Document:

Exhibit 10.1

INDEMNIFICATION
AGREEMENT

THIS AGREEMENT (the “Agreement”) is executed this             ,
200  , to be effective for all purposes as of             ,
200  , among Linens Holding Co., a Delaware corporation (the “Company”),
and                         
(the “Indemnitee”).

WHEREAS, it is essential to the Company to retain and
attract as directors and officers the most capable persons available;

WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against directors
and officers of companies with registered securities in today’s environment;

WHEREAS, Indemnitee is willing to serve and continue
to serve the Company on the condition that he be indemnified to the fullest
extent permitted by law;

WHEREAS, concurrently with the execution of this
Agreement, Indemnitee is agreeing to serve or to continue to serve as a
director or officer of the Company;

WHEREAS, the By-Laws of the Company require the
Company to indemnify and advance expenses to its directors and officers to the
full extent permitted by law; and

WHEREAS, in recognition of Indemnitee’s need for
substantial protection against personal liability in order to enhance
Indemnitee’s service to the Company in an effective manner, the increasing
difficulty in obtaining satisfactory director and officer liability insurance
coverage, and Indemnitee’s reliance on the aforesaid By-Laws, and in part to
provide Indemnitee with specific contractual assurance that the protection
promised by such By-Laws will be available to Indemnitee (regardless of, among
other things, any amendment to or revocation of such By-Laws or any change in
the composition of the Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the coverage
of Indemnitee under the Company’s directors’ and officers’ liability insurance
policies;

NOW, THEREFORE, in consideration of the premises and
of Indemnitee serving the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

1.             Certain Definitions:

(a)           Affiliate:  as to any person, any other person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person.  For
the purposes of this definition, “control” when used with respect to any person
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting Securities, by contract
or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

 

 

(b)           Change of Control:  the occurrence of any of the following
events:

(i)            any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that for purposes of this clause
(i) such person shall be deemed to have beneficial ownership of all shares
that such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the total voting power of the then outstanding Voting Securities of
the Company; provided, however, that no Change of Control shall
be deemed to have occurred under this paragraph (i) if the Permitted
Holders either (a) beneficially own (as defined above), directly or
indirectly, (x) in the aggregate more than 40% of the total voting power
of the then outstanding Voting Securities of the Company and (y) a greater
percentage of the total voting power of the then outstanding Voting Securities
of the Company than any other person or (b) have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Company’s Board of Directors;

(ii)           during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
members of the Board of Directors whose election by such Board of Directors or
whose nomination for election by the equityholders of the Company was approved
by a vote of the majority of the members of the Board of Directors of the
Company then still in office who were either members of the Board of Directors
at the beginning of such period or whose election or nomination for election
was previously so approved including new members of the Board of Directors
designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially
all of the assets of the Company, if such agreement was approved by a vote of
such majority of members of the Board of Directors) cease for any reason to
constitute a majority of the Board of Directors then in office;

(iii)          the adoption by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company by way of merger, consolidation or
otherwise; or

(iv)          the merger or
consolidation of the Company with or into another Person or the merger of
another Person with or into the Company, or the sale of all or substantially
all the assets of the Company and its subsidiaries, taken as a whole, to
another Person (other than to a subsidiary of the Company or to one or more
Permitted Holders or any entity controlled by one or more Permitted Holders),
in which, in the case of any such merger, consolidation or sale, the securities
of the Company that are outstanding immediately prior to such transaction and
that represent 100% of the aggregate Voting Securities of the Company are
changed into or exchanged for cash, 
securities or property; provided, however, that no Change
of Control shall be deemed to have occurred under this paragraph (iv) if
pursuant to such transaction the securities of the Company are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving Person that represent immediately after such transaction, (a) at
least 30% of the aggregate voting power of the Voting Securities of the
surviving Person and (b) a greater percentage of the Voting Securities of
the surviving Person 

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than the
percentage of such Voting Securities beneficially owned by any other person (as
defined in paragraph (i) above).

(c)           Claim:  any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether instituted by the
Company or any other party, that Indemnitee in good faith believes might lead
to the institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other.

(d)           Expenses:  include attorneys’ fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating to
any Indemnifiable Event.

(e)           Indemnifiable
Event:  any event or occurrence
related to the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, or by reason of anything done or not done by Indemnitee in
any such capacity.

(f)            Independent
Legal Counsel:  an attorney or firm
of attorneys, selected in accordance with the provisions of Section 3, who
shall not have otherwise performed services for the Company or Indemnitee
within the last five years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements).

(g)           Permitted Holders:  Linens Investors, LLC and its Affiliates and
members.

(h)           Potential Change
in Control:  shall be deemed to have
occurred if (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control; (ii) any
person (including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in
Control; or (iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.

(i)            Reviewing Party:  any appropriate person or body consisting of
a member or members of the Company’s Board of Directors or any other person or
body appointed by the Board who is not a party to the particular Claim for
which Indemnitee is seeking indemnification, or Independent Legal Counsel.

(j)            Voting
Securities:  any securities of the
Company, the holders of which vote generally in the election of directors.

2.             Basic Indemnification Arrangement.

(a)           In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, a Claim
by reason of (or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later 

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than thirty days after written demand is presented to the Company,
against any and all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) of such Claim.  If so requested by Indemnitee, the Company
shall advance to the fullest extent permitted by law (within two business days
of such request) any and all Expenses to Indemnitee (an “Expense Advance”).  Notwithstanding anything in this Agreement to
the contrary, prior to a Change in Control Indemnitee shall not be entitled to
indemnification pursuant to this Agreement in connection with any Claim
initiated by Indemnitee unless the Board of Directors has authorized or
consented to the initiation of such Claim.

(b)           Notwithstanding the
foregoing, (i) the obligations of the Company under Section 2 shall
be subject to the condition that the Reviewing Party shall not have determined
(in a written opinion, in any case in which the Independent Legal Counsel referred
to in Section 2 hereof is involved) that Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 2 or Section 5
hereof shall be subject to the condition that, if, when and to the extent that
the Reviewing Party determines that Indemnitee would not be permitted to be so
indemnified under applicable law, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse the Company
for any Expense Advance until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed).  If there has not been a
Change in Control, the Reviewing Party shall be selected by the Board of Directors,
and if there has been such a Change in Control (other than a Change in Control
which has been approved by a majority of the Company’s Board of Directors who
were directors immediately prior to such Change in Control), the Reviewing
Party shall be the Independent Legal Counsel referred to in Section 2
hereof.  If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in whole or
in part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of 
Delaware having subject matter jurisdiction thereof and in which venue
is proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of
process and to appear in any such proceeding. 
Any determination by the Reviewing Party otherwise shall be conclusive
and binding on the Company and Indemnitee.

3.             Change in Control.  The Company agrees that if there is a Change
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company’s Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or Company
By-Law now or hereafter in effect relating to Claims for Indemnifiable Events,
the Company shall seek legal advice only from Independent Legal Counsel
selected by Indemnitee 

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and approved by the Company (which approval shall not be unreasonably
withheld).  Such counsel, among other
things, shall render its written opinion to the Company and Indemnitee as to
whether and to what extent the Indemnitee would be permitted to be indemnified
under applicable law.  The Company agrees
to pay the reasonable fees of the Independent Legal Counsel referred to above
and to indemnify fully such counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.

4.             Establishment of Trust.  In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee and from time to time upon written request of
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, fines, penalties
and settlement amounts of any and all Claims relating to an Indemnifiable Event
from time to time actually paid or claimed, reasonably anticipated or proposed
to be paid, provided that in no event shall more than $250,000 be required to
be deposited in any trust created hereunder (and no more than $1,000,000 in the
aggregate with respect to any such trusts created under this Agreement and all
Indemnification Agreements with directors and officers) in excess of amounts
deposited in respect of reasonably anticipated Expenses.  The amount or amounts to be deposited in the
trust pursuant to the foregoing funding obligation shall be determined by the
Reviewing Party, in any case in which the Independent Legal Counsel referred to
above is involved.  The terms of the
trust shall provide that upon a Change in Control (i) the trust shall not
be revoked or the principal thereof invaded, without the written consent of the
Indemnitee, (ii) the trustee shall advance, within two business days of a
request by the Indemnitee, any and all Expenses to the Indemnitee (and the
Indemnitee hereby agrees to reimburse the trust under the circumstances under
which the Indemnitee would be required to reimburse the Company under
Section 2(b) of this Agreement), (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth
above, (iv) the trustee shall promptly pay to Indemnitee all amounts for
which Indemnitee shall be entitled to indemnification pursuant to this
Agreement or otherwise, and (v) all unexpended funds in such trust shall
revert to the Company upon a final determination by the Reviewing Party or a
court of competent jurisdiction, as the case may be, that Indemnitee has been
fully indemnified under the terms of this Agreement.  The trustee shall be chosen by
Indemnitee.  Nothing in this
Section 4 shall relieve the Company of any of its obligations under this
Agreement.

5.             Indemnification for Additional Expenses.  Subject to Section 2(b), the Company
shall indemnify Indemnitee against any and all expenses (including attorneys’
fees and retainers) and, if requested by Indemnitee, shall (within two business
days of such request) advance such expenses to Indemnitee, which are incurred
by Indemnitee in connection with any action brought by Indemnitee for
(i) indemnification or advance payment of Expenses by the Company under
this Agreement or any other agreement or Company By-Law now or hereafter in
effect relating to Claims for Indemnifiable Events and/or (ii) recovery
under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance
recovery, as the case may be.

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6.             Partial Indemnity, Etc.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled.  Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.

7.             Contribution.

(a)           Contribution
Payment.  To the extent the
indemnification provided for under any provision of this Agreement is
determined (in the manner hereinabove provided) not to be permitted under
applicable law, the Company, in lieu of indemnifying Indemnitee, shall, to the
extent permitted by law, contribute to the amount of any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or
in respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) of a Claim by reason of (or arising in part out of) an
Indemnifiable Event incurred or paid by Indemnitee for which such
indemnification is not permitted.  The
amount the Company contributes shall be in such proportion as is appropriate to
reflect the relative fault of Indemnitee, on the one hand, and of the Company
and any and all other parties (including officers and directors of the Company
other than Indemnitee) who may be at fault (collectively, including the
Company, the “Third Parties”), on the other hand.

(b)           Relative
Fault.  The relative fault of the
Third Parties and the Indemnitee shall be determined (i) by reference to
the relative fault of Indemnitee as determined by the court or other
governmental agency or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Reviewing Party after giving
effect to, among other things, the relative intent, knowledge, access to information,
and opportunity to prevent or correct the relevant events, of each party, and
other relevant equitable considerations. The Company and Indemnitee agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in this Section 7(b).

8.             Burden of Proof.  In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified or contribution hereunder the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.

9.             No Presumptions.  For purposes of this Agreement, the
termination or conclusion of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.  In addition, neither the failure of the
Reviewing Party to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of 

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conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under applicable law shall be a defense to Indemnitee’s
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief.

10.           Nonexclusivity, Etc.  The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Company’s
By-Laws or the Delaware General Corporation Law or otherwise.  To the extent that a change in the Delaware
General Corporation Law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
Company’s By-Laws and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change.

11.           Liability Insurance.  To the extent the Company maintains an
insurance policy or policies providing directors’ and officers’ liability
insurance, Indemnitee shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for
any Company director or officer.

12.           Period of Limitations.  No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of the
occurrence of the events leading to such cause of action, and any claim or
cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall govern.

13.           Amendments, Etc.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

14.           Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.

15.           No Duplication of Payments.  The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, By-Law or otherwise) of the amounts otherwise
indemnifiable hereunder.

16.           Binding Effect, Etc.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all 

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or substantially all of the business and/or assets of the Company,
spouses, heirs, executors and personal and legal representatives.  This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as an officer or director
of the Company or of any other enterprise at the Company’s request.

17.           Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.

18.           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.

19.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.  Facsimile transmission of any signed original
document or retransmission of any signed facsimile transmission will be deemed
the same as delivery of an original.  At
the request of any party, the parties will confirm facsimile transmission by
signing a duplicate original document.

[Remainder
of page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

	
  

  	
  THE
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  LINENS HOLDING
  CO.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]Exhibit 10.2

INDEMNIFICATION
AGREEMENT

THIS AGREEMENT (the “Agreement”) is executed this             ,
200   , to be effective for all purposes as of             ,
200   , among Linens ‘n Things, Inc., a Delaware corporation
(the “Company”), and                         
(the “Indemnitee”).

WHEREAS, it is essential to the Company to retain and
attract as directors and officers the most capable persons available;

WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted against directors
and officers of companies with registered securities in today’s environment;

WHEREAS, Indemnitee is willing to serve and continue
to serve the Company on the condition that he be indemnified to the fullest
extent permitted by law;

WHEREAS, concurrently with the execution of this
Agreement, Indemnitee is agreeing to serve or to continue to serve as a
director or officer of the Company and/or of a direct or indirect subsidiary of
the Company;

WHEREAS, the By-Laws of the Company require the
Company to indemnify and advance expenses to its directors and officers to the
full extent permitted by law; and

WHEREAS, in recognition of Indemnitee’s need for
substantial protection against personal liability in order to enhance Indemnitee’s
service to the Company in an effective manner, the increasing difficulty in
obtaining satisfactory director and officer liability insurance coverage, and
Indemnitee’s reliance on the aforesaid By-Laws, and in part to provide
Indemnitee with specific contractual assurance that the protection promised by
such By-Laws will be available to Indemnitee (regardless of, among other
things, any amendment to or revocation of such By-Laws or any change in the
composition of the Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for
the indemnification of and the advancing of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth
in this Agreement, and, to the extent insurance is maintained, for the coverage
of Indemnitee under the Company’s directors’ and officers’ liability insurance
policies;

NOW, THEREFORE, in consideration of the premises and
of Indemnitee serving the Company directly or, at its request, another
enterprise, and intending to be legally bound hereby, the parties hereto agree
as follows:

1.             Certain Definitions:

(a)           Affiliate:  as to any person, any other person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified person.  For
the purposes of this definition, “control” when used with respect to any person
means the power to direct the management and policies of such person, directly
or indirectly, 

 

 

whether through the ownership of voting Securities, by contract or
otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

(b)           Change
of Control:  the occurrence of any of
the following events:

(i)            any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
one or more Permitted Holders, is or becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of
this clause (i) such person shall be deemed to have beneficial ownership
of all shares that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or indirectly,
of more than 35% of the total voting power of the then outstanding Voting
Securities of the Company; provided, however, that no Change of
Control shall be deemed to have occurred under this paragraph (i) if the
Permitted Holders either (a) beneficially own (as defined above), directly
or indirectly, (x) in the aggregate more than 40% of the total voting
power of the then outstanding Voting Securities of the Company and (y) a
greater percentage of the total voting power of the then outstanding Voting
Securities of the Company than any other person or (b) have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Company’s Board of Directors;

(ii)           during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any new
members of the Board of Directors whose election by such Board of Directors or
whose nomination for election by the equityholders of the Company was approved
by a vote of the majority of the members of the Board of Directors of the
Company then still in office who were either members of the Board of Directors
at the beginning of such period or whose election or nomination for election was
previously so approved including new members of the Board of Directors
designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially
all of the assets of the Company, if such agreement was approved by a vote of
such majority of members of the Board of Directors) cease for any reason to
constitute a majority of the Board of Directors then in office;

(iii)          the
adoption by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company by way of merger,
consolidation or otherwise; or

(iv)          the
merger or consolidation of the Company with or into another Person or the
merger of another Person with or into the Company, or the sale of all or
substantially all the assets of the Company and its subsidiaries, taken as a
whole, to another Person (other than to a subsidiary of the Company or to one
or more Permitted Holders or any entity controlled by one or more Permitted
Holders), in which, in the case of any such merger, consolidation or sale, the
securities of the Company that are outstanding immediately prior to such
transaction and that represent 100% of the aggregate Voting Securities of the
Company are changed into or exchanged for cash, 
securities or property; provided, however, that no Change
of Control shall be deemed to have occurred under this paragraph (iv) if
pursuant to such transaction the securities of the Company are changed into or
exchanged for, in addition to any other consideration, securities of the
surviving Person that represent immediately after such 

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transaction, (a) at least 30% of the aggregate voting power of the
Voting Securities of the surviving Person and (b) a greater percentage of
the Voting Securities of the surviving Person than the percentage of such
Voting Securities beneficially owned by any other person (as defined in
paragraph (i) above).

(c)           Claim:  any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether instituted by the
Company or any other party, that Indemnitee in good faith believes might lead
to the institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other.

(d)           Expenses:  include attorneys’ fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating to
any Indemnifiable Event.

(e)           Indemnifiable
Event:  any event or occurrence
related to the fact that Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request of the
Company as a director, officer, employee, trustee, agent or fiduciary of
another corporation, partnership, joint venture, employee benefit plan, trust
or other enterprise, or by reason of anything done or not done by Indemnitee in
any such capacity.

(f)            Independent
Legal Counsel:  an attorney or firm
of attorneys, selected in accordance with the provisions of Section 3, who
shall not have otherwise performed services for the Company or Indemnitee
within the last five years (other than with respect to matters concerning the
rights of Indemnitee under this Agreement, or of other indemnitees under
similar indemnity agreements).

(g)           Permitted
Holders:  Linens Investors, LLC and
its Affiliates and members.

(h)           Potential
Change in Control:  shall be deemed
to have occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;
(ii) any person (including the Company) publicly announces an intention to
take or to consider taking actions which if consummated would constitute a
Change in Control; or (iii) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.

(i)            Reviewing
Party:  any appropriate person or
body consisting of a member or members of the Company’s Board of Directors or
any other person or body appointed by the Board who is not a party to the
particular Claim for which Indemnitee is seeking indemnification, or
Independent Legal Counsel.

(j)            Voting
Securities:  any securities of the
Company, the holders of which vote generally in the election of directors.

2.             Basic Indemnification
Arrangement.

(a)           In
the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by 

 3
 

 

 

reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law as
soon as practicable but in any event no later than thirty days after written demand
is presented to the Company, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments
and other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties or amounts paid in settlement) of such
Claim.  If so requested by Indemnitee,
the Company shall advance to the fullest extent permitted by law (within two
business days of such request) any and all Expenses to Indemnitee (an “Expense
Advance”).  Notwithstanding anything in
this Agreement to the contrary, prior to a Change in Control Indemnitee shall
not be entitled to indemnification pursuant to this Agreement in connection
with any Claim initiated by Indemnitee unless the Board of Directors has
authorized or consented to the initiation of such Claim.

(b)           Notwithstanding
the foregoing, (i) the obligations of the Company under Section 2
shall be subject to the condition that the Reviewing Party shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 2 hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the
obligation of the Company to make an Expense Advance pursuant to Section 2
or Section 5 hereof shall be subject to the condition that, if, when and
to the extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court
of competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).  If there has not
been a Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control), the Reviewing
Party shall be the Independent Legal Counsel referred to in Section 2
hereof.  If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee substantively would not be permitted to be indemnified in whole or
in part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the State of 
Delaware having subject matter jurisdiction thereof and in which venue
is proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of
process and to appear in any such proceeding. 
Any determination by the Reviewing Party otherwise shall be conclusive
and binding on the Company and Indemnitee.

3.             Change in Control.  The Company agrees that if there is a Change
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company’s Board of Directors who were directors
immediately prior to such Change in Control) then with respect to all matters
thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or 

 4
 

 

 

Company By-Law now or hereafter in effect relating to Claims for
Indemnifiable Events, the Company shall seek legal advice only from Independent
Legal Counsel selected by Indemnitee and approved by the Company (which
approval shall not be unreasonably withheld). 
Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law.  The Company agrees to pay the reasonable fees
of the Independent Legal Counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys’ fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

4.             Establishment of Trust.  In the event of a Potential Change in
Control, the Company shall, upon written request by Indemnitee, create a trust
for the benefit of Indemnitee and from time to time upon written request of
Indemnitee shall fund such trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, fines, penalties
and settlement amounts of any and all Claims relating to an Indemnifiable Event
from time to time actually paid or claimed, reasonably anticipated or proposed
to be paid, provided that in no event shall more than $250,000 be required to
be deposited in any trust created hereunder (and no more than $1,000,000 in the
aggregate with respect to any such trusts created under this Agreement and all
Indemnification Agreements with directors and officers) in excess of amounts deposited
in respect of reasonably anticipated Expenses. 
The amount or amounts to be deposited in the trust pursuant to the
foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the Independent Legal Counsel referred to above is involved.  The terms of the trust shall provide that
upon a Change in Control (i) the trust shall not be revoked or the
principal thereof invaded, without the written consent of the Indemnitee, (ii) the
trustee shall advance, within two business days of a request by the Indemnitee,
any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees to
reimburse the trust under the circumstances under which the Indemnitee would be
required to reimburse the Company under Section 2(b) of this Agreement),
(iii) the trust shall continue to be funded by the Company in accordance
with the funding obligation set forth above, (iv) the trustee shall
promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled
to indemnification pursuant to this Agreement or otherwise, and (v) all
unexpended funds in such trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that Indemnitee has been fully indemnified under the terms of
this Agreement.  The trustee shall be
chosen by Indemnitee.  Nothing in this
Section 4 shall relieve the Company of any of its obligations under this
Agreement.

5.             Indemnification for Additional
Expenses.  Subject to
Section 2(b), the Company shall indemnify Indemnitee against any and all
expenses (including attorneys’ fees and retainers) and, if requested by
Indemnitee, shall (within two business days of such request) advance such
expenses to Indemnitee, which are incurred by Indemnitee in connection with any
action brought by Indemnitee for (i) indemnification or advance payment of
Expenses by the Company under this Agreement or any other agreement or Company
By-Law now or hereafter in effect relating to Claims for Indemnifiable Events and/or
(ii) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company, regardless of whether Indemnitee 

 5
 

 

 

ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.

6.             Partial Indemnity, Etc.  If Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled.  Moreover, notwithstanding
any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including dismissal without prejudice, Indemnitee shall be
indemnified against all Expenses incurred in connection therewith.

7.             Contribution.

(a)           Contribution
Payment.  To the extent the
indemnification provided for under any provision of this Agreement is
determined (in the manner hereinabove provided) not to be permitted under
applicable law, the Company, in lieu of indemnifying Indemnitee, shall, to the
extent permitted by law, contribute to the amount of any and all Expenses,
judgments, fines, penalties and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or
in respect of such Expenses, judgments, fines, penalties or amounts paid in
settlement) of a Claim by reason of (or arising in part out of) an
Indemnifiable Event incurred or paid by Indemnitee for which such
indemnification is not permitted.  The
amount the Company contributes shall be in such proportion as is appropriate to
reflect the relative fault of Indemnitee, on the one hand, and of the Company
and any and all other parties (including officers and directors of the Company
other than Indemnitee) who may be at fault (collectively, including the
Company, the “Third Parties”), on the other hand.

(b)           Relative
Fault.  The relative fault of the
Third Parties and the Indemnitee shall be determined (i) by reference to
the relative fault of Indemnitee as determined by the court or other
governmental agency or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Reviewing Party after giving
effect to, among other things, the relative intent, knowledge, access to
information, and opportunity to prevent or correct the relevant events, of each
party, and other relevant equitable considerations. The Company and Indemnitee
agree that it would not be just and equitable if contribution were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in this Section 7(b).

8.             Burden of Proof.  In connection with any determination by the
Reviewing Party or otherwise as to whether Indemnitee is entitled to be
indemnified or contribution hereunder the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled.

9.             No Presumptions.  For purposes of this Agreement, the
termination or conclusion of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable 

 6
 

 

 

law.  In addition, neither the
failure of the Reviewing Party to have made a determination as to whether
Indemnitee has met any particular standard of conduct or had any particular
belief, nor an actual determination by the Reviewing Party that Indemnitee has
not met such standard of conduct or did not have such belief, prior to the
commencement of legal proceedings by Indemnitee to secure a judicial
determination that Indemnitee should be indemnified under applicable law shall
be a defense to Indemnitee’s claim or create a presumption that Indemnitee has
not met any particular standard of conduct or did not have any particular
belief.

10.           Nonexclusivity, Etc.  The rights of the Indemnitee hereunder shall
be in addition to any other rights Indemnitee may have under the Company’s
By-Laws or the Delaware General Corporation Law or otherwise.  To the extent that a change in the Delaware
General Corporation Law (whether by statute or judicial decision) permits
greater indemnification by agreement than would be afforded currently under the
Company’s By-Laws and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change.

11.           Liability Insurance.  To the extent the Company maintains an
insurance policy or policies providing directors’ and officers’ liability
insurance, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.

12.           Period of Limitations.  No legal action shall be brought and no cause
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of the
occurrence of the events leading to such cause of action, and any claim or
cause of action of the Company shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such two-year period;
provided, however, that if any shorter period of limitations is otherwise
applicable to any such cause of action such shorter period shall govern.

13.           Amendments, Etc.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

14.           Subrogation.  In the event of payment under this Agreement,
the Company shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.

15.           No Duplication of Payments.  The Company shall not be liable under this
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, By-Law or otherwise) of the amounts otherwise
indemnifiable hereunder.

 7
 

 

 

16.           Binding Effect, Etc.  This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, assigns, including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, executors and personal
and legal representatives.  This
Agreement shall continue in effect regardless of whether Indemnitee continues
to serve as an officer or director of the Company or of any other enterprise at
the Company’s request.

17.           Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) are held by a court
of competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.

18.           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware
applicable to contracts made and to be performed in such state without giving
effect to the principles of conflicts of laws.

19.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.  Facsimile transmission of any signed original
document or retransmission of any signed facsimile transmission will be deemed
the same as delivery of an original.  At
the request of any party, the parties will confirm facsimile transmission by
signing a duplicate original document.

[Remainder
of page intentionally left blank]

 8

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.

	
  

  	
  THE
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  LINENS ‘N
  THINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name]

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