
	 
	 	29/011921	 	D352827
	RELEASABLY LOCKING BUTTON PIN
	 	 	 	 
	 
	 	29/066168	 	D390162
	CARRIER FOR DIGITAL PLAYER AND HEADPHONES
	 	 	 	 
	 
	 	29/224985	 	D519275
	GUN PROTECTOR
	 	 	 	 
	 
	 	10/942330	 	 
	GUN SLING WITH SINGLE-HANDED ADJUSTMENT MECHANISM
	 	 	 	 
	 
	 	10/360191	 	 
	ORNAMENTAL BEAD AND RADIO COMBINATION
	 	 	 	 
	 
	 	10/793874	 	 
	PERSONAL ACCESSORY WITH QUICK-ACCESS
	 	 	 	 
	 
	 	10/025542	 	6601622
	BELT RACK TAB
	 	 	 	 
	 
	 	29/022042	 	D366065
	CRAWFISH BEAD
	 	 	 	 
	 
	 	29/092379	 	D411967

Schedule 8.18

 

COPYRIGHT SCHEDULE

	 	 	 	 	 
	Title of Work	 	Application Number	 	Registration Number
	 
	 	 	 	 
	Amity Racing Almanac CD
	 	 	 	 
	 

	 	TXu-1-114-703
	 	TXu-1-114-703
	 
	 	 	 	 
	Rolfs Sports Almanac CD
	 	 	 	 
	 

	 	TXu 1-099-544
	 	TXu 1-099-544
	 
	 	 	 	 
	Waterfowl Duck Tie #3
	 	 	 	 
	 

	 	VA 577-760
	 	VA 577-760
	 
	 	 	 	 
	Waterfowl Duck Tie #2
	 	 	 	 
	 

	 	VA 557-757
	 	VA 577-757
	 
	 	 	 	 
	Waterfowl Duck Tie #1
	 	 	 	 
	 

	 	VA 577-756
	 	VA 577-756
	 
	 	 	 	 
	Waterfowl Duck Tie #5
	 	 	 	 
	 

	 	VA 577-759
	 	VA 577-759
	 
	 	 	 	 
	Waterfowl Duck Tie #4

	 	VA 577-758
	 	VA 577-758

LICENSE SCHEDULE

Capital Mercury

Churchill Downs, Licensing Partners

Collegiate Licensing Co. (CLC)

Eileen West

Haggar

Indiana University Research & Tech

Jones New York

Jordache

Levi Strauss & Co / Dockers for Women

Levi Strauss & Co / Levi Signature

Levi Strauss & Co / Levi’s Brand

License Resource Group (LRG)

Major League Baseball (MLB)

Michigan State University

National Basketball Association (NBA)

National Football League (NFL)

National Hockey League (NHL)

Ohio State

Totes

Travel Sentry (Marketing License Agreement)

Schedule 8.18

 

U of CA Berkeley

U of Iowa Hawkeyes

U of Southern CA

West Virginia University

Woolrich

Dallas_1\4485322\2

13118-122 9/6/2006

Schedule 8.18

 

Schedule 8.19

ERISA

Tandy Brands Accessories, Inc. Employees Investment Plan, as amended and restated effective July 1,
2000, as the same has been amended, modified or supplemented from time to time.

Schedule 8.19

 

 

Schedule 8.22

Material Contracts

Trademark license agreements that generate sales revenue in excess of $1,000,000 per annum.

Schedule 8.22

 

 

Schedule 10.11

Investments

Investments in H.A. Sheldon Canada, Ltd.

Schedule 10.11

 

 

Schedule 13.4

Notices/Credit Matters

Tandy Brands Accessories, Inc.

690 E. Lamar Boulevard, Suite 200

Arlington, TX 76011

Attention: Mark J. Flaherty

Telephone: (817) 548-0090

Facsimile: (817) 274-7346

Email: mark_flaherty@tandybrands.com

Wells Fargo HSBC Trade

Bank, N.A.

1445 Ross Avenue, Suite 450

Dallas, TX 75202

Attention: John R. Peloubet

Telephone: (214) 740-1585

Facsimile: (682) 225-3523

Email: peloubj@wellsfargo.com

Wells Fargo Bank, N. A.

1445 Ross Avenue, Suite 450

Dallas, TX 75202

Attention: John W. Johnson

Telephone: (214) 740-1517

Facsimile: (682) 220-2166

Email: john.w.johnson@wellsfargo.com

Comerica Bank

8828 Stemmons Freeway, Suite 441

Dallas, TX 75247

Attention: Corey R. Bailey

Telephone: (214) 589-1314

Facsimile: (214) 589-1360

Email: crbailey@comerica.com

Bank of America, N.A.

901 Main Street, 68th Floor

Dallas, TX 75202

Attention: Allison W. Connally

Telephone: (214) 209-1425

Facsimile: (214) 209-9560

Email: allison.connally@bankofamerica.com

Schedule 13.4

 

 

JPMorgan Chase Bank, N.A.

500 E. Border

Arlington, TX 76004-0250

Attention: Jerry Petrey

Telephone: (817) 856-3125

Facsimile: (817) 856-3183

Email: jerry.petrey@chase.com

Schedule 13.4exv10w35

 

EXHIBIT 10.35

AMENDMENT NO. 2

TO THE

TANDY BRANDS ACCESSORIES, INC.

1995 STOCK DEFERRAL PLAN FOR NON-EMPLOYEE DIRECTORS

     This Amendment No. 2 (the “Amendment”) to the Tandy Brands Accessories, Inc. 1995 Stock
Deferral Plan for Non-Employee Directors (the “Plan”) is made this 16th day of August, 2006 by
Tandy Brands Accessories, Inc. a corporation duly organized and existing under the laws of the
State of Delaware (“Company”). Capitalized terms used herein but not otherwise defined shall have
the meaning set forth in the Plan.

     WHEREAS, the Company established the Plan to provide Non-Employee Directors an opportunity to
elect to defer receipt of Retainer Fees and for the payment of such fees in Stock Units, each of
which is equal in value to a share of Stock;

     WHEREAS the Plan was previously amended to permit Non-Employee Directors to also elect to
defer the receipt of Meeting Fees and to provide for the payment of such fees in Stock Units;

     WHEREAS, the Company desires to further amend the Plan to (i) provide for an alternative
mechanism to settle Stock Units credited to a Non-Employee Director’s Account pursuant to the Plan,
and (ii) to modify the timing of an election to defer Retainer Fees in order to comply with section
409A of the Internal Revenue Code of 1986, as amended; and

     WHEREAS, pursuant to Article VIII of the Plan, the Plan may be amended by the Board of
Directors of the Company;

     NOW, THEREFORE, effective August 16, 2006, the Plan is hereby amended as follows:

     1. Section 3.1(a) of the Plan is hereby amended by adding the following at the end of the
first paragraph:

“Effective January 1, 2005, any election by a Non-Employee Director to defer Retainer Fees
shall be made prior to the beginning of the calendar year in which such Retainer Fees are
earned and such Deferral Election shall be irrevocable except upon a subsequent Deferral
Election that is made prior to the beginning of the calendar year to which such subsequent
election applies; provided however, that with respect to a Non-Employee Director who first
becomes a member of the Board of Directors during a calendar year, any election to defer
Retainer Fees must be made within 30 days following the date the individual first becomes a
Non-Employee Director and any such Deferral Election shall only apply to Retainer Fees which
relate to services performed subsequent to the effective date of such election.”

     2. Section 3.1(d) of the Plan is hereby amended and restated in its entirety to read as
follows:

 

 

     “(d) Payment of Stock Units. Stock Units credited to a Non-Employee Director’ Account
pursuant to the Plan shall be payable in a single distribution made at each such time (no
more frequently than annually) specified by the Non-Employee Director in the applicable
Deferral Election, provided that the designated payment date with respect to any election
must be no earlier than twelve (12) months following the establishment of the affected Stock
Unit, and shall be payable in (i) an equal number of shares of Stock, or (ii) at the
Company’s option, an amount in cash equal to the Fair Market Value of the shares of Stock
underlying the affected Stock Units at the time of distribution. For purposes of this
Section 3.1(d), Fair Market Value shall mean:

     (i) If the Stock is listed or admitted to trade on a national securities
exchange, the average of the high and low prices of the Stock as reported by such
national securities exchange for the date immediately preceding the distribution,
or, if no sale of the Stock shall have been made on that date, the next preceding
day on which there was a sale of Stock;

     (ii) If the Stock is not listed or admitted to trade on a national securities
exchange, the average between the bid and asked price for the Stock on any
electronic quotation system on the date immediately preceding the distribution; or

     (iii) If the Stock is not listed or admitted to trade on a national securities
exchange or any electronic quotation system, the Compensation Committee of the Board
of Directors shall establish the Fair Market Value in its good faith judgment.

     IN WITNESS WHEREOF, this Amendment is adopted this 16th day of August, 2006.

	 	 	 	 	 	 	 	 	 
	ATTEST:	 	 	 	TANDY BRANDS ACCESSORIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ W. Mike Baggett

	 	 	 	By:
	 	/s/ Mark J. Flaherty	 	 
	 

	 	 	 	 	 	 	 	 
	Secretary	 	 	 	Name: Mark J. Flaherty	 	 
	 	 	 	 	Title: Chief Financial Officer, Treasurer and
Assistant Secretary	 	 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]