EXCHANGE AGREEMENT

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:

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