Exhibit 10.2
    

    
      EXCHANGE AGREEMENT
(Unrestricted Notes)
    

    
      ___________________ (including any other persons or entities exchanging
      Existing Notes hereunder for whom the undersigned Holder holds
      contractual and investment authority, the “Holder”) enters
      into this Exchange Agreement (the “Agreement”) with Pier 1
      Imports, Inc. (the “Company”) on July __, 2009 whereby on
      the date hereof the Holder will exchange (the “Exchange”) the Company’s
      6.375% Convertible Senior Notes due February 15, 2036 (the “Existing
      Notes”) for the Company’s new ____% Convertible Senior Notes due 2036
      (the “New Notes”) that will be issued pursuant to the provisions of an
      Indenture dated as of July __, 2009 (the “Indenture”) among the Company,
      certain subsidiary guarantors party thereto (the “Guarantors”), and The
      Bank of New York Mellon Trust Company, N.A., as Trustee (the “Trustee”).
    

    
      On and subject to the terms hereof, the parties hereto agree as follows:
    

    
      Article I:  Exchange of the Existing Notes for New Notes
    

    
      At the Closing (as defined herein), the Holder hereby agrees to exchange
      and deliver to the Company the following Existing Notes, and in exchange
      therefor the Company hereby agrees to issue to the Holder the principal
      amount of New Notes described below and to pay in cash the following
      accrued but unpaid interest on such Existing Notes:
    

    
    	
          Principal Amount of Existing Notes to be Exchanged:
        	
           
        	
          $
        
	

        	

        	
          
            (the “Exchanged Notes”).
          

        
	
          Principal Amount of New Notes to be issued in Exchange:
        	

        	
          $
        
	

        	

        	
          
            (the “Holder’s New Notes”).
          

        
	
          Cash Payment of Accrued but Unpaid Interest on Exchanged Notes:
        	

        	
          $
        
	

        	

        	
          
            (the “Cash Payment”).
          

        


    

    
      The closing of the Exchange (the “Closing”) shall occur no
      later than three business days after the date of this Agreement
      (assuming the timely delivery of the Exchanged Notes).  At the Closing,
      (a) the Holder shall deliver or cause to be delivered to the Company all
      right, title and interest in and to the Exchanged Notes free and clear
      of any mortgage, lien, pledge, charge, security interest, encumbrance,
      title retention agreement, option, equity or other adverse claim thereto
      (collectively, “Liens”), and all documentation related
      thereto, and whatever documents of conveyance or transfer may be
      necessary or desirable to transfer to and confirm in the Company all
      right, title and interest in and to the Exchanged Notes free and clear
      of any Liens, (b) the Company shall issue to the Holder the Holder’s New
      Notes and (c) the Company shall deliver to the Holder the Cash Payment;
      provided, however, that the parties acknowledge that the issuance of the
      Holder’s New Notes to the Holder may be delayed due to procedures and
      mechanics within the system of the Depository Trust Company and that
      such delay will not be a default under this Agreement so long as (i) the
      Company is using its best efforts to effect the issuance of one or more
      global notes representing the New Notes, (ii) such delay is no longer
      than three business days and (iii) interest shall accrue on such New
      Notes from the date of the Indenture.  Simultaneously with or after the
      Closing, the Company may issue New Notes to one or more other holders of
      outstanding Existing Notes, subject to the terms of the Indenture.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      Article II:  Covenants, Representations and Warranties
      of the Holder
    

    
      The Holder hereby covenants as follows, and makes the following
      representations and warranties, each of which is and shall be true and
      correct on the date hereof and at the Closing, to the Company, Lazard
      Frères & Co. LLC and Lazard Capital Markets LLC, and all such covenants,
      representations and warranties shall survive the Exchange.
    

    
      Section 2.1         Power
      and Authorization.  The Holder is duly organized, validly
      existing and in good standing, and has the power, authority and capacity
      to execute and deliver this Agreement, to perform its obligations
      hereunder, and to consummate the Exchange contemplated hereby.  If the
      Holder that is signatory hereto is executing this Agreement to effect
      the exchange of Exchanged Notes beneficially owned by one or more other
      persons or entities (who are thus included in the definition of “Holder”
      hereunder), (a) such signatory Holder has all requisite discretionary
      authority to enter into this Agreement on behalf of, and bind, each such
      other person or entity that is a beneficial owner of Exchanged Notes,
      and (b) Exhibit A hereto is a true, correct and
      complete list of (i) the name of each party delivering (as beneficial
      owner) Exchanged Notes hereunder, (ii) the principal amount of such
      Holder’s Exchanged Notes, (iii) the principal amount of Holder’s New
      Notes to be issued to such Holder in respect of its Exchanged Notes, and
      (iv) the amount of the cash payment to be made to such Holder in respect
      of the accrued interest on its Exchanged Notes.
    

    
      Section 2.2         Valid
      and Enforceable Agreement; No Violations.  This Agreement has
      been duly executed and delivered by the Holder and constitutes a legal,
      valid and binding obligation of the Holder, enforceable against the
      Holder in accordance with its terms, except that such enforcement may be
      subject to (a) bankruptcy, insolvency, reorganization, moratorium or
      other similar laws affecting or relating to enforcement of creditors’
      rights generally, and (b) general principles of equity (the “Enforceability
      Exceptions”).  This Agreement and consummation of the Exchange will
      not violate, conflict with or result in a breach of or default under
      (i) the Holder’s organizational documents, (ii) any agreement or
      instrument to which the Holder is a party or by which the Holder or any
      of its assets are bound, or (iii) any laws, regulations or governmental
      or judicial decrees, injunctions or orders applicable to the Holder.
    

    
      Section 2.3         Title
      to the Exchanged Notes.  The Holder is the sole legal and
      beneficial owner of the Exchanged Notes, and the Holder has good, valid
      and marketable title to the Exchanged Notes, free and clear of any Liens
      (other than pledges or security interests that the Holder may have
      created in favor of a prime broker under and in accordance with its
      prime brokerage agreement with such broker).  The Holder has not, in
      whole or in part, except as described in the preceding sentence,
      (a) assigned, transferred, hypothecated, pledged, exchanged or otherwise
      disposed of any of the Exchanged Notes or its rights in the Exchanged
      Notes, or (b) given any person or entity any transfer order, power of
      attorney or other authority of any nature whatsoever with respect to the
      Exchanged Notes.  Upon the Holder’s delivery of the Exchanged Notes to
      the Company pursuant to the Exchange, the Exchanged Notes shall be free
      and clear of all Liens created by the Holder.
    

    
      Section 2.4         Accredited
      Investor.  The Holder is an “accredited investor” within the
      meaning of Rule 501 of Regulation D promulgated under the Securities Act
      of 1933, as amended (the “Securities Act”).
    

    
      Section 2.5         No
      Affiliate, Related Party or 5% Stockholder Status.  The Holder
      is not, and has not been during the consecutive three month period
      preceding the date hereof, a director, officer or “affiliate,” within
      the meaning of Rule 144 promulgated under the Securities Act (an “Affiliate”),
      of the Company.  The Holder has no affirmative knowledge that it
      acquired any of the Exchanged Notes, directly or indirectly, from an
      Affiliate of the Company.  The Holder and its Affiliates collectively
      beneficially own and will beneficially own as of the date of the closing
      of the Exchange (but without giving effect to the Exchange) less than 5%
      of the outstanding common stock, par value $0.001 per share, of the
      Company (the “Common Stock”).  The Holder is not a
      subsidiary, affiliate or, to its knowledge, otherwise closely-related to
      any director or officer of the Company or beneficial owner of 5% or more
      of the outstanding Common Stock (each such director, officer or
      beneficial owner, a “Related Party”).  To its knowledge, no
      Related Party beneficially owns 5% or more of the outstanding voting
      equity of the Holder.
    

    
      Section 2.6         No
      Illegal Transactions.  The Holder has not, directly or
      indirectly, and no person acting on behalf of or pursuant to any
      understanding with the Holder has, engaged in any transactions in the
      securities of the Company (including, without limitation, any Short
      Sales (as defined below) involving any of the Company’s securities)
      since the time that such Holder was first contacted by either the
      Company, Lazard Frères & Co. LLC or Lazard Capital Markets LLC or any
      other person regarding an investment in the New Notes or the
      Company.  Such Holder covenants that neither it nor any person acting on
      its behalf or pursuant to any understanding with such Holder will
      engage, directly or indirectly, in any transactions in the securities of
      the Company (including Short Sales) prior to the time the transactions
      contemplated by this Agreement are publicly disclosed.  “Short
      Sales” include, without limitation, all “short sales” as defined in
      Rule 200 of Regulation SHO promulgated under the Securities Exchange Act
      of 1934, as amended (the “Exchange Act”), and all types of
      direct and indirect stock pledges, forward sale contracts, options,
      puts, calls, short sales, swaps, derivatives and similar arrangements
      (including on a total return basis), and sales and other transactions
      through non-U.S. broker-dealers or foreign regulated brokers.  Solely
      for purposes of this Section 2.6, subject to the Holder’s compliance
      with its obligations under the U.S. federal securities laws and the
      Holder’s internal policies, “Holder” shall not be deemed to include any
      subsidiaries or affiliates of the Holder that are effectively walled off
      by appropriate “Chinese Wall” information barriers approved by the
      Holder’s legal or compliance department (and thus have not been privy to
      any information concerning the Exchange).
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      Section 2.7         Adequate
      Information; No Reliance.  The Holder acknowledges and agrees
      that (a) the Holder has been furnished with all materials it considers
      relevant to making an investment decision to enter into the Exchange and
      has had the opportunity to review the Company’s filings with the
      Securities and Exchange Commission (the “SEC”), including,
      without limitation, all filings made pursuant to the Exchange Act,
      (b) the Holder has had a full opportunity to ask questions of the
      Company and its representative and to obtain from representatives of the
      Company such information as is necessary to permit it to evaluate the
      merits and risks of its investment in the Company, including in relation
      to its business, operations, financial performance, financial condition
      and prospects, and the terms and conditions of the Exchange, (c) the
      Holder has had the opportunity to consult with its accounting, tax,
      financial and legal advisors to be able to evaluate the risks involved
      in the exchange of the Existing Notes pursuant hereto and to make an
      informed investment decision with respect to such Exchange and (d) the
      Holder is not relying, and has not relied, upon any statement, advice
      (whether legal, tax, financial, accounting or other), representation or
      warranty made by the Company or any of its affiliates or representatives
      including, without limitation, Lazard Frères & Co. LLC and Lazard
      Capital Markets LLC, except for (i) the publicly available filings made
      by the Company with the SEC under the Exchange Act and (ii) the
      representations and warranties made by the Company in this Agreement.
    

    
      Section 2.8         No
      Public Market.  The Holder understands that no public
      market exists for the New Notes, and that there is no assurance that a
      public market will ever develop for the New Notes.
    

    
      Article III:  Covenants, Representations and Warranties
      of the Company
    

    
      The Company hereby covenants as follows, and makes the following
      representations and warranties, each of which is and shall be true and
      correct on the date hereof and at the Closing, to the Holder, Lazard
      Frères & Co. LLC and Lazard Capital Markets LLC, and all such covenants,
      representations and warranties shall survive the Exchange.
    

    
      Section 3.1         Power
      and Authorization.  The Company is duly incorporated, validly
      existing and in good standing under the laws of the State of Delaware,
      and has the power, authority and capacity to execute and deliver this
      Agreement and the Indenture, to perform its obligations hereunder and
      thereunder, and to consummate the Exchange contemplated hereby.  Each
      Guarantor is duly organized, validly existing and in good standing, and
      has the power, authority and capacity to execute and deliver the
      Indenture and to perform its obligations thereunder.
    

    
      Section 3.2         Valid
      and Enforceable Agreements.  This Agreement has been duly
      executed and delivered by the Company and constitutes a legal, valid and
      binding obligation of the Company, enforceable against the Company in
      accordance with its terms, except that such enforcement may be subject
      to the Enforceability Exceptions.  At the Closing, the Indenture,
      substantially in the form of Exhibit B hereto, will have
      been duly executed and delivered by the Company and the Guarantors and
      will govern the terms of the New Notes, and the Indenture will
      constitute a legal, valid and binding obligation of the Company and the
      Guarantors, enforceable against the Company and the Guarantors in
      accordance with its terms, except that such enforcement may be subject
      to the Enforceability Exceptions.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      Section 3.3         Validity
      of the Holder’s New Notes.  The Holder’s New Notes have
      been duly authorized by the Company and, when executed and authenticated
      in accordance with the provisions of the Indenture and delivered to the
      Holder pursuant to the Exchange against delivery of the Exchanged Notes
      in accordance with the terms of this Agreement, the Holder’s New Notes
      will be valid and binding obligations of the Company, enforceable in
      accordance with their terms, except that such enforcement may be subject
      to the Enforceability Exceptions, and the Holder’s New Notes will not be
      subject to any preemptive, participation, rights of first refusal and
      other similar rights.  Assuming the accuracy of the Holder’s
      representations and warranties hereunder, the Holder’s New Notes
      (a) will be issued in the Exchange exempt from the registration
      requirements of the Securities Act pursuant to Section 4(2) of the
      Securities Act, and (b) will be free of any restrictions on resale by
      the Holder pursuant to Rule 144 promulgated under the Securities Act,
      and (c) will be issued in compliance with all applicable state and
      federal laws concerning the issuance of the Holder’s New Notes.  
    

    
      Section 3.4         Validity
      of Underlying Common Stock.  The Holder’s New Notes are
      convertible into shares of Common Stock (the “Conversion Shares”)
      in accordance with the terms of the Indenture.  The Conversion Shares
      have been duly authorized and reserved by the Company for issuance upon
      conversion of the Holder’s New Notes and, when issued upon conversion of
      the Holder’s New Notes in accordance with the terms of the Holder’s New
      Notes and the Indenture, will be validly issued, fully paid and
      non-assessable, and the issuance of the Conversion Shares will not be
      subject to any preemptive, participation, rights of first refusal and
      other similar rights.  
    

    
      Section 3.5         Listing
      Approval.  The Conversion Shares have been listed on the New
      York Stock Exchange.  
    

    
      Section 3.6         Disclosure.  On
      or before the first business day following the date of this Agreement,
      the Company shall issue a publicly available press release or file with
      the SEC a Current Report on Form 8-K disclosing all material terms of
      the Exchange (to the extent not previously publicly disclosed).  
    

    
      Article IV:  Miscellaneous
    

    
      Section 4.1         Entire
      Agreement.  This Agreement and any documents and agreements
      executed in connection with the Exchange embody the entire agreement and
      understanding of the parties hereto with respect to the subject matter
      hereof and supersede all prior and contemporaneous oral or written
      agreements, representations, warranties, contracts, correspondence,
      conversations, memoranda and understandings between or among the parties
      or any of their agents, representatives or affiliates relative to such
      subject matter, including, without limitation, any term sheets, emails
      or draft documents.  
    

    
      Section 4.2         Construction.  References
      in the singular shall include the plural, and vice versa, unless the
      context otherwise requires.  References in the masculine shall include
      the feminine and neuter, and vice versa, unless the context otherwise
      requires.  Headings in this Agreement are for convenience of reference
      only and shall not limit or otherwise affect the meanings of the
      provisions hereof. Neither party, nor its respective counsel, shall be
      deemed the drafter of this Agreement for purposes of construing the
      provisions of this Agreement, and all language in all parts of this
      Agreement shall be construed in accordance with its fair meaning, and
      not strictly for or against either party.
    

    
      Section 4.3         Costs
      and Expenses. The Holder and the Company shall each pay their
      own respective costs and expenses incurred in connection with the
      negotiation, preparation, execution and performance of this Agreement,
      including, but not limited to, attorneys’ fees.
    

    
      Section 4.4         Governing
      Law.  This Agreement shall in all respects be construed in
      accordance with and governed by the substantive laws of the State of New
      York, without reference to its choice of law rules.
    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      Section 4.5         Counterparts.  This
      Agreement may be executed in counterparts, each of which shall be deemed
      an original, but all of which taken together shall constitute one and
      the same instrument.  Any counterpart or other signature hereon
      delivered by facsimile shall be deemed for all purposes as constituting
      good and valid execution and delivery of this Agreement by such party.
    

    
      IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
      to be executed as of the date first above written.
    

    

    

    
    	
          
            “HOLDER”:
          

        	
           
        	
          
            “COMPANY”:
          

        
	
          
             
          

        	

        	
          
             
          

          
            PIER 1 IMPORTS, INC.
          

          
             
          

        
	
          
            By:
          

        	

        	
          
            By:
          

        
	

        	

        	
           
        
	
          
            Name:
          

        	

        	
          
            Name:
          

        
	

        	

        	
           
        
	
          
            Title:
          

        	

        	
          
            Title:
          

        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      EXHIBIT A
Exchanging Beneficial Owners
    

    

    

    
    	
          Name of
Beneficial Owner
        	
          
            Principal Amount of
Exchanged Notes
          

        	
          
            Principal Amount of
Holder’s New Notes
          

        	
          Cash Interest Payment
        
	

        	

        	

        	
           
        
	
           
        	
           
        	
           
        	
           
        
	
           
        	
           
        	
           
        	
           
        
	
           
        	
           
        	
           
        	
           
        
	
           
        	
           
        	
           
        	
           
        
	
           
        	
           
        	
           
        	
           
        
	
           
        	
           
        	
           
        	
           
        


    

    
      
        

        

      

      
        

        

        
          


        

      

      
        

        

      

    

    
      EXHIBIT B
Indenture