Document:

EX-10.15

EXHIBIT 10.15

PLEDGE AND SECURITY AGREEMENT

(Membership Interest Pledge Agreement)

     This PLEDGE AND SECURITY AGREEMENT (as amended and in effect from time to time, this “Pledge
Agreement”), dated as of August 1, 2008, is by each of the undersigned Persons (as defined in the
Loan Agreement, as hereinafter defined) (each a “Pledgor”, and, collectively, the “Pledgors”) to
and in favor of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its capacity as
agent (in such capacity, “Pledgee”) pursuant to the Loan Agreement (as hereinafter defined) acting
for and on behalf of the Lenders (as defined in the Loan Agreement).

W I T N E S S E T H:

     WHEREAS, each Pledgor is now the direct and beneficial owner of all of the issued and
outstanding Interests (as defined below) of the limited liability companies listed on Exhibit A
hereto (which may be amended, updated or otherwise modified from time to time pursuant to the terms
hereof);

     WHEREAS, Pledgee and the Lenders have entered into or are about to enter into financing
arrangements pursuant to which Lenders (or Pledgee on behalf of Lenders) may make loans and
advances and provide other financial accommodations to Hancock Fabrics, Inc, a Delaware corporation
(“Parent”), HF Merchandising, Inc., a Delaware corporation (“Merchandising”), Hancock Fabrics of
MI, Inc., a Delaware corporation (“Fabrics MI”), hancockfabrics.com, Inc., a Delaware corporation
(“Fabrics.com”), and Hancock Fabrics, LLC, a Delaware limited liability company (“Fabrics LLC”, and
together with Parent, Merchandising, Fabrics MI and Fabrics.com, each individually a “Borrower” and
collectively, “Borrowers”) as set forth in the Loan and Security Agreement, dated of even date
herewith, by and among Borrowers, certain affiliates of Borrowers, Pledgee and Lenders (as the same
now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”) and other agreements, documents and instruments referred to therein
or at any time executed and/or delivered in connection therewith or related thereto, including, but
not limited to, the Guarantee (as hereinafter defined) and this Pledge Agreement (all of the
foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, being collectively referred to
herein as the “Financing Agreements”);

     WHEREAS, each Pledgor has absolutely and unconditionally guaranteed the payment and
performance of the Obligations as set forth in the Guarantee, dated of even date herewith, by
Pledgors in favor of Pledgee and Lenders (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, the “Guarantee”); and

     WHEREAS, in order to induce Pledgee and Lenders to enter into the Loan Agreement and the other
Financing Agreements and to make loans and advances and provide other financial accommodations to
Borrowers pursuant thereto, each Pledgor has agreed to secure the payment and performance of the
Obligations and to accomplish same by (i) executing and delivering to

 

 

Pledgee this Pledge Agreement and (ii) delivering to Pledgee any and all other documents which
Pledgee deems necessary to protect Pledgee’s and Lenders’ interests hereunder.

     NOW, THEREFORE, in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby agrees as
follows:

     1. DEFINITIONS All capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Loan Agreement, and the following terms shall have the following
meanings:

          (a) “Interests” shall mean all limited liability membership units, together with all voting
trust certificates evidencing the right to vote the foregoing subject to any voting trust.

          (b) “Issuers” shall mean the limited liability companies now owned or hereafter acquired
(whether in connection with any recapitalization, reclassification or reorganization of the capital
of any such company or any successors in interest thereto) by any Pledgor, including, without
limitation, the limited liability companies listed on Exhibit A attached hereto.

          (c) “Pledged Interests” shall mean all Interests of the Issuers, including, without
limitation, the Interests listed on Exhibit A hereto (which may be amended, updated or otherwise
modified from time to time) pledged by the Pledgors pursuant to this Pledge Agreement.

     2. GRANT OF SECURITY INTEREST

          (a) As collateral security for the prompt performance, observance and indefeasible payment in
full in cash of all of the Obligations, each Pledgor hereby assigns, pledges, hypothecates,
transfers and sets over to Pledgee and grants to Pledgee, for itself and for the benefit of
Lenders, a security interest in and lien upon the following (collectively, the “Collateral”): (i)
the Pledged Interests owned by such Pledgor and all other ownership interests of such Pledgor in
any Issuer in which such Pledgor has an ownership interest, all certificates (if any) at any time
representing or evidencing such ownership interests (including without limitation the membership
certificate described on Exhibit A hereto) and (A) all of such Pledgor’s right, title and interest
in, to and under any operating agreement to which such Pledgor is a party with respect to any such
Issuer as set forth on Exhibit A hereto (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated, or replaced, each an “LLC Agreement” and
collectively the “LLC Agreements”), including, without limitation, all of such Pledgor’s right,
title and interest as a member to participate in the operation or management of any such Issuer and
all of such Pledgor’s ownership interests under any such LLC Agreement, and (B) all present and
future rights of such Pledgor to receive payment of money or other distribution of payments arising
out of or in connection with the Pledged Interests owned by such Pledgor and all other ownership
interests and its rights under any such LLC Agreement now or hereafter owned by such Pledgor, (ii)
all additional Interests of any Issuer in which such Pledgor now has an ownership interest or any
other Person from time to time acquired or formed by such Pledgor in any manner (which additional
Interests shall be

2

 

deemed part of the Pledged Interests whether or not Exhibit A has been updated in accordance
with the terms hereof) and any certificates representing such Interests, (iii) all proceeds of and
to any of the property of such Pledgor described above, including, without limitation, all causes
of action, claims and warranties now or hereafter held by such Pledgor in respect of any of the
items listed above and (iv) such Pledgor’s books and records with respect to any of the foregoing.

          (b) This Pledge Agreement is executed only as security for the Obligations and, therefore, the
execution and delivery of this Pledge Agreement shall not subject Pledgee or any Lender to, or
transfer or pass to Pledgee or any Lender, or in any way affect or modify, the liability of any
Pledgor under any LLC Agreement to which such Pledgor is a party or any related agreements,
documents or instruments or otherwise. In no event shall the acceptance of this Pledge Agreement
by Pledgee or Lenders or the exercise by Pledgee or any Lender of any rights hereunder or assigned
hereby, constitute an assumption of any liability or obligation of any Pledgor to, under or in
connection with any such LLC Agreement or any related agreements, documents or instruments or
otherwise.

          (c) Each Pledgor agrees that the Pledgee may from time to time attach as Exhibit A
hereto an updated list of the Interests, securities or other equity interests at the time pledged
to the Pledgee hereunder without the consent of any Pledgor hereunder.

     3. OBLIGATIONS SECURED

     The security interest, lien and other interests granted to Pledgee (for itself and on behalf
of Lenders) pursuant to this Pledge Agreement shall secure the prompt performance and payment in
full of any and all Obligations.

     4. REPRESENTATIONS, WARRANTIES AND COVENANTS

     Each Pledgor hereby represents, warrants and covenants with and to Pledgee and Lenders the
following (all of such representations, warranties and covenants being continuing so long as any of
the Obligations are outstanding):

          (a) The Pledged Interests owned by such Pledgor are duly authorized, validly existing, fully
paid and non-assessable and constitute all of the issued and outstanding membership interests in
any Issuer in which such Pledgor has an ownership interest, and such Pledgor is the registered
owner of such membership interests. Such Pledgor is the holder of one hundred (100%) percent of
the membership interests therein and is the sole member of any such Issuer.

          (b) The Collateral pledged by such Pledgor is directly, legally and beneficially owned by such
Pledgor, free and clear of all claims, liens, pledges and encumbrances of any kind, nature or
description, except for (i) the pledge, lien and security interest in favor of Pledgee, for itself
and the benefit of Lenders and (ii) the subordinated lien permitted pursuant to Section 9.8(n) of
the Loan Agreement.

3

 

          (c) The Collateral pledged by such Pledgor is not subject to any restrictions relative to the
transfer thereof and such Pledgor has the right to transfer and hypothecate such Collateral free
and clear of any liens, encumbrances or restrictions.

          (d) The Collateral pledged by such Pledgor is duly and validly pledged to Pledgee, for itself
and for the benefit of Lenders; no consent or approval of any governmental or regulatory authority
or of any securities exchange or the like, nor any consent or approval of any other third party,
was or is necessary to the validity and enforceability of this Pledge Agreement.

          (e) Such Pledgor authorizes Pledgee to: (i) store, deposit and safeguard the Collateral
pledged by such Pledgor, (ii) perform any and all other acts which Pledgee in good faith deems
reasonable and/or necessary for the protection and preservation of such Collateral or its value or
Pledgee’s security interest therein, including, without limitation, transferring, registering or
arranging for the transfer or registration of such Collateral to or in Pledgee’s, or any Lender’s,
own name and receiving the income therefrom as additional security for the Obligations and (iii)
pay any charges or expenses which Pledgee deems necessary for the foregoing purpose, but without
any obligation to do so. Any obligation of Pledgee for reasonable care for such Collateral in
Pledgee’s possession shall be limited to the same degree of care which Pledgee uses for similar
property pledged to Pledgee by other Persons.

          (f) As of the date hereof, there are no certificates or other written instruments evidencing
or representing the Pledged Interests owned by such Pledgor (except for the membership
certificate(s) described on Exhibit A hereto, which certificate(s) is/are being pledged and
delivered to Pledgee herewith, accompanied by an assignment of such certificate, duly endorsed by
such Pledgor in blank). If at any time after the date hereof such Pledgor shall become entitled to
receive or acquire, or shall receive any other membership interest certificate, or option or right
with respect to any membership interests of any Issuer in which such Pledgor has an ownership
interest (including without limitation, any certificate representing a distribution or exchange of
or in connection with reclassification of any Pledged Interest pledged by such Pledgor) whether as
an addition to, in substitution of, or in exchange for any of the Collateral pledged by such
Pledgor or otherwise, such Pledgor agrees to accept same as Pledgee’s agent, to hold same in trust
for Pledgee and to deliver same forthwith to Pledgee or Pledgee’s agent or bailee in the form
received, with the endorsement(s) of such Pledgor where necessary and/or appropriate powers and/or
assignments duly executed to be held by Pledgee or Pledgee’s agent or bailee subject to the terms
hereof, as further security for the Obligations.

          (g) The Collateral pledged by such Pledgor is not and shall not at any time hereafter be
investment property or otherwise subject to Article 8 of the UCC, except as Pledgee may otherwise
expressly agree.

          (h) Such Pledgor shall keep full and accurate books and records relating to the Collateral
pledged by such Pledgor and stamp or otherwise mark such books and records in such manner as
Pledgee may require in order to reflect the security interests granted by this Pledge Agreement.

          (i) Such Pledgor shall not, without the prior consent of Pledgee, directly or indirectly,
sell, assign, transfer, or otherwise dispose of, or grant any option with respect to the

4

 

Collateral pledged by such Pledgor, nor shall such Pledgor create, incur or permit any further
pledge, hypothecation, encumbrance, lien, mortgage or security interest with respect to such
Collateral.

          (j) So long as no Event of Default (as hereinafter defined) has occurred and is continuing,
such Pledgor shall have the right to exercise all limited liability company rights with respect to
the Collateral pledged by such Pledgor, except as expressly prohibited herein or in any of the
other Financing Agreements, and to receive any distributions payable in respect of such Collateral
(but subject to terms of the Loan Agreement with respect thereto).

          (k) Such Pledgor has delivered to Pledgee a true, correct and complete copy of the LLC
Agreements to which such Pledgor is a party and the certificate of formation of any Issuer in which
such Pledgor has an ownership interest. There are and shall be no other agreements governing the
formation, organization or terms of the membership interests with respect to any such Issuer.

          (l) Such Pledgor shall not permit any Issuer in which such Pledgor has an ownership interest,
directly or indirectly, to (i) issue, sell, grant, assign, transfer or otherwise dispose of, any
additional membership interests of such Issuer or any option or warrant with respect to, or other
right or security convertible into, any additional membership interests, now or hereafter
authorized, unless all such additional membership interests, options, warrants, rights or other
such securities are made and shall remain part of the Collateral pledged by such Pledgor subject to
the pledge and security interest granted herein, (ii) take any action to withdraw the authority of
or to limit or restrict the authority of the managers or officers of such Issuer to deal and
contract with Pledgee and to bind and obligate such Issuer, or (iii) pay any interim distribution
in cash or other assets to any member, except as permitted in the Loan Agreement. Any distribution
by such Issuer other than as permitted in the Loan Agreement shall constitute a “wrongful
distribution” for purposes of applicable law.

          (m) Such Pledgor shall promptly notify Pledgee in writing of the occurrence of any event
specified in any LLC Agreement to which such Pledgor is a party or the certificate of formation of
any Issuer in which such Pledgor has an ownership interest that may result in such Issuer’s
dissolution or liquidation.

          (n) Such Pledgor shall not, and shall not permit any Issuer in which such Pledgor has an
ownership interest, directly or indirectly, to, amend, modify or supplement any of the provisions
of any LLC Agreement to which such Pledgor is a party or the certificate of formation of the
applicable Issuer without the prior written consent of Pledgee if any such amendment, modification
or supplement would or could affect any rights of Pledgee hereunder or under any of the other
Financing Agreements or would limit or restrict the permissible activities in which such Issuer may
engage.

          (o) In accordance with the LLC Agreement(s) to which such Pledgor is a party, Pledgor, as the
sole member of the applicable Issuer, hereby acknowledges and agrees that Pledgee or any of its
successors, assigns or designees, shall, at Pledgee’s option upon written notice to such Pledgor of
Pledgee’s intent to be admitted itself (or to have any such successor, assignee or designee
admitted) as a member of such Issuer at any time an Event of Default exists

5

 

or has occurred and is continuing, be admitted as a member of any such Issuer without any
further approval of such Pledgor and without compliance by Pledgee or any other Person with any of
the conditions or other requirements of such LLC Agreement and without conferring upon any member
thereof any option (whether under such LLC Agreement or otherwise) to acquire the membership
interests so transferred to Pledgee, its successors, assigns, or designees. Such Pledgor agrees to
take such other action and execute such further documents as Pledgee may reasonably request from
time to time in order to give effect to the foregoing provisions of this Section 4.

          (p) Such Pledgor shall pay all charges and assessments of any nature against the Collateral
pledged by such Pledgor or with respect thereto prior to said charges and/or assessments being
delinquent.

          (q) Such Pledgor shall promptly reimburse Pledgee and Lenders, on demand, together with
interest at the highest rate then applicable to the Obligations set forth in the Loan Agreement,
for any charges, assessments or expenses paid or incurred by Pledgee for the protection,
preservation and maintenance of the Collateral pledged by such Pledgor and the enforcement of
Pledgee’s or Lenders’ rights hereunder, including, without limitation, attorneys’ fees and legal
expenses incurred by Pledgee in seeking to protect, collect or enforce its rights in such
Collateral or otherwise hereunder. Any such amounts paid or incurred by Pledgee shall constitute
part of the Obligations secured hereby and may be charged by Pledgee to any loan account of such
Pledgor maintained by Pledgee or any Lender, at its option.

          (r) Such Pledgor shall furnish, or cause to be furnished, to Pledgee such information
concerning any Issuer in which such Pledgor has an ownership interest and the Collateral pledged by
such Pledgor as may from time to time be required under the Loan Agreement.

          (s) Pledgee may notify any Issuer in which such Pledgor has an ownership interest or the
appropriate transfer agent of the Collateral pledged by such Pledgor to register the security
interest and pledge granted herein and to honor the rights of Pledgee with respect thereto.

          (t) Such Pledgor authorizes Pledgee to (i) perform any and all other acts which Pledgee deems
reasonable and/or necessary for the protection and preservation of the Collateral pledged by such
Pledgor or its value or Pledgee’s security interest therein and (ii) pay any charges or expenses
which Pledgee deems necessary for the foregoing purpose, but without any obligation to do so (and
any amounts so paid shall constitute Obligations).

          (u) Such Pledgor waives: (i) all rights to require Pledgee or Lenders to proceed against any
other Person, entity or collateral or to exercise any remedy, (ii) the defense of the statute of
limitations in any action upon any of the Obligations, (iii) any right of subrogation or interest
in the Obligations or the Collateral until all Obligations have been indefeasibly paid in full in
immediately available funds and the Loan Agreement has been terminated, (iv) any rights to notice
of any kind or nature whatsoever, unless specifically required in this Pledge Agreement, the Loan
Agreement (to the extent applicable to this Pledge Agreement) or non-waivable under any applicable
law, and (v) to the extent permissible, its

6

 

rights under Section 9-207 of the UCC. Such Pledgor agrees that the Collateral, other
collateral, or any other guarantor or endorser may be released, substituted or added with respect
to the Obligations, in whole or in part, without releasing or otherwise affecting the liability of
such Pledgor, the pledge and security interests granted hereunder, or this Pledge Agreement.
Pledgee is entitled to all of the benefits of a secured party set forth in Section 9-207 of the
UCC.

     5. AUTHORIZATION TO PLEDGE IN LLC AGREEMENT.

          (a) Each Pledgor hereby represents, warrants and covenants with and to Pledgee and Lenders
that as of the date hereof:

               (i) each LLC Agreement to which such Pledgor is a party permits such Pledgor to pledge and
assign any and all membership interests in (or other ownership interests of) the applicable Issuer
(including, without limitation, the Pledged Interests owned by such Pledgor) to Pledgee, for itself
and the ratable benefit of Lenders, and such LLC Agreement shall not be amended, modified, altered
or changed in such a manner to limit, restrict or prevent such pledge and assignment; and

               (ii) each LLC Agreement to which such Pledgor is a party permits Pledgee and its successors,
assigns and designees to be admitted to the applicable Issuer as a member thereof upon transfer of
membership interests to Pledgee as provided in Section 8 hereof without compliance by Pledgee or
any other Person with any of the conditions or other requirements of such LLC Agreement and without
conferring upon such Issuer or any other member thereof any option to acquire the membership
interests so transferred to Pledgee or its designees.

          (b) Such Pledgor agrees to take such other action and execute such further documents as
Pledgee may from time to time request in order to give effect to the foregoing provisions of this
Section 5.

     6. NO ASSUMPTION OF LIABILITIES.

          (a) Nothing herein shall be construed to make Pledgee or any Lender liable as a member of any
Issuer, and neither Pledgee nor any Lender, by virtue of this Pledge Agreement or otherwise, shall
have any of the duties, obligations or liabilities of a member of such Issuer. The parties hereto
expressly agree that this Pledge Agreement shall not be construed as creating a partnership or
joint venture among Pledgee or any Lender and any Pledgor and/or any Issuer.

          (b) By accepting this Pledge Agreement, Pledgee and Lenders do not intend to become a member
of any Issuer or otherwise be deemed to be a co-venturer with respect to any Pledgor or any Issuer
either before or after an Event of Default shall have occurred. Pledgee and Lenders shall have
only those powers set forth herein and shall assume none of the duties, obligations or liabilities
of any Pledgor or of a member of any Issuer. Pledgee and Lenders shall not be obligated to perform
or discharge any obligation of any Pledgor as a result of the pledge hereby effected.

          (c) The acceptance by Pledgee and Lenders of this Pledge Agreement, with all of the rights,
powers, privileges and authority so created, shall not at any time or in any event obligate Pledgee
or any Lender to appear in or defend any action or proceeding relating to the

7

 

Collateral to which it is not a party, or to take any action hereunder or thereunder, or to
expend any money or incur any expense or perform or discharge any obligation, duty or liability
hereunder or otherwise with respect to the Collateral.

     7. EVENTS OF DEFAULT

     The occurrence or existence of any Event of Default under and as defined in any of the
Financing Agreements is referred to herein individually as an “Event of Default” and collectively
as “Events of Default”.

     8. RIGHTS AND REMEDIES

     At any time an Event of Default exists or has occurred and is continuing, in addition to all
other rights and remedies of Pledgee and Lenders, whether provided under this Pledge Agreement, the
Loan Agreement, the other Financing Agreements, applicable law or otherwise, Pledgee shall have the
following rights and remedies which may be exercised without notice to, or consent by, any Pledgor
except as such notice or consent is expressly provided for hereunder or under the Loan Agreement
(to the extent applicable to this Pledge Agreement):

          (a) Pledgee, at its option, shall be empowered to exercise its continuing right to instruct
any Issuer (or the appropriate transfer agent of the Collateral) to register any or all of the
Collateral in the name of Pledgee or in the name of Pledgee’s nominee and Pledgee may complete, in
any manner Pledgee may deem expedient, any assignments or other documents heretofore or hereafter
executed in blank by such Pledgor and delivered to Pledgee. After said instruction, and without
further notice, Pledgee shall have the exclusive right to exercise all rights with respect to the
Collateral (including all voting and limited liability company rights), and exercise any and all
rights of conversion, redemption, exchange, subscription or any other rights, privileges, or
options pertaining to the Collateral as if Pledgee were the absolute owner thereof, including,
without limitation, the right to exchange, in its discretion, any and all of the Collateral upon
any merger, consolidation, reorganization, recapitalization or other readjustment with respect
thereto. Upon the exercise of any such rights, privileges or options by Pledgee, Pledgee shall
have the right to deposit and deliver any and all of the Collateral to any committee, depository,
transfer agent, registrar or other designated agency upon such terms and conditions as Pledgee may
determine, all without liability, except to account for property actually received by Pledgee.
However, Pledgee shall have no duty to exercise any of the aforesaid rights, privileges or options
(all of which are exercisable in the sole discretion of Pledgee) and shall not be responsible for
any failure to do so or delay in doing so.

          (b) Upon prior written notice thereof to the applicable Issuer and the applicable Pledgor, (i)
Pledgee may transfer the membership interests of such Pledgor in such Issuer into the name of
Pledgee (or its successors or assignees, or designee) and (ii) Pledgee (or its successors,
assignees, or designees) shall be admitted as a member of such Issuer in the place of such Pledgor.

          (c) In addition to all the rights and remedies of a secured party under the UCC or other
applicable law, Pledgee shall have the right, at any time and without demand of performance or
other demand, advertisement or notice of any kind (except the notice specified

8

 

below of time and place of public or private sale) to or upon any Pledgor or any other Person
(all and each of which demands, advertisements and/or notices are hereby expressly waived to the
extent permitted by applicable law), to proceed forthwith to collect, redeem, recover, receive,
appropriate, realize, sell, or otherwise dispose of and deliver the Collateral or any part thereof
in one or more lots at public or private sale or sales at any exchange, broker’s board or at any of
Pledgee’s offices or elsewhere at such prices and on such terms as Pledgee may deem best. The
foregoing disposition(s) may be for cash or on credit or for future delivery without assumption of
any credit risk, with Pledgee having the right to purchase all or any part of the Collateral so
sold at any such sale or sales, public or private, free of any right or equity of redemption in
such Pledgor, which right or equity is hereby expressly waived or released by such Pledgor. The
proceeds of any such collection, redemption, recovery, receipt, appropriation, realization, sale or
other disposition, after deducting all costs and expenses of every kind incurred relative thereto
or incidental to the care, safekeeping or otherwise of any and all of the Collateral or in any way
relating to the rights of Pledgee hereunder, including attorneys’ fees and legal expenses, shall be
applied first to the satisfaction of the Obligations (in such order as Pledgee may elect and
whether or not due) and then to the payment of any other amounts required by applicable law,
including Section 9-615(a)(3) of the UCC, with such Pledgor to be and remain liable for any
deficiency. Each Pledgor shall be jointly and severally liable to Pledgee and Lenders for the
payment on demand of all such costs and expenses, together with interest at the highest rate then
applicable to Obligations set forth in the Loan Agreement and any attorneys’ fees and legal
expenses incurred by Pledgee. Any such amounts shall constitute Obligations under the Loan
Agreement and may be charged by Pledgee to the loan account of the Borrowers maintained by Pledgee
at its option. Each Pledgor agrees that ten (10) days prior written notice by Pledgee designating
the place and time of any public sale or of the time after which any private sale or other intended
disposition of any or all of the Collateral is to be made, is reasonable notification of such
matters.

          (d) Each Pledgor recognizes that Pledgee may be unable to effect a public sale of all or part
of the Collateral by reason of certain prohibitions contained in the Securities Act of 1933 (as
amended and as now or hereafter in effect, the “Act”) or in applicable Blue Sky or other state
securities law, as now or hereafter in effect, but may be compelled to resort to one or more
private sales to a restricted group of purchasers who will be obliged to agree, among other things,
to acquire the Collateral for their own account for investment and not with a view to the
distribution or resale thereof. If at the time of any sale of the Collateral or any part thereof,
the same shall not, for any reason whatsoever, be effectively registered (if required) under the
Act (or other applicable state securities law), as then in effect, Pledgee in its sole and absolute
discretion is authorized to sell the Collateral or such part thereof by private sale in such manner
and under such circumstances as Pledgee or its counsel may deem necessary or advisable in order
that such sale may legally be effected without registration. Each Pledgor agrees that private
sales so made may be at prices and other terms less favorable to the seller than if the Collateral
were sold at public sale, and that Pledgee has no obligation to delay the sale of any the
Collateral for the period of time necessary to permit any Issuer, even if such Issuer would agree,
to register the Collateral for public sale under such applicable securities laws. Each Pledgor
agrees that any private sales made under the foregoing circumstances shall be deemed to have been
conducted in a commercially reasonable manner. If Pledgee determines in its sole discretion that
it is necessary or advisable to effect a public registration of all or part of the

9

 

Pledged Interests pursuant to the Act, such Pledgor shall cooperate in all respects to
effectuate such registration.

          (e) All of the rights and remedies of Pledgee and Lenders, including, but not limited to, the
foregoing and those otherwise arising under this Pledge Agreement, the Loan Agreement and the other
Financing Agreements, the instruments comprising the Collateral, applicable law or otherwise, shall
be cumulative and not exclusive and shall be enforceable alternatively, successively or
concurrently as Pledgee may deem expedient. No failure or delay on the part of Pledgee or any
Lender in exercising any of its options, powers or rights or partial or single exercise thereof,
shall constitute a waiver of such option, power or right.

     9. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

          (a) The validity, interpretation and enforcement of this Pledge Agreement and any dispute
arising out of the relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York without regard to
principles of conflicts of law or choice of law (other than Section 5-1401 and Section 5-1402 of
the General Obligations Laws of the State of New York).

          (b) Each Pledgor irrevocably consents and submits to the non exclusive jurisdiction of the
Supreme Court of the State of New York in New York County and the United States District Court for
the Southern District of New York, whichever Pledgee may elect, and waives any objection based on
venue or forum non conveniens with respect to any action instituted therein arising under this
Pledge Agreement or in any way connected with or related or incidental to the dealings of the
parties hereto in respect of this Pledge Agreement or the transactions related hereto or thereto,
in each case whether now existing or hereafter arising, and whether in contract, tort, equity or
otherwise, and agrees that any dispute with respect to any such matters shall be heard only in the
courts described above (except that Pledgee shall have the right to bring any action or proceeding
against any Pledgor or its property in the courts of any other jurisdiction which Pledgee deems
necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights
against such Pledgor or its property).

          (c) Each Pledgor hereby waives personal service of any and all process upon it and consents
that all such service of process may be made by U.S. certified mail (return receipt requested)
directed to its address set forth herein and service so made shall be deemed to be completed
immediately upon receipt thereof by such Pledgor, or, at Pledgee’s option, by service upon such
Pledgor in any other manner provided under the rules of any such courts. Within thirty (30) days
after such service, such Pledgor shall appear in answer to such process, failing which such Pledgor
shall be deemed in default and judgment may be entered by Pledgee against such Pledgor for the
amount of the claim and other relief requested.

          (d) PLEDGORS AND PLEDGEE EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING
AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF ANY
PLEDGOR AND PLEDGEE OR ANY

10

 

LENDER IN RESPECT OF THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT SUCH PLEDGOR OR PLEDGEE MAY FILE A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

          (e) Pledgee and Lenders shall not have any liability to any Pledgor (whether in tort,
contract, equity or otherwise) for losses suffered by any Pledgor in connection with, arising out
of, or in any way related to the transactions or relationships contemplated by this Pledge
Agreement, or any act, omission or event occurring in connection herewith, unless it is determined
by a final and non-appealable judgment or court order binding on Pledgee or such Lender, that the
losses were the result of acts or omissions constituting gross negligence or willful misconduct by
Pledgee or such Lender. In any such litigation, Pledgee and Lenders shall be entitled to the
benefit of the rebuttable presumption that it acted in good faith and with the exercise of ordinary
care in the performance by it of the terms of this Pledge Agreement.

     10. MISCELLANEOUS

          (a) Each Pledgor agrees that at any time and from time to time upon the written request of
Pledgee, such Pledgor shall execute and deliver such further documents, in form satisfactory to
Pledgee, and will take or cause to be taken such further acts as Pledgee may request in order to
effect the purposes of this Pledge Agreement and perfect or continue the perfection of the security
interest in the Collateral pledged by such Pledgor to Pledgee hereunder.

          (b) Beyond the exercise of reasonable care to assure the safe custody of the Collateral
(whether such custody is exercised by Pledgee, or Pledgee’s nominee, agent or bailee), Pledgee or
Pledgee’s nominee agent or bailee shall have no duty or liability to protect or preserve any rights
pertaining thereto and shall be relieved of all responsibility for such Collateral upon
surrendering it to the applicable Pledgor or foreclosure with respect thereto.

          (c) All notices, requests and demands to or upon the respective parties hereto shall be in
writing and shall be deemed to have been duly given or made: if delivered in person, immediately
upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service with instructions to
deliver the next business day, one (1) business day after sending; and if by registered or
certified mail, return receipt requested, five (5) days after mailing by deposit (postage prepaid)
in the U.S. mail. All notices, requests and demands upon the parties are to be given to the
following addresses (or to such other address as any party may designate by notice in accordance
with this Section 10):

	 	 	 
	If to any Pledgor:

	 	c/o Hancock Fabrics, Inc.
	 

	 	One Fashion Way
	 

	 	Baldwyn, Mississippi 38824

11

 

	 	 	 
	 

	 	Attention: Robert Driskell, CFO
	 

	 	Telephone No.: (662) 365-6112
	 

	 	Telecopy No.: (662) 365-6025
	 
	 	 
	with a copy to:

	 	Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
	 

	 	165 Madison Avenue
	 

	 	First Tennessee Building
	 

	 	Memphis, TN 38103
	 

	 	Attention: Sam D. Chafetz, Esq.
	 

	 	Telephone No.: (901) 577-2148
	 

	 	Telecopy No.: (901) 577-0854
	 
	 	 
	If to Pledgee:

	 	General Electric Capital Corporation, as Agent
	 

	 	401 Merritt 7, P.O. Box 5201
	 

	 	Norwalk, CT 06856-5201
	 

	 	Attention: Hancock Fabrics Account Manager
	 

	 	Telephone No.: (203) 956-4598
	 

	 	Telecopy No.: (203) 956-4002
	 
	 	 
	with copies to:

	 	Bingham McCutchen LLP
	 

	 	One Federal Street
	 

	 	Boston, MA 02110
	 

	 	Attention: Robert A. J. Barry, Esq.
	 

	 	Telephone No.: (617) 951-8624
	 

	 	Telecopy No.: (617) 951-8736
	 
	 	 
	and

	 	General Electric Capital Corporation
	 

	 	401 Merritt 7
	 

	 	Norwalk, CT 06851
	 

	 	Attention: Corporate Counsel — Corporate Lending
	 

	 	Telephone No.: (203) 956-4001
	 

	 	Telecopy No.: (203) 229-1800

          (d) All references to the plural herein shall also mean the singular and to the singular shall
also mean the plural. All references to any Pledgor, Borrowers, any Issuer, Pledgee or any Lender
pursuant to the definitions set forth in the recitals hereto, or to any other Person herein, shall
include their respective successors and assigns. The words “hereof,” “herein,” “hereunder,” “this
Pledge Agreement” and words of similar import when used in this Pledge Agreement shall refer to
this Pledge Agreement as a whole and not any particular provision of this Pledge Agreement and as
this Pledge Agreement now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced. An Event of Default shall exist or continue or be continuing until
such Event of Default is waived in accordance with Section 10(g) hereof or the provisions of the
Loan Agreement.

12

 

          (e) This Pledge Agreement shall be binding upon each Pledgor and its successors and assigns
and inure to the benefit of and be enforceable by Pledgee and its successors and assigns.

          (f) If any provision of this Pledge Agreement is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Pledge Agreement as a whole, but this
Pledge Agreement shall be construed as though it did not contain the particular provision held to
be invalid or unenforceable and the rights and obligations of the parties shall be construed and
enforced only to such extent as shall be permitted by applicable law.

          (g) Neither this Pledge Agreement nor any provision hereof shall be amended, modified, waived
or discharged orally or by course of conduct, but only by a written agreement signed by an
authorized officer of Pledgee. Pledgee and Lenders shall not, by any act, delay, omission or
otherwise be deemed to have expressly or impliedly waived any of their respective rights, powers
and/or remedies unless such waiver shall be in writing and signed by an authorized officer of
Pledgee. Any such waiver shall be enforceable only to the extent specifically set forth therein.
A waiver by Pledgee or any Lender of any right, power and/or remedy on any one occasion shall not
be construed as a bar to or waiver of any such right, power and/or remedy which Pledgee or such
Lender would otherwise have on any future occasion, whether similar in kind or otherwise.

          (h) This Pledge Agreement may be executed in any number of counterparts, each of which shall
be an original, but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of this Pledge Agreement by telefacsimile or other means of
electronic transmission shall have the same force and effect as the delivery of an original
executed counterpart of this Pledge Agreement. Any party delivering an executed counterpart of
this Pledge Agreement by telefacsimile or other means of electronic transmission shall also deliver
an original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Pledge Agreement.

          (i) New Subsidiaries of the Pledgors or other entities (each an “Additional Pledgor”) may
hereafter become parties to this Pledge Agreement by executing a counterpart hereof or,
alternatively, by executing a joinder agreement in form and substance satisfactory to Pledgee, and
there shall be no need to re-execute, amend or restate this Pledge Agreement in connection
therewith. Upon such execution and delivery by any Additional Pledgor, such Additional Pledgor
shall be deemed to have made the representations and warranties set forth in Section 4 hereof, and
shall be bound by all of the terms, covenants and conditions hereof to the same extent as if such
Additional Pledgor had executed this Pledge Agreement as of the Closing Date, and Pledgee and the
Lenders shall be entitled to all of the benefits of such Additional Pledgor’s obligations
hereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

13

 

     IN WITNESS WHEREOF, each Pledgor has executed this Pledge Agreement as of the day and year
first above written.

	 	 	 	 	 
	 	PLEDGORS

HANCOCK FABRICS, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	HF MERCHANDISING, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	HANCOCK FABRICS OF MI, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	HANCOCKFABRICS.COM, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Treasurer 	 
	 
	 	HANCOCK FABRICS, LLC

 	 
	 	By:  	/s/ Larry D. Fair	 
	 	 	Name:  	Larry D. Fair 	 
	 	 	Title:  	Treasurer 	 
	 
	 	HF ENTERPRISES, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Vice President 	 
	 
	 	HF RESOURCES, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Pledge and Security Agreement (LLCs)]

 

 

EXHIBIT A

TO

PLEDGE AND SECURITY AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	No. of	 	 
	 	 	 	 	Operating	 	Certificate	 	Membership	 	Percentage
	Pledgor	 	Issuer	 	Agreement (Date)	 	No.	 	Interests	 	Interest Owned
	HF
Enterprises,
Inc.

	 	Hancock
Fabrics, LLC
	 	January 28, 2002,
as amended
	 	 	2	 	 	 	1	 	 	 	100	%

A-1EX-10.16

EXHIBIT 10.16

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

     This TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT (this “Trademark Agreement”),
dated as of August 1, 2008, is by and between each of the undersigned (each individually, an
“Assignor” and, collectively, the “Assignors”), and GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation, in its capacity as agent (in such capacity “Agent”) under the Loan Agreement
(as defined below) acting for and on behalf of the Lenders (as defined in the Loan Agreement).

W
I T N E S S E T H:

     WHEREAS, each Assignor is the owner of the entire right, title, and interest in and to its
particular trademarks, trade names, terms, designs and applications therefor described in Exhibit A
hereto and made a part hereof; and

     WHEREAS, Agent and the Lenders have entered or are about to enter into financing arrangements
pursuant to which Lenders (or Agent on behalf of Lenders) may make loans and advances and provide
other financial accommodations to Borrowers (as defined below), and certain affiliates of Borrowers
as set forth in the Loan and Security Agreement, dated of even date herewith, by and among Hancock
Fabrics, Inc, a Delaware corporation (“Parent”), HF Merchandising, Inc., a Delaware corporation
(“Merchandising”), Hancock Fabrics of MI, Inc., a Delaware corporation (“Fabrics MI”),
hancockfabrics.com, Inc., a Delaware corporation (“Fabrics.com”), Hancock Fabrics, LLC, a Delaware
limited liability company (“Fabrics LLC”, and together with Parent, Merchandising, Fabrics MI and
Fabrics.com, each individually a “Borrower” and, collectively, “Borrowers”), certain affiliates of
Borrowers, Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”; capitalized terms used
herein without definition shall have the meanings ascribed to such terms in the Loan Agreement) and
other agreements, documents and instruments referred to therein or at any time executed and/or
delivered in connection therewith or related thereto, including, but not limited to, this Agreement
(all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the “Financing Agreements”); and

     WHEREAS, in order to induce Agent and Lenders to enter into the Loan Agreement and the other
Financing Agreements and to make loans and advances and provide other financial accommodations to
Borrowers pursuant thereto, each Assignor has agreed to grant to Agent certain collateral security
as set forth herein.

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby
agrees as follows:

 

 

     1. GRANT OF SECURITY INTEREST

     As collateral security for the prompt performance, observance and indefeasible payment in full
of all of the Obligations, each Assignor hereby grants to Agent, for itself and for the benefit of
Lenders, a continuing security interest in and a general lien upon the following (being
collectively referred to herein as the “Collateral”): (a) all of such Assignor’s now existing or
hereafter acquired right, title, and interest in and to: (i) all of such Assignor’s trademarks,
trade names, trade styles and service marks and all applications, registrations and recordings
relating to the foregoing as may at any time be filed in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State thereof, any political
subdivision thereof or in any other country, including, without limitation, the trademarks, terms,
designs and applications described in Exhibit A hereto, together with all rights and privileges
arising under applicable law with respect to such Assignor’s use of any trademarks, trade names,
trade styles and service marks, and all reissues, extensions, continuation and renewals thereof
(all of the foregoing being collectively referred to herein as the “Trademarks”); and (ii) all
prints and labels on which such trademarks, trade names, trade styles and service marks appear,
have appeared or will appear, and all designs and general intangibles of a like nature; (b) the
goodwill of the business symbolized by each of the Trademarks, including, without limitation, all
customer lists and other records relating to the distribution of products or services bearing the
Trademarks; (c) all present and future license and distribution agreements (subject to the rights
of the licensors therein) pertaining to the Trademarks; (d) all income, fees, royalties and other
payments at any time due or payable with respect thereto, including, without limitation, payments
under all licenses at any time entered into in connection therewith; (e) the right to sue for past,
present and future infringements thereof; (f) all rights corresponding thereto throughout the
world; and (g) any and all other proceeds of any of the foregoing, including, without limitation,
damages and payments or claims by such Assignor against third parties for past or future
infringement of the Trademarks.

     2. OBLIGATIONS SECURED

     The security interest, lien and other interests granted to Agent, for the benefit of Lenders,
pursuant to this Trademark Agreement shall secure the prompt performance, observance and payment in
full of any and all Obligations.

     3. REPRESENTATIONS, WARRANTIES AND COVENANTS

     Each Assignor hereby represents, warrants and covenants with and to Agent the following (all
of such representations, warranties and covenants being continuing so long as any of the
Obligations are outstanding):

     (a) Such Assignor shall pay and perform all of the Obligations according to their terms.

     (b) All of the existing Collateral owned or held by such Assignor is valid and subsisting in
full force and effect, and such Assignor owns the sole, full and clear title thereto, and the right
and power to grant the security interest and collateral assignment granted hereunder. Such
Assignor shall, at such Assignor’s expense, perform all acts and execute all documents necessary to
maintain the existence of the Collateral owned or held by such Assignor consisting of

2

 

registered Trademarks as registered trademarks and to maintain the existence of all of the
Collateral owned or held by such Assignor as valid and subsisting, including, without limitation,
the filing of any renewal affidavits and applications. The Collateral owned or held by such
Assignor is not subject to any liens, claims, mortgages, assignments, licenses, security interests
or encumbrances of any nature whatsoever, except: (i) the security interests granted hereunder and
pursuant to the Loan Agreement, (ii) the security interests permitted under the Loan Agreement, and
(iii) the licenses permitted under Section 3(e) below.

     (c) Such Assignor shall not assign, sell, mortgage, lease, transfer, pledge, hypothecate,
grant a security interest in or lien upon, encumber, grant an exclusive or non-exclusive license
relating to the Collateral owned or held by such Assignor, or otherwise dispose of any of the
Collateral owned or held by such Assignor, in each case without the prior written consent of Agent,
except as otherwise permitted herein or in the Loan Agreement. Nothing in this Trademark Agreement
shall be deemed a consent by Agent or any Lender to any such action, except as such action is
expressly permitted hereunder.

     (d) Such Assignor shall, at such Assignor’s expense, promptly perform all acts and execute all
documents requested at any time by Agent to evidence, perfect, maintain, record or enforce the
security interest in and collateral assignment of the Collateral owned or held by such Assignor
granted hereunder or to otherwise further the provisions of this Trademark Agreement. Such
Assignor hereby authorizes Agent to execute and file one or more financing statements (or similar
documents) with respect to the Collateral owned or held by such Assignor. Such Assignor further
authorizes Agent to have this Trademark Agreement or any other similar security agreement filed
with the Commissioner of Patents and Trademarks or any other appropriate federal, state or
government office.

     (e) As of the date hereof, such Assignor does not have any Trademarks registered, or subject
to pending applications, in the United States Patent and Trademark Office or any similar office or
agency in the United States, any State thereof, any political subdivision thereof or in any other
country, other than those described in Exhibit A hereto, and such Assignor has not granted any
licenses with respect thereto other than as set forth in Exhibit B hereto.

     (f) Such Assignor shall, concurrently with the execution and delivery of this Trademark
Agreement, execute and deliver to Agent five (5) originals of a Special Power of Attorney in the
form of Exhibit C annexed hereto for the implementation of the assignment, sale or other
disposition of the Collateral owned or held by such Assignor pursuant to Agent’s exercise of the
rights and remedies granted to Agent hereunder.

     (g) Agent may, in its discretion, pay any amount or do any act which such Assignor fails to
pay or do as required hereunder or as requested by Agent to preserve, defend, protect, maintain,
record or enforce the Obligations, the Collateral owned or held by such Assignor, or the security
interest and collateral assignment granted hereunder, including, but not limited to, all filing or
recording fees, court costs, collection charges, attorneys’ fees and legal expenses. Such Assignor
shall be liable to Agent for any such payment, which payment shall be deemed an advance by Agent to
Borrowers, shall be payable on demand together with interest at the rate then applicable to the
indebtedness of Borrowers to Agent set forth in the Loan Agreement and shall be part of the
Obligations secured hereby.

3

 

     (h) Such Assignor shall not file any application for the registration of a Trademark with the
United States Patent and Trademark Office or any similar office or agency in the United States, any
State thereof, any political subdivision thereof or in any other country, unless such Assignor has
given Agent prompt written notice of such action. If, after the date hereof, such Assignor shall
(i) obtain any registered trademark or trade name, or apply for any such registration in the United
States Patent and Trademark Office or in any similar office or agency in the United States, any
State thereof, any political subdivision thereof or in any other country, or (ii) become the owner
of any trademark registrations or applications for trademark registration used in the United States
or any State thereof, political subdivision thereof or in any other country, the provisions of
Section 1 hereof shall automatically apply thereto. Upon the request of Agent, such Assignor shall
promptly execute and deliver to Agent any and all assignments, agreements, instruments, documents
and such other papers as may be requested by Agent to evidence the security interest in and
collateral assignment of such Trademark in favor of Agent.

     (i) Such Assignor has not abandoned any of such Assignor’s Trademarks, and such Assignor will
not do any act, nor omit to do any act, whereby such Assignor’s Trademarks may become abandoned,
invalidated, unenforceable, avoided, or avoidable. Such Assignor shall notify Agent immediately if
it knows or has reason to know of any reason why any application, registration, or recording with
respect to such Assignor’s Trademarks may become abandoned, canceled, invalidated, avoided, or
avoidable.

     (j) Such Assignor shall render any assistance, as Agent shall determine is necessary, to Agent
in any proceeding before the United States Patent and Trademark Office, any federal or state court,
or any similar office or agency in the United States, any State thereof, any political subdivision
thereof or in any other country, to maintain such application and registration of such Assignor’s
Trademarks as such Assignor’s exclusive property and to protect Agent’s interest therein,
including, without limitation, filing of renewals, affidavits of use, affidavits of
incontestability and opposition, interference, and cancellation proceedings.

     (k) No material infringement or unauthorized use presently is being made of any of such
Assignor’s Trademarks that would adversely affect in any material respect the fair market value of
the Collateral owned or held by such Assignor or the benefits of this Trademark Agreement granted
to Agent and Lenders, including, without limitation, the validity, priority or perfection of the
security interest granted herein or the remedies of Agent and Lenders hereunder. There has been no
judgment holding any of such Assignor’s Trademarks invalid or unenforceable, in whole or part nor
is the validity or enforceability of any of the Trademarks presently being questioned in any
litigation or proceeding to which such Assignor is a party. Such Assignor shall promptly notify
Agent if such Assignor (or any affiliate or subsidiary thereof) learns of any use by any person of
any term or design which infringes on any Trademark or is likely to cause confusion with any
Trademark. If requested by Agent, such Assignor, at such Assignor’s expense, shall join with Agent
in such action as Agent, in Agent’s discretion, may deem advisable for the protection of Agent’s
interest in and to such Assignor’s Trademarks.

     (l) Such Assignor assumes all responsibility and liability arising from the use of such
Assignor’s Trademarks, and such Assignor hereby indemnifies, jointly and severally with the other
Assignors, and holds Agent and Lenders harmless from and against any claim, suit, loss, damage, or
expense (including attorneys’ fees and legal expenses) arising out of any alleged

4

 

defect in any product manufactured, promoted, or sold by such Assignor (or any affiliate or
subsidiary thereof) in connection with such Assignor’s Trademarks or out of the manufacture,
promotion, labeling, sale or advertisement of any such product by such Assignor (or any affiliate
or subsidiary thereof). The foregoing indemnity shall survive the payment of the Obligations, the
termination of this Trademark Agreement and the termination or non-renewal of the Loan Agreement.

     (m) Such Assignor shall promptly pay Agent and Lenders for any and all expenditures made by
Agent pursuant to the provisions of this Trademark Agreement or for the defense, protection or
enforcement of the Obligations, the Collateral owned or held by such Assignor, or the security
interests and collateral assignment granted hereunder, including, but not limited to, all filing or
recording fees, court costs, collection charges, travel expenses, and attorneys’ fees and legal
expenses. Such expenditures shall be payable on demand, together with interest at the rate then
applicable to the indebtedness of Borrowers to Agent set forth in the Loan Agreement and shall be
part of the Obligations secured hereby.

     4. EVENTS OF DEFAULT

     All Obligations shall become immediately due and payable in full, in cash, without notice or
demand, at the option of Agent, upon the occurrence of any Event of Default.

     5. RIGHTS AND REMEDIES

     At any time an Event of Default exists or has occurred and is continuing, in addition to all
other rights and remedies of Agent or any Lender, whether provided under this Trademark Agreement,
the Loan Agreement, the other Financing Agreements, applicable law or otherwise, Agent shall have
the following rights and remedies which may be exercised without notice to, or consent by, any
Assignor except as such notice or consent is expressly provided for hereunder:

     (a) Agent may require that no Assignor nor any affiliate or subsidiary of any Assignor make
any use of the Trademarks or any marks similar thereto for any purpose whatsoever. Agent may make
use of any Trademarks for the sale of goods, completion of work-in-process or rendering of services
or otherwise in connection with enforcing any other security interest granted to Agent by any
Assignor or any subsidiary or affiliate of any Assignor or for such other reason as Agent may
determine.

     (b) Agent may grant such license or licenses relating to the Collateral for such term or
terms, on such conditions, and in such manner, as Agent shall in its discretion deem appropriate.
Such license or licenses may be general, special or otherwise, and may be granted on an exclusive
or non-exclusive basis throughout all or any part of the United States of America, its territories
and possessions, and all foreign countries.

     (c) Agent may assign, sell or otherwise dispose of the Collateral or any part thereof, either
with or without special conditions or stipulations except that if notice to the applicable Assignor
of intended disposition of Collateral is required by law, the giving of ten (10) days prior written
notice to such Assignor of any proposed disposition shall be deemed reasonable notice thereof and
each Assignor waives any other notice with respect thereto. Agent shall have the power to buy the
Collateral or any part thereof, and Agent shall also have the power to

5

 

execute assurances and perform all other acts which Agent may, in its discretion, deem
appropriate or proper to complete such assignment, sale, or disposition. In any such event, the
Assignors shall be liable for any deficiency.

     (d) In addition to the foregoing, in order to implement the assignment, sale, or other
disposition of any of the Collateral pursuant to the terms hereof, Agent may at any time execute
and deliver on behalf of any Assignor, pursuant to the authority granted in the Powers of Attorney
described in Section 3(f) hereof, one or more instruments of assignment of the Trademarks (or any
application, registration, or recording relating thereto), in form suitable for filing, recording,
or registration. Assignors agree to pay Agent on demand all costs incurred in any such transfer of
the Collateral, including, but not limited to, any taxes, fees, and attorneys’ fees and legal
expenses. Assignors further agree that Agent and Lenders have no obligation to preserve rights to
the Trademarks against any other parties.

     (e) Agent may first apply the proceeds actually received from any such license, assignment,
sale or other disposition of any of the Collateral to the costs and expenses thereof, including,
without limitation, attorneys’ fees and all legal, travel and other expenses which may be incurred
by Agent. Thereafter, Agent may apply any remaining proceeds to such of the Obligations as Agent
may in its discretion determine. Assignors shall remain jointly and severally liable to Agent for
any of the Obligations remaining unpaid after the application of such proceeds, and Assignors shall
pay Agent on demand any such unpaid amount, together with interest at the rate then applicable to
the indebtedness of Borrowers to Agent set forth in the Loan Agreement.

     (f) Each Assignor shall supply to Agent or to Agent’s designee, such Assignor’s knowledge and
expertise relating to the manufacture, sale and distribution of the products and services bearing
such Assignor’s Trademarks and such Assignor’s customer lists and other records relating to the
Trademarks and the distribution thereof.

     (g) Nothing contained herein shall be construed as requiring Agent to take any such action at
any time. All of Agent’s rights and remedies, whether provided under this Trademark Agreement, the
other Financing Agreements, applicable law, or otherwise, shall be cumulative and none is
exclusive. Such rights and remedies may be enforced alternatively, successively, or concurrently.

     6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW 

     (a) The validity, interpretation and enforcement of this Trademark Agreement and the other
Financing Agreements and any dispute arising out of the relationship between the parties hereto,
whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State
of New York but excluding any principles of conflicts of law or choice of law (other than Section
5-1401 and Section 5-1402 of the General Obligations Laws of the State of New York).

     (b) Each Assignor and Agent irrevocably consents and submits to the non-exclusive jurisdiction
of the Supreme Court of the State of New York in New York County and the United

6

 

States District Court for the Southern District of New York, whichever Agent may elect, and
waives any objection based on venue or forum non conveniens with respect to
any action instituted therein arising under this Trademark Agreement or any of the other Financing
Agreements or in any way connected with or related or incidental to the dealings of such Assignor
and Agent or any Lender in respect of this Trademark Agreement or any of the other Financing
Agreements or the transactions related hereto or thereto, in each case whether now existing or
hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute
with respect to any such matters shall be heard only in the courts described above (except that
Agent shall have the right to bring any action or proceeding against any Assignor or its property
in the courts of any other jurisdiction which Agent deems necessary or appropriate in order to
realize on the Collateral owned or held by such Assignor or to otherwise enforce its rights against
such Assignor or its property).

     (c) Each Assignor hereby waives personal service of any and all process upon it and consents
that all such service of process may be made by U.S. certified mail (return receipt requested)
directed to its address set forth herein and service so made shall be deemed to be completed
immediately upon receipt thereof by such Assignor, or, at Agent’s option, by service upon such
Assignor in any other manner provided under the rules of any such courts. Within thirty (30) days
after such service, such Assignor shall appear in answer to such process, failing which such
Assignor shall be deemed in default and judgment may be entered by Agent against such Assignor for
the amount of the claim and other relief requested.

     (d) EACH ASSIGNOR AND AGENT EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS TRADEMARK AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
ANY ASSIGNOR AND AGENT OR ANY LENDER IN RESPECT OF THIS TRADEMARK AGREEMENT OR ANY OF THE OTHER
FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH ASSIGNOR
AND AGENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY ASSIGNOR OR AGENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS TRADEMARK AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF ANY ASSIGNOR AND AGENT TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     (e) Notwithstanding any other provision contained herein, Agent and Lenders shall not have any
liability to any Assignor (whether in tort, contract, equity or otherwise) for losses suffered by
any Assignor in connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Trademark Agreement, or any act, omission or event occurring in
connection herewith, unless it is determined by a final and non-appealable judgment or court order
binding on Agent or such Lenders that the losses were the result of acts or omissions constituting
gross negligence or willful misconduct. In any such litigation, Agent and Lenders shall be
entitled to the benefit of the rebuttable presumption that it acted in good

7

 

faith and with the exercise of ordinary care in the performance by it of the terms of this
Trademark Agreement and the other Financing Agreements.

     7. MISCELLANEOUS

     (a) All notices, requests and demands hereunder shall be in writing and deemed to have been
given or made: if delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next business day, one (1)
business day after sending; and if by certified mail, return receipt requested, five (5) days after
mailing by deposit (postage prepaid) in the U.S. mail. All notices, requests and demands upon the
parties are to be given to the following addresses (or to such other address as any party may
designate by notice in accordance with this Section):

	 	 	 
	If to any Assignor:

	 	c/o Hancock Fabrics, Inc.

One Fashion Way

Baldwyn, Mississippi 38824

Attention: Robert Driskell, CFO

Telephone No.: (662) 365-6112

Telecopy No.: (662) 365-6025
	 
	 	 
	with a copy to

	 	Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

165 Madison Avenue

First Tennessee Building

Memphis, TN 38103

Attention: Sam D. Chafetz, Esq.

Telephone No.: (901) 577-2148

Telecopy No.: (901) 577-0854
	 
	 	 
	If to Agent:

	 	General Electric Capital Corporation

401 Merritt 7, P.O. Box 5201

Norwalk, CT 06856-5201

Attention: Hancock Fabrics Account Manager

Telephone No.: (203) 956-4003

Telecopy No.: (203) 956-4598
	 
	 	 
	with copies to
	 	 
	 

	 	Bingham McCutchen LLP

One Federal Street

Boston, MA 02110

Attention: Robert A. J. Barry, Esq.

Telephone No.: (617) 951-8624

Telecopy No.: (617) 951-8736

     (b) All references to the plural herein shall also mean the singular and to the singular shall
also mean the plural. All references to Assignors, Agent, any Lender and Borrowers

8

 

pursuant to the definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns. The words “hereof,” “herein,” “hereunder,”
“this Trademark Agreement” and words of similar import when used in this Trademark Agreement shall
refer to this Trademark Agreement as a whole and not any particular provision of this Trademark
Agreement and as this Trademark Agreement now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced. An Event of Default shall exist or continue
or be continuing until such Event of Default is waived in accordance with Section 7(e) hereof or
the provisions of the Loan Agreement.

     (c) This Trademark Agreement, the other Financing Agreements and any other document referred
to herein or therein shall be binding upon each Assignor and its successors and assigns and inure
to the benefit of and be enforceable by Agent and its successors and assigns.

     (d) If any provision of this Trademark Agreement is held to be invalid or unenforceable, such
invalidity or unenforceability shall not invalidate this Trademark Agreement as a whole, but this
Trademark Agreement shall be construed as though it did not contain the particular provision held
to be invalid or unenforceable and the rights and obligations of the parties shall be construed and
enforced only to such extent as shall be permitted by applicable law.

     (e) Neither this Trademark Agreement nor any provision hereof shall be amended, modified,
waived or discharged orally or by course of conduct, but only by a written agreement signed by an
authorized officer of Agent. Agent shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver
shall be in writing and signed by an authorized officer of Agent. Any such waiver shall be
enforceable only to the extent specifically set forth therein. A waiver by Agent of any right,
power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such
right, power and/or remedy which Agent would otherwise have on any future occasion, whether similar
in kind or otherwise.

     (f) This Trademark Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of this Trademark Agreement by telefacsimile or other means of
electronic transmission shall have the same force and effect as the delivery of an original
executed counterpart of this Trademark Agreement. Any party delivering an executed counterpart of
this Trademark Agreement by telefacsimile or other means of electronic transmission shall also
deliver an original executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Trademark Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

9

 

     IN WITNESS WHEREOF, each of the Assignors and Agent have executed this Trademark Agreement as
of the day and year first above written.

	 	 	 	 	 
	 	HANCOCK FABRICS, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	HF MERCHANDISING, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	HANCOCK FABRICS OF MI, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Senior Vice President and  Chief Financial Officer 	 
	 

[Signature Page to Trademark Collateral and Security Agreement]

 

 

CERTIFICATE OF ACKNOWLEDGMENT

STATE OF                                                             ) ss.:

COUNTY OF                                                             )

     On
this ___ day of ___, 2008, before me personally came
                                                            , to me known, who being duly sworn, did depose and say, that
he/she is the                                                              of Hancock Fabrics, Inc., HF Merchandising, Inc.
and Hancock Fabrics of MI, Inc., each of the companies described in and which executed the
foregoing instrument; and that he/she signed his/her name thereto by order of the Board of
Directors of said companies.

	 	 	 
	 

	 	 
	 

	 	(official signature and seal of Notary Public)
	 
	 	 
	 

	 	My commission expires:

[Acknowledgment to Trademark Collateral and Security Agreement for

Hancock Fabrics, Inc., Merchandising and Fabrics MI]

 

 

	 	 	 	 	 
	 	HANCOCKFABRICS.COM, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Treasurer 	 
	 

[Signature Page to Trademark Collateral and Security Agreement]

 

 

CERTIFICATE OF ACKNOWLEDGMENT

STATE OF                                                             ) ss.:

COUNTY OF                                                             )

     On
this ___ day of ___, 2008, before me personally came
                                                            , to me known, who being duly sworn, did depose and say, that
he/she is the                                                              of hancockfabrics.com, Inc., each of the
companies described in and which executed the foregoing instrument; and that he/she signed
his/her name thereto by order of the Board of Directors of said companies.

	 	 	 
	 

	 	 
	 

	 	(official signature and seal of Notary Public)
	 
	 	 
	 

	 	My commission expires:

[Acknowledgment to Trademark Collateral and Security Agreement for Fabrics.com]

 

 

	 	 	 	 	 
	 	HF ENTERPRISES, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Vice President 	 
	 
	 	HF RESOURCES, INC.

 	 
	 	By:  	/s/ Robert W. Driskell	 
	 	 	Name:  	Robert W. Driskell 	 
	 	 	Title:  	Vice President 	 
	 

[Signature Page to Trademark Collateral and Security Agreement]

 

 

CERTIFICATE OF ACKNOWLEDGMENT

STATE OF                                                             ) ss.:

COUNTY OF                                                             )

     On this ___day of ___, 2008, before me personally came
                                                            , to me known, who being duly sworn, did depose and say, that
he/she is the                                                              of HF Enterprises, Inc. and HF Resources, Inc.,
each of the companies described in and which executed the foregoing instrument; and that
he/she signed his/her name thereto by order of the Board of Directors of said companies.

	 	 	 
	 

	 	 
	 

	 	(official signature and seal of Notary Public)
	 
	 	 
	 

	 	My commission expires:

[Acknowledgment to Trademark Collateral and Security Agreement

for Enterprises and Resources]

 

 

	 	 	 	 	 	 	 
	 	 	HANCOCK FABRICS, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Larry D. Fair	 	 
	 

	 	Name:
	 	 

Larry D. Fair
	 	 
	 

	 	Title:
	 	Treasurer	 	 

[Signature Page to Trademark Collateral and Security Agreement]

 

 

CERTIFICATE OF ACKNOWLEDGMENT

STATE OF                                                             ) ss.:

COUNTY OF                                                             )

     On this ___day of ___, 2008, before me personally came
                                                            , to me known, who being duly sworn, did depose and say, that
he/she is the                                                              of Hancock Fabrics, LLC, each of the companies
described in and which executed the foregoing instrument; and that he/she signed his/her
name thereto by order of the Board of Directors of said companies.

	 	 	 
	 

	 	 
	 

	 	(official signature and seal of Notary Public)
	 
	 	 
	 

	 	My commission expires:

[Acknowledgment to Trademark Collateral and Security Agreement

for Hancock Fabrics, LLC]

 

 

	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL 

CORPORATION, as Agent

 	 
	 	By:  	/s/ Charles D. Chiodo	 
	 	 	Name:  	Charles D. Chiodo 	 
	 	 	Title:  	Its Duly Authorized Signatory 	 
	 

[Signature Page to Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                        

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HANCOCK FABRICS, INC. (“Assignor”), having an office at
One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and
lawful attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HANCOCK FABRICS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                        

	 	 )	 	 

     On this ___day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                        

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HF MERCHANDISING, INC. (“Assignor”), having an office at
One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and
lawful attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HF MERCHANDISING, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                        

	 	 )	 	 

     On this ___day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HANCOCK FABRICS OF MI, INC. (“Assignor”), having an
office at One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes,
severally, GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its
true and lawful attorney, with full power of substitution and with full power and authority to
perform the following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HANCOCK FABRICS OF MI, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On this ___day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HANCOCKFABRICS.COM, INC. (“Assignor”), having an office
at One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and
lawful attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                    , 2008

	 	 	 	 	 
	 	HANCOCKFABRICS.COM, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On this ___day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HANCOCK FABRICS, LLC (“Assignor”), having an office at
One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and
lawful attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HANCOCK FABRICS, LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On
this ___ day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HF ENTERPRISES, INC. (“Assignor”), having an office at
One Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally,
GENERAL ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and
lawful attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HF ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On
this ___ day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that HF RESOURCES, INC. (“Assignor”), having an office at One
Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally, GENERAL
ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and lawful
attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

Dated:                     , 2008

	 	 	 	 	 
	 	HF RESOURCES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On
this ___ day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public
	 	 

[Special Power of Attorney for Trademark Collateral and Security Agreement]

 

 

EXHIBIT A

TO

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

LIST OF TRADEMARKS AND TRADEMARK APPLICATIONS

	 	 	 	 	 	 	 	 	 
	Trademark	 	 	 	Registration	 	Registration	 	Expiration
	Owner	 	Trademark	 	Number	 	Date	 	Date
	HF Enterprises, Inc.
	 	America’s Fabric Store
	 	2,090,281
	 	08/19/97
	 	08/19/17
	HF Enterprises, Inc.
	 	Hancock Fabrics
	 	2,161,840
	 	06/02/98
	 	06/02/18
	HF Enterprises, Inc.
	 	Lauren Hancock

Collection
	 	2,615,823
	 	09/03/02
	 	09/03/08
	HF Enterprises, Inc.
	 	Sew Perfect (tools)
	 	1,971,704
	 	04/30/96
	 	04/30/16
	HF Enterprises, Inc.
	 	Sew Perfect (bobbins,

needles, etc.)
	 	1,971,703
	 	04/30/96
	 	04/30/16
	HF Enterprises, Inc.
	 	The Fabric Card
	 	1,970,555
	 	04/23/96
	 	04/23/16
	Hancock Fabric[s], Inc.
	 	Buy Retail Add Detail
	 	3,270,559
	 	07/24/07
	 	07/24/13
	HF Enterprises, Inc.
	 	Absolutely Cotton
	 	3,157,181
	 	10/17/06
	 	10/17/12
	HF Enterprises, Inc.
	 	Hancock Fabrics -

Canada
	 	TMA594,330
	 	11/07/03
	 	11/07/18

	 	 	 	 	 	 	 
	Trademark	 	Trademark	 	Application/Serial	 	Application
	Applicant	 	Application	 	Number	 	Date
	Hancock Fabrics, Inc.
	 	Wishes & Dreams
	 	77/251,959
	 	08/10/07

A-1

 

EXHIBIT B

TO

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

LIST OF LICENSES

HF Enterprises, Inc. license of trademarks to Hancock Fabrics, Inc.

B-1

 

EXHIBIT C

TO

TRADEMARK COLLATERAL ASSIGNMENT

AND SECURITY AGREEMENT

SPECIAL POWER OF ATTORNEY

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     KNOW ALL MEN BY THESE PRESENTS, that [                    ] (“Assignor”), having an office at One
Fashion Way, Baldwyn, Mississippi 38824-8547, hereby appoints and constitutes, severally, GENERAL
ELECTRIC CAPITAL CORPORATION, as Agent (“Agent”), and each of its officers, its true and lawful
attorney, with full power of substitution and with full power and authority to perform the
following acts on behalf of Assignor:

     1. Execution and delivery of any and all agreements, documents, instrument of assignment, or
other papers which Agent, in its discretion, deems necessary or advisable for the purpose of
assigning, selling, or otherwise disposing of all right, title, and interest of Assignor in and to
any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or
for the purpose of recording, registering and filing of, or accomplishing any other formality with
respect to the foregoing.

     2. Execution and delivery of any and all documents, statements, certificates or other papers
which Agent, in its discretion, deems necessary or advisable to further the purposes described in
Subparagraph 1 hereof.

     This Power of Attorney is made pursuant to a Trademark Collateral Assignment and Security
Agreement, dated of even date herewith, between Assignor and Agent (the “Trademark Agreement”) and
is subject to the terms and provisions thereof. This Power of Attorney, being coupled with an
interest, is irrevocable until all Obligations are paid in full in cash and the Trademark Agreement
is terminated in writing by Agent.

[Remainder of page intentionally left blank]

C-1

 

Dated:                     , 2008

	 	 	 	 	 
	 

	 	[                                        ]
	 	 
	 
	 	 	 	 
	 

	 	By:                                        
	 	 
	 
	 	 	 	 
	 

	 	Title:                                         
	 	 

	 	 	 	 	 
	STATE OF                                         

	 	 )
	 	 
	 

	 	 	 	) ss.: 
	COUNTY OF                                         

	 	 )	 	 

     On
this ___ day of                     , 2008, before me personally came                     , to me known,
who being duly sworn, did depose and say, that he/she is the                      of
                    , the company described in and which executed the foregoing instrument; and
that he/she signed his/her name thereto by order of the Board of Directors of said company.

	 	 	 	 	 
	 

	 	 

Notary Public

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]