Document:

EX-4.6 Specimen representing the Floating Rate

Exhibit 4.6

(Face of Note)

Floating Rate Series A Secured Notes due 2013

	 	 	 	 	 
	CUSIP
	 	 	 	 
	 
	 	 	 	 
	No.
	 	 	 	$

HANCOCK FABRICS, INC.

promises to pay to Cede & Co. or registered assigns, the principal sum of                      Dollars
($                    ) on                     , 2013 [5 years from the date of issuance].

Interest Payment Dates: [quarterly from date of issuance]

Record Dates: [15 days prior to interest payment date]

	 	 	 	 	 
	 	 	HANCOCK FABRICS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	Name:
	 	 
 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

 

 

[This is the Global Note

referred to in the within-

mentioned Indenture]1

	 	 	 	 	 
	DEUTSCHE BANK NATIONAL TRUST COMPANY,

as Trustee	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 	 	 

Authorized Signatory

Dated:
                              ,
20 ___

 

			
	1	 	Used on Global Note only.

 

 

(Back of Note)

Floating Rate Series A Secured Notes due 2013

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN ARTICLE XI OF THE INDENTURE BETWEEN THE COMPANY AND
THE TRUSTEE DATED JUNE 17, 2008. EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLE XI APPLICABLE TO A HOLDER.

[THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS
NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (i) THE TRUSTEE MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OR IN ACCORDANCE WITH SECTION
9.06 OF THE INDENTURE, (ii) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(e) OF THE INDENTURE, (iii) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE, AND (iv) THIS GLOBAL
NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR
BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]2

 

			
	2	 	Used on Global Note only.

 

 

     Capitalized terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated.

     1. INTEREST. Hancock Fabrics, Inc., a Delaware corporation (the “Company”), promises to pay
interest, either in cash or by issuance of PIK Notes on the principal amount of this Note at a
variable rate of interest, adjusted quarterly, equal to LIBOR plus 4.50% per annum until maturity
and shall pay the Additional Amounts, if any, as follows:

     (a) Interest
and Additional Amounts, if any, shall be paid quarterly on                     ,
                    ,
                    , and                      of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an “Interest Payment Date”), to Persons who are registered
Holders of Notes at the close of business on the date that is 15 days immediately prior to an
Interest Payment Date (the “Record Date”), even if such Notes are cancelled after such record date
and on or before an Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. Quarterly interest accrued and unpaid under this paragraph (a)
will, to the extent lawful, accrue interest at the rate provided in this Note. Interest on the
Notes shall accrue from the most recent date to which interest has been paid or, if no interest has
been paid, from                                         , 2008, through the next succeeding Interest Payment Date
(the “Interest Period”). The first Interest Payment Date shall be                     , 2008 and the
last Interest Payment Date shall be
                                        , 2013.

     (b) “LIBOR” shall mean, for each Interest Period, a rate of interest determined by Trustee
equal to the offered rate for deposits in United States dollars for the applicable Interest Period
that appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London time), on the second full
Business Day next preceding the first day of each Interest Period (unless such date is not a
Business Day, in which event the next succeeding Business Day will be used). If such interest
rates shall cease to be available from Telerate News Service (or its successor satisfactory to the
Trustee), LIBOR shall be determined from such financial reporting service or other information as
shall be reasonably determined by the Trustee.

     (c) The Company shall pay interest (i) entirely in money of the United States that at the time
of payment is legal tender for payment of public and private debts (“Cash Interest”) for all
amounts due, or (ii) with respect to the initial four Interest Payment Dates, in the Company’s
discretion either (A) entirely by the payment of Cash Interest, (B) partially by the payment of
Cash Interest and partially by the issuance of additional Notes (“PIK Notes”), or (C) entirely by
the issuance of PIK Notes. If the Company elects to issue PIK Notes in lieu of part or all of the
Cash Interest owed, the Company shall give written notice of such election to the Trustee on or
before the record date for the applicable Interest Payment Date, and execute such PIK Notes, dated
the date of such Interest Payment Date. In the event the Company elects to pay some or all of the
interest that is due for a Payment Period by issuance of PIK Notes, the interest due on that
portion of the Indebtedness to be paid by a PIK Note shall be equal to LIBOR plus 5.50% per annum
for such Payment Period. The issuance of such PIK Notes shall constitute payment in full of the
interest in lieu of cash payment of which such PIK Notes are issued.

     (d) The Company shall pay interest (including post-petition interest in any Proceeding under
any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay

 

 

interest (including post-petition interest in any Proceeding under any Bankruptcy Law) on
overdue installments of interest and Additional Amounts, if any (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent lawful. Interest shall be
computed on the basis of a 360-day year of twelve 30-day months.

     2. METHOD OF PAYMENT. The Company shall pay principal, premium, if any, interest and
Additional Amounts, if any, on the Maturity Date and Interest Payment Dates, as applicable, to the
Persons who are registered Holders of Notes. The Notes shall be payable by wire transfer of
immediately available funds to the registered Holder of the Global Note and, with respect to
certificated Notes, by wire transfer of immediately available funds in accordance with instructions
provided by the registered Holders of certificated Notes or, if no such instructions are specified,
by mailing a check to each such Holder’s registered address.

     3. PAYING AGENT AND REGISTRAR. Initially, Deutsche Bank National Trust Company, the Trustee
under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.

     4. INDENTURE. The Company issued the Notes under an Indenture dated as of June 17, 2008
(“Indenture”) between the Company and the Trustee. The terms of the Notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939,
as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any
provision of this Note conflicts with the express provisions of the Indenture, the provisions of
the Indenture shall govern and be controlling.

     5. OPTIONAL REDEMPTION. The Notes are subject to redemption for cash at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days notice to each Holder of
Notes to be redeemed at a redemption price equal to (i) (A) 102.000% of the principal amount
thereof if redeemed on or before one year from the date of issuance of the Notes, (B) 101.000% of
the principal amount thereof if redeemed after one year but on or before two years from the date of
issuance of the Notes, or (C) 100.000% of the principal amount thereof if redeemed after two years
from the date of issuance of the Notes, plus (ii) any accrued and unpaid interest, plus (iii) any
Additional Amounts thereon to the redemption date.

     6. REPURCHASE AT OPTION OF HOLDER. If there is a Change of Control, the Company shall, subject
to Article XI of the Indenture, be required to make an offer (a “Change of Control Offer”) to
repurchase all or any part (equal to $1,000 or an integral multiple thereof if in part) of each
Holder’s Notes at a purchase price equal to 101.000% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon and Additional Amounts, if any, to the date of purchase (the
“Change of Control Payment”). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.

     7. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its
registered address. Notes and portions of Notes selected shall be in amounts of

 

 

$1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. On and after the redemption date interest ceases to accrue on Notes, or
portions thereof called for redemption.

     8. SECURITY. To secure the due and punctual payment of the principal, interest and Additional
Amounts, if any, on the Notes and all other amounts payable by the Company under the Indenture and
the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or
otherwise, according to the terms of the Notes and the Indenture, the Company has granted a
security interest in the Collateral to the Trustee for the benefit of the Holders of Notes pursuant
to the Indenture. The Collateral is subject to release from the Lien of the Indenture to the extent
provided therein.

     9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require
a Holder, among other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record date and the
corresponding interest payment date.

     10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all
purposes.

     11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the
Notes may be amended or supplemented with the consent of the Holders of at least a majority in
principal amount of the then outstanding Notes voting as a single class, and any existing default
or compliance with any provision of the Indenture or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding Notes voting as a single
class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for certificated Notes in
addition to or in place of uncertificated Notes, to provide for the assumption of the Company’s
obligations to Holders of the Notes in case of a merger or consolidation, or sale of substantially
all of the Company’s assets, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal rights under the
Indenture of any such Holder, or to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust Indenture Act.

     12. DEFAULTS AND REMEDIES. Events of Default are identified in the Indenture, and include, in
summary form (the following summary being for illustrative purposes only and not creating any
additional Events of Default or expanding any Events of Default identified in the Indenture): (a)
default in payment when due of the principal of or premium, if any, on the

 

 

Notes; (b) default for 30 days in the payment when due of interest or Additional Amounts, if
any, on the Notes; (c) failure by the Company for 60 days after notice to comply with any of its
other agreements in the Indenture or the Notes; (d) the nonpayment within any applicable grace
period after the final maturity, or the acceleration by the Holders because of a default, of
Indebtedness of the Company or any Subsidiary, and the total amount of such Indebtedness unpaid or
accelerated exceeds $5,750,000; (e) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $5,750,000, which judgments are not paid, discharged or stayed
for a period of 60 consecutive days; and (f) certain events of bankruptcy or insolvency with
respect to the Company. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 50.1% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable, subject to certain conditions. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes shall become due and payable without further action or notice. Holders may not
enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of
the Notes notice of any continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it determines that withholding notice
is in their interest. The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest and premium, if any, on, or the principal
of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default or Event of
Default.

     13. DEFEASANCE. The Indenture and the obligations under the Notes may be defeased (subject to
certain exceptions) upon satisfaction of the conditions specified in Article 8 of the Indenture.

     14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the Company or its Affiliates, and
may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

     15. NO RECOURSE AGAINST OTHERS. No recourse for the payment of the principal of, premium, if
any, or interest or Additional Amounts, if any, on any of the Notes, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company contained in this Indenture or in any of the Notes, or because of the
creation of any Indebtedness represented thereby, shall be had against any incorporator or past,
present or future director, officer, employee, controlling Person or stockholder of the Company.
Each Holder by accepting a Note waives and releases all such liability. The waiver and release are
part of the consideration for the issuance of the Notes.

     16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature
of the Trustee or an authenticating agent.

 

 

     17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).

     18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes
and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.

     The Company shall furnish to any Holder upon written request and without charge a copy of the
Indenture. Requests may be made to:

Hancock Fabrics, Inc.

One Fashion Way

Baldwyn, MS 38824

Attention: President

 

 

ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

 

(Insert assignee’s social security or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                             
 to transfer this Note on the books of the
Company. The agent may substitute another to act for him.

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 

	 	

 Your
Signature:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Sign exactly as your name appears on the face of
this Note)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Signature Guarantee:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

 

OPTION OF HOLDER TO ELECT PURCHASE

     If you want to elect to have this Note purchased by the Company pursuant to Section 3.8 of the
Indenture, check the box below:

     [ ]

     If you want to elect to have only part of the Note purchased by the Company pursuant to
Section 3.8 of the Indenture, state the amount you elect to have purchased: $                    

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 
	 	 	 	 	Your Signature:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	(Sign exactly as your name appears on the face of
the Note)	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Signature Guarantee:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	Tax Identification No.:	 	 
	 

	 	 	 	 	 	 

	 	 

 

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

     The following exchanges of a part of this Global Note for a Series A Definitive Note, or
exchanges of a part of a Series A Definitive Note for an interest in this Global Note, have been
made:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Principal Amount	 	 	 	 
	 	 	 	 	Amount of	 	 	Amount of	 	 	of this	 	 	Signature	 
	 	 	 	 	decrease in	 	 	increase in	 	 	Global Note	 	 	of	 
	 	 	 	 	Principal Amount	 	 	Principal Amount	 	 	following such	 	 	authorized officer	 
	 	 	 	 	of this	 	 	of this	 	 	decrease	 	 	of	 
	Date of Exchange	 	 	Global Note	 	 	Global Note	 	 	(or increase)	 	 	Trustee or CustodianEX-4.7 Specimen representing the Warrants

Exhibit 4.7

FORM OF FACE OF GLOBAL WARRANT CERTIFICATE

VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON                     , 2013

     This Global Warrant Certificate is held by The Depository Trust Company (the “Depository”) or
its nominee in custody for the benefit of the beneficial owners hereof, and is not transferable to
any Person under any circumstances except that (i) this Global Warrant Certificate may be exchanged
in whole but not in part pursuant to Section 6.1(a) of the Warrant Agreement, (ii) this Global
Warrant Certificate may be delivered to the Warrant Agent for cancellation pursuant to Section
6.1(h) of the Warrant Agreement and (iii) this Global Warrant Certificate may be transferred to a
successor Depository with the prior written consent of the Company.

     Unless this Global Warrant Certificate is presented by an authorized representative of the
Depository to the Company or the Warrant Agent for registration of transfer, exchange or payment
and any certificate issued is registered in the name of Cede & Co. or such other entity as is
requested by an authorized representative of the Depository (and any payment hereon is made to Cede
& Co. or to such other entity as is requested by an authorized representative of the Depository),
any transfer, pledge or other use hereof for value or otherwise by or to any Person is wrongful
because the registered owner hereof, Cede & Co., has an interest herein.

     Transfers of this Global Warrant Certificate shall be limited to transfers in whole, but not
in part, to nominees of the Depository or to a successor thereof or such successor’s nominee, and
transfers of portions of this Global Warrant Certificate shall be limited to transfers made in
accordance with the restrictions set forth in Section 6 of the Warrant Agreement.

     No registration or transfer of the securities issuable pursuant to the Warrant will be
recorded on the books of the Company until such provisions have been complied with.

1

 

     THE SECURITIES REPRESENTED BY THIS WARRANT CERTIFICATE (INCLUDING THE SECURITIES ISSUABLE UPON
EXERCISE OF THE WARRANT) ARE SUBJECT TO ADDITIONAL AGREEMENTS SET FORTH IN THE WARRANT AGREEMENT
DATED AS OF JUNE 17, 2008, BY AND BETWEEN THE COMPANY AND THE WARRANT AGENT (THE “WARRANT
AGREEMENT”).

     THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON
                    .

WARRANT TO PURCHASE SHARES OF COMMON STOCK OF

HANCOCK FABRICS, INC.

     CUSIP #                     

     ISSUE DATE:                     , 2008

     No.                    

     This certifies that, for value received,                                        , and its registered assigns
(collectively, the “Registered Holder”), is entitled to purchase from Hancock Fabrics, Inc., a
corporation incorporated under the laws of the State of Delaware (the “Company”), subject to the
terms and conditions hereof, at any time before 5:00 p.m., New York time, on                                         ,
2013, the number of fully paid and non-assessable shares of Common Stock of the Company set forth
above at the Exercise Price (as defined in the Warrant Agreement). The Exercise Price and the
number and kind of shares purchasable hereunder are subject to adjustment from time to time as
provided in Article V of the Warrant Agreement. The initial Exercise Price shall be
$                    .

     This Warrant Certificate shall not be valid unless countersigned by the Warrant Agent.

     IN WITNESS WHEREOF, this Warrant has been duly executed by the Company under its corporate
seal as of the
                      day of                                         , 2008.

	 	 	 	 	 	 	 
	 	 	HANCOCK FABRICS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:      	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Print Name:
	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 

	 	Attest:	 	 	 	 
	 

	 	 	 	 

Secretary
	 	 

2

 

	 	 	 	 	 
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, 

as Warrant Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

Address of Registered Holder for Notices (until changed in accordance with this Warrant):

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS WARRANT CERTIFICATE SET FORTH ON
THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH
FULLY SET FORTH AT THIS PLACE.

3

 

FORM OF REVERSE OF WARRANT

     The Warrant evidenced by this Warrant Certificate is a part of a duly authorized issue of
Warrants to purchase
                                        
shares of Common Stock issued pursuant to that the Warrant
Agreement, a copy of which may be inspected at the Warrant Agent’s office. The Warrant Agreement
hereby is incorporated by reference in and made a part of this instrument and is hereby referred to
for a description of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Warrant Agent, the Company and the Registered Holders of the Warrants. All
capitalized terms used on the face of this Warrant herein but not defined that are defined in the
Warrant Agreement shall have the meanings assigned to them therein.

     Upon due presentment for registration of transfer of the Warrant at the office of the Warrant
Agent, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement, without charge except
for any applicable tax or other governmental charge.

     The Company shall not be required to issue fractions of Warrant Shares or any certificates
that evidence fractional Warrant Shares.

     No Warrants may be sold, exchanged or otherwise transferred in violation of the Securities Act
or state securities laws.

     This Warrant does not entitle the Registered Holder to any of the rights of a stockholder of
the Company.

     The Company and Warrant Agent may deem and treat the Registered Holder hereof as the absolute
owner of this Warrant Certificate (notwithstanding any notation of ownership or other writing
hereon made by anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

4

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