0001005794-05-000334 Sample Contracts

AMENDMENT TO DEFERRED COMPENSATION AGREEMENT AND AGREEMENT TO SECURE CERTAIN CONTINGENT PAYMENTS
Deferred Compensation Agreement • April 15th, 2005 • Hancock Fabrics Inc • Retail-miscellaneous shopping goods stores

THIS AMENDMENT TO AGREEMENT AND AGREEMENT TO SECURE CERTAIN CONTINGENT PAYMENTS between Hancock Fabrics, Inc., a Delaware corporation (the “Corporation”), and Bruce D. Smith (the “Executive”), dated as of the 15th day of March, 2005 (the “Agreements”).

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INDEMNIFICATION AGREEMENT
Indemnification Agreement • April 15th, 2005 • Hancock Fabrics Inc • Retail-miscellaneous shopping goods stores • Delaware

WHEREAS, the Company understands that there can be no assurance that directors' and officers' liability insurance will continue to be available to the Company and Officer, and believes that it is possible that the cost of such insurance, if obtainable, may not be acceptable to the Company or the coverage of such insurance, if obtainable, may be reduced below what has historically been afforded; and

FIRST AMENDMENT TO CREDIT AGREEMENT
Credit Agreement • April 15th, 2005 • Hancock Fabrics Inc • Retail-miscellaneous shopping goods stores

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the “First Amendment”) is made as of October 14, 2004, by and between HANCOCK FABRICS, INC., a Delaware corporation (the “Borrower”), and SOUTHTRUST BANK, an Alabama banking corporation (the “Bank”). Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Credit Agreement (as hereinafter defined).

EMPLOYMENT AGREEMENT
Employment Agreement • April 15th, 2005 • Hancock Fabrics Inc • Retail-miscellaneous shopping goods stores • Mississippi

This EMPLOYMENT AGREEMENT is made and entered into by and between HANCOCK FABRICS, INC., a Delaware corporation (“Company”), and JANE F. AGGERS (“Executive”) as of December 15, 2004.

SECOND AMENDMENT TO CREDIT AGREEMENT
Credit Agreement • April 15th, 2005 • Hancock Fabrics Inc • Retail-miscellaneous shopping goods stores

THIS SECOND AMENDMENT TO CREDIT AGREEMENT (“Second Amendment”) is dated as of April 14, 2004 by and among Hancock Fabrics, Inc. (“Borrower”); and Hancock Fabrics of Mi, Inc., HF Merchandising, Inc., HF Resources, Inc., HF Enterprises, Inc., Hancock Fabrics, LLC and HancockFabrics.com, Inc. (“Guarantors”); Union Planters Bank, National Association (“Union Planters”); and BancorpSouth Bank (“Bancorp”).

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