EX-4.8 Form of Subscription






Exhibit 4.8




FORM OF SUBSCRIPTION CERTIFICATE




Certificate No.:                                         

Name of Registered Holder

Address of Registered Holder

___ Subscription Rights




TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH

IN THE COMPANY’S PROSPECTUS, DATED JUNE 19, 2008,

AND ARE INCORPORATED HEREIN BY REFERENCE.

COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM

WUNDERLICH SECURITIES, INC., THE SUBSCRIPTION AGENT.




 




HANCOCK FABRICS, INC.



A Delaware Corporation



SUBSCRIPTION CERTIFICATE



Evidencing the number of Subscription Rights stated above, each right representing the right to
purchase one $1,000 principal amount of floating rate secured note (“Note”) and a warrant
(“Warrant”) to purchase 400 shares of common stock at an exercise price equal to the greater of (i)
$1.00 and (ii) the volume weighted average trading price for the 30 days prior to the
3rd business day before the date of issuance of the warrants.
Subscription Price: $1,000




VOID IF NOT EXERCISED BEFORE 5:00 P.M., EASTERN TIME ON

JULY 18, 2008.



THIS CERTIFIES THAT the registered owner whose name is inscribed herein is the owner of the number
of Subscription Rights set forth above, each of which entitles the owner to subscribe for and
purchase one Note and one Warrant of Hancock Fabrics, Inc., a Delaware corporation, on the terms
and subject to the conditions set forth in the Prospectus and the instructions relating hereto. The
Subscription Rights represented by this Subscription Certificate may be exercised by completing
Section 1 hereof. Special delivery restrictions may be specified by completing Section 2 hereof.




Dated: June 19, 2008




	 	 	 
	 

	 	 
	Jane F. Aggers

	 	Robert W. Driskell
	President

	 	Secretary






 









 






SECTION 1. EXERCISE AND SUBSCRIPTION



The undersigned irrevocably exercises Subscription Rights to subscribe for Notes and Warrants as
indicated below on the terms and subject to the conditions specified in the Prospectus, the receipt
of which is hereby acknowledged.





	 	(a)	 	Number of Subscription Rights subscribed:                     
	 
	 	(b)	 	Total Subscription Price (total number of Subscription Rights subscribed for
multiplied by the Subscription Price of

 $1,000):                     





METHOD OF PAYMENT (CHECK ONE)




	 	 	 
	[ ]

	 	Certified check or bank draft (cashier’s check) drawn on a
U.S. bank or money order, payable to Wunderlich
Securities, Inc., as Subscription Agent.
	 
	 	 
	[ ]

	 	Wire transfer of immediately available funds directed to
the account maintained by Wunderlich Securities, Inc.,
Subscription Agent for Hancock Fabrics, Inc. at Wachovia
Bank, ABA # 053000219, Account No. 2000041008548.





If the amount enclosed or transmitted is not sufficient to pay the purchase price for all
Subscription Rights that are stated to be subscribed for, or if the number of Subscription Rights
being subscribed for is not specified, the number of Subscription Rights subscribed for will be
assumed to be the maximum number that could be subscribed for upon payment of such amount. If the
amount enclosed or transmitted exceeds the purchase price for all Subscription Rights that the
undersigned has the right to subscribe for (such excess amount, the “Subscription Excess”) the
Subscription Agent will return the Subscription Excess to the subscriber without interest or
deduction.




SECTION 2. SPECIAL ISSUANCE OR DELIVERY INSTRUCTIONS FOR SUBSCRIPTION RIGHTS HOLDERS:



(a) To be completed ONLY if the Notes and Warrants are to be issued in a name other than that of
the registered holder. See the Instructions. DO NOT FORGET TO COMPLETE THE GUARANTEE OF
SIGNATURE(S) SECTION BELOW.




	 	 	 
	Name in which to be issued:

	 	Soc. Sec. #/Tax ID #:
	 
	 	 
	 

	 	 
	Address:
	 	 
	 
	 	 
	 


	 	 
	 
	 	 
	 


	 	 






(b) To be completed ONLY if the certificate representing Notes and Warrants are to be sent to the
registered holder at an address other than that show above. See the Instructions. DO NOT FORGET TO
COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW



	 	 	 
	Name:

	 	Address:
	 
	 	 
	 

	 	 





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ACKNOWLEDGMENT — THE SUBSCRIPTION ORDER FORM IS NOT VALID UNLESS YOU SIGN BELOW




I/We acknowledge receipt of the Prospectus and understand that, after delivery to the Subscription
Agent for Hancock Fabrics, Inc., I/we may not modify or revoke this Subscription Certificate.
Under penalties of perjury, I/we certify that the information contained herein, including the
social security number or taxpayer identification number given above, is correct.



The signature below must correspond with the name of the registered holder exactly as it appears on
the books of the Company’s transfer agent without any alteration or change whatsoever.



	 	 	 
	Signature(s) of Registered Holder:

	 	Date:
	 
	 	 
	 

	 	 





If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact,
agent(s), officer(s) of a corporation or another acting in a fiduciary or representative capacity,
please provide the following information (please print). See the Instructions.



	 	 	 	 	 
	Name:

	 	Capacity:
	 	Soc. Sec. #/Tax ID #
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	Address:

	 	 	 	Phone:
	 
	 	 	 	 
	 	 	 





GUARANTEE OF SIGNATURE(S)




All Subscription Rights Holders who specify special issuance or delivery instructions must have
their signatures guaranteed by an Eligible Institution, as defined in Rule 17Ad-15 of the
Securities Exchange Act of 1934, as amended. See the Instructions.



	 	 	 	 	 
	Authorized Signature:

	 	 	 	Name of Firm:
	 
	 	 	 	 
	   	 	 
	 
	 	 	 	 
	Name:

	 	Title:
	 	Soc. Sec. #/Tax ID #:
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	Address:

	 	 	 	Phone:
	 
	 	 	 	 
	   	 	 





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YOU MUST HAVE YOUR SIGNATURE GUARANTEED IF YOU WISH TO HAVE YOUR SHARES DELIVERED TO AN ADDRESS
OTHER THAN YOUR OWN OR TO A STOCKHOLDER OTHER THAN YOURSELF.



	 	 	 	 	 	 	 	 	 
	 	 	Signature Guaranteed:	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Name of Bank or Firm:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 






BACKUP WITHHOLDING CERTIFICATIONS




TIN:                                         



TAXPAYER I.D. NUMBER. The Taxpayer Identification Number shown above (TIN) is my correct taxpayer
identification number.



[ ] BACKUP WITHHOLDING. I am not subject to backup withholding either because I have not been
notified that I am subject to backup withholding as a result of a failure to report all interest
or dividends, or the Internal Revenue Service has notified me that I am no longer subject to
backup withholding.



[ ] EXEMPT RECIPIENTS. I am an exempt recipient under the Internal Revenue Service Regulations.



[ ] NONRESIDENT ALIENS. I am not a United States person, or if I am an individual, I am neither a
citizen nor a resident of the United States.



SIGNATURE: I certify under penalties of perjury the statements checked in this section.



	 	 	 	 	 
	Signature:

	 	Date:	 	 
	 
	 	 	 	 
	 


	 	 

	 	 






(See “Federal Income Tax Consequences — Information Reporting and Backup Withholding” in the
Hancock Fabrics, Inc. Prospectus dated June 19, 2008 for information concerning this certification
and U.S. federal income tax withholding that may apply.



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FORM OF INSTRUCTIONS FOR USE OF HANCOCK FABRICS, INC.



SUBSCRIPTION CERTIFICATES




The following instructions relate to a rights offering (the “Rights Offering”) by Hancock Fabrics,
Inc., a Delaware corporation (the “Company”), to the holders of its common stock, par value $0.01
per share (“Common Stock”), as described in the Company’s prospectus dated June 19, 2008 (the
“Prospectus”). Holders of record of Common Stock at the close of business on June 17, 2008 (the
“Record Date”) will receive one transferable subscription right (the “Subscription Rights”) for
each 970 shares of Common Stock held by them as of the close of business on the Record Date. An
aggregate of up to 20,000 Subscription Rights exercisable to purchase an aggregate of up to
$20,000,000 principal amount of floating rate secured notes (“Notes”) and warrants to purchase up
to 8,000,000 shares of the Company’s Common Stock (“Warrants”) are being distributed in connection
with the Rights Offering. Each Subscription Right is exercisable, upon payment of $1,000 in cash
(the “Subscription Price”), to purchase one Note in the principal amount of $1,000 accompanied by a
Warrant to purchase 400 shares of Common Stock. See “Prospectus Summary” and “The Rights Offering”
in the Prospectus.



No fractional Subscription Rights or cash in lieu thereof will be issued or paid. The total number
of Subscription Rights issued to each stockholder will be rounded down to the nearest full
Subscription Right.



The Subscription Rights will expire at 5:00 p.m., Eastern Time, on July 18, 2008 (the “Expiration
Date”).



The number of Subscription Rights to which you are entitled is printed on the face of your
Subscription Certificate. You should indicate your wishes with regard to the exercise of your
Subscription Rights by completing the appropriate section on your Subscription Certificate and
returning the Subscription Certificate to the Subscription Agent in the envelope provided.



THE SUBSCRIPTION AGENT MUST RECEIVE YOUR SUBSCRIPTION CERTIFICATE ON OR BEFORE THE EXPIRATION DATE.
IN ADDITION, THE SUBSCRIPTION AGENT MUST RECEIVE PAYMENT OF THE SUBSCRIPTION PRICE FOR ALL
SUBSCRIPTION RIGHTS EXERCISED ON OR BEFORE THE EXPIRATION DATE. ONCE A HOLDER OF SUBSCRIPTION
RIGHTS HAS EXERCISED THE SUBSCRIPTION RIGHTS, SUCH EXERCISE MAY NOT BE REVOKED.



1. SUBSCRIPTION RIGHTS. To exercise Subscription Rights, properly complete and execute your
Subscription Certificate and send it, together with payment in full of the Subscription Price to
the Subscription Agent. Delivery of the Subscription Certificate must be made by mail, by hand
delivery or by overnight delivery. FACSIMILE DELIVERY OF THE SUBSCRIPTION CERTIFICATE WILL NOT BE
ACCEPTED AND WILL NOT CONSTITUTE VALID DELIVERY. All payments must be made in United States dollars
by (i) certified check or bank draft (cashier’s check) drawn on a U.S. bank or money order payable
to Wunderlich Securities, Inc., as Subscription Agent or (ii) wire transfer of immediately
available funds. Banks, brokers, trusts, depositaries or other nominee holders of the Subscription
Rights who exercise the Subscription Rights on behalf of beneficial owners of Subscription Rights
will



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be required to certify to the Subscription Agent and the Company on a Nominee Holder Certification
Form as to the aggregate number of Subscription Rights that have been exercised by each beneficial
owner of Subscription Rights on whose behalf such nominee holder is acting. In the event such
certification is not delivered in respect of a Subscription Certificate, the Subscription Agent
shall for all purposes be entitled to assume that such certificate is exercised on behalf of a
single beneficial owner.



ACCEPTANCE OF PAYMENTS. Payments will be deemed to have been received by the Subscription Agent
only upon the receipt by the Subscription Agent of any certified check or bank draft (cashier’s
check) drawn on a U.S. bank, money order or immediately available funds transferred through a wire
transfer.



CONTACTING THE SUBSCRIPTION AGENT. The address, telephone and facsimile numbers of the Subscription
Agent, Wunderlich Securities, Inc. are as follows:



	 	 	 	 	 
	 

	 	If by Hand Delivery, Overnight Delivery,
	 	 
	 

	 	First Class Mail or Registered Mail:	 	 
	 
	 	 	 	 
	 

	 	Wunderlich Securities, Inc.	 	 
	 

	 	6000 Poplar Avenue, Suite 210	 	 
	 

	 	Memphis, TN 38119	 	 
	 

	 	Attention: Jim Harwood	 	 
	 

	 	Telephone: (901) 251-2233	 	 
	 

	 	Facsimile: (901) 251-1349	 	 






PARTIAL EXERCISE. If you exercise less than all of the Subscription Rights evidenced by your
Subscription Certificate, the Subscription Agent will issue to you a new Subscription Certificate
evidencing the unexercised Subscription Rights. However, if you choose to have a new Subscription
Certificate sent to you, you may not receive any such new Subscription Certificate in sufficient
time to permit exercise of the Subscription Rights being exercised, or if you do not deliver the
dollar amount sufficient to purchase the number of shares subscribed for, you will be deemed to
have exercised the Subscription Right with respect to the maximum number of whole Subscription
Rights which may be exercised for the Subscription Price payment you deliver.



2. DELIVERY OF NOTES AND WARRANTS, ETC. The following deliveries and payments to you will be made
to the address shown on the face of your Subscription Certificate unless you provide instructions
to the contrary on your Subscription Certificate.



(a) SUBSCRIPTION RIGHTS. As soon as practicable after the valid exercise of Subscription Rights
and the Expiration Date, the Subscription Agent will mail to each exercising Subscription Rights
holder (i) evidence of the Notes, and (ii) Warrant certificates, each purchased pursuant to the
Subscription Rights.



(b) EXERCISE PAYMENTS. As soon as practicable after the Expiration Date and after all prorations
and adjustments contemplated by the terms of the Rights Offering have been effected, the
Subscription Agent will mail to each Subscription Rights holder any excess funds received



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(without interest or deduction) in payment of the Subscription Price for shares that are subscribed
for but not allocated to such Subscription Rights holder.



3. TO HAVE A SUBSCRIPTION CERTIFICATE DIVIDED INTO SMALLER DENOMINATIONS. To have a Subscription
Certificate divided into certificates for smaller numbers of Subscription Rights, send your
Subscription Certificate, together with complete instructions (including specification of the whole
number of Subscription Rights you wish to be evidenced by each new Subscription Certificate) signed
by you, to the Subscription Agent, allowing three to five days for the Subscription Certificates to
be issued and returned so that they can be used prior to the Expiration Date. Alternatively, you
may ask a bank or broker to effect such actions on your behalf. As a result of delays in the mail,
the time of the transmittal, the necessary processing time and other factors, you may not receive
the new Subscription Certificates in time to enable you to complete an exercise by the Expiration
Date. Neither Hancock Fabrics, Inc. nor the Subscription Agent will be liable to you for any such
delays.



4. EXECUTION.



(a) EXECUTION BY REGISTERED HOLDER. The signature on the Subscription Certificate must correspond
with the name of the registered holder exactly as it appears on the face of the Subscription
Certificate without any alteration or change whatsoever. Persons who sign the Subscription
Certificate in a representative or other fiduciary capacity must indicate their capacity when
signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must
present to the Subscription Agent satisfactory evidence of their authority so to act.



(b) EXECUTION BY PERSON OTHER THAN REGISTERED HOLDER. If the Subscription Certificate is executed
by a person other than the holder named on the face of the Subscription Certificate, prior evidence
of authority of the person executing the Subscription Certificate must accompany the name unless
the Subscription Agent, in its discretion, dispenses with proof of authority.



(c) SIGNATURE GUARANTEES. Your signature must be guaranteed by an Eligible Guarantor Institution
if you specify special issuance or delivery instructions.



5. METHOD OF DELIVERY. The method of delivery of Subscription Certificates and the payment of the
Subscription Price to the Subscription Agent will be at the election and risk of the Subscription
Rights holder. If sent by mail, it is recommended that they be sent by registered mail, properly
insured, with return receipt requested, and that a sufficient number of days be allowed to ensure
delivery to the Subscription Agent prior to the Expiration Date.




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