EXHIBIT 10.2
[*]=Information redacted pursuant to a confidential treatment request.
Such
information has been filed separately with the Securities and Exchange
Commission.
N.B.
THE RIGHTS GRANTED TO THE TRUSTEE IDENTIFED HEREIN, INCLUDING, WITHOUT
LIMITATION THE AUTHORITY GRANTED TO THE TRUSTEE TO DIRECT THE BANK (AS DEFINED
BELOW) WITH RESPECT TO THE DEPOSIT ACCOUNT COLLATERAL (AS DEFINED BELOW) AS
HEREIN PROVIDED, SHALL BE LIMITED AS HEREIN PROVIDED.
THIS SECOND LIEN DEPOSIT
ACCOUNT CONTROL AGREEMENT IS SUBJECT TO THE TERMS OF THE FIRST LIEN AGREEMENT
REFERRED TO BELOW AND IN THE EVENT OF ANY INCONSISTENCIES BETWEEN THIS AGREEMENT
AND THE FIRST LIEN AGREEMENT, THE FIRST LIEN AGREEMENT SHALL CONTROL.
SECOND LIEN DEPOSIT ACCOUNT CONTROL AGREEMENT
THIS DEPOSIT ACCOUNT CONTROL AGREEMENT (as amended and in effect from time to
time, this "Agreement") is dated as of July 24, 2009 and effective for all
purposes as of August 1, 2008, by and among BancorpSouth Bank (together with its
successors and assigns, "Bank"), Hancock Fabrics, Inc. (together with its
successors and assigns, the "Company") and Deutsche Bank National Trust Company,
in its capacity as trustee (in such capacity, together with its successors and
assigns, "the Trustee") pursuant to the Indenture (as hereinafter defined)
acting for itself and on behalf of the Holders (as defined in the Indenture).
WITNESSETH
WHEREAS, Bank maintains for the use of the Company the following deposit
account:
[*] (the "Elavon Designated Deposit Account")
which deposit account is hereinafter referred to as the "Deposit Account";
WHEREAS, Bank additionally maintains for the use of the Company the following
deposit account (among others):
[*]
(the "Concentration Account")
which deposit account is hereinafter referred to as the "Concentration Account";
WHEREAS, Bank additionally maintains for the use of the Company the following
deposit account (among others):
[*]
(the "Operating Account")
which deposit account is hereinafter referred to as the "Operating Account";
WHEREAS, pursuant to the Loan and Security Agreement dated as of August 1, 2008,
by and among the Company, certain of Company's affiliates and subsidiaries,
General Electric Capital Corporation, in its capacity as agent (together with
its successors and assigns, the "Agent") and the lenders identified therein (the
"Lenders") (as amended, restated, supplemented or otherwise modified and in
effect, the "Loan Agreement"), Agent and the Lenders have a first priority
security interest in, among other things, all right, title and interest of the
Company in and to the following, whether now or hereafter existing or arising
(collectively, the "Deposit Account Collateral"):
(a) the Deposit Account, (b)
all cash, checks, money orders, drafts, instruments, electronic funds transfers
and other items and forms of remittances and all funds and other amounts at any
time paid, deposited or credited (whether for collection, provisionally or
otherwise), held or otherwise in the possession or under the control of, or in
transit to, Bank or any agent or custodian thereof for credit to or to be
deposited in the Deposit Account, (c) all funds and cash balances or other
amounts in or attributable to the Deposit Account, and (d) any