EXHIBIT 10.2

 

STORE CLOSING GUIDELINES

 

The following procedures shall apply to the Sale(1) to be held at the closing
Stores and the disposal of the Owned FF&E in the closing Stores:

 

1.             The Sale shall be conducted so that the closing Stores in which
sales are to occur remain open no longer than the normal hours of operation
provided for in the respective leases or other occupancy agreements for the
closing Stores.

 

2.             The Sale shall be conducted in accordance with applicable state
and local “Blue Laws,” and thus, where applicable, no Sale shall be conducted on
Sunday unless the Merchant had been operating such Stores on a Sunday.

 

3.             All display and hanging signs used by the Merchant and the Agent
in connection with Sale shall be professionally produced and all hanging signs
shall be hung in a professional manner. The Merchant and the Agent may advertise
the Sale as a “going out of business”, “sale on everything”, “store closing”, or
similar theme sale at the closing Stores as provided by the Agency Agreement. 
The Merchant and the Agent shall not use neon or day-glo signs. Furthermore,
with respect to enclosed mall locations no exterior signs or signs in common
areas of a mall shall be used. Nothing contained herein shall be construed to
create or impose upon the Merchant and the Agent any additional restrictions not
contained in the applicable lease or other occupancy agreement. In addition, the
Merchant and the Agent shall be permitted to utilize exterior banners at
(i) non-enclosed mall Stores, and (ii) enclosed mall Stores to the extent the
applicable Store entrance does not require entry into the enclosed mall common
area; provided, however, that such banners shall be located or hung so as to
make clear that the Sale is being conducted only at the affected store shall not
be wider than the closing Storefront of the closing Store and shall not be
larger than 4 feet by 40 feet. In addition, the Merchant and the Agent shall be
permitted to utilize sign walkers and street signage, notwithstanding any state,
county or local law or ordinance; provided however the use of sign walkers and
use of street signage shall be done in a safe manner and shall not be permitted
on mall or shopping center property.

 

4.             Conspicuous signs shall be posted in the cash register areas of
each Store to the effect that all sales are “final” and that customers with any
questions or complaints subsequent to the conclusion of the Sale may contact a
named representative of the Merchant or the Agent at a specified telephone
number.  Conspicuous signage shall be posted in the cash register area of each
Store to the effect that the manufacturer’s warranty, if any, may still exist
and customers should consult the packaging materials to see what, if any,
manufacturer’s warranties are available.

 

5.             Within a “Shopping Center”, the Agent shall not distribute
handbills, leaflets or other written materials to customers outside of any of
the closing Stores, unless permitted by the applicable lease or, if distribution
is customary in the shopping center in which the closing Store is located.
Otherwise, the Agent may solicit customers in the closing Stores themselves. The

 

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(1)  Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Agency Agreement.

 

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Agent shall not use any flashing lights or amplified sound to advertise the Sale
or solicit customers, except as permitted under the applicable lease or agreed
to by the landlord.

 

6.             Agent shall provide signage in the Closing Stores notifying
customers that the Additional Agent Merchandise has been included in the Sale.

 

7.             At the conclusion of the Sale, Agent shall vacate the closing
Stores in “broom-clean” condition, and shall otherwise leave the closing Stores
in the same condition as on the commencement of the Sale, ordinary wear and tear
excepted; provided, however, that the Merchant and Agent hereby do not undertake
any greater obligation than as set forth in an applicable lease with respect to
a Stores. The Merchant may abandon any FF&E or other materials (the “Abandoned
Property”) not sold in the Sale at the closing Store premises at the conclusion
of the Sale. Any Abandoned Property left in a Store after a lease is rejected
shall be deemed abandoned with the landlord having the right to dispose of the
same as the landlord chooses without any liability whatsoever on the part of the
landlord to any party and without waiver of any damage claims against the
Merchant.

 

8.             Subject to the provisions of the Agency Agreement, the Agent
shall have the right to sell Owned FF&E located in the closing Stores; provided,
however, Merchant shall have the right (subject to the consent of the Indenture
Trustee and the Noteholders), at any time prior to the date that is fourteen
days after the Sale Commencement Date, to designate certain FF&E located in the
closing Stores that Merchant intends to keep for its own use and which Agent
shall not be permitted or entitled to sell. The Agent may advertise the sale of
the Owned FF&E consistent with the guidelines provided in paragraphs 4 and 6
hereof. Additionally, the purchasers of any Owned FF&E sold during the Sale
shall only be permitted to remove the Owned FF&E either through the back
shipping areas or through other areas after store business hours unless
otherwise agreed by on-site mall management.  For the avoidance of doubt, as of
the Sale Termination Date, Agent may abandon, in place, and without further
responsibility, any unsold FF&E located at the closing Stores.

 

9.             The Agent shall not make any alterations to interior or exterior
Store lighting. No property of any landlord of a Store shall be removed or sold
during the Sale. The hanging of exterior banners or other signage shall not
constitute an alteration to a Store.

 

10.           At the conclusion of the Sale at each Store, pending assumption or
rejection of applicable leases, the landlords of the closing Stores shall have
reasonable access to the closing Store premises as set forth in the applicable
leases. The Merchant, the Agent and their agents and representatives shall
continue to have exclusive and unfettered access to the closing Stores.

 

11.           Post-petition rents shall be paid by the Merchant as required by
the Bankruptcy Code until the rejection or assumption and assignment of each
lease.

 

12.           The rights of the landlords for any damages to the closing Stores
shall be reserved in accordance with the applicable leases.

 

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13.           The Merchant shall notify a representative of the relevant
landlord of the date on which the Sale is scheduled to conclude at a given
Store, within three business days of the Merchant’s receipt of such notice from
the Agent.

 

14.           To the extent that any Store landlord affected hereby contends
that the Merchant is in breach or default under these Store Closing Guidelines,
such landlord shall provide at least five (5) days’ written notice, served by
facsimile and overnight delivery, on the Merchant and the Merchant’s counsel,
and the Agent and the Agent’s counsel, at the following facsimile numbers and
addresses:

 

If to the Merchant:

 

LINENS HOLDING CO.

 

 

6 Brighton Road

 

 

Clifton, NJ 07012

 

 

Attn:

Dave Coder

 

 

Fax:

(973) 836-0309

 

 

Email:

dcoder@lnt.com

 

 

 

With a copy to:

 

ASSET DISPOSITION ADVISORS, LLC

 

 

499 Park Avenue

 

 

New York, NY 10022

 

 

Attn:

Paul Traub

 

 

 

Steven Fox

 

 

Tel:

(212) 573-9084

 

 

Fax:

(212) 652-3863

 

 

 

 

 

RICHARDS, LAYTON & FINGER, P.A.

 

 

920 North King Street

 

 

P.O. Box 551

 

 

Wilmington, DE 19899

 

 

Attn:

Mark D. Collins

 

 

Tel:

(302) 651-7700

 

 

Fax:

(302) 651-7701

 

 

Email:

Collins@rlf.com

 

 

 

If to the Agent:

 

[TBD]

 

If the parties are unable to resolve the dispute between themselves, either the
landlord or the Merchant shall have the right to schedule a “status hearing”
before the Bankruptcy Court on no less than five (5) days notice to the other
parties.

 

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