S-4/A

Use these links to rapidly review the document
TABLE OF CONTENTS
INDEX TO FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on August 10, 2006

Registration No. 333-135646

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

LINENS HOLDING CO.
LINENS 'N THINGS, INC.
LINENS 'N THINGS CENTER, INC.
*And the Subsidiary Guarantors listed in Table of Additional Registrants
(Exact name of Registrant as specified in its charter)

Delaware Delaware California (State or other jurisdiction of incorporation)	5719 5719 5719 (Primary Standard Industrial Classification Code Number)	20-4192917 22-3463939 59-2740308 (I.R.S. Employer Identification Number)
6 Brighton Road Clifton, New Jersey 07015 (973) 778-1300 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Francis M. Rowan
6 Brighton Road
Clifton, New Jersey 07015
Tel: (973) 778-1300
(Name and address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

David R. Earhart, Esq.
Gardere Wynne Sewell LLP
1601 Elm Street, Suite 3000
Dallas, Texas 75201-4761
Tel: (214) 999-4645
Fax: (214) 999-3645

        Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

        If the securities being registered on this Form are to be offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

*Table of Additional Registrants

Name of Additional Registrant#	State or other Jurisdiction of Incorporation or Formation	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
Bloomington MN., L.T., Inc.	Minnesota	5719	22-2708498
Vendor Finance, LLC	Delaware	5719	81-0665543
LNT, Inc.	New Jersey	5719	22-2074668
LNT Services, Inc.	Delaware	5719	20-0392093
LNT Leasing II, LLC	Delaware	5719	26-0004182
LNT West, Inc.	Delaware	5719	20-0391975
LNT Virginia LLC	Virginia	5719	22-0379453
LNT Merchandising Company LLC	Delaware	5719	20-0422616
LNT Leasing III, LLC	Delaware	5719	51-0503599
Citadel LNT, LLC	Delaware	5719	33-1092479

^#

Addresses and telephone numbers of principal executive offices are the same as those of Linens 'n Things, Inc.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT COMPLETE THE EXCHANGE OFFER OF THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR DOES IT SEEK AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED AUGUST 10, 2006

PROSPECTUS

[LOGO]

LINENS 'N THINGS, INC.
LINENS 'N THINGS CENTER, INC.

Offer to Exchange all of the Outstanding
$650,000,000 Senior Secured Floating Rate Notes due 2014
for
$650,000,000 Registered Senior Secured Floating Rate Notes due 2014

        We are offering to exchange all of our outstanding Senior Secured Floating Rate Notes due 2014, which were issued in a private placement on February 14, 2006 and which we refer to as the "old notes," for an equal aggregate amount of our registered Senior Secured Floating Rate Notes due 2014, which have been registered with the Securities and Exchange Commission, or the "Commission," and which we refer to as the "exchange notes." The terms of the exchange notes are identical in all material respects to the terms of the old notes, except that the exchange notes will not bear legends restricting their transfer under the Securities Act of 1933, as amended, and certain transfer restrictions, registration rights and additional interest payment provisions relating to the old notes will not apply to the exchange notes.

        The old notes were issued, jointly and severally, by Linens 'n Things, Inc., or "Linens 'n Things," and Linens 'n Things Center, Inc., or "Linens 'n Things Center," on February 14, 2006, in connection with the acquisition of Linens 'n Things by Linens Holding Co. The old notes have been, and the exchange notes will be, guaranteed by Linens Holding Co. and all of its wholly owned domestic restricted subsidiaries other than the co-issuers.

MATERIAL TERMS OF THE EXCHANGE OFFER

•

The exchange offer expires at 5:00 p.m., New York City time, on    •    , 2006, unless extended.



•

We will exchange all old notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer.



•

You may withdraw tendered old notes at any time prior to the expiration of the exchange offer.



•

Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes.



•

The only conditions to completing the exchange offer are that the exchange offer not violate any applicable law or applicable interpretation of the staff of the Commission and no injunction, order or decree has been issued that would prohibit, prevent or materially impair our ability to proceed with the exchange offer.



•

We will not receive any cash proceeds from the exchange offer.



•

There is no active trading market for the old notes and we do not intend to list the exchange notes on any securities exchange or to seek approval for quotations through any automated quotation system.

Before participating in this exchange offer, consider carefully the "Risk Factors" beginning on page 18 of this prospectus.

Neither the Commission nor any state securities commission has approved or disapproved of the exchange notes or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is                , 2006

TABLE OF CONTENTS

The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates that another date applies. No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this prospectus in connection with the offer contained herein and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstances create an implication that there has been no change in our affairs or that of our subsidiaries since the date hereof.

        In this prospectus and except as the context otherwise requires or indicates:

•

"Issuers" means Linens 'n Things, Inc. and Linens 'n Things Center, Inc.; and



•

"Us," "we," "our" or "Company" means Linens Holding Co., a Delaware corporation, together with its consolidated subsidiaries, including Linens 'n Things, Inc. and Linens 'n Things Center, Inc.

WHERE CAN YOU FIND MORE INFORMATION

        We have filed with the Commission a registration statement on Form S-4 under the Securities Act relating to the offering of the exchange notes. This prospectus is part of that registration statement. You may obtain from the Commission a copy of the registration statement and exhibits that we have filed with the Commission. The registration statement may contain additional information that may be important to you. Statements made in this prospectus about legal documents may not necessarily be complete, and you should read it together with the documents filed as exhibits to the registration statement filed with the Commission.

i

FORWARD-LOOKING STATEMENTS

        Certain information included in this prospectus may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements, other than statements of historical facts, included in this prospectus, are forward-looking statements. In particular, statements that we make relating to our overall volume trends, industry forces, margin trends, anticipated capital expenditures and our strategies are forward-looking statements. When used in this document, the words "believe," "expect," "anticipate," "estimate," "project," "plan," "should" and similar expressions are intended to identify forward-looking statements.

        These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements. We disclaim any duty to update any forward-looking statements. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the risk factors discussed under the heading "Risk Factors." We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on our results of operations and financial condition.

ii

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus and may not contain all of the information that is important to you. You should read carefully this entire prospectus and should consider, among other things, the financial statements appearing elsewhere in this prospectus and the matters set forth in the section entitled "Risk Factors." We operate on a fiscal year ending on the Saturday closest to December 31. Fiscal years 2005, 2004 and 2003 were fifty-two week periods.

Our Company

        We are the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 549 stores in 47 U.S. states and six Canadian provinces as of April 1, 2006. We are a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Our average store size of approximately 33,000 gross square feet enables us to offer a more comprehensive product and brand selection than department stores and other retailers that sell home furnishings. We believe our store format coupled with our knowledgeable sales assistance and attentive service to our customers, whom we refer to as our guests, creates an enjoyable shopping experience. Our primary target guest is female between the ages of 25 and 55 who is fashion and brand conscious, has good-to-better income and focuses on the home as a reflection of her individuality.

        We are committed to providing our guests with a one-stop shopping destination for home furnishings. Our extensive merchandise offering enables our guests to select from a wide assortment of styles, brands, colors and designs across varying price points at competitive values. Our "linens" product line includes home textiles such as bedding, towels, window treatments and table linens. Our "things" product line includes housewares and home accessories such as cookware, dinnerware, glassware, small appliances, candles, picture frames and storage and cleaning products. We offer a wide array of national home furnishing brands, including All-Clad, Braun, Calphalon, Conair, Croscill, Cuisinart, Henckels, Krups, KitchenAid, Nautica, OXO, Wamsutta and Yankee Candle. We also offer products under our LNT Home private label brand, which is designed to complement our brand name products by offering our guests quality merchandise at value prices. We also carry a number of exclusive products, including several high-fashion home textile patterns from Waverly and our Nate Berkus collection.

        Our store format features an efficient racetrack layout in a visually appealing format that encourages guests to shop the entire store. We operate various store size formats generally ranging from 25,000 to 40,000 gross square feet. This allows us to match the size of our stores with the market potential of each location. Our stores are located predominately in power strip centers adjacent to complementary broad-based retail chains. In addition, our stores are generally located in geographic trading areas with at least 150,000 people within a five to ten mile radius and with demographic characteristics that match our target guest profile. We were incorporated on September 10, 1996 and were a wholly owned subsidiary of CVS Corporation ("CVS"), formerly Melville Corporation, until November 26, 1996, when CVS completed an initial public offering of our common stock.

Business Strategy

        Improve Our Overall Merchandise Assortments.    We intend to maximize merchandise productivity by implementing the following assortment planning initiatives:

•

reduce our overall SKUs and increase the in-stock positions of our most popular merchandise;



•

re-allocate space in our stores to more productive categories;



•

increase the use of analytics in our merchandise assortment planning process, enabling us to make more informed, trend-based purchasing decisions in advance of guest demand; and

1

•

selectively expand existing merchandise categories and key vendor assortments as well as introduce new merchandise product lines that better reflect the style and regional preferences of our guests.

        Establish a Key Item Program.    We have established a "Best Bets" program in order to provide our guests superior value on our top 100 selling items. We intend to price these key items competitively and maintain deep in-stock positions to meet guest demand. We believe that our key item program will help drive store traffic, improve sales per square foot and strengthen the Linens 'n Things brand over the long-term.

        Increase the Effectiveness of Our Marketing Expenditures.    We intend to implement an aggressive new, multi-tiered marketing campaign that re-invigorates the Linens 'n Things brand, emphasizes our commitment to our Best Bets program and drives traffic to our stores. Our marketing expenditures were approximately $114.0 million in fiscal 2005, or 4.2% of net sales. We expect to reduce marketing expenditures as a percentage of net sales in fiscal 2006; however, we intend to broaden our reach with a more diversified mix of marketing utilizing broadcast media, preprint, newspaper advertising and direct mail. We believe that these changes, coupled with a greater emphasis on national advertising, will be more effective in communicating our merchandising strategy while attracting new guests into our stores and enhancing our brand.

        Improve Our Guests' Shopping Experience.    Our goal is to exceed our guests' expectations in every store, every day. We intend to achieve this goal by building on our existing service philosophy and by creating a more inviting atmosphere for our guests. We believe we can make our guests' shopping experience more efficient and enjoyable through enhanced merchandise presentation, including more stimulating product displays and clearer in-store signage.

        Improve Our Operating Free Cash Flow.    We are highly committed to increasing our operating free cash flow. As a result, we plan to reduce new store openings over the next few years and focus on improving the operations of our existing stores. We currently expect to open approximately 25 to 30 new stores in 2006, primarily consisting of stores we have already committed to opening, as opposed to an average of approximately 56 new stores per year since 2003. As a result, we currently expect our fiscal 2006 capital expenditures to be approximately $85.0 million, as opposed to $127.6 million in fiscal 2005. In addition, in connection with our merchandise assortment planning and sales productivity initiatives, we expect to improve our inventory turns and reduce our working capital. Our new business strategy does not require any out of the ordinary or one-time capital expenditures.

        Realize Improved Financial Performance as Recently Opened Stores Mature.    As of April 1, 2006, we operate 549 stores, 174 of which were opened since the beginning of 2003. These 174 stores have not yet reached sales and store-level EBITDA consistent with our stores that were opened before 2003. Store-level EBITDA represents operating profit derived for each store, before depreciation for all fixed assets located at each store and amortization, where operating profit is based on each store's actual sales less direct expenses excluding an allocation of overhead. Historically, new stores take 4 to 5 years to reach the financial performance of a mature store. Accordingly, we expect our recently opened stores to generate improved financial performance and contribute meaningfully to our overall net sales and store-level EBITDA as they mature over the next few years.

Competitive Strengths

        Strong Brand Name Recognition.    The Linens 'n Things brand name has a strong reputation as a leading provider of home furnishings. Our brand recognition is reinforced by our national footprint and highly visible store locations. Additionally, we utilize extensive national and local advertising through multiple formats to reinforce our guest recognition and support our promotional events. Based on a

2

study by Leo J. Shapiro & Associates, an independent market research firm, in May 2005, 9 out of 10 U.S. households located in our markets recognize the Linens 'n Things brand.

        Leading Destination for Home Furnishings.    We are the second largest specialty retailer of home textiles, housewares and home accessories in North America and, as of April 1, 2006, operate 549 stores in 47 U.S. states and six Canadian provinces with an aggregate of approximately 18.3 million gross square feet. With over 25,000 SKUs, we market one of the broadest and deepest selections of home furnishings in the industry, providing us with a competitive advantage over department stores and mass merchants who offer a more limited product selection. Our more comprehensive product and brand selection provides our guests with a one-stop shopping destination for their home furnishing needs.

        Well Maintained Store Base with Attractive Real Estate.    Our portfolio of stores is primarily located in high traffic suburban locations that are convenient and accessible to our core guests and in close proximity to other high quality, national retailers. According to a study done by MapInfo in March 2004, our real estate is extremely competitive as to location and size with other national specialty retailers of home furnishings. Our store base is up to date with an average age per store of approximately five years. We believe that the average age of our store base minimizes our near-term maintenance and remodeling capital expenditure requirements.

        Strong and Diversified Vendor Relationships.    We are one of the largest purchasers of home furnishings in the United States and have developed strong long-term relationships with our vendors, from whom we consistently purchase large quantities of quality merchandise. We believe that our strong and diversified vendor relationships coupled with our buying power provides us a competitive advantage in the U.S. home furnishings industry. In addition, due to our broad range of branded products, our success is not dependent on any one specific product or vendor. In fiscal 2005, no single vendor accounted for more than 8% of our purchases.

        Strong Guest Base.    We have cultivated a strong base of loyal guests who return to our stores time and again. This is complemented by our Internet website which allows guests both to purchase our products and receive product information. We have a large customer database that we use to reach our target guests through, among other things, direct mail events. We define active guests as those who have visited our stores at least once in the last 12 months. We have over 12 million active guests in our database, who on average visit our stores approximately two to three times each year. To further strengthen our guest base, we also offer a private label charge card program, which has built-in loyalty programs to encourage more frequent visits and allows us to more efficiently target our direct mail efforts.

Attractive Industry Fundamentals

        The U.S. home furnishings market, which we define as the retail market for textile home furnishing and durable home furnishings, was approximately an $82 billion market in 2005 according to the U.S. Department of Commerce. Textile home furnishings include bedding, bath accessories, kitchen and table linens and window treatments. Durable home furnishings include kitchenware, tabletop, small appliances, floor care, home décor and storage items. According to the U.S. Department of Commerce, the U.S. home furnishings market has generated positive growth in each year since 1990 and has grown at a 5.0% compound annual growth rate between 1990 and 2004. According to Retail Forward, Inc., a market research firm, the U.S. home furnishings market is expected to grow at a 4.4% compound annual growth rate between 2004 and 2009. Positive industry trends include continued consumer focus on the home, greater consumer disposable income and increasing home ownership.

        The retail U.S. home furnishings market is highly fragmented. The market includes many different types of retailers including, among others, department stores, home improvement centers, mass

3

merchandisers and discounters, specialty retailers and warehouse clubs. We believe that specialty retailers have been one of the fastest growing segments of the market over the past few years. As compared to department stores and other retailers of home furnishings, we believe that "big box" specialty retailers offer a broader and deeper merchandise selection, a higher level of customer service and a more convenient, one-stop shopping experience. As a result, we believe that "big box" specialty retailers will continue to gain market share, particularly as department stores focus increasingly on the fashion elements in their business, including apparel and cosmetics.

The Transactions

        On November 8, 2005, Linens Merger Sub Co. and its parent company, Linens Holding Co., entered into an Agreement and Plan of Merger with Linens 'n Things, Inc. governing a reverse subsidiary merger (the "Merger") pursuant to which, on February 14, 2006, Linens Merger Sub Co. was merged with and into Linens 'n Things, Inc., with Linens 'n Things, Inc. as the surviving corporation. In the Merger, each share of common stock of Linens 'n Things, Inc. (other than shares held in treasury or owned by Linens Merger Sub Co., its parent company or any affiliate of Linens Merger Sub Co. and other than shares held by stockholders who properly demanded and perfected appraisal rights) was converted into the right to receive $28.00 in cash, without interest, for aggregate consideration of approximately $1.3 billion. As the surviving corporation in the Merger, Linens 'n Things, Inc. assumed by operation of law all of the rights and obligations of Linens Merger Sub Co., including those under the notes and the related indenture. Linens 'n Things Center, Inc., a direct wholly owned subsidiary of Linens 'n Things, Inc., was a co-issuer of the notes.

        Affiliates of Apollo Management, L.P., National Realty & Development Corp. and Silver Point Capital Fund Investments LLC (the "Sponsors") collectively contributed approximately $648.0 million as equity to Linens Merger Sub Co. immediately prior to the Merger.

        The Sponsors financed the purchase of Linens 'n Things, Inc. and paid related fees and expenses through the offering of the notes, the equity investment described above and excess cash on hand at Linens 'n Things, Inc. We did not draw on our asset-based revolving credit facility at closing.

        The aforementioned transactions, including the Merger and its payment of any costs related to these transactions, are collectively referred to herein as the "Transactions." In connection with the Transactions, we incurred significant indebtedness and became highly leveraged.

        Immediately following the Merger, we became a wholly owned subsidiary of Linens Holding Co. Linens Holding Co. is an entity that was formed in connection with the Transactions and had no assets or liabilities other than the shares of Linens Merger Sub Co. and its rights and obligations under and in connection with the merger agreement with us and the equity commitment letters and debt financing commitment letters provided in connection with the Transactions.

        The closing of the Merger occurred simultaneously with:

•

the closing of the note offering;



•

the closing of our $600.0 million asset-based revolving credit facility;



•

the termination of our prior $250.0 million unsecured revolving credit facility and CAN $40.0 million unsecured credit facility agreements; and



•

the equity investments described above.

        As a result of the Merger, all of Linens 'n Things, Inc.'s issued and outstanding capital stock was acquired by Linens Holding Co. At such time, investment funds associated with or designated by the Sponsors acquired approximately 99.7% of the common stock of Linens Holding Co. through an

4

investment vehicle controlled by Apollo Management V, L.P., or one of its affiliates, and Robert J. DiNicola, our Chairman and Chief Executive Officer, acquired the remaining 0.3%.

        Upon consummation of the Transactions, we delisted our shares of common stock from the New York Stock Exchange (the "NYSE") and deregistered under Section 12 of the Securities Exchange Act of 1934. The last day of trading on the NYSE was February 14, 2006.

        Our principal executive offices are located at 6 Brighton Road, Clifton, New Jersey 07015 and our telephone number at that address is (973) 778-1300. Our corporate website address is www.lnt.com. Our website and the information contained on our website are not part of this prospectus.

        Linens Holding Co. was incorporated on November 7, 2005. Linens 'n Things, Inc. was incorporated on September 10, 1996. Linens 'n Things Center, Inc. was incorporated on January 12, 1996.

        Certain of the titles and logos referenced in this prospectus are our trademarks and service marks. All other trademarks, service marks and trade names referred to in this prospectus are the property of their respective owners.

5

Summary of the Exchange Offer

We are offering to exchange $650 million aggregate principal amount of our exchange notes for $650 million aggregate principal amount of our old notes. The following is a brief summary of the terms and conditions of the exchange offer. For a more complete description of the exchange offer, you should read the discussions under the heading "The Exchange Offer."

Exchange Notes	$650 million aggregate principal amount of Senior Secured Floating Rate Notes due 2014. The terms of the exchange notes are identical to the terms of the old notes, except that the exchange notes have been registered under the Securities Act and will not bear legends restricting their transfer under the Securities Act. In addition, certain transfer restrictions, registration rights and additional interest payment provisions relating to the old notes will not apply to the exchange notes.
Old Notes	$650 million aggregate principal amount of Senior Secured Floating Rate Notes due 2014, which were issued in a private placement on February 14, 2006.
The Exchange Offer	We are offering to exchange $1,000 principal amount of our exchange notes for each $1,000 principal amount of our old notes. We are making this exchange offer to satisfy our obligations under a registration rights agreement that we entered into with the initial purchasers of the old notes in connection with the private placement.
	To exchange your old notes, you must properly tender them in the exchange offer and we must accept your tender. All old notes that you validly tender and do not subsequently validly withdraw will be exchanged in the exchange offer.
	We will issue the exchange notes promptly after the expiration of the exchange offer.
Registration Rights Agreement	You are entitled under the registration rights agreement to exchange your old notes for exchange notes with substantially identical terms. This exchange offer is intended to satisfy these rights. After the exchange offer is complete, except as set forth in the next paragraph, you will no longer be entitled to any exchange or registration rights with respect to your old notes.
	The registration rights agreement requires us to file a registration statement for a continuous offering in accordance with Rule 415 under the Securities Act for your benefit if you would not receive freely tradable exchange notes in the exchange offer or you are ineligible to participate in the exchange offer, provided that you indicate that you wish to have your old notes registered under the Securities Act. See "The Exchange Offer—Procedures for Tendering."

6

Resales of the Exchange Notes	We believe that you may resell, offer for resale or otherwise transfer any exchange notes issued to you in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act if you meet all of the following conditions:
	(1)	you acquired the exchange notes in the ordinary course of your business;
	(2)	you are not engaging in and do not intend to engage in a distribution of the exchange notes;
	(3)	you do not have an arrangement or understanding with any person to participate in the distribution of the exchange notes; and
	(4)	you are not an affiliate of ours, as the term "affiliate" is defined in Rule 405 under the Securities Act.
	Our belief is based on interpretations by the staff of the Commission, as set forth in no-action letters issued to third parties unrelated to us. We have not asked the staff for a no-action letter in connection with this exchange offer, however, and we cannot assure you that the staff would make a similar determination with respect to the exchange offer.
	If you do not meet all of the above conditions, you may incur liability under the Securities Act if you transfer any exchange note without delivering a prospectus meeting the requirements of the Securities Act. We do not and will not assume or indemnify you against that liability.
	Each broker-dealer that is issued exchange notes in the exchange offer for its own account in exchange for old notes that the broker-dealer acquired as a result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of the exchange notes. A broker-dealer may use this prospectus for an offer to resell or to otherwise transfer the exchange notes. We have agreed that, for a period of 180 days from the effective date of this registration statement, upon the request of a broker-dealer, we will make this prospectus, as amended or supplemented, available to the broker-dealer for use in connection with any such resale.

7

Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on •, 2006, unless we decide to extend the exchange offer. We do not intend to extend the exchange offer, although we reserve the right to do so.
Conditions to the Exchange Offer	We will complete the exchange offer only if it will not violate applicable law or any applicable interpretation of the staff of the Commission and no injunction, order or decree has been issued which would prohibit, prevent or materially impair our ability to proceed with the exchange offer. See "The Exchange Offer—Conditions."
Procedures for Tendering Old Notes Held in the Form of Book-Entry Interests	The old notes were issued as global securities in fully registered form without interest coupons. Beneficial interests in the old notes are held by direct or indirect participants in The Depository Trust Company, or DTC, through certificateless depositary interests that are shown on, and transfers of the old notes can be made only through, records maintained in book-entry form by DTC with respect to its participants.
	If you are a holder of an old note held in the form of a book-entry interest and you wish to exchange your old note for an exchange note pursuant to the exchange offer, you must transmit to The Bank of New York, as exchange agent, on or prior to the expiration of the exchange offer a computer-generated message transmitted by means of DTC's Automated Tender Offer Program system and forming a part of a confirmation of book-entry transfer in which you acknowledge and agree to be bound by the terms of the letter of transmittal.
	The exchange agent must also receive on or prior to the expiration of the exchange offer either:
	•	a timely confirmation of book-entry transfer of your old notes into the exchange agent's account at DTC, in accordance with the procedure for book-entry transfers described in this prospectus under the heading "The Exchange Offer—Procedures for Tendering" and "—Book-Entry Transfer"; or
	•	the documents necessary for compliance with the guaranteed delivery procedures described below.

8

	A letter of transmittal accompanies this prospectus. By delivering a computer-generated message through DTC's Automated Tender Offer Program system, you will represent to us, among other things, that:
	•	you are acquiring the exchange notes in the exchange offer in the ordinary course of your business;
	•	you are not engaging in and do not intend to engage in a distribution of the exchange notes;
	•	you do not have an arrangement or understanding with any person to participate in the distribution of the exchange notes; and
	•	you are not our affiliate.
Procedures for Tendering Certificated Notes	No certificated notes are issued and outstanding as of the date of this prospectus. If you are a holder of book-entry interests in old notes, you are entitled to receive, in limited circumstances, in exchange for your book-entry interests, certificated notes in principal amounts equal to your book-entry interests. If you acquire certificated old notes prior to the expiration of the exchange offer, you must tender your certificated old notes in accordance with the procedures described in "The Exchange Offer—Procedures for Tendering" and "—Certificated Old Notes."
Special Procedures for Beneficial Owners	If you are the beneficial owner of old notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender your old notes, you should promptly contact the person in whose name your old notes are registered and instruct that person to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your notes, either make appropriate arrangements to register ownership of the old notes in your name or obtain a properly completed bond power from the person in whose name your old notes are registered. The transfer of registered ownership may take considerable time. See "The Exchange Offer—Procedures for Tendering."
Guaranteed Delivery Procedures	If you wish to tender your old notes and you cannot get the required documents to the exchange agent on time, you may tender your old notes in accordance with the guaranteed delivery procedures set forth in "The Exchange Offer—Procedures for Tendering" and "—Guaranteed Delivery Procedures."

9

Acceptance of Old Notes and Delivery of Registered Notes	Except under the circumstances summarized above under "Conditions to the Exchange Offer," we will accept for exchange any and all old notes that are properly tendered in the exchange offer prior to 5:00 p.m., New York City time, on the expiration date for the exchange offer. The exchange notes to be issued to you in the exchange offer will be delivered promptly following the expiration of the exchange offer. See "The Exchange Offer—Terms of the Exchange Offer."
Withdrawal	You may withdraw any tender of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will return to you any old notes not accepted for exchange for any reason without expense to you as promptly as we can after the expiration or termination of the exchange offer.
Exchange Agent	The Bank of New York is serving as the exchange agent in connection with the exchange offer.
Consequences of Failure to Exchange	If you do not participate or properly tender your old notes in the exchange offer:
	•	you will retain old notes that are not registered under the Securities Act and that will continue to be subject to restrictions on transfer that are described in the legend on the old notes;
	•	you will not be able, except in very limited instances, to require us to register your old notes under the Securities Act;
	•	you will not be able to offer to resell or transfer your old notes unless they are registered under the Securities Act or unless you offer to resell or transfer them pursuant to an exemption under the Securities Act; and
	•	the trading market for your old notes will become more limited to the extent that other holders of old notes participate in the exchange offer.
Federal Income Tax Consequences	Your exchange of old notes for exchange notes in the exchange offer should not result in any gain or loss to you for U.S. federal income tax purposes. See "Certain United States Federal Income Tax Considerations."

10

The summary below describes the principal terms of the notes. Some of the terms and conditions described below are subject to important limitations and exceptions. The "Description of Exchange Notes" section of this prospectus contains a more detailed description of the terms and conditions of the notes.

Co-Issuers	Linens 'n Things, Inc. and Linens 'n Things Center, Inc.
Notes Offered	$650,000,000 aggregate principal amount of senior secured floating rate notes due 2014.
Maturity Date	January 15, 2014.
Interest Payment Date	We pay interest on the old notes and will pay interest on the exchange notes at a per annum rate equal to LIBOR plus 5.625%, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The interest rate on the exchange notes will be reset quarterly.
Guarantees	The old notes are and the exchange notes will be fully and unconditionally guaranteed, jointly and severally, on a senior basis by Linens Holding Co., the parent corporation of the Issuers, and by each of our direct and indirect subsidiaries that guarantee our asset-based revolving credit facility except for our Canadian subsidiaries, all of which are referred to in this prospectus as the guarantors. If the Issuers cannot make payments required by the exchange notes, the guarantors are required to make payments instead. The guarantees may be released under certain circumstances.
Ranking	The exchange notes and the guarantees will be our senior secured obligations and:
	•	will rank equally in right of payment with all of our existing and future senior indebtedness;
	•	will rank senior in right of payment to all of our existing and future senior subordinated and subordinated indebtedness;
	•	will be effectively senior to our asset-based revolving credit facility to the extent of the value of the collateral securing the exchange notes on a first priority basis;
	•	will be effectively junior in right of payment to indebtedness under our asset-based revolving credit facility to the extent of the value of the collateral securing our asset-based revolving credit facility on a first priority basis; and
	•	be effectively junior in right of payment to the indebtedness and all other liabilities, including trade payables, of our subsidiaries that do not guarantee the exchange notes.

11

	As of April 1, 2006, our subsidiaries that do not guarantee the exchange notes had outstanding liabilities of $35.8 million, excluding intercompany liabilities and notes payable. For the 13 weeks ended April 1, 2006, our foreign subsidiaries had net sales of $36.5 million (6.2% of our total net sales), net loss of $1.4 million (2.2% of our total net loss) and assets of $113 million including intercompany payable and excluding intercompany notes receivable (5.6% of our total assets).
Collateral	The exchange notes and guarantees will be secured by first-priority liens, subject to permitted liens, on all of our and the guarantors' equipment, intellectual property rights and related general intangibles and all of our capital stock and the capital stock of certain subsidiaries. The lien on capital stock may be released under certain circumstances. The exchange notes and guarantees will also be secured by second-priority liens, subject to permitted liens, in all of our and the guarantors' inventory, accounts receivable, cash, securities and other general intangibles. See "Description of Exchange Notes—Security."
Intercreditor Agreement	The trustee under the indenture and the agent under our asset-based revolving credit facility (and their respective collateral agents) have entered into an intercreditor agreement as to the relative priorities of their respective security interests in our assets securing the exchange notes and the loans under our asset-based revolving credit facility and certain other matters relating to the administration of such security interests. The terms of the intercreditor agreement are set forth under "Description of Exchange Notes—Intercreditor Agreement."
Optional Redemption	We may, at our option, redeem some or all of the exchange notes at any time on or after January 15, 2008 at the redemption prices listed under "Description of Exchange Notes—Optional Redemption" plus accrued and unpaid interest and additional interest.
	Prior to January 15, 2008, we may, at our option, redeem up to 35% of the exchange notes with the proceeds of certain sales of our equity or equity of our parent at the redemption prices listed under "Description of Exchange Notes—Optional Redemption" plus accrued and unpaid interest and additional interest. We may make the redemption only if, after the redemption at least 65% of the aggregate principal amount of the exchange notes originally issued remains outstanding.

12

	Prior to January 15, 2008, we may, at our option, redeem some or all of the exchange notes at a price equal to 100% of the principal amount of the exchange notes plus a "make-whole" premium.
Mandatory Repurchase Offer	If we experience certain kinds of changes of control, we must offer to purchase the exchange notes at 101% of their principal amount, plus accrued and unpaid interest and additional interest. For more details, see "Description of Exchange Notes—Repurchase at the Option of Holders—Change of Control."
	If we sell assets under certain circumstances, we must offer to repurchase the exchange notes at a price equal to par plus the accrued and unpaid interest and additional interest, if any, to the repurchase date as described under "Description of Exchange Notes—Repurchase at the Option of Holders—Asset Sales."
Certain Covenants	We will issue the exchange notes under an indenture with The Bank of New York, which will initially act as trustee on your behalf. The indenture will, among other things, restrict our ability and the ability of our restricted subsidiaries to:
	•	incur, assume or guarantee additional indebtedness;
	•	issue redeemable stock and preferred stock;
	•	repurchase capital stock;
	•	make other restricted payments including, without limitation, paying dividends and making investments;
	•	create liens;
	•	redeem debt that is junior in right of payment to the exchange notes; and
	•	sell or otherwise dispose of assets, including capital stock of subsidiaries.
	These covenants are subject to a number of important limitations and exceptions. See "Description of Exchange Notes—Certain Covenants."
Absence of Public Market for the Notes	The exchange notes are a new issue of securities and there is currently no established trading market for the exchange notes. The exchange notes generally will be freely transferable but will also be new securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes.
Use of Proceeds	We will not receive any cash proceeds upon completion of the exchange offer.

You should refer to the section entitled "Risk Factors" for an explanation of certain risks of participating or not participating in the exchange offer.

13

Summary Historical and Unaudited Pro Forma Consolidated Financial and Operating Data

        The following table sets forth our summary historical and pro forma consolidated financial and operating data. The summary historical income statement data for fiscal 2005, fiscal 2004 and fiscal 2003 and the summary historical balance sheet data as at the end of fiscal 2005 and fiscal 2004 have been derived from our consolidated financial statements for such periods and such dates, which have been audited by KPMG LLP and are included in this registration statement. The summary historical, pro forma and financial data should be read in conjunction with the consolidated financial statements for the year ended December 31, 2005, the related notes and the independent registered public accounting firm's report, which refers to a change in the method of accounting for vendor arrangements to conform to the requirements of Emerging Issues Task Force Issue No. 02-16. As a result of the consummation of the transaction, a new entity was formed with an effective date of February 14, 2006. The historical financial data as of and for each of the periods through February 13, 2006 shown under the predecessor entity caption, consists of Linens 'n Things and subsidiaries. The historical financial data for the successor entity as of April 1, 2006 and for the period February 14 to April 1, 2006 show the operations of the successor entity, Linens Holding Co. and subsidiaries. The unaudited historical financial data as of April 1, 2006, for the periods from January 1, 2006 to February 13, 2006 and February 14, 2006 to April 1, 2006, and the thirteen weeks ended April 2, 2005, have been derived from our unaudited consolidated financial statements. The unaudited consolidated financial statements for the period after February 13, 2006 are presented on a different basis than that for the periods before February 14, 2006, as a result of the application of purchase accounting as of February 14, 2006 and therefore are not comparable. In the opinion of management, such unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the results for that period. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period.

        The summary unaudited pro forma consolidated financial data are based on our historical consolidated financial statements appearing elsewhere in this prospectus and give effect to the Transactions as if they had occurred on January 2, 2005. The pro forma adjustments are based upon available information and assumptions that we believe are reasonable; however, we can provide no assurance that the assumptions used in the preparation of the pro forma condensed consolidated financial information are correct. The pro forma condensed consolidated financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what our financial condition or results of operations would have been had the Transactions described under "Prospectus Summary—The Transactions" occurred on such dates. The pro forma condensed consolidated financial information also should not be considered representative of our future financial condition or results of operations. The acquisition of Linens 'n Things, Inc. is being accounted for as a business combination using the purchase method of accounting.

        The term "predecessor" refers to Linens 'n Things, Inc. and the term "successor" refers to Linens Holding Co. after its acquisition of Linens 'n Things, Inc. on February 14, 2006. This information is a summary and should be read in conjunction with "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

14

	(Predecessor)															(Successor)
																						Pro Forma Fifty-Two Weeks Ended(2)
	Fiscal Year Ended									Thirteen Weeks Ended									Thirteen Weeks Ended(1)
	January 3, 2004			January 1, 2005(3)			December 31, 2005			April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006			April 1, 2006			April 1, 2006
										(unaudited)			(unaudited)			(unaudited)			(unaudited)			(unaudited)
	(dollars in thousands)
Income Statement Data:
Net sales	$	2,395,272		$	2,661,469		$	2,694,742		$	570,946		$	284,971		$	307,845		$	592,816		$	2,716,612
Cost of sales, including buying and distribution costs		1,426,880			1,589,700			1,595,394			334,553			180,675			189,068			369,743			1,630,859
Gross profit		968,392			1,071,769			1,099,348			236,393			104,296			118,777			223,073			1,085,753
Selling, general and administrative expenses		846,826			970,479			1,037,521			242,154			174,138			137,761			311,899			1,107,674
Operating profit (loss)		121,566			101,290			61,827			(5,761	)		(69,842	)		(18,984	)		(88,826	)		(21,921	)
Interest income		(169	)		(542	)		(894	)		(495	)		(668	)		(86	)		(754	)		(1,153	)
Interest expense		4,001			3,903			4,860			1,218			—			9,987			9,987			82,689
Income (loss) before provision (benefit) for income taxes		117,734			97,929			57,861			(6,484	)		(69,174	)		(28,885	)		(98,059	)		(103,457	)
Provision (benefit) for income taxes		44,975			37,408			21,879			(2,410	)		(21,270	)		(11,313	)		(32,583	)		(41,716	)
Net income (loss)	$	72,759		$	60,521		$	35,982		$	(4,074	)	$	(47,904	)	$	(17,572	)	$	(65,476	)	$	(61,741	)

		(Predecessor)															(Successor)
																						Pro Forma Fifty-Two Weeks Ended(2)
		Fiscal Year Ended									Thirteen Weeks Ended								Thirteen Weeks Ended(1)
		January 3, 2004			January 1, 2005(3)			December 31, 2005			April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006		April 1, 2006			April 1, 2006
											(unaudited)			(unaudited)			(unaudited)		(unaudited)			(unaudited)
		(dollars in thousands, except for ratios and store data)
Other Financial Data:
Adjusted EBITDA(4)		$	215,669		$	226,843		$	173,726		$	17,618		$	(14,170	)	$	10,721	$	(3,449	)	$	192,395
Depreciation and amortization			71,348			81,318			90,270			21,176			12,642			15,022		27,664			108,182
Capital expenditures:
	New stores		82,531			87,863			93,678			9,258			6,875			6,517		13,392			97,812
	Existing stores and other		30,765			31,189			33,904			2,769			901			2,054		2,955			34,090
Total capital expenditures			113,296			119,052			127,582			12,027			7,776			8,571		16,347			131,902
Cash interest expense			3,888			4,018			4,851			1,288			135			47		182			69,161
Ratio of total debt to Adjusted EBITDA																							3.81	x
Ratio of Adjusted EBITDA to cash interest expense																							2.78	x
Store Data:
Number of stores (at period end)			440			492			542			499			542			549		549			549
Total gross square footage (000's) (at period end)			15,106			16,702			18,071			16,900			18,071			18,300		18,300			18,300
Comparable net sales(5)			1.3	%		1.8	%		(5.9	)%		(5.4	)%		—			—		(3.7	)%		(5.5	)%
Balance Sheet Data (at period end):
Cash and cash equivalents		$	136,129		$	204,009		$	158,158		$	75,271		$	90,333		$	15,033	$	15,033		$	15,033
Working capital			458,519			519,686			537,453			533,971			506,757			442,017		442,017			442,017
Total assets			1,467,456			1,591,884			1,650,834			1,509,856			1,613,665			2,027,450		2,027,450			2,027,450
Total debt			—			2,196			2,139			2,182			2,131			733,725		733,725			733,725
Total shareholders' equity			737,377			809,353			849,863			806,012			820,408			630,184		630,184			565,288

(1)

For comparative purposes, the Company combined the two periods from January 1, 2006 through April 1, 2006. This combination is not GAAP presentation. However, the Company believes this presentation is useful to provide the reader a more accurate comparison.

(2)

The Pro Forma Fifty-Two Weeks ended April 1, 2006 have been derived from historical consolidated financial statements for the fiscal year 2005, less data from the consolidated financial statements for the thirteen weeks ended April 2, 2005 plus data from the consolidated financial statements for the thirteen weeks ended April 1, 2006 giving effect to the Transactions as if they had occurred on January 2, 2005.

(3)

Fiscal year 2004 results include the implementation of the provisions of EITF 02-16, Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor ("EITF 02-16") which reduced the Company's net income in fiscal 2004 by $13.3 million net of tax.

15

(4)

EBITDA represents net income (loss) before provision (benefit) for income taxes, interest expense, net and depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted to exclude non-cash and unusual items. Management uses EBITDA and Adjusted EBITDA as additional tools to assess our operating performance. Management considers EBITDA and Adjusted EBITDA to be useful measures in highlighting trends in our business and in analyzing the profitability of similar enterprises. It is also used as a measurement for the calculation of management incentive compensation. Management believes that EBITDA and Adjusted EBITDA are effective, when used in conjunction with net income, in evaluating asset performance and differentiating efficient operators in the industry. Furthermore, management believes that EBITDA and Adjusted EBITDA provide useful information to, and is commonly used by, investors, analysts and others to measure operating performance and because it provides insights into management's evaluation of our results of operations. EBITDA and Adjusted EBITDA (as calculated with contractually specified adjustments) are also one of the key measures used in calculating compliance with covenants in our new asset-based revolving credit facility and our notes. Non-compliance with financial covenants could prevent us from engaging in certain activities or result in a default under our asset-based revolving credit facility or our notes.

EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP, are not intended to represent cash flow from operations under GAAP and should not be used as an alternative to net income as an indicator of operating performance or to cash flow from operating, investing or financing activities as a measure of liquidity. Management compensates for the limitations of using EBITDA and Adjusted EBITDA by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business. Each of EBITDA and Adjusted EBITDA has its limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations of EBITDA and Adjusted EBITDA are:

•

EBITDA and Adjusted EBITDA do not reflect our cash used for capital expenditures;



•

although depreciation and amortization are non-cash charges, the assets being depreciated or amortized often will have to be replaced and EBITDA and Adjusted EBITDA do not reflect the cash requirements for such replacements;



•

EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital requirements;



•

EBITDA and Adjusted EBITDA do not reflect the cash necessary to make payments of interest or principal on our indebtedness; and



•

EBITDA and Adjusted EBITDA do not reflect non-recurring expenses which qualify as extraordinary such as one-time write-offs to inventory and reserve accruals.

While EBITDA and Adjusted EBITDA are frequently used as a measure of operations and the ability to meet indebtedness service requirements, they are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.

(5)

Comparable net sales includes our internet sales and sales for our stores beginning on the first day of the month following the 13^th full month of sales. Stores that are closed for a number of days in a particular month are excluded from comparable net sales if it would cause meaningful disparity in sales over the prior period. In the case of a store to be permanently closed, such store's sales are not considered comparable once the store closing process has commenced.

The following table reconciles EBITDA and Adjusted EBITDA as presented above, to net income (loss) as presented in our summary consolidated statements of operations and in accordance with GAAP (dollars in thousands):

		(Predecessor)															(Successor)
																							Pro Forma Fifty-Two Weeks Ended
		Fiscal Year Ended									Thirteen Weeks Ended									Thirteen Weeks Ended
		January 3, 2004			January 1, 2005			December 31, 2005			April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006			April 1, 2006			April 1, 2006
Net income (loss)		$	72,759		$	60,521		$	35,982		$	(4,074	)	$	(47,904	)	$	(17,572	)	$	(65,476	)	$	(61,741	)
Income tax provision (benefit)			44,975			37,408			21,879			(2,410	)		(21,270	)		(11,313	)		(32,583	)		(41,716	)
Interest expense, net			3,832			3,361			3,966			723			(668	)		9,901			9,233			81,536
Depreciation and amortization			71,348			81,318			90,270			21,176			12,642			15,022			27,664			108,182
	EBITDA		192,914			182,608			152,097			15,415			(57,200	)		(3,962	)		(61,162	)		86,261
Non-cash rent expense(a)			8,052			7,978			4,739			1,238			534			1,682			2,216			17,996
Non-cash landlord allowance amortization(b)			(17,283	)		(19,968	)		(21,633	)		(5,234	)		(2,959	)		(94	)		(3,053	)		(2,735	)
Cash landlord allowances received(c)			30,410			29,096			28,697			5,490			1,277			1,054			2,331			25,538
EBITDA after rent-related adjustments			214,093			199,714			163,900			16,909			(58,348	)		(1,320	)		(59,668	)		127,060
Transaction expenses(d)			—			—			3,322			—			31,730			—			31,730			35,052
Non-cash fixed asset impairment charge(e)			760			900			4,060			—			—			—			—			4,059
Non-cash stock-based compensation(f)			816			510			1,243			109			3,143			36			3,179			4,313
Accounting change for vendor allowances(g)			—			21,468			—			—			—			—			—			—
Non-recurring consulting expenses(h)			—			4,251			5,412			600			—			—			—			4,812
Write-down of aged inventory(i)			—			—			—			—			—			10,313			10,313			10,313
Accelerated payment of stock option(j)			—			—			—			—			9,305			—			9,305			9,305
Executive Severance(k)			—			—			—			—			—			1,692			1,692			1,692
Visa/Mastercard litigation settlement(l)			—			—			(2,211	)		—			—			—			—			(2,211	)
Gain on sale of lease(m)			—			—			(2,000	)		—			—			—			—			(2,000	)
	Adjusted EBITDA	$	215,669		$	226,843		$	173,726		$	17,618		$	(14,170	)	$	10,721		$	(3,449	)		192,395

(a)

Represents the non-cash portion of rent expense.

16

(b)

Non-cash landlord allowance amortization represents the amortization of cash allowances received from landlords at inception of leases. Non-cash landlord allowance amortization has the effect of reducing rent expense.

(c)

Represents cash allowances received from landlords at inception of leases.

(d)

Transaction costs represent legal and other merger-related expenses.

(e)

Represents the non-cash accelerated write-down of the book value of certain underperforming fixed assets.

(f)

Represents non-cash compensation expense related to predecessor period restricted stock grants.

(g)

Prior to January 4, 2004, certain funds received from vendors were reflected immediately as a reduction of advertising expense in SG&A or cost of sales. Effective January 4, 2004, in connection with the implementation of EITF 02-16, the Company treats these vendor funds as a reduction in the cost of inventory and as a result, these funds are recognized as a reduction to cost of sales when the inventory is sold. The effect of the implementation of EITF 02-16 was to reduce pre-tax income by $21.5 million for the fiscal year ended January 1, 2005.

(h)

Represents non-recurring consulting costs related to a strategic corporate profitability project that began in 2004 and was completed in 2005 and that was significantly greater in scope and costs than what the Company typically incurs or is expected to incur.

(i)

Charges related to change in reserves for markdowns on non-productive and aged inventory.

(j)

Represents acceleration of compensation expense related to stock option grants, as a result of the acquisition of the Company by the Sponsors.

(k)

Changes related to severance for departure of Jane Gilmartin.

(l)

Represents the Company's share of the Visa/MasterCard antitrust litigation settlement.

(m)

Represents non-recurring gain from sale of favorable lease.

17

RISK FACTORS

You should carefully consider the risks described below as well as the other information contained in this prospectus before tendering your old notes in the exchange offer. The risks described below are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business operations.

Risks Related to Our Business

Our profitability would be adversely affected if our merchandise selections do not match guest preferences.

        The retail industry is subject to changing merchandise trends and consumer preferences. Our success depends in large part on our ability to identify merchandise trends as well as to anticipate, gauge and react to changing consumer demands in a timely manner. We cannot assure you that our merchandise selections will accurately reflect the preferences of our guests at any given time. In addition, any decline in the popularity or quality of any of our key brands could adversely affect our business. Furthermore, the products we sell often require long lead times to order and must appeal to consumers whose preferences cannot be predicted with certainty and often change rapidly. Consequently, we must stay abreast of changing lifestyle and consumer trends and anticipate trends and fashions that will appeal to our guests. If we miscalculate the market for our merchandise or the purchasing preferences of our guests, our business and financial results could be adversely affected.

We do not have long-term contracts with any of our vendors and if we are unable to purchase suitable merchandise in sufficient quantities at competitive prices, we may be unable to offer a merchandise mix that is attractive to our guests and our sales may be harmed.

        Third-party vendors manufacture virtually all of the products that we offer. In fiscal 2005, we purchased our merchandise from approximately 1,200 vendors. Many of our key vendors limit the number of retail channels they use to sell their merchandise and competition among retailers to obtain and sell these goods is intense. In addition, nearly all of the brands of our top vendors are sold by competing retailers, and some of our top vendors also have their own dedicated retail stores. Moreover, we typically buy products from our vendors on a purchase order basis. We have no long-term purchase contracts with any of our vendors and, therefore, have no contractual assurances of continued supply, pricing or access to products, and any vendor could change the terms upon which they sell to us or discontinue selling to us at any time. In fiscal 2005, products supplied by our 25 largest vendors represented approximately 40% of our purchases, with our top three vendors supplying approximately 14% and our largest single vendor supplying approximately 8% of our purchases for that year.

        If our relationships with our vendors were disrupted, we might not be able to acquire the merchandise we require in sufficient quantities or on terms acceptable to us. Any inability to acquire suitable merchandise would have a negative effect on our business and operating results because we would be missing products from our merchandise mix unless and until alternative supply arrangements were made, resulting in deferred or lost guest sales.

Delays in receipt of merchandise in connection with either the manufacturing or shipment of such merchandise could affect our performance.

        Virtually all of our merchandise is delivered to us by our vendors as finished goods and is manufactured in numerous locations. Our vendors rely on third party carriers to deliver merchandise to our distribution facilities. In addition, our success depends on our ability to efficiently source and distribute merchandise to our retail stores and online guests. Events such as labor disputes, natural disasters, availability of raw materials, vendor financial liquidity, inclement weather, work stoppages or

18

boycotts affecting the manufacturing or transportation sectors could increase the cost or reduce the supply of merchandise available to us and could adversely affect our results of operations. Upon the loss of one or more of our vendors, we may not be able to develop relationships with new vendors, and products from alternative sources, if available, may be more expensive or of a different or inferior quality from the ones we currently sell.

        In addition, a significant portion of our merchandise is currently sourced by us or by our domestic suppliers from foreign vendors. As a result, events resulting in the disruption of trade from other countries or the imposition of additional regulations relating to duties upon imports could cause significant delays or interruptions in the supply of our merchandise or increase our costs, either of which could have a material adverse effect on our business. Examples of such events include:

•

political unrest, terrorist activities, war or other hostilities;



•

strikes and labor problems;



•

economic upheaval;



•

import duties and quotas; and



•

loss or change in "Most Favored Nation" status of the United States with a particular foreign country.

        An increase in the cost to manufacture, or a disruption in shipment to us of, foreign-sourced products could decrease our sales and profitability.

Our future growth and profitability could be adversely affected if our advertising and marketing programs are not effective in generating sufficient levels of customer awareness and traffic.

        We rely heavily on print advertising, especially direct mail, to promote new store openings, to increase consumer awareness of our product offerings and pricing and to drive store traffic. In addition, we rely and will increasingly rely on other forms of media advertising. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our advertising and marketing programs. In order for our advertising and marketing programs to be successful, we must:

•

effectively manage advertising and marketing costs in order to maintain acceptable operating margins and return on our marketing investment; and



•

convert customer awareness into actual store visits and product purchases.

        Our planned advertising and marketing expenditures may not result in increased total or comparable net sales or generate sufficient levels of product awareness. We may not be able to manage our advertising and marketing expenditures on a cost-effective basis.

        There are a limited number of companies capable of distributing our direct mail advertising at the volume levels we require. If any of these companies cease operations, or if their expenses (e.g., postage, printing and paper costs) increase substantially, then it is likely that our advertising expenses will increase, which will have a negative effect on our business and operating results.

Weak economic conditions may significantly impact discretionary consumer spending and reduce our sales and profitability.

        Most of the products the we sell are not consumer necessities. Purchases of our merchandise are largely dependent upon discretionary spending by our guests. A number of external economic factors could affect the purchases by our guests of the type of merchandise we offer, including:

•

disposable income or consumer confidence in future economic conditions;

19

•

general economic and business conditions; and



•

increased interest rates or consumer debt levels.

        Decreases in consumer confidence and consumer spending could adversely impact our sales and results of operations. Reduced consumer spending may also require increased markdowns and increased promotional expenses, which would adversely impact our results of operations.

Competitive factors could reduce our sales and profitability.

        The U.S. retail home furnishings market is highly fragmented and intensely competitive. We compete with many different types of retailers, including among others department stores, mass merchandisers and discounters, specialty retail stores, home improvement centers, warehouse clubs and other retailers. Some of our competitors sell many of the same products and brands that we sell. The competitive challenges facing us include:

•

anticipating and quickly responding to changing consumer demands;



•

increasing customer awareness and traffic to our stores;



•

variety and fashion of the products we offer;



•

maintaining favorable brand recognition and achieving customer perception of value;



•

effectively marketing and competitively pricing our products to our target guests; and



•

competing with entities that have substantially greater financial and other resources than we do.

        Competition by existing or future competitors, including aggressive price competition, could result in the need to reduce our prices or increase our spending and could result in a decrease in our sales and profitability and require a change in our operating strategies.

Attrition among our buyers or key sales associates could adversely affect our financial performance and our growth.

        Our success is largely dependent on the efforts and abilities of our buyers and key sales associates. Our ability to meet our labor needs generally is subject to numerous factors, including the availability of a sufficient number of qualified persons in the work force, unemployment levels, the wages and benefits we pay, prevailing wage rates, changing demographics, health and other insurance costs and changes in employment legislation. If we were to lose buyers or key sales associates and not promptly fill their positions with comparably qualified individuals, our ability to benefit from long-standing relationships with key vendors or to provide relationship-based guest service may suffer. We cannot assure you that we will not suffer significant attrition among our current buyers or key sales associates. The loss of these individuals could adversely affect our business.

We may not be successful in opening and operating new stores profitably or making our recently opened stores profitable.

        Although at a decreased rate as compared to prior years, we plan to open a number of new stores as part of our growth strategy. There are many risks inherent in our store expansion strategy, and we cannot assure you that we will be able to achieve our expansion goals. Our ability to grow our store base and operate our new and recently opened stores profitably will be affected by many factors, including:

•

risks inherent in constructing, furnishing and supplying a store in a timely and cost effective manner, including obtaining necessary permits and zoning approvals;



•

integrating the new store into our distribution network;

20

•

our ability to maintain financing on commercially reasonable terms;



•

our ability to identify and secure favorable sites for our new stores in well-trafficked areas and to negotiate satisfactory rent and other lease terms;



•

the competition for favorable store sites;



•

the presence of other complementary retail outlets at the locations where we open our new stores;



•

the proximity of our competitors' stores;



•

the impact on sales at our existing stores if we locate new stores in the same market;



•

our ability to invest in and expand our distribution, information technology, management and logistics infrastructure to support a continually increasing store base;



•

our ability to attract, train and retain good and experienced store managers and store personnel for our new stores; and



•

acceptance of our new stores in markets where we have limited or no existing presence.

        We intend to open additional stores in new markets, as well as in existing markets, in fiscal 2006, 2007 and beyond. The new markets we enter may have different competitive conditions, consumer trends and discretionary spending patterns than our existing markets, which may cause our stores in these new markets to be less successful than stores in our existing markets.

        Where we add stores into our existing markets, we may not be able to attract sufficient new customers to these new stores and, in addition, these new stores may have the effect of reducing sales from our existing stores in those markets, which may have an adverse effect on our results of operations.

        We cannot assure you that our new or recently opened stores will meet our internal financial operating targets or that we will be able to operate our new or recently opened stores profitably. We also cannot assure you that the operating results of our new or recently built stores will be comparable to the operating results of our mature existing stores.

A disruption in the operation of our distribution centers would impact our ability to deliver merchandise to our stores, which could adversely impact our sales and our results of operations.

        Our inventory is generally shipped by our suppliers to one of our three distribution centers, which are located in Shepherdsville, Kentucky; Swedesboro, New Jersey and Greensboro, North Carolina. At our distribution centers, the merchandise is processed, sorted and shipped to our stores. Events such as fire or other catastrophic events, any malfunction or disruption of our centralized information systems or shipping problems may result in delays or disruptions in the timely distribution of merchandise to our stores, which could adversely impact our sales and our results of operations. Additionally, increases in variable expenses such as fuel costs associated with our distribution operations may adversely impact our results of operations.

Our revenues and cash requirements are affected by the seasonal nature of our business.

        Our business is subject to substantial seasonal variations. Historically, we have realized a significant portion of our net sales and substantially all of our earnings for the year during the third and fourth quarters, with a majority of sales and earnings for these quarters realized in the fourth quarter. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of new store openings, holiday spending patterns and general economic conditions. We believe this is the typical pattern associated with our segment of the retail industry, and we expect

21

this pattern will continue in the future. In anticipation of its peak selling season, we incur substantial additional costs, including additional inventory, payroll and advertising costs. If for any reason our sales during the fourth quarter of any year were significantly below expectations, our results of operations for that full year would be materially adversely affected.

A problem with our management information systems could impact our flow of product and information and adversely affect our operating productivity and results of operations.

        We rely heavily upon our existing management information systems in operating and monitoring all aspects of our business, including sales, warehousing, distribution, purchasing, inventory control, merchandise planning and replenishment and our financial systems. The bulk of our management information systems are centrally located at our headquarters, with offsite backup at other locations. Any extended disruption in the operation of our management information systems could have an adverse effect on our operating productivity and results of operations.

        Furthermore, to keep pace with changing technology, we must continuously provide for the design and implementation of new information technology systems as well as enhancements of our existing systems. Any failure to adequately maintain and update the information technology systems supporting our sales operations or inventory control could prevent us from processing and delivering merchandise, which could adversely affect our business.

Our business can be affected by extreme or unseasonable weather conditions.

        Extreme weather conditions in the areas in which our stores are located could adversely affect our business. For example, heavy snowfall, rainfall or other extreme weather conditions over a prolonged period might make it difficult for our guests to travel to our stores and thereby reduce our sales and profitability. Our business is also susceptible to unseasonable weather conditions. For example, extended periods of unseasonably warm weather temperatures during the winter seasons could render a portion of our inventory incompatible with those conditions. Reduced sales from extreme or prolonged unseasonable weather conditions would adversely affect our business.

Acts of terrorism could adversely affect our business.

        The economic downturn that followed the terrorist attacks of September 11, 2001 had a material adverse effect on our business. Any further acts of terrorism or other future conflict may disrupt commerce and undermine consumer confidence, cause a downturn in the economy generally, cause consumer spending or shopping center traffic to decline or reduce the desire of our guests to make discretionary purchases. Any of the foregoing factors could negatively impact our sales revenue, particularly in the case of any terrorist attack targeting retail space, such as a shopping center. Furthermore, an act of terrorism or war, or the threat thereof, could negatively impact our business by interfering with our ability to obtain merchandise from foreign manufacturers. Any future inability to obtain merchandise from our foreign manufacturers or to substitute other manufacturers, at similar costs and in a timely manner, could adversely affect our business.

We are subject to numerous regulations that could affect our operations.

        We are subject to customs, truth-in-advertising and other laws, including consumer protection regulations and zoning and occupancy ordinances, which regulate retailers generally and/or govern the importation, promotion and sale of merchandise and the operation of retail stores and warehouse facilities. Although we undertake to monitor changes in these laws, if these laws change without our knowledge, or are violated by importers, designers, manufacturers or distributors, we could experience delays in shipments and receipt of goods or be subject to fines or other penalties under the controlling regulations, any of which could adversely affect our business.

22

If we are unable to enforce our intellectual property rights, or if we are accused of infringing on a third party's intellectual property rights, our profitability may be adversely affected.

        We and our subsidiaries currently own our trademarks and service marks, including the "Linens 'n Things" and "LNT" marks. Our trademarks and service marks are registered with both the United States Patent and Trademark Office and the Canadian Intellectual Property Office. The laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States. Moreover, we are unable to predict the effect that any future foreign or domestic intellectual property legislation or regulation may have on our existing or future business. The loss or reduction of any of our significant proprietary rights could have an adverse effect on our business.

        Additionally, third parties may assert claims against us alleging infringement, misappropriation or other violations of their trademarks, copyrights or patents (including with respect to alleged proprietary designs) or other proprietary rights, whether or not the claims have merit. Claims like these may be time consuming and expensive to defend and could result in us being required to cease using the trademark, copyright or patent, design or other rights and selling the allegedly infringing products or to acquire licenses to continue using such intellectual property. This might have an adverse affect on our sales or business operations and cause us to incur significant litigation costs and expenses.

If we significantly overestimate our sales, our profitability may be adversely affected.

        We make decisions regarding the purchase of our merchandise well in advance of the season in which it will be sold, generally six months to one year. If our sales during any season, particularly a peak season, are significantly lower than we expect for any reason, we may not be able to adjust our expenditures for inventory and other expenses in a timely fashion and may be left with a substantial amount of unsold inventory. If that occurs, we may be forced to rely on markdowns or promotional sales to dispose of excess inventory. This could have an adverse effect on our margins and operating income. At the same time, if we fail to purchase a sufficient quantity of merchandise or if our vendors do not have the capacity to handle our new purchase commitments, we may not have an adequate supply of products to meet guest demand. This may cause us to lose sales or adversely affect our reputation.

Changes in our credit card arrangements, applicable regulations and consumer credit patterns could adversely impact our ability to facilitate the provision of consumer credit to our guests and adversely affect our business.

        We maintain a proprietary credit card program through which credit is extended to guests under the "Linens 'n Things" name. Changes in our proprietary credit card arrangements that adversely impact our ability to facilitate the provision of consumer credit may adversely affect our performance. Credit card operations are subject to numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. Any effect of these regulations or change in the regulation of credit arrangements that would materially limit the availability of credit to our guest base could adversely affect our business. In addition, changes in credit card use, payment patterns and default rates may result from a variety of economic, legal, social and other factors that we cannot control or predict with certainty.

Failure to maintain competitive terms under our loyalty programs could adversely affect our business.

        As part of our strategy, we intend to formalize and maintain loyalty programs that are designed to cultivate long-term relationships with our customers and enhance the quality of service we provide to our customers. We must constantly monitor and update the terms of our loyalty programs so that we continue to meet the demands and needs of our customers and remain competitive with loyalty

23

programs offered by our competitors. Our failure to provide quality service and competitive loyalty programs to our customers could adversely affect our business.

If we are unable to renew or replace our store leases or enter into leases for new stores on favorable terms, or if any of our current leases are terminated prior to the expiration of their stated term and we cannot find suitable alternate locations, our growth and profitability could be harmed.

        We lease all of our store locations. Our current leases expire at various dates through 2029 subject, in many cases, to renewal options for periods ranging from five to 20 years. Our ability to renew any expired lease or, if such lease cannot be renewed, our ability to lease a suitable alternate location, and our ability to enter into leases for new stores on favorable terms will depend on many factors which are not within our control, such as conditions in the local real estate market, competition for desirable properties and our relationships with current and prospective landlords. If we are unable to renew existing leases or lease suitable alternate locations, or enter into leases for new stores on favorable terms, our growth and our profitability may be significantly harmed.

Restrictions contained in some of our leases relating to change of control of our Company may make any change of control more difficult or impair our ability to retain such leases in the event of a change of control.

        Approximately 5% of our leases contain, and leases related to new stores may contain, various restrictions relating to a change of control of our Company. In such cases, a change of control of our Company without the consent of the landlord may result in a violation of the terms of such lease, thereby exposing us to potential damages or lease termination. This, in turn, could harm our growth and profitability. The presence of such provisions may also make any change of control in the future more difficult.

We have identified certain issues relating to our internal controls and procedures, which, if not remedied effectively, could have an adverse effect on our business.

        On February 7, 2005, the Office of the Chief Accountant of the SEC issued a clarification regarding lease accounting under Generally Accepted Accounting Principles in the United States ("GAAP"). As a result of this clarification, we reviewed our lease accounting practices and determined that our former methods of accounting for leases and landlord allowances were not consistent with the views expressed by the SEC. As a result, management has concluded that our internal control over the selection and monitoring of appropriate assumptions and factors affecting accounting for leases and landlord allowances was not effective as the end of fiscal 2004. Such internal control deficiencies resulted in the restatement of certain of our financial statements and constituted a material weakness in our internal control over financial reporting. We made this determination in consultation with the audit committee of our board of directors and senior management. Consequently, our assessment resulted in an attestation report with an opinion from our independent registered public accounting firm that we had not maintained effective internal control over financial reporting as of January 1, 2005. In addition, during the fourth quarter of 2004, management determined that there was a material weakness in the design of controls over inventory existence, due to the timing of our physical inventory counts and our cycle counting procedures over inventory. In response to this control deficiency we enhanced our inventory cycle count procedures within the fourth quarter of 2004 to confirm the existence of inventory.

        Our management also determined that as of the end of fiscal 2005 we did not have adequate review controls to ensure the propriety of the accounting for the classification of capital expenditures related to store self-development transactions. Our accounting treatment for capital expenditures related to store self-development transactions, initially recorded on the balance sheet as other current assets and on the cash flow statement as a change in other current assets, was subsequently determined

24

to be incorrect according to generally accepted accounting principles, which principles provide that capital expenditures related to store self-development transactions should be recorded on the balance sheet as property and equipment and on the cash flow statement as additions to property and equipment. Our management corrected the accounting related to store self-development transactions prior to issuance of the financial statements for the fiscal year ended December 31, 2005. There was no change in the overall cash flow generated by us and the incorrect accounting had no impact on our income statement. The control deficiency that resulted in the incorrect accounting for the classification of capital expenditures related to store self-development transactions represented a material weakness in our internal control over financial reporting as of December 31, 2005. Our management has implemented review controls to ensure the propriety of our accounting for these transactions.

        A material weakness in internal control over financial reporting is a control deficiency (within the meaning of the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No. 2), or combination of control deficiencies, that adversely affects a company's ability to initiate, authorize, record, process or report external financial data reliably in accordance with GAAP that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

        Although we have taken certain actions to address these issues, if we are unable to identify and remedy all such issues promptly and effectively, it could have a material adverse effect on our business, results of operations and financial condition. Maintaining effective control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud. If our management or our independent registered public accounting firm were to conclude again in the future that our internal control over financial reporting was ineffective, investors could lose confidence in our reported financial information.

We are indirectly owned and controlled by the Sponsors, and their interests as equity holders may conflict with creditors.

        We are indirectly owned and controlled by affiliates of Apollo Management, L.P., National Realty & Development Corp. and Silver Point Capital Fund Investments LLC (the "Sponsors"), and the Sponsors have the ability to elect all of the members of our board of directors and thereby control our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence of debt by us, amendments to our certificate of incorporation and bylaws and the entering into of extraordinary transactions. The interests of the Sponsors may not in all cases be aligned with the interests of noteholders. For example, if we encounter financial difficulties or are unable to pay our indebtedness as it matures, the interests of our equity holders might conflict with the interests of noteholders. In addition, our equity holders may have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though such transactions might involve risks to noteholders. Furthermore, the Sponsors may in the future own businesses that directly or indirectly compete with us. One or more of the Sponsors also may pursue acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. So long as the Sponsors continue to own a significant amount of our combined voting power, even if such amount is less than 50%, they will continue to be able to strongly influence or effectively control our decisions.

25

Risks Related to Holding the Notes

Our substantial leverage may impair our financial condition and prevent us from fulfilling our obligations under the notes.

        We have a substantial amount of indebtedness. As of April 1, 2006, our total debt was $733.7 million, and we had $351.4 million of available borrowings under our asset-based revolving credit facility. For the thirteen weeks ended April 1, 2006, we had a deficit of earnings to fixed charges of $98.1 million.

        Our substantial indebtedness could have important consequences to you, including:

•

making it more difficult for us to satisfy our obligations with respect to the notes;



•

increasing our vulnerability to general adverse economic and industry conditions by making it more difficult for us to react quickly to changing conditions;



•

limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions and other general corporate requirements;



•

requiring a substantial portion of our cash flow from operations for the payment of interest on our indebtedness and reducing our ability to use our cash flow to fund working capital, capital expenditures, acquisitions and general corporate requirements;



•

exposing us to risks inherent in interest rate fluctuations because some of our borrowings will be at variable rates of interest, which could result in a higher interest expense in the event of increases in interest rates;



•

limiting our flexibility in planning for, or reacting to, changes in our business, and the industry in which we operate; and



•

placing us at a competitive disadvantage compared with our competitors that have less indebtedness.

Despite current indebtedness levels, we and our subsidiaries may still be able to incur substantially more indebtedness. This could further exacerbate the risks associated with our substantial leverage.

        Subject to specified limitations, the indenture governing the notes and the credit agreement governing our asset-based revolving credit facility permits us and our subsidiaries to incur substantial additional indebtedness, including $600.0 million of borrowings under our asset-based revolving credit facility that ranks equally with the notes. If new indebtedness is added to our and our subsidiaries' current indebtedness levels, the risks described above could intensify. See "Description of Certain Indebtedness" and "Description of Exchange Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" for additional information.

Covenant restrictions under our indebtedness may limit our ability to operate our business.

        The credit agreement governing our asset-based revolving credit facility and the indenture governing the notes do, and our future indebtedness agreements may, contain covenants that may restrict our ability to finance future operations or capital needs or to engage in other business activities. Our asset-based revolving credit facility and the indenture restricts, among other things, our ability and the ability of our restricted subsidiaries to:

•

incur, assume or guarantee additional indebtedness;



•

issue redeemable stock and preferred stock;



•

repurchase capital stock;

26

•

make other restricted payments including, without limitation, paying dividends and making investments;



•

create liens;



•

redeem debt that is junior in right of payment to the notes;



•

sell or otherwise dispose of assets, including capital stock of subsidiaries;



•

enter into agreements that restrict dividends from subsidiaries;



•

enter into mergers or consolidations;



•

enter into transactions with affiliates; and



•

enter into sale/leaseback transactions.

        In addition, our asset-based revolving credit facility requires us to maintain specified financial ratios and satisfy certain financial condition tests in certain situations. Events beyond our control, including changes in general economic and business conditions, may affect our ability to meet those financial ratios and financial condition tests. We cannot assure you that we will meet those tests or that the lenders will waive any failure to meet those tests. A breach of any of these covenants would result in a default under our asset-based revolving credit facility and the indenture. If an event of default under our asset-based revolving credit facility occurs, the lenders could terminate all commitments to lend and elect to declare all amounts outstanding thereunder, together with accrued interest, to be immediately due and payable. If we were unable to pay such amounts, the lenders could proceed against the collateral pledged to them. We have pledged our inventory, accounts receivable, cash, securities, other general intangibles and the capital stock of certain subsidiaries (our "revolving credit collateral") to the lenders on first-priority basis. In such an event, we cannot assure you that we would have sufficient assets to pay amounts due on the notes. As a result, you may receive less than the full amount you would be otherwise entitled to receive on the notes. See "Description of Certain Indebtedness," "Description of Exchange Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" and "Description of Exchange Notes—Certain Covenants—Liens" for additional information.

Certain of the collateral securing the notes is subject to control by creditors with first priority liens. If there is a default, the value of that collateral may not be sufficient to repay both the first priority creditors and the holders of the notes.

        The notes are secured by a first priority lien on equipment, intellectual property rights, related general intangibles and all of our capital stock and the capital stock of certain subsidiaries (our "note lien collateral"), and a second priority lien on our revolving credit collateral. Our asset-based revolving credit facility is secured by a first priority lien on our revolving credit collateral and a second priority lien on our note lien collateral. If we become insolvent or are liquidated, or if payment under any of the instruments governing our secured debt under our asset-based revolving credit facility is accelerated, the lenders under those instruments will be entitled to exercise the remedies available to a secured lender under applicable law and pursuant to the instruments governing such debt. Accordingly, you will have a prior claim on our note lien collateral and the lenders under our asset-based revolving credit facility will have a prior claim on our revolving credit collateral. We cannot assure you that, in the event of a foreclosure, the proceeds from the sale of our note lien collateral would be sufficient to satisfy the amounts outstanding under the notes or that proceeds from the sale of our revolving credit collateral would be sufficient to satisfy the amounts outstanding under the notes and other obligations secured by the second priority liens, if any, after payment in full of all obligations under our asset-based revolving credit facility secured by the first priority liens on our revolving credit collateral. If such proceeds were not sufficient to repay amounts outstanding under the notes, then holders of such notes

27

(to the extent not repaid from the proceeds of the sale of the collateral) would only have an unsecured claim against our remaining assets, which claim will rank equal in priority to the unsecured claims with respect to any unsatisfied portion of the obligations secured by the first priority liens and our other unsecured senior indebtedness. We have not performed valuations on the value of our note lien collateral or our revolving credit collateral. We will be permitted to borrow substantial additional secured indebtedness in the future under the terms of the indenture. See "Description of Exchange Notes—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" and "Description of Exchange Notes—Certain Covenants—Liens."

        Under the indenture, we could also incur additional indebtedness secured by first priority liens and second priority liens so long as such first and second priority liens are securing indebtedness permitted to be incurred by the covenants described under "Description of Exchange Notes" and certain other conditions are met. Our ability to designate future debt as either first priority secured or second priority secured and, in either event, to enable the holders thereof to share in the collateral on either a priority basis or a pari passu basis with holders of the notes and our asset-based revolving credit facility, may have the effect of diluting the ratio of the value of such collateral to the aggregate amount of the obligations secured by the collateral.

It may be difficult to realize the value of the collateral securing the notes.

        The collateral securing the notes is subject to any and all exceptions, defects, encumbrances, liens and other imperfections as may be accepted by the trustee for the notes and any other creditors that also have the benefit of first liens on the collateral securing the notes from time to time, whether on or after the date the notes are issued. The existence of any such exceptions, defects, encumbrances, liens or other imperfections could adversely affect the value of the collateral securing the notes as well as the ability of the collateral agent to realize or foreclose on such collateral.

        No appraisals of any collateral have been prepared in connection with this offering. The value of the collateral at any time will depend on market and other economic conditions, including the availability of suitable buyers. By their nature, some or all of the pledged assets may be illiquid and may have no readily ascertainable market value. We cannot assure you that the fair market value of the collateral as of the date of this prospectus exceeds the principal amount of the indebtedness secured thereby. The value of the assets pledged as collateral for the notes could be impaired in the future as a result of changing economic conditions, our failure to implement our business strategy, competition or other future trends. In the event that a bankruptcy case is commenced by or against us, if the value of the collateral is less than the amount of principal and accrued and unpaid interest on the notes and all other senior secured obligations, interest may cease to accrue on the notes from and after the date the bankruptcy petition is filed.

        The security interest of the collateral agent is subject to practical problems generally associated with the realization of security interests in collateral. For example, the collateral agent may need to obtain the consent of a third party to obtain or enforce a security interest in a contract. We cannot assure you that the collateral agent will be able to obtain any such consent. We also cannot assure you that the consents of any third parties will be given when required to facilitate a foreclosure on such assets. Accordingly, the collateral agent may not have the ability to foreclose upon those assets and the value of the collateral may significantly decrease.

The lien-ranking provisions set forth in the indenture and the intercreditor agreement will substantially limit the rights of the holders of the notes with respect to the collateral securing the notes.

        The rights of the holders of the notes with respect to the collateral securing the notes is substantially limited pursuant to the terms of the lien-ranking provisions set forth in the indenture and the intercreditor agreement. Under those lien-ranking provisions, at any time that obligations that have

28

the benefit of the first priority liens are outstanding, any actions that may be taken in respect of the collateral, including the ability to cause the commencement of enforcement proceedings against the collateral and to control the conduct of such proceedings, and the approval of amendments to, releases of collateral from the lien of and waivers of past defaults under, the collateral documents, will be at the direction of the holders of the obligations secured by the first priority liens. The trustee, on behalf of the holders of the notes, will not necessarily have the ability to control or direct such actions, even if the rights of the holders of the notes are adversely affected. Additional releases of collateral from the second priority lien securing the notes are permitted under some circumstances.

Your rights in the collateral may be adversely affected by the failure to perfect security interests in collateral.

        Applicable law requires that a security interest in certain tangible and intangible assets can only be properly perfected and its priority retained through certain actions undertaken by the secured party. The first priority liens in the collateral securing the notes may not be perfected with respect to the claims or the notes if we are not able to take the actions necessary to perfect any of these liens. There can be no assurance that the lenders under our asset-based revolving credit facility will have taken all actions necessary to create properly perfected security interests in the collateral subject to a second priority lien securing the notes, which, as a result of the intercreditor agreement, may result in the loss of the priority of the security interest in favor of the noteholders to which they would have been entitled as a result of such non-perfection.

Rights of holders of notes in the collateral may be adversely affected by the failure to perfect security interests in certain collateral acquired in the future.

        The security interest in the collateral securing the notes includes assets of us and of the guarantors, both tangible and intangible, whether now owned or acquired or arising in the future. Applicable law requires that certain property and rights acquired after the grant of a general security interest, such as real property, equipment subject to a certificate and certain proceeds, can only be perfected at the time such property and rights are acquired and identified. We and the guarantors are not obligated to perfect the noteholders' security interest in specified collateral. There can be no assurance that the trustee or the collateral agent will monitor, or that we will inform the trustee or the collateral agent of, the future acquisition of property and rights that constitute collateral, and that the necessary action will be taken to properly perfect the security interest in such after-acquired collateral. The collateral agent for the notes has no obligation to monitor the acquisition of additional property or rights that constitute collateral or the perfection of any security interest. Such failure may result in the loss of the security interest in the collateral or the priority of the security interest in favor of the notes against third parties.

Bankruptcy laws may limit your ability to realize value from the collateral.

        The right of the collateral agent to repossess and dispose of the collateral securing the notes and guarantees is likely to be significantly impaired by applicable bankruptcy law if another bankruptcy proceeding were to be commenced by or against us. Even if the repossession and disposition has occurred, a subsequent bankruptcy proceeding could give rise to causes of action against the collateral agent and the holders of notes. Following the commencement of a case under the U.S. Bankruptcy Code, a secured creditor such as the collateral agent is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without prior bankruptcy court approval, which may not be given. Moreover, the U.S. Bankruptcy Code permits the debtor to continue to retain and use collateral, and the proceeds, products, rents or profits of the collateral, even though the debtor is in default under the applicable debt instruments, provided that the secured creditor is given "adequate protection." The meaning of the term "adequate protection" varies

29

according to circumstances, but it is intended in general to protect the value of the secured creditor's interest in the collateral as of the commencement of the bankruptcy case and may include cash payments, the granting of additional security or otherwise, if and at such times as the bankruptcy court in its discretion determines during the pendency of the bankruptcy case. A bankruptcy court may determine that a secured creditor may not require compensation for a diminution in the value of its collateral if the value of the collateral exceeds the debt it secures.

        Given the uncertainty as to what will be the value of the collateral at the time when a bankruptcy case may be commenced, and in view of the fact that the granting of "adequate protection" varies on a case-by-case basis and the broad discretionary power of a bankruptcy court, it is impossible to predict:

•

how long payments under the notes could be delayed following commencement of a bankruptcy case;



•

whether or when the collateral agent could repossess or dispose of the collateral; or



•

whether or to what extent holders of the notes would be compensated for any delay in payment or loss of value of the collateral through the requirement of "adequate protection."

        Furthermore, in the event a bankruptcy court determines the value of the collateral is not sufficient to repay all amounts due on first priority lien debt and, thereafter, the notes, the holders of the notes would hold unsecured claims with respect to such insufficiency. The U.S. Bankruptcy Code only permits the accrual of post-petition interest (and sometimes current payment), costs and attorney's fees to a secured creditor during a debtor's bankruptcy case to the extent the value of its collateral exceeds the aggregate outstanding principal amount of the obligations secured by the collateral.

        In addition, the intercreditor agreement provides that, in the event of a bankruptcy, the trustee and the collateral agent may not object to a number of important matters following the filing of a bankruptcy petition so long as any first lien debt is outstanding.

Any future pledge of collateral might be avoidable in bankruptcy.

        Any future pledge of collateral in favor of the collateral agent, including pursuant to security documents delivered after the date of the indenture, might be avoidable by the pledgor (as debtor in possession) or by its trustee in bankruptcy if certain events or circumstances exist or occur, including, among others, if the pledgor is insolvent at the time of the pledge, the pledge permits the holders of the notes to receive a greater recovery than if the pledge had not been given and a bankruptcy proceeding in respect of the pledgor is commenced within 90 days following the pledge or, in certain circumstances, a longer period.

We will require a significant amount of cash, and our ability to generate sufficient cash depends upon many factors, some of which are beyond our control.

        Our ability to make payments on and refinance our indebtedness and to fund working capital needs and planned capital expenditures depends on our ability to generate adequate cash flow in the future. To some extent, this is subject to general economic, financial, competitive, legislative and regulatory factors and other factors that are beyond our control. For example, our need to stock substantial inventory could increase our working capital needs. We cannot assure you that our business will continue to generate cash flow from operations at current levels or that our cash needs will not increase. If we are unable to generate sufficient cash flow from operations in the future to service our indebtedness and meet our other needs, we may have to refinance all or a portion of our existing indebtedness, obtain additional financing, reduce expenditures that we deem necessary to our business or sell assets. We cannot assure you that any refinancing of this kind would be possible or that any additional financing could be obtained or could be obtained on commercially reasonable terms. The

30

inability to obtain additional financing could have a material adverse effect on our financial condition and on our ability to meet our obligations to you under the notes.

We may not be able to make the change of control offer required by the indenture.

        Upon a change of control, subject to certain conditions, we are required to offer to repurchase all outstanding notes at 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. The source of funds for that purchase of notes will be our available cash or cash generated from our subsidiaries' operations or other potential sources, including borrowings, sales of assets or sales of equity. We cannot assure you that sufficient funds from such sources will be available at the time of any change of control to make required repurchases of notes tendered. In addition, the terms of our asset-based revolving credit facility limit our ability to repurchase your notes and provides that certain change of control events will constitute an event of default thereunder. Our future indebtedness agreements may contain similar restrictions and provisions. If the holders of the notes exercise their right to require us to repurchase all of the notes upon a change of control, the financial effect of this repurchase could cause a default under our other indebtedness, even if the change of control itself would not cause a default. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of our other indebtedness and the notes or that restrictions in our asset-based revolving credit facility and the indenture will not allow such repurchases. In addition, certain corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "Change of Control" under the indenture. See "Description of Exchange Notes—Repurchase at the Option of Holders—Change of Control" and "Description of Certain Indebtedness" for additional information.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

        Certain of our borrowings, primarily borrowings under our asset-based revolving credit facility and the notes, are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. Borrowings under our asset-based revolving credit facility bear interest at a rate equal to, at our option, either (a) an alternate base rate determined by reference to the higher of (1) the base rate in effect on such day and (2) the federal funds effective rate plus 0.50% or (b) a LIBOR rate, with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin. The initial applicable margin for borrowings under our asset-based revolving credit facility was 0% with respect to alternate base rate borrowings and 1.50% with respect to LIBOR borrowings. The applicable margin with respect to the notes was a percentage per annum equal to 5.625%. Assuming all revolving loans are fully drawn, each quarter point change in interest rates would result in a $3.1 million change in annual interest expense on our asset-based revolving credit facility and the notes. Pursuant to the indenture governing the old notes and the exchange notes, we are required to enter into interest rate swaps, involving the exchange of floating for fixed rate interest payments, or other forms of derivative transactions, to reduce interest rate volatility. However, we may not be successful in obtaining interest rate swaps on commercially reasonable terms or at all.

Fraudulent transfer statutes may limit your rights as a holder of the notes.

        Federal and state fraudulent transfer laws as previously interpreted by various courts permit a court, if it makes certain findings, to:

•

avoid all or a portion of our obligations to holders of the notes;

31

•

subordinate our obligations to holders of the notes to our other existing and future indebtedness, entitling other creditors to be paid in full before any payment is made on the notes; and



•

take other action detrimental to holders of the notes, including invalidating the notes.

        In that event, we cannot assure you that you would ever be repaid. There is also no assurance that amounts previously paid to you would not be subject to return.

        Under federal and state fraudulent transfer laws, in order to take any of those actions, courts will typically need to find that, at the time the notes were issued, we:

•

issued the notes with the intent of hindering, delaying or defrauding current or future creditors; or



•

received less than fair consideration or reasonably equivalent value for incurring the indebtedness represented by the notes; and



•

were insolvent or were rendered insolvent by reason of the issuance of the notes;



•

were engaged, or were about to engage, in a business or transaction for which our capital was unreasonably small; or



•

intended to incur, or believed or should have believed we would incur, indebtedness beyond our ability to pay as such indebtedness matures.

        Many of the foregoing terms are defined in or interpreted under those fraudulent transfer statutes and as judicially interpreted. A court could find that we did not receive fair consideration or reasonably equivalent value for the incurrence of the indebtedness represented by the notes.

        The measure of insolvency for purposes of the foregoing considerations will vary depending on the law of the jurisdiction that is being applied in any such proceeding. Generally, a company would be considered insolvent if, at the time it incurred the indebtedness:

•

the sum of its indebtedness (including contingent liabilities) is greater than its assets, at fair valuation; or



•

the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing indebtedness and liabilities (including contingent liabilities) as they become absolute and matured.

        We cannot assure you what standard a court would apply in determining our solvency and whether it would conclude that we were solvent when we incurred our obligations under the notes.

        Our obligations under the notes are guaranteed by our parent and all of our direct and indirect present and future subsidiaries that guarantee our obligations under our asset-based revolving credit facility, and the guarantees may also be subject to review under various laws for the protection of creditors. It is possible that creditors of the guarantors may challenge the guarantees as a fraudulent transfer or conveyance. The analysis set forth above would generally apply, except that the guarantees could also be subject to the claim that, because the guarantees were incurred for the benefit of the Issuers, and only indirectly for the benefit of the guarantors, the obligations of the guarantors thereunder were incurred for less than reasonably equivalent value or fair consideration. A court could avoid a guarantor's obligation under its guarantee, subordinate the guarantee to the other indebtedness of a guarantor, direct that holders of the notes return any amounts paid under a guarantee to the relevant guarantor or to a fund for the benefit of its creditors or take other action detrimental to the holders of the notes.

32

There is no active trading market for the notes.

        The old notes are not listed, and we do not intend to list the exchange notes, on any securities exchange or to seek approval for quotations through any automated quotation system. We do not anticipate that an active and liquid trading market for the notes will develop as a result of the exchange of the exchange notes for the old notes. For that reason we cannot assure you that:

•

a liquid market for the notes will develop;



•

you will be able to sell your notes; or



•

you will receive any specific price upon any sale of the notes.

        If a public market for the notes does develop, the notes could trade at prices that may be higher or lower than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar notes and our financial performance.

You may have difficulty selling the old notes that you do not exchange in this exchange offer.

        If you do not participate or properly tender your old notes in this exchange offer:

•

you will retain old notes that are not registered under the Securities Act and that will continue to be subject to restrictions on transfer that are described in the legend on the old notes;



•

you will not be able, except in very limited instances, to require us to register your old notes under the Securities Act;



•

you will not be able to offer to resell or transfer your old notes unless they are registered under the Securities Act or unless you offer to resell or transfer them pursuant to an exemption under the Securities Act; and



•

the trading market for your old notes will become more limited to the extent that other holders of old notes participate in the exchange offer.

If you do not properly tender your old notes, you will continue to hold unregistered old notes and be subject to the same limitations on your ability to transfer old notes.

        We will only issue exchange notes in exchange for old notes that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the old notes and you should carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old notes. If you are eligible to participate in the exchange offer and do not tender your old notes or if we do not accept your old notes because you did not tender your old notes properly, then, after we consummate the exchange offer, you will continue to hold old notes that are subject to the existing transfer restrictions and will no longer have any registration rights or be entitled to any additional interest with respect to the old notes. In addition:

•

if you tender your old notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes; and



•

if you are a broker-dealer that receives exchange notes for your own account in exchange for old notes that you acquired as a result of market making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of those exchange notes.

33

        We have agreed that, for a period of 180 days after the exchange offer is consummated, we will make this prospectus available to any broker-dealer for use in connection with any resales of the exchange notes.

        After the exchange offer is consummated, if you continue to hold any old notes, you may have difficulty selling them because there will be fewer old notes outstanding.

The market price for the notes may be volatile.

        Historically, the market for non-investment grade indebtedness has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes. The market for the notes, if any, may be subject to similar disruptions. Any such disruptions may materially adversely affect you as a holder of the notes.

34

THE EXCHANGE OFFER

Purpose and Effect

        We issued the old notes in a private placement on February 14, 2006. The old notes were, and the exchange notes will be, issued under the Indenture, dated February 14, 2006, between us, Linens 'n Things, Inc., Linens 'n Things Center, Inc., the subsidiary guarantors and The Bank of New York, as trustee. In connection with the private placement, we entered into a registration rights agreement, which requires that we file this registration statement under the Securities Act with respect to the exchange notes to be issued in the exchange offer and, upon the effectiveness of this registration statement, offer to you the opportunity to exchange your old notes for a like principal amount of exchange notes. The exchange notes will be issued without a restrictive legend and, except as set forth below, you may reoffer and resell them without registration under the Securities Act. After we complete the exchange offer, our obligation to register the exchange of exchange notes for old notes will terminate. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part.

        Based on an interpretation by the staff of the Commission set forth in no-action letters issued to third parties, if you are not our "affiliate" within the meaning of Rule 405 under the Securities Act or a broker-dealer referred to in the next paragraph, we believe that you may reoffer, resell or otherwise transfer the exchange notes issued to you in the exchange offer without compliance with the registration and prospectus delivery requirements of the Securities Act. This interpretation, however, is based on your representation to us that:

•

the exchange notes to be issued to you in the exchange offer are acquired in the ordinary course of your business;



•

you are not engaging in and do not intend to engage in a distribution of the exchange notes to be issued to you in the exchange offer; and



•

you have no arrangement or understanding with any person to participate in the distribution of the exchange notes to be issued to you in the exchange offer.

        If you tender old notes in the exchange offer for the purpose of participating in a distribution of the exchange notes to be issued to you in the exchange offer, you cannot rely on this interpretation by the staff of the Commission. Under those circumstances, you must comply with the registration and prospectus delivery requirements of the Securities Act in order to reoffer, resell or otherwise transfer your exchange notes. Each broker-dealer that receives exchange notes in the exchange offer for its own account in exchange for old notes that were acquired by the broker-dealer as a result of market-making activities or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resales of those exchange notes. See "Plan of Distribution."

        If you will not receive freely tradeable exchange notes in the exchange offer or are not eligible to participate in the exchange offer, you can elect, by indicating on the letter of transmittal and providing certain additional necessary information, to have your old notes registered on a "shelf" registration statement pursuant to Rule 415 under the Securities Act. In the event that we are obligated to file a shelf registration statement, we will be required to keep the shelf registration statement effective for a period of two years following the date of original issuance of the old notes or such shorter period that will terminate when all of the old notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement. Other than as set forth in this paragraph, you will not have the right to require us to register your old notes under the Securities Act. See "—Procedures for Tendering" below.

35

Consequences of Failure to Exchange

        If you do not participate or properly tender your old notes in this exchange offer:

•

you will retain old notes that are not registered under the Securities Act and that will continue to be subject to restrictions on transfer that are described in the legend on the old notes;



•

you will not be able to require us to register your old notes under the Securities Act unless, as set forth above, you do not receive freely tradable exchange notes in the exchange offer or are not eligible to participate in the exchange offer, and we are obligated to file a shelf registration statement;



•

you will not be able to offer to resell or transfer your old notes unless they are registered under the Securities Act or unless you offer to resell or transfer them pursuant to an exemption under the Securities Act; and



•

the trading market for your old notes will become more limited to the extent that other holders of old notes participate in the exchange offer.

Terms of the Exchange Offer

        Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue $1,000 principal amount of the exchange notes in exchange for each $1,000 principal amount of the old notes accepted in the exchange offer. You may tender some or all of your old notes pursuant to the exchange offer; however, old notes may be tendered only in integral multiples of $1,000 in principal amount.

        The forms and terms of the exchange notes are substantially the same as the forms and terms of the old notes, except that the exchange notes have been registered under the Securities Act and will not bear legends restricting their transfer. The exchange notes will be issued pursuant to, and entitled to the benefits of, the indenture that governs the old notes. The exchange notes and any remaining old notes will be deemed one class of notes under the indenture.

        As of the date of this prospectus, $650 million in aggregate principal amount of the old notes are outstanding. This prospectus, together with the letter of transmittal, is being sent to all registered holders of old notes and to others believed to have beneficial interests in the old notes. You do not have any appraisal or dissenters' rights in connection with the exchange offer under Delaware or California law or the indenture.

        We will be deemed to have accepted validly tendered old notes if and when we have given oral or written notice of our acceptance to The Bank of New York, the exchange agent for the exchange offer. The exchange agent will act as our agent for the purpose of receiving from us the exchange notes for the tendering noteholders. If we do not accept any tendered old notes because of an invalid tender, the occurrence of certain other events set forth in this prospectus, or otherwise, we will return certificates, if any, for any unaccepted old notes, without expense, to the tendering noteholder as promptly as practicable after the expiration date of the exchange offer.

        You will not be required to pay brokerage commissions or fees or, except as set forth below under "—Transfer Taxes," with respect to the exchange of your old notes in the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the exchange offer. See "—Fees and Expenses" below.

36

Expiration Date; Amendment

        The exchange offer will expire at 5:00 p.m., New York City time, on    •    , 2006, unless we determine, in our sole discretion, to extend the exchange offer, in which case it will expire at the later date and time to which it is extended. We do not intend to extend the exchange offer, however, although we reserve the right to do so. If we extend the exchange offer, we will give oral or written notice of the extension to the exchange agent and give each registered holder of old notes notice by means of a press release or other public announcement of any extension prior to 9:00 a.m., New York City time, on the next business day after the scheduled expiration date.

        We also reserve the right, in our sole discretion,

•

to accept tendered notes upon the expiration of the tender offer, and extend the exchange offer with respect to untendered notes;



•

to delay accepting any old notes or, if any of the conditions set forth below under "—Conditions" have not been satisfied or waived, to terminate the exchange offer by giving oral or written notice of such delay or termination to the exchange agent; or



•

to amend the terms of the exchange offer in any manner by complying with Rule 14e-l(d) under the Exchange Act to the extent that rule applies.

        We will notify you as promptly as we can of any extension, termination or amendment. In addition, we acknowledge and undertake to comply with the provisions of Rule 14e-l(c) under the Exchange Act, which requires us to pay the consideration offered, or return the old notes surrendered for exchange, promptly after the termination or withdrawal of the exchange offer.

Procedures for Tendering

        Only a holder of old notes may tender the old notes in the exchange offer. Except as set forth under "—Book-Entry Transfer," to tender in the exchange offer a holder must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal and mail or otherwise deliver the letter of transmittal or copy to The Bank of New York, as the exchange agent, prior to the expiration date. In addition:

•

the certificates representing your old notes must be received by the exchange agent prior to the expiration date;



•

a timely confirmation of book-entry transfer of such notes into the exchange agent's account at The Depository Trust Company, or DTC, pursuant to the procedure for book-entry transfers described below under "—Book-Entry Transfer" must be received by the exchange agent prior to the expiration date; or



•

you must comply with the guaranteed delivery procedures described below.

        If you hold old notes through a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old notes, you should contact the registered holder of your old notes promptly and instruct the registered holder to tender on your behalf.

        If you tender an old note and you do not properly withdraw the tender prior to the expiration date, you will have made an agreement with us to participate in the exchange offer in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal.

37

        Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible institution unless:

•

old notes tendered in the exchange offer are tendered either by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the holder's letter of transmittal or for the account of an eligible institution; and



•

the box entitled "Special Registration Instructions" on the letter of transmittal has not been completed.

        If signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantee must be by a financial institution, which includes most banks, savings and loan associations and brokerage houses, that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Program or the Stock Exchanges Medallion Program.

        If the letter of transmittal is signed by a person other than you, your old notes must be endorsed or accompanied by a properly completed bond power and signed by you as your name appears on those old notes.

        If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this requirement, in this instance you must submit with the letter of transmittal proper evidence satisfactory to us of their authority to act on your behalf.

        We will determine, in our sole discretion, all questions regarding the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered old notes. Our determination will be final and binding. We reserve the absolute right to reject any and all old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to certain old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.

        You must cure any defects or irregularities in connection with tenders of your old notes within the time period that we determine unless we waive that defect or irregularity. Although we intend to notify you of defects or irregularities with respect to your tender of old notes, neither we, the exchange agent nor any other person will incur any liability for failure to give this notification. Your tender will not be deemed to have been made and your old notes will be returned to you if:

•

you improperly tender your old notes;



•

you have not cured any defects or irregularities in your tender; and



•

we have not waived those defects, irregularities or improper tender.

        The exchange agent will return your old notes, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration of the exchange offer.

        In addition, we reserve the right in our sole discretion to:

•

purchase or make offers for, or offer exchange notes for, any old notes that remain outstanding subsequent to the expiration of the exchange offer;



•

terminate the exchange offer; and



•

to the extent permitted by applicable law, purchase notes in the open market, in privately negotiated transactions or otherwise.

        The terms of any of these purchases or offers could differ from the terms of the exchange offer.

38

        In all cases, the issuance of exchange notes for old notes that are accepted for exchange in the exchange offer will be made only after timely receipt by the exchange agent of certificates for your old notes or a timely book-entry confirmation of your old notes into the exchange agent's account at DTC, a properly completed and duly executed letter of transmittal, or a computer-generated message instead of the letter of transmittal, and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if old notes are submitted for a greater principal amount than you desire to exchange, the unaccepted or non-exchanged old notes, or old notes in substitution therefor, will be returned without expense to you. In addition, in the case of old notes tendered by book-entry transfer into the exchange agent's account at DTC pursuant to the book-entry transfer procedures described below, the non-exchanged old notes will be credited to your account maintained with DTC, as promptly as practicable after the expiration or termination of the exchange offer.

Book-Entry Transfer

        The old notes were issued as global securities in fully registered form without interest coupons. Beneficial interests in the global securities, held by direct or indirect participants in DTC, are shown on, and transfers of these interests are effected only through, records maintained in book-entry form by DTC with respect to its participants.

        The exchange agent will make a request to establish an account with respect to the old notes at DTC for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in DTC's systems may make book-entry delivery of old notes being tendered by causing DTC to transfer such old notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at DTC, the letter of transmittal or a copy of the letter of transmittal, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at the address set forth under "—Exchange Agent" on or prior to the expiration date or you must comply with the guaranteed delivery procedures described below.

        The Depository Trust Company's Automated Tender Offer Program, or ATOP, is the only method of processing exchange offers through DTC. To accept the exchange offer through ATOP, participants in DTC must send electronic instructions to DTC through DTC's communication system instead of sending a signed, hard copy letter of transmittal. DTC is obligated to communicate those electronic instructions to the exchange agent. To tender old notes through ATOP, the electronic instructions sent to DTC and transmitted by DTC to the exchange agent must contain the character by which the participant acknowledges its receipt of, and agrees to be bound by, the letter of transmittal.

        If you hold your old notes in the form of book-entry interests and you wish to tender your old notes for exchange for exchange notes, you must instruct a participant in DTC to transmit to the exchange agent on or prior to the expiration date for the exchange offer a computer-generated message transmitted by means of ATOP and received by the exchange agent and forming a part of a confirmation of book-entry transfer, in which you acknowledge and agree to be bound by the terms of the letter of transmittal.

        In addition, in order to deliver old notes held in the form of book-entry interests:

•

a timely confirmation of book-entry transfer of such notes into the exchange agent's account at DTC pursuant to the procedure for book-entry transfers described above must be received by the exchange agent prior to the expiration date; or



•

you must comply with the guaranteed delivery procedures described below.

39

Certificated Old Notes

        Only registered holders of certificated old notes may tender those notes in the exchange offer. If your old notes are certificated notes and you wish to tender those notes in the exchange offer, you must transmit to the exchange agent on or prior to the expiration date a written or facsimile copy of a properly completed and duly executed letter of transmittal, including all other required documents, to the address set forth below under "—Exchange Agent." In addition, in order to validly tender your certificated old notes:

•

the certificates representing your old notes must be received by the exchange agent prior to the expiration date; or



•

you must comply with the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

        If you desire to tender your old notes and your old notes are not immediately available or one of the situations described in the immediately preceding paragraph occurs, you may tender if:

•

you tender through an eligible financial institution;



•

on or prior to 5:00 p.m., New York City time, on the expiration date, the exchange agent receives from an eligible institution, a written or facsimile copy of a properly completed and duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us; and



•

the certificates for all certificated old notes, in proper form for transfer, or a book-entry confirmation, and all other documents required by the letter of transmittal, are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.

        The notice of guaranteed delivery may be sent by facsimile transmission, mail or hand delivery. The notice of guaranteed delivery must set forth:

•

your name and address;



•

the amount of old notes you are tendering; and



•

a statement that your tender is being made by the notice of guaranteed delivery and that you guarantee that within three New York Stock Exchange trading days after the execution of the notice of guaranteed delivery, the eligible institution will deliver the following documents to the exchange agent:



•

the certificates for all certificated old notes being tendered, in proper form, for transfer or a book-entry confirmation of tender;



•

a written or facsimile copy of the letter of transmittal or a book-entry confirmation instead of the letter of transmittal; and



•

any other documents required by the letter of transmittal.

Withdrawal Rights

        You may withdraw tenders of your old notes at any time prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer.

        For your withdrawal to be effective, the exchange agent must receive a written or facsimile transmission of or, for DTC participants, an electronic ATOP transmission of, the notice of withdrawal

40

at its address set forth below under "—Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date.

        The notice of withdrawal must:

•

state your name;



•

identify the specific old notes to be withdrawn, including the certificate number or numbers and the principal amount of the old notes to be withdrawn;



•

be signed by you in the same manner as you signed the letter of transmittal when you tendered your old notes, including any required signature guarantees, or be accompanied by documents of transfer sufficient for the exchange agent to register the transfer of the old notes into your name; and



•

specify the name in which the old notes are to be registered, if different from yours.

        We will determine all questions regarding the validity, form and eligibility, including time of receipt, of withdrawal notices. Our determination will be final and binding on all parties. Any old notes withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes that have been tendered for exchange but that are not exchanged for any reason will be returned to you without cost as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures described under "—Procedures for Tendering" above at any time on or prior to 5:00 p.m., New York City time, on the expiration date.

Conditions

        Notwithstanding any other provision of the exchange offer, and subject to our obligations under the related registration rights agreement, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any old notes and may terminate or amend the exchange offer, if at any time before the acceptance of any old notes for exchange any one of the following events occurs:

•

any injunction, order or decree has been issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair our ability to proceed with the exchange offer; or



•

the exchange offer violates any applicable law or any applicable interpretation of the staff of the Commission.

        These conditions are for our sole benefit and we may assert them regardless of the circumstances giving rise to them, subject to applicable law. We also may waive in whole or in part at any time and from time to time any particular condition in our sole discretion. If we waive a condition, we may be required in order to comply with applicable securities laws, to extend the expiration date of the exchange offer. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of these rights and these rights will be deemed ongoing rights which may be asserted at any time and from time to time.

        In addition, we will not accept for exchange any old notes tendered, and no exchange notes will be issued in exchange for any tendered old notes if, at the time the notes are tendered, any stop order is threatened by the Commission or in effect with respect to the registration statement of which this prospectus is a part or the qualification of the indenture under the Trust Indenture Act of 1939.

        The exchange offer is not conditioned on any minimum principal amount of old notes being tendered for exchange.

41

Exchange Agent

        We have appointed The Bank of New York as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of the prospectus, the letter of transmittal and other related documents should be directed to the exchange agent addressed as follows:

        By registered or certified mail, by hand or by overnight courier:

	The Bank of New York Corporate Trust Operations Reorganization Unit 101 Barclay Street—Floor 7 East New York, New York 10286 Attention: Franca Ferrera
By facsimile:	(212) 815-5704
By telephone:	(212) 815-4779

        The exchange agent also acts as trustee under the indenture.

Fees and Expenses

        We will not pay brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail. Additional solicitations, however, may be made in person or by telephone by our officers and employees.

        We will pay the estimated cash expenses to be incurred in connection with the exchange offer. These are estimated in the aggregate to be approximately $740,000, which includes fees and expenses of the exchange agent and accounting, legal, printing and related fees and expenses.

Transfer Taxes

        You will not be obligated to pay any transfer taxes in connection with a tender of your old notes unless you instruct us to register exchange notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder of old notes, in which event the registered tendering holder will be responsible for the payment of any applicable transfer tax.

Accounting Treatment

        We will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will amortize the expense of the exchange offer over the term of the exchange notes under generally accepted accounting principles.

42

USE OF PROCEEDS

        We will not receive any cash proceeds from the exchange offer. Any old notes that are properly tendered and exchanged pursuant to the exchange offer will be retired and cancelled.

CAPITALIZATION

        The following table sets forth our capitalization as of April 1, 2006. The table below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Description of Certain Indebtedness" and our consolidated financial statements and related notes included elsewhere in this prospectus.

			As of April 1, 2006
			Actual
			(unaudited) (dollars in thousands)
Cash and cash equivalents			$	15,033
Asset-based revolving credit facility			$	81,601
Mortgage loan payable				2,124
Old Notes				650,000
	Total debt			733,725
Shareholders' equity				630,184
		Total capitalization	$	1,363,909

43

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

        The following unaudited pro forma condensed consolidated statements of operations for the fiscal year ended December 31, 2005 and for the thirteen week period ended April 1, 2006 and the thirteen week period ended April 2, 2005 are based on our historical financial statements appearing elsewhere in this prospectus and give effect to the Transactions as if they had occurred on January 2, 2005 (the first day of the 2005 fiscal year).

        Pro forma adjustments were made to reflect:

•

the net increase to depreciation and amortization expense resulting from recording property and equipment and intangible assets at its fair value and remaining useful lives;



•

the increase in rent expense based on an assessment of remaining lease terms for those leases in place at January 2, 2005;



•

the amounts attributable to the annual management fee to be paid to the Sponsors; and



•

the incremental interest expense related to issuing the old notes, entering into our new asset-based revolving credit facility and the termination of our former $250.0 million unsecured revolving credit facility.

        The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements appearing elsewhere in this prospectus. The unaudited pro forma condensed consolidated financial statements are presented for information purposes only and are not intended to represent or be indicative of the results of operations that we would have reported had the Transactions been completed at the beginning of the periods presented, and should not be taken as representative of our consolidated results of operations for future periods.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Fiscal Year Ended December 31, 2005
(in thousands)

	Historical			Pro Forma Adjustments			Pro Forma
Net sales	$	2,694,742		$	—		$	2,694,742
Cost of sales		1,595,394			340	(a)		1,595,734
Gross profit		1,099,348			(340	)		1,099,008
Selling, general and administrative expenses		1,037,521			50,831	(a)		1,088,352
Operating income (loss)		61,827			(51,171	)		10,656
Interest income		(894	)		—			(894	)
Interest expense		4,860			78,316	(b)		83,176
Income (loss) before provision (benefit) for income taxes		57,861			(129,487	)		(71,626	)
Provision (benefit) for income taxes		21,879			(50,760	)(c)		(28,881	)
Net income (loss)	$	35,982		$	(78,727	)	$	(42,745	)

44

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Thirteen Week Period Ended April 1, 2006
(in thousands)

	Historical			Pro Forma Adjustments			Pro Forma
Net sales	$	592,816		$	—		$	592,816
Cost of sales		369,743			87	(a)		369,830
Gross profit		223,073			(87	)		222,986
Selling, general and administrative expenses		311,899			(37,933	)(a)		273,966
Operating (loss) income		(88,826	)		37,846			(50,980	)
Interest income		(754	)		—			(754	)
Interest expense		9,987			9,183	(b)		19,170
(Loss) income before (benefit) provision for income taxes		(98,059	)		28,663			(69,396	)
(Benefit) provision for income taxes		(32,583	)		5,154	(c)		(27,429	)
Net (loss) income	$	(65,476	)	$	23,509		$	(41,967	)

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
For the Thirteen Week Period Ended April 2, 2005
(in thousands)

	Historical			Pro Forma Adjustments			Pro Forma
Net sales	$	570,946		$	—		$	570,946
Cost of sales		334,553			152	(a)		334,705
Gross profit		236,393			(152	)		236,241
Selling, general and administrative expenses		242,154			12,490	(a)		254,644
Operating (loss)		(5,761	)		(12,642	)		(18,403	)
Interest income		(495	)		—			(495	)
Interest expense		1,218			18,439	(b)		19,657
(Loss) before (benefit) for income taxes		(6,484	)		31,081			(37,565	)
(Benefit) for income taxes		(2,410	)		(12,184	)(c)		(14,594	)
Net (loss)	$	(4,074	)	$	(18,897	)	$	(22,971	)

45

Notes to the Unaudited Pro Forma Condensed Consolidated Statements of Operations
(dollars in thousands)

        (a)   Reflects the aggregate effect of the following items:

	Fiscal Year Ended		Thirteen Weeks Ended
	December 31, 2005		April 1, 2006			April 2, 2005
Property and equipment(1)	$	9,351	$	1,331		$	2,328
Intangible assets(2)		3,508		439			877
Total depreciation and amortization		12,859		1,770			3,205
Rent(3)		36,312		4,229			8,937
Management fees(4)		2,000		333			500
Transaction costs(5)		—		(44,178	)		—
	$	51,171	$	(37,846	)	$	12,642
Allocated to:
Costs of goods sold	$	340	$	87		$	152
Selling, general and administrative expenses		50,831		(37,933	)		12,490
	$	51,171	$	(37,846	)	$	12,642

(1)

Represents the net increase to depreciation expense resulting from recording property and equipment at its fair value and depreciating over revised shorter remaining useful lives. The increase has been allocated between cost of goods sold and selling, general and administrative expense based on historical allocations between the two items.

(2)

Represents the net increase in amortization expense resulting from the values allocated to our credit card customer relationships and customer list, which is being amortized over lives ranging from 3 to 5 years, on a straight-line basis.

(3)

Represents the adjustment to rent expense based on an assessment of remaining lease terms for those leases in place at January 2, 2005. The adjustment records both rent expense and tenant allowances received after January 2, 2005 on a straight-line basis over an assumed revised rental period from January 2, 2005 to the scheduled termination of the lease. The adjustment also records net favorable lease amortization over an average estimated remaining life of 5 years for the favorable lease asset and 8 years for the unfavorable lease liability.

(4)

Represents the amounts attributable to the annual management fee to be paid to the Sponsors. See "Certain Relationships and Related Party Transactions—Management Services Agreement."

(5)

Represents the adjustment for transaction costs related to the merger that were expensed as incurred in the period.

        (b)   Reflects incremental interest expense related to the additional indebtedness, consisting of the notes offered hereby in the principal amount of $650,000 and assumed borrowings under our new asset-based revolving credit facility, which borrowings are based on historical levels of borrowings plus (i) expected cash needs as the result of the use of cash in the Transactions and (ii) interest payments on the notes. The interest rates used for pro forma purposes are LIBOR plus 5.625% (10.345%) on borrowings under the notes and LIBOR plus 1.500% (6.220%) on the new asset-based revolving credit facility. The adjustment assumes amortization of debt issuance costs using the effective interest method over the maturities of the indebtedness. A 0.125% change in interest rates on our indebtedness, all of which is floating rate, would change pro forma interest expense by approximately $211 and $203 for the thirteen weeks ended April 1, 2006 and April 2, 2005, respectively, and $937 for the fiscal year ended December 31, 2005.

        (c)   Reflects the estimated tax effect resulting from the pro forma adjustments at an estimated rate of 39.2%. The pro forma adjustments for the thirteen-week period ending April 1, 2006 were adjusted by permanent non-deductible expenses amounting to approximately $15.5 million.

46

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        The following table sets forth our selected historical consolidated financial and operating data. The historical income statement data for fiscal 2005, fiscal 2004 and fiscal 2003, and the historical balance sheet data as of the end of fiscal 2005 and fiscal 2004 have been derived from our consolidated financial statements and related notes for such periods and such dates, which have been audited by KPMG LLP and are included in this registration statement. The selected historical consolidated financial data should be read in conjunction with the consolidated financial statements for the year ended December 31, 2005, the related notes and the independent registered public accounting firm's report, which refers to a change in the method of accounting for vendor arrangements to conform to the requirements of Emerging Issues Task Force Issue No. 02-16. As a result of the consummation of the transaction, a new entity was formed with an effective date of February 14, 2006. The historical financial data as of and for each of the periods through February 13, 2006 shown under the predecessor entity caption, consists of Linens 'n Things and subsidiaries. The historical financial data for the successor entity as of April 1, 2006 and for the period February 14 to April 1, 2006 show the operations of the successor entity, Linens Holding Co and subsidiaries. The unaudited historical financial data as of and for the thirteen weeks ended April 2, 2005 and for the periods from January 1, 2006 to February 13, 2006 and February 14, 2006 to April 1, 2006 have been derived from our unaudited consolidated financial statements and related notes and are included in this registration statement. The unaudited consolidated financial statements for the period after February 13, 2006 are presented on a different basis than that for the periods before February 14, 2006, as a result of the application of purchase accounting as of February 14, 2006 and therefore are not comparable. In the opinion of management, such unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair presentation of the results for that period. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period. Selected historical income statement data for fiscal 2002 and fiscal 2001 and the selected historical balance sheet data as of the end of fiscal 2003, fiscal 2002 and fiscal 2001 have been derived from our unaudited consolidated financial statements for such periods and at such dates are not included in this prospectus.

        Our historical results included below and elsewhere in this prospectus are not necessarily indicative of our future performance and the results for the periods from January 1, 2006 to February 13, 2006 and February 14, 2006 to April 1, 2006 are not necessarily indicative of our results of operations for a full fiscal year. The term "predecessor" refers to Linens 'n Things, Inc. and the term "successor" refers to Linens Holding Co. after its acquisitions of Linens 'n Things, Inc. on February 14, 2006. This information is only a summary and should be read in conjunction with "Capitalization," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus.

47

		(Predecessor)																		(Successor)
		Fiscal Year Ended(1)															Thirteen Weeks Ended									Thirteen Weeks Ended
		December 29, 2001			January 4, 2003			January 3, 2004			January 1, 2005(2)			December 31, 2005			April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006			April 1, 2006
		(unaudited)			(unaudited)												(unaudited)			(unaudited)			(unaudited)			(unaudited)
		(dollars in thousands, except for ratios and store data)
Income Statement Data:
Net sales		$	1,823,803		$	2,184,716		$	2,395,272		$	2,661,469		$	2,694,742		$	570,946		$	284,971		$	307,845		$	592,816
Cost of sales, including buying and distribution costs			1,100,470			1,308,524			1,426,880			1,589,700			1,595,394			334,553			180,675			189,068			369,743
Gross profit			723,333			876,192			968,392			1,071,769			1,099,348			236,393			104,296			118,777			223,073
Selling, general and administrative expenses			639,065			764,590			846,826			970,479			1,037,521			242,154			174,138			137,761			311,899
Restructuring and asset impairment charge			34,006			—			—			—			—			—			—			—			—
Litigation charge			4,000			—			—			—			—			—			—			—			—
Operating profit (loss)			46,262			111,602			121,566			101,290			61,827			(5,761	)		(69,842	)		(18,984	)		(88,826	)
Interest income			(27	)		(79	)		(169	)		(542	)		(894	)		(495	)		(668	)		(86	)		(754	)
Interest expense			5,849			5,588			4,001			3,903			4,860			1,218			—			9,987			9,987
Income (loss) before provision (benefit) for income taxes			40,440			106,093			117,734			97,929			57,861			(6,484	)		(69,174	)		(28,885	)		(98,059	)
Provision (benefit) for income taxes			15,741			40,508			44,975			37,408			21,879			(2,410	)		(21,270	)		(11,313	)		(32,583	)
Net income (loss)		$	24,699		$	65,585		$	72,759		$	60,521		$	35,982		$	(4,074	)	$	(47,904	)	$	(17,572	)	$	(65,476	)
Other Financial Data:
Depreciation and amortization			51,487			60,124			71,348			81,318			90,270			21,176			12,642			15,022			27,664
Capital expenditures:
	New stores		110,164			79,888			82,531			87,863			93,678			9,258			6,875			6,517			13,392
	Existing stores and other		27,737			30,932			30,765			31,189			33,904			2,769			901			2,054			2,955
Total capital expenditures			137,901			110,820			113,296			119,052			127,582			12,027			7,776			8,571			16,347
Cash interest expense			6,011			5,945			3,888			4,018			4,851			1,288			135			47			182
Ratio of earnings to fixed charges(3)			1.71	x		2.59	x		2.65	x		2.23	x		1.66	x		.70	x		(5.09	)x		(.33	)x		(1.97	)x
Store Data:
Number of stores (at period end)			343			391			440			492			542			499			542			549			549
Total gross square footage (000's) (at period end)			11,980			13,607			15,106			16,702			18,071			16,900			18,071			18,300			18,300
Net sales per store (000's)		$	5,800		$	5,900		$	5,700		$	5,600		$	5,200		$	1,144		$	526		$	561		$	1,080
Net sales per square foot		$	168		$	171		$	167		$	166		$	156		$	164			—			—		$	153
Comparable net sales			(2.40	)%		3.10	%		1.30	%		1.80	%		(5.90	)%		(5.40	)%		—			—			(3.70	)%
Balance Sheet Data (at period end):
Cash and cash equivalents		$	15,437		$	86,605		$	136,129		$	204,009		$	158,158		$	75,271		$	90,333		$	15,033		$	15,033
Working capital			218,163			369,221			458,519			519,686			537,453			533,971			506,757			442,017			442,017
Total assets			1,046,305			1,277,123			1,467,456			1,591,884			1,650,834			1,509,856			1,613,665			2,027,450			2,027,450
Total debt			29,675			1,831			—			2,196			2,139			2,182			2,131			733,725			733,725
Total shareholders' equity			479,858			646,733			737,377			809,353			849,863			806,012			820,408			630,184			630,184
Cash Flow:
Cash provided by (used in):
	Operating activities	$	82,131		$	109,362		$	150,892		$	177,341		$	78,201		$	(117,422	)	$	(65,146	)	$	(132,574	)	$	(197,720	)
	Investing activities		137,901			(110,820	)		(113,296	)		(119,052	)		(127,582	)		(12,027	)		(7,776	)		(1,214,073	)		(1,221,849	)
	Financing activities		32,689			72,704			11,375			8,727			3,369			917			4,972			1,361,754			1,366,726

(1)

Fiscal years 2005, 2004, 2003 and 2001 were fifty-two week periods. Fiscal year 2002 was a fifty-three week period.

(2)

Fiscal year 2004 results include the implementation of the provisions of EITF 02-16, which reduced the Company's net income in fiscal 2004 by $13.3 million net of tax.

(3)

For purposes of calculating the ratio of earnings to fixed charges, earnings represent net income (loss) from continuing operations before income taxes plus fixed charges. Fixed charges include interest expense, including amortization of debt issuance costs, and a third of rental expense which management believes is representative of the interest component of rental expense.

48

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our audited historical consolidated financial statements and the notes accompanying those statements, which are included in the back of this prospectus and "Unaudited Pro Forma Condensed Consolidated Financial Information." The results described below are not necessarily indicative of the results to be expected in any future periods. This discussion contains forward-looking statements based on our current expectations, which are inherently subject to risks and uncertainties. Actual results may differ significantly from those projected in such forward-looking statements due to a number of factors. We undertake no obligation to update or revise any forward-looking statement.

Introduction

        We are the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 549 stores in 47 U.S. states and six Canadian provinces at April 1, 2006. During our fiscal 2005, we opened 55 new stores and closed five stores, increasing our total net square footage by 8.2% to approximately 18.1 million.

        Net sales consist of gross sales to customers net of returns, discounts and incentives. Provisions for estimated future sales returns are recorded in the period that the related sales are recorded. We determine the amount of provision based on historical information. Sales discounts, coupons, cash rebates and other similar incentives are recorded as a reduction of sales revenue in the period when the related sales are recorded.

Acquisition of our Company by Apollo Management, L.P. Together with Certain Co-Investors

        On November 8, 2005, Linens Merger Sub Co. and its parent company, Linens Holding Co., entered into an Agreement and Plan of Merger with Linens 'n Things, Inc. governing a reverse subsidiary merger (the "Merger") pursuant to which, on February 14, 2006, Linens Merger Sub Co. was merged with and into Linens 'n Things, Inc., with Linens 'n Things, Inc. as the surviving corporation. In the Merger, each share of common stock of Linens 'n Things, Inc. (other than shares held in treasury or owned by Linens Merger Sub Co., its parent company or any affiliate of Linens Merger Sub Co. and other than shares held by stockholders who properly demand and perfect appraisal rights) was converted into the right to receive $28.00 in cash, without interest, for aggregate consideration of approximately $1.3 billion. As the surviving corporation in the Merger, Linens 'n Things, Inc. assumed by operation of law all of the rights and obligations of Linens Merger Sub Co., including those under the notes and the related indenture. Linens 'n Things Center, Inc., a direct wholly owned subsidiary of Linens 'n Things, Inc., was a co-issuer of the notes.

        Affiliates of Apollo Management, L.P., National Realty & Development Corp. and Silver Point Capital Fund Investments LLC (the "Sponsors") collectively contributed approximately $648.0 million as equity to Linens Merger Sub Co. immediately prior to the Merger.

        The Sponsors financed the purchase of Linens 'n Things, Inc. and paid related fees and expenses through the offering of the notes, the equity investment described above and excess cash on hand at Linens 'n Things, Inc. We did not draw on our asset-based revolving credit facility at closing.

        The aforementioned transactions, including the Merger and the payment of any costs related to these transactions, are collectively referred to herein as the "Transactions." In connection with the Transactions, we incurred significant indebtedness and became highly leveraged.

        Immediately following the Merger, we became a wholly owned subsidiary of Linens Holding Co. Linens Holding Co. is an entity that was formed in connection with the Transactions and had no assets or liabilities other than the shares of Linens Merger Sub Co. and its rights and obligations under and

49

in connection with the merger agreement with us and the equity commitment letters and debt financing commitment letters provided in connection with the Transactions.

        The closing of the Merger occurred simultaneously with:

•

the closing of the note offering;



•

the closing of our $600.0 million asset-based revolving credit facility;



•

the termination of our existing $250.0 million unsecured revolving credit facility and CAD $40.0 million unsecured credit facility agreements; and



•

the equity investments described above.

        As a result of the Merger, all of Linens 'n Things, Inc.'s issued and outstanding capital stock was acquired by Linens Holding Co. At such time, investment funds associated with or designated by the Sponsors acquired approximately 99.7% of the common stock of Linens Holding Co. through an investment vehicle controlled by Apollo Management V, L.P., or one of its affiliates, and Robert J. DiNicola, our Chairman and Chief Executive Officer, acquired the remaining 0.3%.

        Upon consummation of the Transactions, we delisted our shares of common stock from the New York Stock Exchange (the "NYSE") and deregistered under Section 12 of the Securities Exchange Act of 1934. The last day of trading on the NYSE was February 14, 2006.

Overview of Business

        We are a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Our average store size of approximately 33,000 gross square feet enables us to offer a more comprehensive product and brand selection than department stores and other retailers that sell home furnishings. We believe our store format coupled with our knowledgeable sales assistance and attentive service to our customers, whom we refer to as our "guests," creates an enjoyable shopping experience. Our primary target guest is female between the ages of 25 and 55 who is fashion and brand conscious, has good-to-better income and focuses on the home as a reflection of her individuality.

        Our financial performance weakened in 2005 due to less effective merchandising and marketing initiatives that were implemented in the second half of 2004 and in 2005. We believe, however, the underlying fundamentals of our Company remain strong, including our strong brand name recognition and attractive real estate locations, and the fundamentals of our industry are very favorable. As a result, we believe we have the opportunity to significantly improve our financial performance in the near term. Effective upon consummation of the Transactions, Robert J. DiNicola became our new Chairman and Chief Executive Officer. Mr. DiNicola is a 34-year veteran of the retail industry, with extensive experience in retail, including home furnishings. Previously, Mr. DiNicola served as Executive Chairman of General Nutrition Centers, Inc. and as Chairman and Chief Executive Officer of Zale Corporation. Under the leadership of Mr. DiNicola, we intend to focus on growing our sales per square foot and improving the productivity of our existing store base, which we believe is key to improving our profitability and cash flow. To achieve this the we intend to:

•

improve our overall merchandise assortment;



•

establish a formalized key item program;



•

increase the effectiveness and diversify the mix of our marketing expenditures;



•

improve our guests' shopping experience; and



•

improve our operating free cash flow.

50

Effect of the Transactions

        In connection with the Transactions, we incurred significant additional indebtedness, including $650.0 million aggregate principal amount of the old notes.

        Our acquisition is being accounted for as a business combination using the purchase method of accounting. As a result, our assets and liabilities were assigned new values on a fair value basis.

Cost of Acquisition
Cash Paid		$	1,295,834
Transaction costs			22,824
					$	1,318,658
Net Assets Acquired:
Historical net assets			820,408
Add: deferred rent reversed			252,236
Less: New basis of accounting for previous ownership percentage			(1,112	)
Less: historical goodwill			(18,126	)
Write-off Southern Linens			(252	)
	Net assets acquired					1,053,154
Excess of costs of acquisition over net assets acquired					$	265,504
Allocated to:
Property and equipment						(57	)
Definite lived intangibles						38,330
Indefinite lived intangibles						122,688
Unfavorable lease liability						(20,000	)
Goodwill						277,435
Deferred Income taxes						(152,892	)
					$	265,504

        Intangible assets identified in the preliminary purchase price allocation above included the following:

Definite-lived intangible assets (liabilities)
	Credit card customer relationships and customer list (estimated life 3 to 5 years)	$	10,542
	Favorable leases (average life 5 years)		27,788
	Unfavorable leases (average life 8 years)		(20,000	)
Indefinite-lived intangible assets
	Trademark and trade names	$	122,688

        The following discussion and analysis of our historical financial condition and results of operation covers periods prior to and after the consummation of the Transactions. Accordingly, most of the discussion and analysis of such periods does not reflect the significant impact the Transactions have had on us. After the Transactions, we became highly leveraged. Significant additional liquidity requirements, resulting primarily from increased interest expense, and other factors related to the Transactions, such as increased depreciation and amortization as a result of the application of purchase accounting, has significantly affected our financial condition, results of operations and liquidity going forward.

        Net sales increased 1.2% to $2.69 billion in fiscal 2005 compared to $2.66 billion in fiscal 2004. For fiscal 2005, comparable net sales decreased 5.9% versus a 1.8% increase in fiscal 2004. For fiscal 2005,

51

our earnings per share on a fully diluted basis were $0.79 as compared to $1.32 on a fully diluted basis for fiscal 2004.

        The following table sets forth the results and percentage of net sales included in our Consolidated Statements of Operations for the fifty-two week periods ended December 31, 2005, January 1, 2005 and January 3, 2004 and the periods from January 1, 2006 to February 13, 2006 and February 14, 2006 to April 1, 2006:

	February 14 to April 1, 2006(1) (Successor)					January 1 to February 13, 2006 (Predecessor)					Fiscal Year Ended December 31, 2005 (Predecessor)				Fiscal Year Ended January 1, 2005(2) (Predecessor)				Fiscal Year Ended January 3, 2004 (Predecessor)
	Unaudited					Unaudited
	(in thousands, except per share data)
Net sales	$	307,845		100.00	%	$	284,971		100.00	%	$	2,694,742	100.00	%	$	2,661,469	100.00	%	$	2,395,272	100.00	%
Cost of sales(3)		189,068		61.42	%		180,675		63.40	%		1,595,394	59.20	%		1,589,700	59.73	%		1,426,880	59.57	%
Gross profit		118,777		38.58	%		104,296		36.60	%		1,099,348	40.80	%		1,071,769	40.27	%		968,392	40.43	%
SG&A(4)		137,761		44.75	%		174,138		61.11	%		1,037,521	38.50	%		970,479	36.46	%		846,826	35.35	%
Operating (loss) profit		(18,984	)	(6.17	)%		(69,842	)	(24.51	)%		61,827	2.29	%		101,290	3.81	%		121,566	5.08	%
Interest expense, net		9,901		3.22	%		(668	)	(0.23	)%		3,966	0.15	%		3,361	0.13	%		3,832	0.16	%
(Loss) income before (benefit) provision for income taxes		(28,885	)	(9.38	)%		(69,174	)	(24.27	)%		57,861	2.15	%		97,929	3.68	%		117,734	4.92	%
(Benefit) provision for income Taxes		(11,313	)	(3.67	)%		(21,270	)	(7.46	)%		21,879	0.81	%		37,408	1.41	%		44,975	1.88	%
Net (loss) income	$	(17,572	)	(5.71	)%	$	(47,904	)	(16.81	)%	$	35,982	1.34	%	$	60,521	2.27	%	$	72,759	3.04	%
Earnings per share:
Basic		N/A					N/A				$	0.79			$	1.34			$	1.65
Fully diluted		N/A					N/A				$	0.79			$	1.32			$	1.62

(1)

The unaudited consolidated financial statements for the period after February 13, 2006 are presented on a different basis than that for the periods before February 14, 2006, as a result of the application of purchase accounting as of February 14, 2006 and therefore are not comparable.

(2)

Results of operations for fiscal 2004 include the implementation of the provisions of EITF 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF 02-16"), which negatively impacted our fiscal 2004 net income by $13.3 million or $0.29 per fully diluted share. EITF 02-16 had no impact on our net cash flows.

(3)

Decrease in the cost of sales result from management's decision to mark down certain inventory.

(4)

Decrease was a result of transaction costs in the January 1, 2006 to February 13, 2006 period.

52

        We use a number of key indicators of financial condition and operating performance to evaluate the performance of our business, including the following:

							Fiscal Year Ended
				January 1 to February 13, 2006 (Predecessor)
Key Performance Indicators	February 14 to April 1, 2006 (Successor)						December 31, 2005 (Predecessor)			January 1, 2005 (Predecessor)			January 3, 2004 (Predecessor)
Net sales growth		N/A			N/A			1.20	%		11.10	%		9.60	%
Comparable net sales growth		N/A			N/A			(5.90	)%		1.80	%		1.30	%
Net sales per average square foot	$	17.04		$	15.57		$	156		$	166		$	167
Average net sales per store (in millions)	$	0.57		$	0.52		$	5.20		$	5.60		$	5.70
Gross profit as a % of net sales		38.58	%		36.60	%		40.80	%		40.27	%		40.43	%
SG&A as a % of net sales		44.75	%		61.11	%		38.50	%		36.46	%		35.35	%
SG&A per average square foot	$	7.62		$	9.52		$	59.90		$	60.70		$	58.90
Operating (loss) profit as a % of net sales.		(6.17	)%		(24.51	)%		2.29	%		3.81	%		5.08	%
Net (loss) income as a % of sales		(5.71	)%		(16.81	)%		1.34	%		2.27	%		3.04	%
Diluted earnings per share		N/A			N/A		$	0.79		$	1.32		$	1.62
Inventory turnover		2.0			N/A			2.0			2.1			2.1
Inventory per square foot	$	45.81			N/A		$	43.57		$	42.82		$	46.37
Net square footage growth		1.30	%		N/A			8.0	%		11.0	%		11.0	%

        During the latter part of fiscal 2004, we implemented several initiatives, which aimed to improve sales productivity and enhance the guest shopping experience. These strategic initiatives impacted several areas throughout our Company, from our buying, assortment planning and inventory management functions, to our sales floor activities. We also intensified our focus on up-front planning and continued to refine our forecasting methods to anticipate the needs of each store on a regular basis, as opposed to merely measuring total stock levels across the entire chain.

        Although we made significant progress in implementing these initiatives in 2004, there was more to be accomplished as of the start of fiscal 2005. During fiscal 2005, we planned to leverage our expanded buying team and our improved capabilities to introduce new brands and accelerate new businesses that would distinguish our product selection with a sense of "freshness."

        Fiscal 2005 proved to be a very difficult year for us. The external retail environment was challenging as we were faced with a softening home furnishings industry. Many parts of the decorative home furnishings industry were not in a strong cycle. Improving our merchandise assortment and maintaining our focus on trend-merchandising and brand building remained a high priority throughout the year, but the merchandise initiatives undertaken to inject more newness and freshness in our assortment took more time to evolve and were not as effective as was originally expected. We underestimated the impact of these initiatives on guest traffic, transaction conversion and the disruption to the organization as a whole, which ultimately led to the inconsistencies in our financial performance.

        Throughout the year, guest response to our marketing content and vehicles was weaker than planned, and changes to our distribution did not generate the level of traffic that was originally anticipated. Other factors that weakened our financial performance in fiscal 2005 included unfavorable weather conditions in the Northeast during the first quarter of the year, the negative impact on our spring and summer outdoor businesses caused by early, unseasonable weather, resulting in both a loss of business and additional merchandise markdowns later in the season when the weather improved, and leaner inventories than planned at various times during the year due to vendor late deliveries.

        Although the results of our merchandising and marketing initiatives in fiscal 2005 were disappointing, there were also some noteworthy accomplishments. The "things" business performed well in fiscal 2005, with net sales improving approximately 6% compared to last year. During the year, we

53

continued the successful expansion of our furniture business to over 400 stores. In September, we launched the Nate Berkus collection exclusively at Linens 'n Things, which generated excitement in our stores around this important new trend-setting brand.

        Throughout fiscal 2005 we undertook significant changes within our organization with a view toward improved financial results. But, we were not fully successful in consistently delivering a meaningful recovery in profitability. In September, the board of directors took decisive action to carry out its fiduciary responsibility to our stockholders to do their best to create value, including an exploration of all possible strategic avenues. The board of directors announced that it intended to fulfill its responsibility to explore, examine and evaluate whatever strategic alternatives may emerge, including a possible sale of our Company. This responsibility was fulfilled when the board of directors approved on November 8, 2005 the Merger Agreement.

        In fiscal 2006, we continued to take the necessary steps to consummate the Merger Agreement. A key condition to the Merger Agreement was satisfied when, at a special meeting of the stockholders on January 30, 2006, the Merger Agreement was overwhelming approved. On February 14, 2006, the Merger Agreement was consummated and trading of our common stock on the NYSE ceased at the closing bell. Moving forward, as a private concern, we intend to focus on growing our sales per square foot and improving the productivity of our existing store base, which we believe are key to improving our profitability and cash flow. To do so, we intend to improve our overall merchandise assortment, establish a formalized key item program, increase the effectiveness and diversify the mix of our marketing expenditures, improve our guests shopping experience and improve our operating free cash flow.

        We expect to slow our square footage growth in fiscal 2006 as we continue to refine our stores' design in order to improve the guest shopping experience and improve our stores' productivity. In fiscal 2006, we expect to open approximately 25 to 30 new stores, primarily consisting of stores that we have already committed to opening, as opposed to approximately 56 new store openings per year since fiscal 2003, inclusive. Additionally, real estate typically has a 12 to 18 month lead-time, and although we believe that there are ample real estate opportunities, we will continue to be selective in executing our real estate strategy.

        We were required to begin expensing stock options as compensation cost as of the beginning of fiscal 2006. Prior to the beginning of fiscal 2006, we disclosed the effect on net income and earnings per share related to the expensing of options as a note to our Consolidated Financial Statements. This accounting change in the recognition of compensation expense for stock options impacted our fiscal 2006 consolidated results of operation by approximately $6.4 million, net of tax, due to the accelerated recognition of compensation expense resulting from the consummation of the Merger Agreement. The expensing of stock options does not have any impact on our net cash flows.

Consolidated Results of Operations

        The following discusses the Consolidated Results of Operations for each of the fifty-two week periods ended December 31, 2005 ("fiscal 2005"), January 1, 2005 ("fiscal 2004") and January 3, 2004 ("fiscal 2003") and the thirteen week periods ended April 1, 2006 and April 2, 2005:

Thirteen Week Period Ended April 1, 2006 Compared With Thirteen Week Period Ended April 2, 2005

        For comparative purposes, the Company combined the two periods from January 1, 2006 to February 13, 2006 and February 14, 2006 to April 1, 2006. This combination is not GAAP presentation. However, the Company believes this presentation is useful to provide the reader a more accurate comparison.

54

Net Sales

        Net sales for the thirteen weeks ended April 1, 2006 increased approximately 3.8% to $592.8 million compared to $570.9 million for the same period last year. We believe that the increased sales associated with new store openings since last year were partially offset by declines in guest traffic. Guest traffic was negatively impacted by the shift of the Easter holiday to the second quarter of this year versus the first quarter last year, and to changes in our marketing programs. At April 1, 2006, we operated 549 stores, including 30 stores in Canada, as compared with 499 stores, including 24 stores in Canada, at April 2, 2005. Store square footage increased approximately 8.4% to 18.3 million at April 1, 2006 compared with 16.9 million at April 2, 2005. During the thirteen weeks ended April 1, 2006, we opened seven stores and closed no stores as compared with opening eight stores and closing one store during the same period last year.

        Comparable net sales decreased 3.7% for the thirteen weeks ended April 1, 2006 compared to a decline of 5.4% for the same period last year. The continuing decline in comparable net sales is due to lower guest traffic.

Gross Profit

        In addition to the cost of inventory sold, we include our buying and distribution expenses in our cost of sales. Buying expenses include all direct and indirect costs to procure merchandise. Distribution expenses include the cost of operating our distribution centers and freight expense related to transporting merchandise. Gross profit for the thirteen weeks ended April 1, 2006 was $223.1 million, or 37.6% of net sales, compared with $236.4 million, or 41.4% of net sales, for the same period last year. During the first quarter, increases in gross margin from improved markup, through lower acquisition costs, and vendor allowances were offset by an increase in markdowns associated with our efforts to move old and slow moving merchandise in anticipation of replacing it with better selling items in the second half of the year.

Expenses

        Our selling, general and administrative expenses consist of store selling expenses, occupancy costs, advertising expenses and corporate office expenses. SG&A for the thirteen weeks ended April 1, 2006 was $311.9 million, or 52.6% of net sales, compared with $242.2 million, or 42.4% of net sales, for the same period last year. The increase in SG&A as a percent of net sales is primarily due to an increase in occupancy costs as a result of new store additions and costs associated with the purchase of Linens 'n Things, Inc. Fixed costs, such as occupancy, increased as a percentage of net sales as a result of the overall decline in our net sales. In response to our sales performance, we reduced certain variable expenses, such as payroll and corporate overhead, but maintained overall marketing spend to support sales. Marketing as a percentage of net sales was 3.8% for the thirteen weeks ended April 1, 2006 versus 3.8% for the thirteen weeks ended April 2, 2005.

        Operating loss for the thirteen weeks ended April 1, 2006 was approximately $88.8 million or 15.0% of net sales, compared with an operating loss of $5.8 million or 1.0% of net sales, for the same period last year.

        Net interest expense for the thirteen weeks ended April 1, 2006 increased to approximately $9.2 million from $0.7 million during the same period last year primarily due to the additional interest expense associated with the $650 million Senior Secured Floating Rate Notes due 2014 issued on February 14, 2006. In addition, lower average investment balances and higher average borrowings required to fund working capital needs and an increase in average borrowing interest rates also contributed to the overall increase in net interest expense.

55

        Our income tax benefit was approximately $32.6 million for the thirteen weeks ended April 1, 2006, compared with an income tax benefit of $2.4 million for the same period last year. This increase is due to additional merger related charges. Due to an increase in nondeductible expenses related to the merger, our effective tax rate for the thirteen weeks ended April 1, 2006 declined to 33.2% compared to 37.2% for the same period last year.

Net Income

        As a result of the factors described above, net loss for the thirteen weeks ended April 1, 2006 was approximately $65.5 million compared with a net loss of $4.1 million for the same period last year.

Fiscal 2005 Compared With Fiscal 2004

Net Sales

        Net sales for fiscal 2005 were $2,694.7 million, an increase of 1.2% over fiscal 2004 net sales of $2,661.5 million, primarily as a result of new store openings offset by a decrease in comparable net sales. We opened 55 stores and closed five stores in fiscal 2005, compared with opening 54 stores and closing two stores in fiscal 2004. Net square footage increased 8.2% to 18.1 million at December 31, 2005 compared with 16.7 million at January 1, 2005.

        Comparable net sales decreased 5.9% for fiscal 2005 compared with an increase of 1.8% in fiscal 2004. Comparable net sales percentages are based on total net sales. Comparable net sales include our Internet sales and sales for our stores beginning on the first day of the month following the 13th full month of sales. Stores that are closed for a number of days in a particular month are excluded from comparable net sales if it would cause meaningful disparity in sales over the prior period. In the case of a store to be permanently closed, such store's sales are not considered comparable once the store closing process has commenced. The decrease in comparable net sales is primarily attributable to a decrease in guest traffic as further discussed in the following paragraph.

        Our average net sales per store were $5.2 million in fiscal 2005 and $5.6 million in fiscal 2004. The external retail environment was challenging as we were faced with a softening home furnishings industry. Improving our merchandise assortment and maintaining our focus on trend-merchandising and brand building remained a high priority throughout the year, but the initiatives undertaken to inject more newness and freshness in our assortment were not as effective as was originally hoped for. We underestimated the impact of these initiatives on guest traffic, transaction conversion and the disruption to the organization as a whole, which ultimately led to the inconsistencies in our financial performance and the decline of comparable net sales. Throughout the year, guest response to our marketing content and vehicles was weaker than planned, and changes to our distribution did not generate the level of traffic that was originally anticipated.

        Our core business strategy is to offer a broad and deep selection of high quality brand name "linens" (e.g., bedding, towels and table linens) and "things" (e.g., housewares and home accessories) merchandise. For fiscal 2005, net sales of "linens" merchandise decreased approximately 3% compared to the prior year, while net sales of "things" increased approximately 6% over the prior year. The increase in net sales for "things" merchandise resulted primarily from the continued expansion of product categories within the "things" business and our continued strength in our functional housewares business. Our textile business remained challenging due to the large number of assortment changes during the year, the impact of which was further compounded by inventory in-stock deficiencies caused by vendor late deliveries.

        Our proprietary merchandise accounted for approximately 15% of fiscal 2005 sales. Our proprietary product is an important point of differentiation from our competitors, providing our guests with high value merchandise in categories that we believe are underserved by national brand names.

56

Gross Profit

        Gross profit for fiscal 2005 was $1,099.3 million, or 40.8% of net sales, compared with $1,071.8 million, or 40.3% of net sales, for fiscal 2004. Increases in gross margin from improved markup through lower merchandise acquisition costs were largely offset by an increase in markdowns associated with the acceleration of our transitions to newer assortments.

Expenses

        SG&A expenses consist of store selling expenses, occupancy costs, advertising expenses and corporate office expenses. SG&A expenses for fiscal 2005 were $1,037.5 million, or 38.5% of net sales, compared with $970.5 million, or 36.5% of net sales, for fiscal 2004. The increase in SG&A as a percent of net sales is primarily due to the impact of our flat sales performance compared to the previous year. Although new store additions increased fixed costs, such as occupancy, we responded with reductions in certain variable expenses, such as store payroll and corporate overhead. As a result, SG&A per average square foot declined approximately 1.3% to $59.90 in fiscal 2005 compared to $60.70 in fiscal 2004.

        Operating profit for fiscal 2005 was $61.8 million, or 2.3% of net sales, compared with $101.3 million, or 3.8% of net sales for fiscal 2004.

        Net interest expense in fiscal 2005 was $4.0 million compared to $3.4 million in fiscal 2004. An increase in interest expense, due to higher average borrowings required to fund working capital needs and an increase in average borrowing interest rates, was partially offset by a decrease in interest expense due to the termination of the trade payables arrangement with General Electric Capital Corporation and an increase in interest income from short-term investments due to higher average interest rates.

        Our income tax expense for fiscal 2005 was $21.9 million, compared with $37.4 million for fiscal 2004. Due to a change in the mix of earnings within jurisdictions, our effective tax rate for fiscal 2005 declined to 37.8% compared to 38.2% for the same period last year.

Net Income

        As a result of the factors described above, net income for fiscal 2005 was $36.0 million, or $0.79 per share on a fully diluted basis, compared with $60.5 million, or $1.32 per share on a fully diluted basis, for fiscal 2004.

Fiscal 2004 Compared With Fiscal 2003

        Results of operations for fiscal 2004 include the implementation of the provisions of EITF 02-16, which negatively impacted our fiscal 2004 net income by $13.3 million, net of tax, or $0.29 per fully diluted share. EITF 02-16 did not impact fiscal 2003.

Net Sales

        Net sales for fiscal 2004 were $2,661.5 million, an increase of 11.1% over fiscal 2003 net sales of $2,395.3 million, primarily as a result of new store openings as well as comparable net sales increases. We opened 54 stores and closed two stores in fiscal 2004, compared with opening 58 stores and closing nine stores in fiscal 2003. Net square footage increased 10.6% to 16.7 million at January 1, 2005 compared with 15.1 million at January 3, 2004.

        Comparable net sales, which include our Internet sales, increased 1.8% for fiscal 2004 compared with an increase of 1.3% in fiscal 2003.

        Our average net sales per store were $5.6 million in fiscal 2004 and $5.7 million in fiscal 2003.

57

        For fiscal 2004, net sales of "linens" merchandise increased approximately 9% over the prior year, while net sales of "things" increased approximately 13% over the prior year. The increase in net sales for "things" merchandise resulted primarily from the continued expansion of product categories within the "things" business and its continued strength in its functional housewares business. Although our textile business was challenging in fiscal 2004, we were undergoing significant assortment changes in its textile business to inject more newness into our overall assortment.

        Our proprietary merchandise accounted for approximately 15% of fiscal 2004 sales.

Gross Profit

        Gross profit for fiscal 2004 was $1,071.8 million, or 40.3% of net sales, compared with $968.4 million, or 40.4% of net sales, for fiscal 2003. The EITF 02-16 adjustment impact was to increase gross profit by $5.9 million, or 0.3% of net sales, for fiscal 2004. The increase in gross profit from the EITF 02-16 impact was offset primarily by higher markdowns, as well as higher fuel costs.

Expenses

        SG&A expenses for fiscal 2004 were $970.5 million, or 36.5% of net sales, compared with $846.8 million, or 35.3% of net sales, for fiscal 2003. The EITF 02-16 adjustment impact was $27.4 million, or 1.1% of net sales, for the fifty-two weeks ended January 1, 2005. SG&A for fiscal 2003 also included advertising allowances equaling 1.0% of net sales, which, as a part of the EITF 02-16 implementation, were no longer classified as an offset to SG&A in fiscal 2004. In addition to the increase in SG&A from the EITF 02-16 impact, SG&A increased as a percentage of net sales primarily due to higher occupancy costs as a percentage of net sales, partially offset by store payroll. SG&A per average square foot was $60.70 in fiscal 2004 compared to $58.90 in fiscal 2003. The EITF 02-16 adjustment impact to SG&A per square foot in fiscal 2004 was $1.70.

        Operating profit for fiscal 2004 was $101.3 million, or 3.8% of net sales, compared with $121.6 million, or 5.1% of net sales for fiscal 2003. The EITF 02-16 adjustment impact was $21.5 million, or 0.8% of net sales, for fiscal 2004.

        Net interest expense in fiscal 2004 was $3.4 million compared to $3.8 million in fiscal 2003. The decrease in net interest expense was mainly due to lower average borrowings compared to the same period last year.

        Our income tax expense for fiscal 2004 was $37.4 million, compared with $45.0 million for fiscal 2003. The EITF 02-16 impact was a decrease of $8.2 million for fiscal 2004. Our effective tax rate was 38.2% for fiscal 2004 and 2003.

Net Income

        As a result of the factors described above, net income for fiscal 2004 was $60.5 million, or $1.32 per share on a fully diluted basis, compared with $72.8 million, or $1.62 per share on a fully diluted basis, for fiscal 2003. The EITF 02-16 adjustment negatively impacted net income by $13.3 million, or $0.29 per share on a fully diluted basis for fiscal 2004.

Liquidity and Capital Resources

        In connection with the Transactions the Company had significant cash outlays during the first quarter of 2006 and became highly leveraged upon the issuance of $650 million aggregate principal amount of the notes. As of Decembr 31, 2005, the Company had no indebtedness outstanding except for $2.1 million for the mortgage note. Cash outlays for the payment of interest will be significantly higher in the current fiscal year compared to the last fiscal year as a result of the notes.

58

Post-Transactions

        We fund our operations through a combination of internally generated cash from operations and from borrowings under our asset-based revolving credit facility. Prior to the Transactions, these requirements were funded through a combination of internally generated cash flows from operations and short-term borrowings. Our primary incremental uses of cash after the consummation of the Transactions are working capital requirements, new store expenditures, new store inventory purchases and debt service requirements. We anticipate that cash generated from operations together with amounts available under our asset-based revolving credit facility will be sufficient to meet our future working capital requirements, new store expenditures, new store inventory purchases and debt service obligations as they become due. However, our ability to fund future operating expenses and capital expenditures and our ability to make scheduled payments of interest on, to pay principal on or refinance indebtedness and to satisfy any other present or future debt obligations will depend on future operating performance which will be affected by general economic, financial and other factors beyond our control. See "Risk Factors—We will require a significant amount of cash, and our ability to generate sufficient cash depends upon many factors, some of which are beyond our control."

        As a result of the Transactions, the cash flow results for the first quarter of fiscal 2006 have been separately presented in the Condensed Consolidated Statements of Cash Flows, presented elsewhere herein, split between the "Predecessor Entity," covering the period January 1, 2006 through February 13, 2006 and the "Successor Entity" covering the period February 14, 2006 through April 1, 2006. The results for the prior year's first quarter are presented under "Predecessor Entity." For comparative purposes, the Company combined the two periods from January 1, 2006 through April 1, 2006 in its discussion below. This combination is not a GAAP presentation. However, the Company believes this combination is useful to provide the reader a more accurate comparison and is provided to enhance the reader's understanding of cash flows for the periods presented.

Historical

        Net cash used in operating activities for the periods January 1 to February 13, 2006 and February 14 to April 1, 2006 was $65.1 million and $132.6 million, respectively. Net cash used in operating activities for the combined thirteen weeks ended April 1, 2006 was $197.7 million compared with $117.4 million used in operating activities for the same period last year.

        The increase in net cash used in operating activities is due to the timing of vendor payments, an increase to prepaid rent due to timing of payments and additional costs incurred by the Company resulting from the consummation of the Transactions.

        Net cash used in investing activities for the periods January 1 to February 13, 2006 and February 14 to April 1, 2006 was $7.8 million and $1,214.0 million, respectively. Net cash used in investing activities for the combined thirteen weeks ended April 1, 2006 was $1,221.8 million compared with $12.0 million used in investing activities for the same period last year. Excluding acquisition cost in connection with the Transaction, net cash used in investing activities was $16.3 million. The Company currently estimates capital expenditures will be approximately $85 million in fiscal 2006, primarily to open approximately 25 to 30 new stores, to maintain existing stores, and for system enhancements.

        Net cash provided by financing activities for the periods January 1 to February 13, 2006 and February 14 to April 1, 2006 was $5.0 million and $1,361.8 million, respectively. Net cash provided by financing activities for the combined thirteen weeks ended April 1, 2006 was $1,336.7 million compared with $0.9 million provided by financing activities for the same period last year. The increase is due to the issuance of the Notes, the issuance of Company stock to the Sponsors in connection with the Transactions, and an increase in borrowings under the asset-based revolving credit facility to fund working capital needs.

59

        Net cash provided by operating activities for fiscal 2005 was $78.2 million compared with $177.3 million for fiscal 2004. The decrease in net cash provided between periods is primarily attributable to an increase in inventories due to new store openings, an increase in income tax payments, the timing of receivable collections for guest-related credit card and debit card transactions and for landlord allowances and the decrease in our net sales and net profitability compared to last year.

        Net cash used in investing activities for fiscal 2005 was $127.6 million, primarily for 55 new stores, maintenance of existing stores and system enhancements, compared with $119.1 million for fiscal 2004. We currently estimate capital expenditures will be approximately $85.0 million in fiscal 2006, primarily for an estimated 25 to 30 new stores, maintenance of existing stores, and system enhancements.

        Net cash provided by financing activities for fiscal 2005 was $3.4 million, compared with $8.7 million for fiscal 2004. The decrease is primarily attributable to a decline in proceeds from common stock issued under stock incentive plans. In addition, we had no short-term borrowings at the end of fiscal 2005 and 2004, other than an amount due GECC at the end of fiscal 2004 which was included in accounts payable.

Credit Agreements

        In November 2004, we entered into a $250.0 million senior revolving credit facility agreement with third party institutional lenders which was to expire November 23, 2009, and in July 2005 we entered into a CAD $40.0 million unsecured credit facility agreement which was to expire July 29, 2008 (collectively, the "Credit Agreements"). The Credit Agreements were terminated simultaneously with the consummation of the Transactions.

Asset-Based Revolving Credit Facility

        In connection with the Transactions, as of February 14, 2006 we have an asset-based revolving credit facility (the "Credit Facility) that provides for senior secured financing of up to $600.0 million, subject to the borrowing base. The borrowing base is a formula based on certain eligible inventory and receivables, minus certain reserves. A portion of the Credit Facility, not to exceed $40.0 million, is also available to Linens 'n Things Canada Corp. subject to the Canadian borrowing base. The Credit Facility requires us to comply with financial ratio maintenance covenants if the excess availability under the Credit Facility, at any time, does not exceed $75 million and also contains certain customary affirmative covenants and events of default. The principal amount outstanding of the loans under the Credit Facility, plus interest accrued and unpaid thereon, will be due and payable in full at maturity, five years from the date of closing of the Transactions.

        All obligations under the Credit Facility are unconditionally guaranteed by Linens Holding Co. and certain of our existing and future domestic subsidiaries. All obligations under the Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of our assets and the assets of the Issuers and the subsidiary guarantors, including: (i) a first-priority security interest in inventory, accounts receivable, cash, securities and other general intangibles; and (ii) a second-priority security interest in equipment, intellectual property rights and related general intangibles and all of the capital stock of Linens 'n Things, Inc. and the capital stock of certain subsidiaries.

        Borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) an alternate base rate determined by reference to the higher of (1) the base rate in effect on such day and (2) the federal funds effective rate plus 0.50% or (b) a LIBOR rate, with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin. The initial applicable margin for borrowings under the Credit Facility is 0% with respect to alternate

60

base rate borrowings and 1.50% with respect to LIBOR borrowings. After the delivery of the financial statements for the first full fiscal quarter after the closing date, the applicable margin for borrowings under the Credit Facility will be subject to adjustment based on the excess availability under the Credit Facility. In addition to paying interest on outstanding principal under the Credit Facility, we are required to pay a commitment fee, initially 0.375% per annum, in respect of the unutilized commitments thereunder. After the delivery of financial statements for the first full fiscal quarter after the closing date, the commitment fee will be subject to adjustment based on the excess availability under the Credit Facility. We must also pay customary letter of credit fees and agency fees. We initiated borrowings under our Credit Facility on February 23, 2006 to meet our operational working capital needs.

        Management regularly reviews and evaluates our liquidity and capital needs. We experience peak periods for our cash needs generally during the second quarter and fourth quarter of the fiscal year. As our business continues to grow and our current store expansion plan is implemented, such peak periods may require increases in the amounts available under the Credit Facility from those currently existing and/or other debt or equity funding.

        Management currently believes that our cash flows from operations, our access to increases to the Credit Facility or additional capacity from new credit facilities will be sufficient to fund our expected capital expenditures, working capital and non-acquisition business expansion requirements as they become due.

Off-Balance Sheet Arrangements

        We do not have any transactions or relationships that could be considered material off-balance sheet arrangements.

Contractual Commitments

        We maintained a trade payables arrangement with General Electric Capital Corporation ("GECC") under which GECC purchased our payables at a discount directly from our suppliers prior to the payables due date, thereby permitting a supplier to receive payment prior to the due date of the payable, with us sharing in part of the GECC discount. We and GECC terminated the trade payables program effective January 13, 2006. As of December 31, 2005, we paid all amounts outstanding under the program. As of January 1, 2005, we owed approximately $65.0 million to GECC under this program, which was included in accounts payable. We, in our sole discretion, may continue to offer early payment options to suppliers in exchange for discounted payments. The discontinuance of the availability of the GECC program did not have a material adverse effect on our financial position, results of operations or cash flows.

61

        The following table summarizes existing contractual obligations requiring the use of cash, as of April 1, 2006:

Payments Due By Period (in millions)
Contractual Obligations		Total		Less Than 1 Year		2-3 Years		4-5 Years		More Than 5 Years
Operating leases—real property		$	2,662.8	$	273.6	$	568.0	$	558.8	$	1,262.4
Operating leases—personal Property			11.5		5.1		4.4		2.0		—
	Total operating leases(1)		2,674.3		278.7		572.4		560.8		1,262.4
Inventory purchases			128.6		128.6		—		—		—
New store capital additions			7.2		7.2		—		—		—
Short and long-term debt obligations(2)			733.9		81.8		0.2		0.2		651.7
	Total	$	3,544.0	$	496.3	$	572.6	$	561.0	$	1,914.1

(1)

Operating leases consist of future minimum rental payments required under non-cancelable operating leases excluding lease obligations of closed stores in the amount of $18.9 million.

As of April 1, 2006, we had fully executed leases for 36 stores planned to open in fiscal 2006 and 2007, for which aggregate minimum rental payments over the term of the leases is approximately $193.1 million. The table above includes payments for stores that had fully executed leases as of April 1, 2006.

We also have assigned property at a retail location in which we guarantee the payment of rent over the specified lease term in the event of non-performance. As of April 1, 2006 the maximum potential amount of future payments we could be required to make under such guarantee is approximately $0.7 million.

(2)

Short and long-term debt obligations include senior notes, asset-based revolving credit facility and monthly payments of principal and interest for a mortgage on the land and building of one of our closed stores. Floating interest rate payments related to the senior notes and any future indebtedness and interest under the asset-based revolving credit facility, which will significantly increase our long-term liabilities, are not included in the above table.

Seasonality

        Our business is subject to substantial seasonal variations. Historically, we have realized a significant portion of our net sales and net income for the year during the third and fourth quarters. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of new store openings. We believe this is the general pattern associated with our segment of the retail industry and expect this pattern will continue in the future. Consequently, comparisons between quarters are not necessarily meaningful and the results for any quarter are not necessarily indicative of future results.

Accounting Pronouncements

        In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004), "Share-Based Payment" ("SFAS No. 123 (Revised 2004)"). SFAS No. 123 (Revised 2004) focuses primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions.

62

SFAS No. 123 (Revised 2004) requires us to measure the cost of employee services received in exchange for an award of equity instruments based on the fair value of the award at the date of grant. Under SFAS No. 123 (Revised 2004), the cost is recognized as compensation expense over the period during which an employee is required to provide service in exchange for the award. SFAS No. 123 (Revised 2004) provides guidance but expresses no preference for the type of valuation method to use in determining the fair value of options. Under SFAS No. 123 (Revised 2004), we would have been required to implement the standard as of the beginning of the first interim period that begins after June 15, 2005 (our fiscal 2005 third quarter). On April 14, 2005, the Commission adopted a new rule that allows us to implement SFAS No. 123 (Revised 2004) at the beginning of our next fiscal year, instead of the next interim reporting period that begins after June 15, 2005. Accordingly, we adopted SFAS No. 123 (Revised 2004) as of the beginning of our first fiscal quarter of 2006, using the modified prospective method. Beginning in fiscal 2006, our results of operations reflect compensation expense for new stock option grants, if any, and for the unvested portion of previous stock options granted. Previously, we disclosed the effect on net income and earnings per share related to the expensing of options as a note to our Consolidated Financial Statements (see Note 2). For fiscal 2006, the accounting change in the recognition of compensation expense for stock options resulting from the adoption of SFAS 123 (Revised 2004) impacted our fiscal 2006 consolidated results of operations by approximately $6.4 million, net of tax. The adoption of SFAS No. 123 (Revised 2004) did not have any impact on our net cash flows.

        In December 2004, FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29." This Statement requires that exchanges should be recorded and measured at the fair value of the assets exchanged, with certain exceptions. The Statement is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of this Statement did not have a material effect on our financial position or results of operations.

        In November 2004, FASB issued SFAS No. 151, "Inventory Costs, an amendment of ARB No. 43, Chapter 4." This Statement amends the guidance to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current period charges. In addition, this Statement requires that allocation of fixed production overheads to the costs of conversions be based on the normal capacity of the production facilities. The Statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of this Statement did not have a material effect on our financial position or results of operations.

        In March 2005, the FASB issued Interpretation No. 47, "Accounting for Conditional Asset Retirement Obligations—an interpretation of FASB Statement No. 143" ("FIN 47"). FIN 47 clarifies that an entity is required to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. The adoption of FIN 47 did not have a material effect on our financial position or results of operations.

Impact of Inflation

        We do not believe that our operating results have been materially affected by inflation during the preceding three years. There can be no assurance, however, that our operating results will not be affected by inflation in the future.

63

Critical Accounting Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts and timing of revenues and of expenses during the reporting period. We base our estimates on historical experience and on other assumptions that we believe to be relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Our management believes the following critical accounting estimates involve such significant judgments and estimates inherent in the preparation of the Consolidated Financial Statements. Management discussed the development and selection of these critical accounting estimates with the audit committee of the board of directors.

        Valuation of Inventory:    Merchandise inventory is a significant portion of our balance sheet, representing approximately 41.3% of total assets at April 1, 2006. Inventories are valued using the lower of cost or market value, determined by the retail inventory method ("RIM"). Under RIM, the valuation of inventories at cost and the resulting gross margins are determined by applying a calculated cost-to-retail ratio to the retail value of inventories. RIM is an averaging method that is used in the retail industry due to its practicality. Inherent in RIM calculations are certain significant management judgments and estimates including, among others, merchandise mark-on, mark-up, markdowns and shrinkage based on historical experience between the dates of physical inventories, all of which significantly impact the ending inventory valuation at cost. The methodologies utilized by us in our application of RIM are consistent for all periods presented. Such methodologies include the development of the cost-to-retail ratios, the development of shrinkage reserves and the accounting for price changes. At any one time, inventories include items that have been written down to our best estimate of their realizable value. Factors considered in estimating realizable value include the age of merchandise and anticipated demand. Actual realizable value could differ materially from this estimate based upon future customer demand or economic conditions.

        Sales Returns:    We estimate future sales returns and record a provision in the period that the related sales are recorded based on historical return rates. Should actual returns differ from our estimates, we may be required to revise estimated sales returns. Although these estimates have not varied materially from historical provisions, estimating sales returns requires management judgment as to changes in preferences and quality of products being sold, among other things; therefore, these estimates may vary materially in the future. The sales returns calculations are regularly compared with actual return experience. In preparing our financial statements as of April 2, 2005, December 31, 2005 and April 1, 2006, our sales returns reserve was approximately $5.2 million, $7.1 million and $5.5 million, respectively.

        Impairment of Long-Lived Assets (including Goodwill):    In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets," long-lived assets, such as property and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying value of the asset exceeds the fair value of the asset.

        Goodwill and intangible assets that have indefinite useful lives are tested annually for impairment. These assets are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value. For goodwill, the impairment determination is made at the reporting unit

64

level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of the goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB Statement No. 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. As of April 2, 2005, December 31, 2005 and April 1, 2006, our net value for property and equipment was approximately $569.3 million, $612.2 million and $601.8 million, respectively, and goodwill was approximately $18.1 million, $18.1 million and $277.3 million, respectively. The increase in goodwill was due to the acquisition.

        Store Closure Costs:    In fiscal 2001, we recorded a pre-tax restructuring and asset impairment charge of $37.8 million ($23.7 million after-tax) related to the closing of certain under-performing stores. As of April 2, 2005, December 31, 2005 and April 1, 2006, we had $8.3 million, $5.4 million and $4.2 million, respectively, remaining related to this reserve. We have closed all of the initially identified stores other than one store, which we decided to keep open and whose reserve was reversed. We continue to negotiate and/or explore lease buyouts or sublease agreements for certain of these stores. For the remaining store for which an acceptable buyout or sublease agreement has not yet been negotiated and entered into, we are considering other alternatives, including reopening the store. The activity in the thirteen-week period ended April 1, 2006 includes the reversal of estimated lease commitment costs of approximately $55,000 which were not needed, offset by an increase to lease commitment costs of approximately $130,000 due to changes in estimates based on current negotiations. Final settlement of these reserves is predominantly a function of negotiations with unrelated third parties, and, as such, these estimates may be subject to change in the future.

        Self-Insurance:    We purchase third party insurance for worker's compensation, medical, auto and general liability costs that exceed certain limits for each type of insurance program. We are responsible for the payment of claims under these insured excess limits. We establish accruals for our insurance programs based on available claims data and historical trend and experience, as well as loss development factors prepared by third party actuaries. The ultimate cost of these claims may be greater than or less than the established accrual. The accrued obligation for these self-insurance programs was approximately $13.1 million as of April 2, 2005, $15.3 million as of December 31, 2005 and $14.6 million as of April 1, 2006.

        Stock-based Compensation:    SFAS No. 123 (Revised 2004) requires the recognition of compensation expense in the Consolidated Statements of Operations related to the fair value of employee share-based options. Determining the fair value of share-based awards at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise, the associated volatility and the amount of share-based awards expected to be forfeited prior to vesting. Prior to adopting SFAS No. 123 (Revised 2004), on January 1, 2006 we applied the recognition and measurement principles of Accounting Principles Board Opinion No. 25, and related Interpretations, in accounting for our stock-based compensation plans. All employee stock options were granted at or above the grant date market price. Accordingly, no compensation cost was recognized for fixed stock option grants prior to January 1, 2006.

        Litigation:    We record an estimated liability related to various claims and legal actions arising in the ordinary course of business, which is based on available information and advice from outside counsel where applicable. As additional information becomes available, we assess the potential liability related to our pending claims and may adjust our estimates accordingly.

        Accounting Control Deficiency:    Our management determined that as of the end of fiscal 2005, we did not have adequate review controls to ensure the propriety of the accounting for the classification of capital expenditures related to store self-development transactions. Our accounting treatment for

65

capital expenditures related to store self-development transactions, initially recorded on the balance sheet as other current assets and on the cash flow statement as a change in other current assets, was subsequently determined to be incorrect according to generally accepted accounting principles, which principles provide that capital expenditures related to store self-development transactions should be recorded on the balance sheet as property and equipment and on the cash flow statement as additions to property and equipment. Our management corrected the accounting related to store self-development transactions prior to issuance of the financial statements for the fiscal year ended December 31, 2005. There was no change in the overall cash flow generated by us and the incorrect accounting had no impact on our income statement. The control deficiency that resulted in the incorrect accounting for the classification of capital expenditures related to store self-development transactions represented a material weakness in our internal control over financial reporting as of December 31, 2005. Our management has implemented review controls to ensure the propriety of our accounting for these transactions.

        A material weakness in internal control over financial reporting is a control deficiency (within the meaning of the Public Company Accounting Oversight Board ("PCAOB") Auditing Standard No. 2), or combination of control deficiencies, that adversely affects a company's ability to initiate, authorize, record, process or report external financial data reliably in accordance with GAAP that results in there being more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

        Although we have taken certain actions to address these issues, if we are unable to identify and remedy all such issues promptly and effectively, it could have a material adverse effect on our business, results of operations and financial condition. Maintaining effective control over financial reporting is necessary for us to produce reliable financial reports and is important in helping to prevent financial fraud. If our management or our independent registered public accounting firm were to conclude again in the future that our internal control over financial reporting was ineffective, investors could lose confidence in our reported financial information.

Quantitative and Qualitative Disclosure About Market Risk

        We continuously evaluate the market risk associated with our financial instruments. Market risks relating to our operations result primarily from changes in interest rates. We do not engage in financial transactions for trading or speculative purposes.

        Since fiscal year end 2005, market risk exposure has significantly increased due to the issuance of the notes in connection with the Merger and Transactions.

        Interest Rate Risk:    Our financial instruments include cash and cash equivalents and borrowings under our asset-based revolving credit facility and our notes. Our asset-based revolving credit facility and our notes carry floating rate interest and, therefore, our Consolidated Statement of Operations and our Consolidated Statement of Cash Flows for fiscal 2006 will be exposed to changes in interest rates. As of April 1, 2006, we had $81.6 million in borrowings under our asset-based revolving credit facility at an average interest rate of 6.3% and $650 million aggregate principal amount in notes at an interest rate of 10.3%. As of April 1, 2006 a one percentage point change in floating rate interest would cause an increase to interest expense of approximately $7.3 million. We do not currently use derivative financial instruments in our investment portfolio but expect to hedge a portion of our floating rate interest in future periods.

        Foreign Currency Risk:    We enter into some purchase obligations outside of the United States, which are predominately settled in U.S. dollars, and therefore, we do not have a material exposure to foreign currency exchange risks. We operated 30 stores in Canada as of April 1, 2006. We believe our foreign currency translation risk is not material, as a hypothetical 10% strengthening or weakening of the U.S. dollar relative to the Canadian dollar would not materially affect our results from operations or cash flow. As of April 1, 2006 and for the thirteen-week period then ended we did not hedge against foreign currency risks.

66

BUSINESS

About Our Company

        We are the second largest specialty retailer of home textiles, housewares and home accessories in North America operating 549 stores in 47 U.S. states and six Canadian provinces as of April 1, 2006. We are a destination retailer, offering one of the broadest and deepest selections of high quality brand-name as well as private label home furnishings merchandise in the industry. Our average store size of approximately 33,000 gross square feet enables us to offer a more comprehensive product and brand selection than department stores and other retailers that sell home furnishings. We believe our store format coupled with our knowledgeable sales assistance and attentive service to our customers, whom we refer to as our guests, creates an enjoyable shopping experience. Our primary target guest is female between the ages of 25 and 55 who is fashion and brand conscious, has good-to-better income and focuses on the home as a reflection of her individuality.

        We are committed to providing our guests with a one-stop shopping destination for home furnishings. Our extensive merchandise offering enables our guests to select from a wide assortment of styles, brands, colors and designs across varying price points at competitive values. Our "linens" product line includes home textiles such as bedding, towels, window treatments and table linens. Our "things" product line includes housewares and home accessories such as cookware, dinnerware, glassware, small appliances, candles, picture frames and storage and cleaning products. We offer a wide array of national home furnishing brands, including All-Clad, Braun, Calphalon, Conair, Croscill, Cuisinart, Henckels, Krups, KitchenAid, Nautica, OXO, Wamsutta and Yankee Candle. We also offer products under our LNT Home private label brand, which is designed to complement our brand name products by offering our guests quality merchandise at value prices. We also carry a number of exclusive products, including several high-fashion home textile patterns from Waverly and our Nate Berkus collection.

        Our store format features an efficient racetrack layout in a visually appealing format that encourages guests to shop the entire store. We operate various store size formats generally ranging from 25,000 to 40,000 gross square feet. This allows us to match the size of our stores with the market potential of each location. Our stores are located predominately in power strip centers adjacent to complementary broad-based retail chains. In addition, our stores are generally located in geographic trading areas with at least 150,000 people within a five to 10 mile radius and with demographic characteristics that match our target guest profile. We were incorporated on September 10, 1996 and were a wholly owned subsidiary of CVS Corporation ("CVS"), formerly Melville Corporation, until November 26, 1996, when CVS completed an initial public offering of our common stock.

Business Strategy

        Improve Our Overall Merchandise Assortments.    We intend to maximize merchandise productivity by implementing the following assortment planning initiatives:

•

reduce our overall SKUs and increase the in-stock positions of our most popular merchandise;



•

re-allocate space in our stores to more productive categories;



•

increase the use of analytics in our merchandise assortment planning process, enabling us to make more informed, trend-based purchasing decisions in advance of guest demand; and



•

selectively expand existing merchandise categories and key vendor assortments as well as introduce new merchandise product lines that better reflect the style and regional preferences of our guests.

        Establish a Key Item Program.    We have established a "Best Bets" program in order to provide our guests superior value on our top 100 selling items. We intend to price these key items competitively and

67

maintain deep in-stock positions to meet guest demand. We believe that our key item program will help drive store traffic, improve sales per square foot and strengthen the Linens 'n Things brand over the long-term.

        Increase the Effectiveness of Our Marketing Expenditures.    We intend to implement an aggressive new, multi-tiered marketing campaign that re-invigorates the Linens 'n Things brand, emphasizes our commitment to our Best Bets program and drives traffic to our stores. Our marketing expenditures were approximately $114.0 million in fiscal 2005, or 4.2% of net sales. We expect to reduce marketing expenditures as a percentage of net sales in fiscal 2006; however, we intend to broaden our reach with a more diversified mix of marketing utilizing broadcast media, preprint, newspaper advertising and direct mail. We believe that these changes, coupled with a greater emphasis on national advertising, will be more effective in communicating our merchandising strategy while attracting new guests into our stores and enhancing our brand.

        Improve Our Guests' Shopping Experience.    Our goal is to exceed our guests' expectations in every store, every day. We intend to achieve this goal by building on our existing service philosophy and by creating a more inviting atmosphere for our guests. We believe we can make our guests' shopping experience more efficient and enjoyable through enhanced merchandise presentation, including more stimulating product displays and clearer in-store signage.

        Improve Our Operating Free Cash Flow.    We are highly committed to increasing our operating free cash flow. As a result, we plan to reduce new store openings over the next few years and focus on improving the operations of our existing stores. We currently expect to open approximately 25 to 30 new stores in 2006, primarily consisting of stores we have already committed to opening, as opposed to an average of approximately 56 new stores per year since 2003. As a result, we currently expect our fiscal 2006 capital expenditures to be approximately $85.0 million, as opposed to $127.6 million in fiscal 2005. In addition, in connection with our merchandise assortment planning and sales productivity initiatives, we expect to improve our inventory turns and reduce our working capital. Our new business strategy does not require any out of the ordinary or one-time capital expenditures.

        Realize Improved Financial Performance as Recently Opened Stores Mature.    As of April 1, 2006, we operate 549 stores, 174 of which were opened since the beginning of 2003. These 174 stores have not yet reached sales and store-level EBITDA consistent with our stores that were opened before 2003. Store-level EBITDA represents operating profit derived for each store, before depreciation for all fixed assets located at each store and amortization, where operating profit is based on each store's actual sales less direct expenses excluding an allocation of overhead. Historically, new stores take 4 to 5 years to reach the financial performance of a mature store. Accordingly, we expect our recently opened stores to generate improved financial performance and contribute meaningfully to our overall net sales and store-level EBITDA as they mature over the next few years.

Competitive Strengths

        Strong Brand Name Recognition.    The Linens 'n Things brand name has a strong reputation as a leading provider of home furnishings. Our brand recognition is reinforced by our national footprint and highly visible store locations. Additionally, we utilize extensive national and local advertising through multiple formats to reinforce our guest recognition and support our promotional events. Based on a study by Leo J. Shapiro & Associates, an independent market research firm, in May 2005, 9 out of 10 U.S. households located in our markets recognize the Linens 'n Things brand.

        Leading Destination for Home Furnishings.    We are the second largest specialty retailer of home textiles, housewares and home accessories in North America and operate 549 stores in 47 U.S. states and six Canadian provinces with an aggregate of approximately 18.3 million gross square feet as of April 1, 2006. With over 25,000 SKUs, we market one of the broadest and deepest selections of home

68

furnishings in the industry, providing us with a competitive advantage over department stores and mass merchants who offer a more limited product selection. Our more comprehensive product and brand selection provides our guests with a one-stop shopping destination for their home furnishing needs.

        Well Maintained Store Base with Attractive Real Estate.    Our portfolio of stores is primarily located in high traffic suburban locations that are convenient and accessible to our core guests and in close proximity to other high quality, national retailers. According to a study done by MapInfo in March 2004, our real estate is extremely competitive as to location and size with other national specialty retailers of home furnishings. Our store base is up to date with an average age per store of approximately five years. We believe that the average age of our store base minimizes our near-term maintenance and remodeling capital expenditure requirements.

        Strong and Diversified Vendor Relationships.    We are one of the largest purchasers of home furnishings in the United States and have developed strong long-term relationships with our vendors, from whom we consistently purchase large quantities of quality merchandise. We believe that our strong and diversified vendor relationships coupled with our buying power provides us a competitive advantage in the U.S. home furnishings industry. In addition, due to our broad range of branded products, our success is not dependent on any one specific product or vendor. In fiscal 2005, no single vendor accounted for more than 8% of our purchases.

        Strong Guest Base.    We have cultivated a strong base of loyal guests who return to our stores time and again. This is complemented by our Internet website which allows guests both to purchase our products and receive product information. We have a large customer database that we use to reach our target guests through, among other things, direct mail events. We define active guests as those who have visited our stores at least once in the last 12 months. We have over 12 million active guests in our database, who on average visit our stores approximately two to three times each year. To further strengthen our guest base, we also offer a private label charge card program, which has built-in loyalty programs to encourage more frequent visits and allows us to more efficiently target our direct mail efforts.

Products and Merchandising

        We offer quality home textiles, housewares and home accessories at compelling values. Our extensive merchandise offering of over 25,000 SKUs in an average store enables our guests to select from within each of our major product lines a wide assortment of styles, brands, colors and designs that exceed the selection generally available in department stores. Our "linens" product line includes home textiles such as bedding, towels, window treatments and table linens. Our "things" product line includes housewares, home accessories and storage and cleaning, such as cookware, dinnerware, glassware, small appliances, candles and picture frames. We are committed to maintaining a consistent in-stock inventory position and ensuring that our stores carry a broad and deep merchandise selection.

        We also intend to continue to implement our assortment planning and space management initiatives to maximize productivity. By increasing the use of analytics in our merchandise assortment planning process, we will be in a stronger position to make more informative, trend-based purchasing decisions well in advance of guest demand and will be more able to streamline our merchandise selection, reduce product duplication and develop a more balanced overall assortment. We also continue to re-allocate space in our stores to merchandise categories that better reflect guest demand. This effort allows us the opportunity to maximize productivity by expanding high-growth categories such as rugs, furniture, specialty foam and home environment. Furthermore, we continue to implement our regional merchandising initiatives, thereby positioning our stores to better reflect local geographic tastes and needs. As a result, our stores now carry a deeper, more balanced selection of merchandise that more closely corresponds with the preferences of our guests. In addition, our merchandise is displayed with impactful presentations in groups of related product lines, and seasonal merchandise and impulse

69

items are prominently displayed in the front of the store. The presentation of our merchandise is designed to maximize customer convenience and reinforce our guests' impression that we offer a wide selection. For fiscal 2006, we intend to focus on adding more newness in our assortment by offering updated merchandise and building brands both within a category and across categories. In addition, we intend to focus on improving the in-store experience with enhanced merchandise presentation and clearer signage.

        Merchandise and sample brands offered in each major department are highlighted below:

Department	Items Sold	Sample Brands
Bath	Towels, shower curtains, waste baskets, bathroom rugs and wall hardware	Nautica, Wamsutta and Croscill
Home Accessories	Decorative pillows, napkins, tablecloths, placemats, lamps, gifts, picture frames, candles and framed art	Colonial Candle, Waverly and Yankee Candle
Housewares	Cookware, cutlery, kitchen gadgets, small electric appliances (such as blenders and coffee makers), dinnerware, flatware and glassware	All-Clad, Black & Decker, Braun, Calphalon, Circulon, Cuisinart, Farberware, Henckels, KitchenAid, Krups and OXO
Storage and Cleaning	Closet-related items (such as hangers, organizers and shoe racks), cleaning and laundry care products	Dyson, Euro-Pro, Hoover, Rowenta and Rubbermaid
Bedding	Sheets, comforters, comforter covers, bedspreads, bed pillows, blankets and mattress pads	Croscill, Liz Claiborne, Nautica, Wamsutta and Waverly
Window Treatment	Curtains, valances and window hardware	Croscill, Nautica, Wamsutta and Waverly

        Our merchandise procurement is done centrally rather than in store operations. We utilize an auto-replenishment system, whereby approximately 65% of our core products are replenished from a centralized monitoring system.

Guest Service and Marketing

        We treat every customer as a guest. Our philosophy is to enhance the guest's entire shopping experience so that we will become the store of first choice for our guests' home furnishing needs. To facilitate the ease of shopping, our assisted self-service culture is complemented by trained department specialists, zoned floor coverage, product information displays and videos, self-demonstrations and in-store product seminars. The entire store team is trained to be highly visible in order to assist guests with their selections. The use of modern technologies reduces the need for our associates to manage "back office" activities so that the majority of their time can be focused on greeting and assisting guests and delivering attentive service. Sophisticated management systems that provide efficient guest service and our fair return policies are geared toward making each guest's visit a convenient, efficient and pleasant experience.

Sales Associates

        We seek to maintain a sales force of knowledgeable, professional and well-trained sales associates to deliver personal attention and service to our guests. We offer competitive wages and on-going

70

training and personnel development in order to attract and retain qualified, motivated associates committed to providing superior guest service. Training at the sales associate level focuses on the areas of guest interaction, product knowledge and store systems usage. We actively monitor and analyze the service levels in our stores in order to maximize sales associate productivity and store profitability.

Marketing and Advertising

        We use our advertising programs to communicate, build and strengthen the Linens 'n Things brand. We intend to implement an aggressive new, multi-tiered marketing campaign that re-invigorates the Linens 'n Things brand, emphasizes our commitment to our key item program and drives traffic to our stores. We expect to reduce marketing expenditures as a percentage of net sales in fiscal 2006; however, we intend to broaden our reach with a more diversified mix of marketing utilizing broadcast media, preprint, newspaper advertising and direct mail. We believe that these changes, coupled with a greater emphasis on national advertising, will be more effective in communicating our merchandising strategy while attracting new guests into our stores and enhancing our brand. We focus our advertising programs during key selling seasons such as spring/summer, back-to-school and holidays. In addition, we utilize our proprietary marketing database to track the buying habits of our guests.

Private Label Charge Card

        In April 2002, we launched our private label charge card program. The intent of this program is to build guest loyalty. Through a points program, guests receive enhanced value by using the card. The program also allows us to provide consistent and effective communication with our guests, while increasing our information base of our guests' purchasing patterns. Subject to customary exceptions, credit risk relating to this program is borne by GE Consumer Finance, a top issuer of private label credit cards.

Vendor Relationships

        Our merchandise assortment consists of a wide selection of high quality, brand name fashion home textiles, housewares and home accessories from both established and emerging vendors. We communicate with our vendors frequently, providing feedback on current demand for their products. Many of our key vendors limit the number of retail channels they use to sell their merchandise and competition among retailers to obtain and sell these goods is intense. Our relationships with our vendors has been a significant contributor to our past success. We monitor and evaluate the sales and profitability performance of each vendor and adjusts our future purchasing decisions from time to time based upon the results of this analysis. We have no guaranteed supply arrangements with our principal merchandising sources.

        We purchase our merchandise from a diverse vendor base of approximately 1,200 suppliers, of which approximately 17% are located overseas. In fiscal 2005, products supplied by our 25 largest vendors represented approximately 40% of our purchases, with our top three vendors supplying approximately 14% of our purchases and our largest single vendor supplying approximately 8% of our purchases. We believe that this buying power and our ability to make centralized purchases generally allows us to acquire products at favorable terms. In addition, the breadth of our sourcing helps mitigate risks associated with a single brand or designer.

Store Operations

Store Management and Operations

        We place a strong emphasis on our people, their development and their opportunity for advancement, and are committed to maintaining a high internal promotion rate. Our practice is to open each new store with a seasoned management team, which usually includes managers who have

71

significant experience with our Company. Additionally, our structured management training program requires that each new manager learn all facets of the business within the framework of a fully operational store. This program includes, among other things, product knowledge, merchandise presentation, business and sales perspective, employee relations and manpower planning. At the sales associate level, we focus our training on guest interaction, product knowledge and store systems usage. We believe that our policy of promoting from within, as well as the opportunities for advancement from our store expansion program, serve as incentives to attract and retain quality individuals.

        Our stores are open seven days a week, generally from 9:00 am to 9:30 pm Monday through Saturday and 10:00 am to 7:00 pm on Sunday unless affected by local laws.

Distribution

        We currently operate distribution centers in Shepherdsville, Kentucky; Swedesboro, New Jersey and Greensboro, North Carolina. We also use third-party logistics companies to supplement our distribution centers. We believe that the utilization of centralized distribution centers has resulted in lower average freight expense, more timely control of inventory shipments to stores and improved information flow. We believe strong distribution support for our stores is a critical element in our strategy and is central to our ability to maintain a low cost operating structure.

        We manage the distribution process centrally from our corporate headquarters. Purchase orders issued by us are electronically transmitted to nearly all of our suppliers. We plan to continue our efforts to ship as much merchandise through our distribution centers as possible to ensure all benefits of our logistics strategy are fully taken advantage of. Continued growth will also facilitate new uses of electronic data interchange technologies between us and our suppliers to exploit the most productive and beneficial use of our assets and resources. In order to realize greater efficiency, we also use third-party freight carriers to ship our merchandise from our distribution centers to our stores.

Management Information Systems

        We continually evaluate and upgrade our management information systems to enhance the quantity, quality and timeliness of information available to management. We believe our management information systems have fully integrated our stores, headquarters and distribution process. Over the last several years, we have made significant investments in technology to improve guest service such as Internet and online bridal and gift registry tools. We operate an IBM AS/400 management information system that integrates all major aspects of our business, including sales, distribution, purchasing, inventory control, merchandise planning and replenishment and financial systems. Information obtained from management information systems results in automatic inventory replenishment in response to specific requirements of each store, thereby improving in-stock positions and enhancing guest service. We also utilize hand-held scanners with inventory status and price look-up capabilities, which allow our sales associates to remain accessible to guests on the selling floor.

Competition

        The U.S. retail home furnishings market is highly fragmented. The market includes many different types of retailers including, among others, department stores, mass merchandisers and discounters, specialty retailers, home improvement centers and warehouse clubs. We believe that our ability to compete successfully in our market is influenced by several factors, including price, breadth and quality of product selection, in-stock availability of merchandise, effective merchandise presentation, guest service and superior store locations. We believe that we are well positioned to compete on the basis of these factors. Nevertheless, there can be no assurance that any or all of the factors that enable us to compete favorably will not be adopted by companies having greater financial and other resources than

72

we do. See "Risk Factors—Competitive factors could reduce our sales and profitability." We generally classify our competition as follows:

Department Stores

        This category includes national and regional department stores such as J.C. Penney Company Inc., Sears, Roebuck and Co. and the department store chains operated by Federated Department Stores, Inc. These retailers offer name brand merchandise as well as their own private label furnishings. Department stores also offer certain designer merchandise, such as Ralph Lauren, which is not generally distributed through the specialty and mass merchandise distribution channels. In general, department stores offer a more limited selection of home furnishings merchandise than we do. The prices offered by department stores during off-sale periods generally are significantly higher than ours and during on-sale periods are comparable to or slightly higher than ours.

Mass Merchandisers

        This category includes companies such as Wal-Mart Stores, Inc. and Target Corporation. Fashion home furnishings generally represent only a small portion of the total merchandise sales in these stores; however, this channel of distribution makes up the largest portion of home furnishings sales. These stores generally offer a more limited merchandise selection with fewer high quality name brands and lower quality merchandise at lower price points. In addition, these mass merchandisers typically have more limited guest service staffing than we do.

Specialty Stores/Retailers

        This category includes large format home furnishings retailers including Bed Bath & Beyond, Inc., Home Goods, a division of TJX Companies, Inc. and smaller format retailers such as Pier One Inc., Crate & Barrel and Williams-Sonoma, Inc. We estimate that the large format stores range in size from approximately 25,000 to 70,000 gross square feet offering home furnishing merchandise selection of approximately 15,000 to 40,000 SKUs. These retailers attempt to develop loyal guests and increase guest traffic by providing a single outlet to satisfy the guest's household needs. The smaller format retailers generally offer a more limited selection of merchandise within a specific niche and generally range in size from 2,000 to 20,000 gross square feet.

Other Retailers

        This category includes mail order retailers, such as Domestications; off-price retailers, such as Kohl's Corporation; the T.J. Maxx and Marshall's divisions of the TJX Companies, Inc.; home improvement stores, such as The Home Depot, Inc. and Lowe's Companies, Inc.; warehouse clubs, such as Costco Wholesale Corporation and Sam's Club and smaller local retail stores. These retailers, with the exception of off-price retailers, generally offer a more limited selection of merchandise. Off-price retailers typically offer closeout or out of season name brand merchandise at competitive prices.

Seasonality and Inflation

        Our business is subject to substantial seasonal variations. Historically, we have realized a significant portion of our net sales and substantially all of our net income for the year during the third and fourth quarters. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of new store openings. We believe this is the general pattern associated with our segment of the retail industry and expect that this pattern will continue in the future. Consequently, comparisons between quarters are not necessarily meaningful and the results for any quarter are not necessarily indicative of future results.

73

        We do not believe that our operating results have been materially affected by inflation during the past year. There can be no assurance, however, that our operating results will not be affected by inflation in the future.

Intellectual Property

        We use "Linens 'n Things" and "LNT" as trademarks and as service marks in connection with retail services. We have registered the "Linens 'n Things" and "LNT" marks with both the United States Patent and Trademark Office and the Canadian Intellectual Property Office. We believe that the name "Linens 'n Things" and its related marks are important elements of our business. Our corporate website address is www.lnt.com.

Employees

        As of April 1, 2006, we employed approximately 17,500 individuals, of whom approximately 7,500 were full-time employees and 10,000 were part-time employees. None of our employees is represented by a union, and we believe that we have a good relationship with our employees.

Government Regulation

        Our operations are affected by numerous federal and state laws that impose disclosure and other requirements upon the origination, servicing and enforcement of credit accounts and limitations on the maximum amount of finance charges that may be charged by a credit provider. In addition to our proprietary credit cards, credit to our guests is also provided through third parties such as American Express, Visa and MasterCard. Any change in the regulation of credit that would materially limit the availability of credit to our guest base could adversely affect our results of operations or financial condition.

        Our and our competitors' practices are subject to review in the ordinary course of business by the Federal Trade Commission and are subject to numerous federal and state laws. Additionally, we are subject to certain customs, truth-in-advertising and other laws, including consumer protection regulations that regulate retailers generally and/or govern the importation, promotion and sale of merchandise. We undertake to monitor changes in these laws and believe that we are in material compliance with all applicable state and federal regulations with respect to such practices.

Foreign Sales

        Our current international business is in Canada. The following table represents a summary of net sales and long-lived assets:

		Thirteen Weeks Ended April 1, 2006				Fiscal 2005				Fiscal 2004				Fiscal 2003
		(in millions)
Net sales from stores located within:
	United States	$	556.3	93.8	%	$	2,535.5	94.1	%	$	2,537.5	95.3	%	$	2,310.9	96.5	%
	Canada		36.5	6.2	%		159.2	5.9	%		124.0	4.7	%		84.4	3.5	%
	Total	$	592.8	100.0	%		2,694.7	100.0	%	$	2,661.5	100.0	%	$	2,395.3	100.0	%
Long-lived assets(1):
	United States	$	1,015.1	94.4	%	$	601.2	93.6	%	$	573.9	94.4	%	$	542.1	95.6	%
	Canada		60.0	5.6	%		41.2	6.4	%		34.0	5.6	%		24.7	4.4	%
	Total	$	1,075.1	100.0	%	$	642.4	100.0	%	$	607.9	100.0	%	$	566.8	100.0	%

(1)

Includes property and equipment, intangible assets, goodwill and deferred charges and other non-current assets.

74

MANAGEMENT

        Our executive officers and directors, and their ages and positions, are as follows:

Name	Age	Position
Robert J. DiNicola	58	Chairman of the Board of Directors, President and Chief Executive Officer
Francis M. Rowan	43	Senior Vice President and Chief Financial Officer
F. David Coder	48	Executive Vice President, Store Operations
Robert Homler	60	Executive Vice President, Merchandising
Joyce F. Brown	60	Director
Peter P. Copses	47	Director
Andrew S. Jhawar	34	Director
Lee S. Neibart	55	Director
Richard Baker	40	Director
Michael A. Gatto	38	Director
George G. Golleher	58	Director
Damian J. Giangiacomo	29	Director

Robert J. DiNicola became the Chairman of our board of directors and our President and Chief Executive Officer in February 2006 upon the consummation of the Merger. Mr. DiNicola has operated in the retail industry for 33 years. He is currently the Executive Chairman of GNC Corporation and General Nutrition Centers, Inc. (collectively, "GNC") and has been in that capacity since October 2004. He also served as GNC's interim Chief Executive Officer from December 2004 to May 2005. Mr. DiNicola is the former Chairman of the Board of Directors of Zale Corporation. Mr. DiNicola joined Zale Corporation as its Chairman and Chief Executive Officer in April 1994. In July 1999, Mr. DiNicola relinquished his position as Chief Executive Officer of Zale Corporation and as an officer of the company the following year, but remained a member of the board. At the request of the board, he rejoined Zale Corporation in February 2001 as Chairman and Chief Executive Officer. Mr. DiNicola subsequently relinquished his position as Chief Executive Officer of Zale Corporation in August 2002 but retained his position as Chairman of the Board until March 2004. Prior to joining Zale Corporation, Mr. DiNicola served as the Chairman and Chief Executive Officer of the Bon Marché, a division of Federated Department Stores, located in Seattle, Washington. Mr. DiNicola also serves as the Senior Retail Advisor for Apollo Management, L.P. Beginning his retail career in 1972, Mr. DiNicola has also worked for Macy's, May Company and Federated Department Stores. He has held numerous executive positions in buying, merchandising and store operations across the country during his retail career. Mr. DiNicola is a graduate of St. Peter's College in New Jersey and a veteran of the U.S. Army.

Francis M. Rowan became our Senior Vice President and Chief Financial Officer in April 2006. Mr. Rowan joined Linens 'n Things, Inc. in 1989 as the Budget Manager. He was promoted in April 1993 to Director of Inventory Control and promoted to Assistant Controller in November 1995, Executive Director in August 1999 and Vice President in August 2000. Most recently, Mr. Rowan served as Divisional Vice President. Mr. Rowan has a Bachelor of Science degree in Accounting from St. Peter's College and a Master of Business Administration degree from Montclair State University.

F. David Coder became our Executive Vice President of Stores in 2005. Mr. Coder joined Linens 'n Things, Inc. in 1989 as Regional Manager—Mid-Atlantic Region. He was promoted to Vice President in 1994, was promoted to Vice President of Stores—Eastern Zone in 1995 and was promoted to Senior Vice President, Store Operations in 2001. Prior to joining Linens 'n Things, Inc. Mr. Coder held various store management positions including Market Manager at Branden's, a Division of Dayton-Hudson, and Regional Merchandise Manager at Montgomery Wards. Mr. Coder studied Business Management and Psychology at Anderson College.

75

Robert Homler became our Executive Vice President, Merchandising in May 2006. Mr. Homler joined Linens 'n Things, Inc. in April 2006 as Senior Vice President of Marketing. Prior to that, he was Executive Vice President and Chief Operating Officer of GNC, after having served as Chief Merchandising Officer of GNC from February to December 2005. From March 2001 until January 2005, the Mr. Homler owned a Coffee Beanery (a gourmet coffee retailer) franchise operation in East Brunswick, New Jersey. From July 1998 to January 2000, Mr. Homler was President of Merchandising and Marketing of Levitz Furniture Corporation. Prior to joining Levitz Furniture Corporation, Mr. Homler was, from January 1994 to June 1998, Executive Vice President of Home Store Operations at Macy's East Division of Federated Department Stores. From 1984 through 1994, Mr. Homler was a General Merchandise Manager of Home Store Operations at various Federated Department Store divisions: A & S/Jordan Marsh from 1992 until 1994; Rich's Department Stores from 1991 until 1992; and the Bon Marché from 1988 until 1992. From 1984 until 1988, Mr. Homler was Senior Vice President—Director of Merchandising for R.H. Macy Corporation where he began his retail career in 1968 as a buyer and merchandiser.

Dr. Joyce F. Brown became a member of our board of directors in June 2006. Dr. Brown is president of the Fashion Institute of Technology ("FIT"), a specialized college of art and design, business, and technology of the State University of New York. Prior to her appointment at FIT in 1998, Dr. Brown was Professor of Clinical Psychology at the Graduate School and University Center of the City University of New York ("CUNY"), where she is currently Professor Emerita. From 1983 to 1992, Dr. Brown served CUNY in a variety of capacities, including acting President of Bernard Baruch College and Vice Chancellor for Urban Affairs and Development. From 1993 to 1994, Dr. Brown served as Deputy Mayor for Public and Community Affairs in the Office of the Mayor of the City of New York. In addition to her position at FIT, Dr. Brown serves as Chief Executive Officer of the Educational Foundation for the Fashion Industries, an advisory and support body to FIT. She is also a director of Paxar Corporation, Polo Ralph Lauren Corporation and USEC Inc. Dr. Brown earned her doctorate and master's degrees in Counseling Psychology from New York University and her bachelor's degree from Marymount College in Tarrytown, New York. She also received a certificate from the Institute for Educational Management at Harvard University.

Peter P. Copses became a member of our board of directors in February 2006 upon the consummation of the Merger. Mr. Copses became a founding senior partner at Apollo Management, L.P., one of the Sponsors, in 1990. Mr. Copses is also a director of Rent-A-Center, Inc. and GNC. Mr. Copses received his Master of Business Administration degree from Stanford University's Graduate School of Business and his Bachelor of Commerce degree from the University of Toronto.

Andrew S. Jhawar became a member of our board of directors in February 2006 upon the consummation of the Merger. Mr. Jhawar is a partner of Apollo Management, L.P., where he has been employed since February 2000. Prior to joining Apollo, Mr. Jhawar was an investment banker at Donaldson, Lufkin & Jenrette Securities Corporation and, prior to that, at Jefferies & Company, Inc. where he specialized in leveraged finance. Mr. Jhawar is also a director of GNC and was a director of Rent-A-Center, Inc. from October 2001 through May 2005. Mr. Jhawar received his Master of Business Administration degree from Harvard University's Graduate School of Business and his Bachelor of Science degree in Economics with a concentration in Finance from the Wharton School of the University of Pennsylvania.

Lee S. Neibart became a member of our board of directors in February 2006 upon the consummation of the Merger. Mr. Neibart has been a Partner of Apollo Real Estate Advisors since 1993 and is a Partner of NRDC Advisors. From 1989 to 1993, Mr. Neibart was with the Robert Martin Company, most recently as Executive Vice President and Chief Operating Officer. Robert Martin was a real estate development and management firm with a portfolio of approximately seven million square feet of commercial real estate. Mr. Neibart serves on the Advisory Boards of both The Enterprise Foundation and The Real Estate Institute of New York University. He is also a past President of the

76

New York Chapter of the National Association of Industrial and Office Parks. Mr. Neibart graduated with a Bachelor of Arts degree from the University of Wisconsin and a Master of Business Administration degree from New York University.

Richard Baker became a member of our board of directors in February 2006 upon the consummation of the Merger. Mr. Baker is President and Chief Operating Officer of National Realty & Development Corp., one of the Sponsors. Mr. Baker is a graduate of the Cornell Hotel School. He is a director of City and Suburban Savings Bank, a New York based savings and loan, and is on the Board of Trustees of Brunswick School in Greenwich, Connecticut. In July 2004, Mr. Baker was elected to the Cornell University Council for a four-year term. He is also a member of the Waterside School Board of Trustees in Stamford, Connecticut.

Michael A. Gatto became a member of our board of directors in February 2006 upon the consummation of the Merger. Mr. Gatto is currently a Partner at Silver Point Capital, an affiliate of one of the Sponsors. He was previously a Vice President in the Special Situations Investing Group of Goldman Sachs Group, Inc. from 1998 to 2001, a Principal of Stroble & Associates, a financial consulting firm, from 1997 to 1998 and a Corporate Finance Associate in the Retail Industry Group of Citibank, N.A. from 1993 to 1997. Mr. Gatto served as a director of Party City Corporation from February 2001 to August 2003 and is currently a director of Bush Industries, Inc. Mr. Gatto received a Bachelor of Arts degree in Economics from Cornell University and a Master of Business Administration degree from Columbia Business School. He is also a Chartered Financial Analyst.

George G. Golleher became a member of our board of directors in March 2006. Mr. Golleher has been a business consultant and private equity investor since June 1999. Mr. Golleher was a director of Simon Worldwide, Inc., a former promotional manufacturing company, from September 1999 to April 2006 and was also its Chief Executive Officer from March 2003 to April 2006. From March 1998 to May 1999, Mr. Golleher served as President, Chief Operating Officer and director of Fred Meyer, Inc. a food and drug retailer. Prior to joining Fred Meyer, Inc., Mr. Golleher served for 15 years with Ralphs Grocery Company until March 1998, ultimately as the Chief Executive Officer and Vice Chairman of the Board. Mr. Golleher is also a director of GNC and Rite Aid Corporation.

Damian J. Giangiacomo became a member of our board of directors in March 2006. Mr. Giangiacomo is a principal at Apollo Management, L.P., where he has been employed since July 2000. Prior to joining Apollo, Mr. Giangiacomo was an investment banker at Morgan Stanley & Co. Mr. Giangiacomo received a Bachelor of Business degree in Finance from the University of Notre Dame.

Board Composition

        Our board of directors is composed of nine directors. Each director serves for annual terms and until his or her successor is elected and qualified. Apollo Management V, L.P. indirectly controls a majority of the common stock of our parent company. Pursuant to the stockholders' agreement governing ownership of our parent, the Sponsors have the right to appoint all of the members of its board of directors. See "Certain Relationships and Related Party Transactions—Stockholders' Agreement," which follows.

Board Committees

        The board of directors has the authority to appoint committees to perform certain management and administration functions. The board of directors has provided for an audit committee and a compensation committee. The members of the Audit Committee are Messrs. Copses (chair), Gatto and Giangiacomo. The members of the Compensation Committee are Messrs. Jhawar (chair), Baker and Golleher. The audit committee is responsible for reviewing and monitoring our accounting controls and internal audit functions and recommending to the board of directors the engagement of our outside

77

auditors. The compensation committee reviews and either approves, on behalf of our board of directors, or recommends to the board of directors for approval the annual salaries and other compensation of our executive officers and individual stock and stock option grants. The compensation committee also provides assistance and recommendations with respect to our compensation policies and practices and assists with the administration of our compensation plans.

        We have adopted a Code of Business Conduct and Ethics (the "Code of Ethics") that applies to our chief executive officer, principal financial officer, principal accounting officer and to all other directors, officers and employees. A waiver from any provision of the Code of Ethics for executive officers and directors may only be granted by the board of directors.

Compensation of Directors

        We pay the chairman of our board of directors and each non-employee director an aggregate annual retainer of $40,000 and a stipend of $2,000 for each board meeting attended in person or $500 for each meeting attended telephonically. Additionally, we expect to pay non-employee directors serving on board committees a stipend of $1,000 for each meeting attended in person or $500 for each meeting attended telephonically. In addition, we grant stock options to purchase shares of our parent's common stock to the chairman and each non-employee director, upon first election or appointment to our board of directors, outside of the equity incentive plan described below, with the number of shares to be determined by the board of directors in its discretion. To date, each of the grants have been for 5,000 shares.

Stock Option Plan

        Our parent, Linens Holding Co., adopted a stock option plan pursuant to which it intended to offer equity incentives in the form of options to purchase up to 7.5% of the fully-diluted common stock of Linens Holding Co. to our directors, senior executives and other key employees. The Compensation Committee approved 346,946 stock options under the stock option plan to the following executive officers:

Name	Principal Position	Number of Stock Options Granted		Grant Date of Stock Options
Robert J. DiNicola	Chairman and Chief Executive Officer	281,946	(1)	3/27/2006
F. David Coder	Executive Vice President, Store Operations	25,000	(1)	3/27/2006
Robert Homler	Executive Vice President of Merchandising	25,000	(2)	4/17/2006
Francis M. Rowan	Senior Vice President/CFO	5,000 10,000	(1) (3)	3/27/2006 4/28/2006

        In addition to the above stock option awards, the Compensation Committee also approved the grant of 441,000 to certain other of our employees. As of June 19^th, 2006 the Compensation Committee has approved a total of 798,946 stock options, which includes all grants.

(1)

The stock options granted under the stock option plan to each optionee are equally divided between a "Time Option" and a "Performance Option," as those terms are defined in the standard form of option grant letter. The stock options have an exercise price of $50.00 per share, expire seven years after the date of grant and become vested and exercisable in four equal installments on each of February 14, 2007, February 14, 2008, February 14, 2009 and February 14, 2010 with respect to the Time Options and as provided in the standard form of option grant letter with respect to the Performance Options.

78

(2)

The stock options granted under the stock option plan to each optionee are equally divided between a "Time Option" and a "Performance Option," as those terms is defined in the standard form of option grant letter. The stock options have an exercise price of $50.00 per share, expire seven years after the date of grant and become vested and exercisable in four equal installments on each of April 17, 2007, April 17, 2008, April 17, 2009, and April 17, 2010 with respect to the Time Options and as provided in the standard form of option grant letter with respect to the Performance Options.

(3)

The stock options granted under the stock option plan to each optionee are equally divided between a "Time Option" and a "Performance Option," as those terms is defined in the standard form of option grant letter. The stock options have an exercise price of $50.00 per share, expire seven years after the date of grant and become vested and exercisable in four equal installments on each of April 28, 2007, April 28, 2008, April 28, 2009, and April 28, 2010 with respect to the Time Options and as provided in the standard form of option grant letter with respect to the Performance Options.

79

EXECUTIVE COMPENSATION

        The following table sets forth information with respect to the compensation for the years 2005, 2004 and 2003 of Norman Axelrod (former Chairman and CEO), Jack E. Moore (former President and COO), William T. Giles (former Executive Vice President and Chief Financial Officer), Brian D. Silva (former Senior Vice President, Human Resources, Administration and Corporate Secretary), F. David Coder and Jane Gilmartin (former Executive Vice President, Chief Merchandising Officer), or collectively, the named executive officers.

SUMMARY COMPENSATION TABLE

					Long-Term Compensation
		Annual Compensation			Awards		Payouts
Name and Principal Position	Fiscal Year	Salary ($)	Bonus ($)(1)	Other Annual Compensation ($)(2)	Restricted Stock Award(s) ($)(3)	Number of Securities Underlying Options(4)	LTIP Payouts ($)(3)	All Other Compensation ($)(5)
Norman Axelrod, Former Chairman and Chief Executive Officer(7)	2005 2004 2003	904,231 893,269 813,462	— 126,000 389,400	— — —	— 55,131 —	— 200,000 200,000	— — —	25,602 35,382 22,844
Jack E. Moore, Former President and Chief Operating Officer(6)	2005 2004	585,962 309,615	— 560,000	69,427 151,371	— 720,500	— 400,000	— —	3,639 —
William T. Giles, Former Executive Vice President and Chief Financial Officer(10)	2005 2004 2003	350,769 351,462 315,896	250,000 33,858 94,548	— — —	— 640,902 312,750	— 50,000 40,000	— — —	4,372 4,312 4,041
Brian D. Silva, Former Senior Vice President, Human Resources, Administration and Corporate Secretary(8)	2005 2004 2003	287,308 287,692 267,115	125,000 22,680 71,685	— — —	— 12,599 —	— 25,000 25,000	— — —	4,100 — 3,712
F. David Coder, Executive Vice President, Store Operations	2005 2004 2003	339,769 320,308 278,654	— 25,272 100,000	— — —	— 8,431 —	— 50,000 50,000	— — —	4,100 4,303 4,028
Jane Gilmartin, Former Executive Vice President, Chief Merchandising Officer(9)	2005	222,115	543,193	—	1,576,240	175,000	—	4,100

(1)

Ms. Gilmartin received a $100,000 sign-on bonus upon her commencement of employment in July 2005. Ms. Gilmartin is also entitled to a guaranteed minimum bonus under our annual incentive compensation plan of $300,000, payable no later than March 31, 2006, subject to continued active employment. We also reimbursed Ms. Gilmartin in the amount of $143,193, for part of her signing bonus, relocation allowance and other amounts she was required to repay to her previous employer.

Based on their services during the strategic review process leading up to the execution of the Merger Agreement, Mr. Giles and Mr. Silva each received additional compensation of $250,000 and $125,000, respectively. Mr. Giles and Mr. Silva are also each entitled to additional compensation of $250,000 and $125,000, respectively, due to the consummation of the Merger. In addition, Mr. Coder is entitled to additional compensation of $100,000 due to the consummation of the Merger.

(2)

For fiscal 2005 represents reimbursement of Mr. Moore's relocation costs of $15,027 and moving expenses of $54,400. For fiscal 2004 represents reimbursement of Mr. Moore's relocation costs including moving costs, temporary housing and purchase-related costs of $120,677, tax gross-up related to these costs of $27,299 and COBRA payments of $3,395.

(3)

Ms. Gilmartin was awarded 61,000 restricted stock units in connection with her hiring as Executive Vice President and Chief Merchandising Officer.

80

The number and value of all restricted stock unit holdings at December 31, 2005 were:

Name	Units	Value
Mr. Axelrod	2,341	$	62,505
Mr. Moore	20,000		534,000
Mr. Giles	33,154		885,212
Mr. Silva	535		14,285
Mr. Coder	358		9,559
Ms. Gilmartin	53,500		1,428,450

Holders of restricted stock units are entitled to be credited with any dividends on such units. Awards under our long term incentive plan ("LTIP") had previously been made based on the executive officers having achieved certain preestablished financial performance targets. The LTIP was discontinued in Fiscal 2004. For the 3-year cycles ending in fiscal 2003 and 2004 the financial targets were based on earnings and net return on assets over the prior 3 years, but no awards were achieved.

(4)

Upon the commencement of her employment in July 2005 and in November 2005, Ms. Gilmartin was awarded 150,000 options and 25,000 options, respectively, to purchase shares of our common stock.

(5)

For fiscal 2005 these values represent amounts contributed under our 401(k) profit sharing plan (401(k) employer matches). In addition, for Mr. Axelrod, the fiscal 2005 amount represents: (i) $13,821 credited to his account maintained under the defined contribution component of the supplemental executive retirement program and (ii) imputed income of $7,681 associated with the term portion of the split dollar insurance component of the supplemental executive retirement program.

(6)

Mr. Moore ceased serving as President and Chief Operating Officer on January 12, 2006. His final date of employment was February 14, 2006.

(7)

Mr. Axelrod ceased serving as Chairman and Chief Executive Officer on February 14, 2006.

(8)

Mr. Silva resigned as Senior Vice President, Human Resources, Administration and Corporate Secretary effective February 27, 2006.

(9)

Ms. Gilmartin ceased serving as Executive Vice President, Chief Merchandising Officer on March 24, 2006.

(10)

Mr. Giles resigned as Executive Vice President, Chief Financial Officer effective April 28, 2006.

        Option Grants In Last Fiscal Year.    The table below sets forth certain information concerning stock options granted during fiscal 2005 to the named executive officers.

        The grant date present values shown in the following table are required by SEC regulations, and are not intended to forecast possible future appreciation. We are not aware of any formula which will predict with reasonable accuracy the future appreciation of equity securities. No benefit from the grant of stock options can be realized unless there is an appreciation in stock price, which benefits all shareholders.

        All of the equity interests disclosed in the table below were cashed-out upon consummation of the Merger.

81

OPTION GRANTS IN LAST FISCAL YEAR

	Individual Grants
Name	Number of Securities Underlying Options Granted		Percent of Total Options Granted to Employees in Fiscal Year		Exercise or Base Price ($/Share)	Expiration Date	Grant Date Present Value ($)(2)
Jane F. Gilmartin	100,000 50,000 25,000	(1) (1) (1)	39.9 20.0 10.0	% % %	25.84 25.84 25.61	07/20/2012 07/20/2012 12/31/2012	598,680 523,635 148,337

(1)

These option grants were made in connection with the hiring of Ms. Gilmartin as Executive Vice President and Chief Merchandising Officer. In accordance with the original terms and conditions of each grant—

(a)

The 100,000 options were issued in July 2005 pursuant to our New Hire Authorization. The options vest and are exercisable on or after December 31, 2005, provided that the shares of common stock acquired upon exercise of this option may not be sold or otherwise disposed of at the earlier of (1) June 20, 2012 or (2) in one-third increments if, and at such point, over ten days (which need not be consecutive) in an established period of thirty days, the fair market value of our common stock is at or above $31.01, $34.11, and $37.52, respectively;

(b)

The 50,000 options were issued in July 2005 pursuant to our New Hire Authorization which vest in one-third annual increments beginning March 1, 2006; and

(c)

The 25,000 options were issued in November 2005 pursuant to our New Hire Authorization. The options vest and are exercisable on or after December 31, 2005, provided that the shares of common stock acquired upon exercise of this option may not be sold or otherwise disposed of at the earlier of (1) November 30, 2012 or (2) in one-third increments if, and at such point, over ten days (which need not be consecutive) in an established period of thirty days, the fair market value of our common stock is at or above $30.73, $33.81, and $37.19, respectively.

(2)

The hypothetical present values on the grant date are calculated under the modified Black-Scholes Model, which is a mathematical formula used to value options traded on stock exchanges. This formula considers a number of factors used in hypothesizing an option's present value. Weighted-average factors used to value options granted include the stock's expected volatility rate of 32.8%, risk free rate of return of 4.0%, dividend yield of 0.0%, projected time of exercise of 3.23 years and projected risk of forfeiture and non-marketability for the vesting period of 0% per annum.

        Option Exercises and Year-end Option Holdings.    The following table shows information regarding option exercises during fiscal 2005 as well as fiscal 2005 year-end option holdings for each of the named executive officers. All of the equity interests disclosed in the table below (exercisable and unexercisable) were cashed-out upon consummation of the Merger.

82

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

			Number of Securities Underlying Unexercised Options at FY-End (#) Exercisable/ Unexercisable		Value of Unexercised In-the-Money Options at FY-End ($) Exercisable/ Unexercisable
	Shares Acquired on Exercise (#)
Name		Value Realized ($)
			Exercisable	Unexercisable	Exercisable	Unexercisable
Norman Axelrod	—	—	1,865,984	—	4,892,076	—
Jack E. Moore	—	—	120,000	280,000	168,000	—
William T. Giles	—	—	345,000	—	1,495,725	—
Brian D. Silva	—	—	186,250	—	564,175	—
F. David Coder	—	—	172,500	10,000	290,575	31,600
Jane Gilmartin	—	—	125,000	50,000	113,250	43,000

Employment Agreements and Other Executive Agreements

Robert J. DiNicola

        Upon the consummation of the Merger, Robert J. DiNicola became Chairman of our board of directors and Chief Executive Officer. We and Mr. DiNicola have entered into an employment agreement containing the following terms: an initial term expiring on December 31, 2008, subject to automatic one-year renewals unless either party provides one-year advance notice of non-renewal; a base salary of $1,350,000; a target bonus of up to 100% of base salary subject to meeting pre-established performance goals; an option grant for 2% of the fully-diluted common stock of Linens Holding Co. from the 7.5% equity pool described in "Stock Option Plan" above; severance pay, in the event of a termination of employment by us, other than for cause, or by Mr. DiNicola for good reason equal to continued base salary and benefits for the remainder of the term (but no less than two years if such termination occurs during the six month period following a change in control); restrictions on Mr. DiNicola's engaging in competitive and similar activities during his employment and for 12 months following termination of his employment, or, if longer, the period during which he is receiving severance pay. In addition, upon consummation of the Merger, Mr. DiNicola purchased 40,000 shares, or approximately 0.3% of the fully diluted common stock, of Linens Holding Co. for $2 million, and also received a fully vested option, outside of the stock option plan, to purchase 40,000 shares at an exercise price of $50.00 per share.

Other Executive Officers

        We have employment agreements with each of Mr. Rowan, Mr. Coder and Mr. Homler (the "Executives") (the "Employment Agreements"). The following summarizes the principal terms of these Employment Agreements. The Employment Agreements are for an initial term ending on December 31, 2007. The Employment Agreements contain automatic one-year extensions at the end of the term unless either party provides one-year advance notice of non-renewal (the "Employment Period").

        The Employment Agreements provide that we agree to pay to the Executives an annual base salary (the "Base Salary") in the following amounts: Mr. Rowan—$250,000, Mr. Coder—$400,000, and Mr. Homler—$400,000. Our Board of Directors or the Compensation Committee of the Board of Directors will review the Executive's performance on an annual basis and, based on such review, may change the Base Salary, as it, acting in its sole discretion, shall determine to be reasonable and appropriate.

83

        The Employment Agreements also provide, with respect to the 2006 calendar year, and each calendar year that commences during the Employment Period, that the Executive will be eligible to receive an annual performance bonus ("Annual Bonus") on a basis and in an amount to be determined by our Board of Directors or the Compensation Committee of the Board of Directors in the exercise of their sole discretion. The Annual Bonus, if any, may be up to 40-100% of the Executive's Base Salary, depending on the Executive, and shall be payable in full as soon as reasonably practicable following the determination thereof, but in no event later than May 15 of the following year. The Executive shall also be eligible to participate in and be granted stock options under the Linens Holding Co. Stock Option Plan to purchase shares of Common Stock, par value $0.01 per share, of Linens Holding Co.

        The Employment Agreements also provide for (1) participation during the Employment Period in benefit plans and programs including life insurance, medical benefits and financial planning services, (2) restrictive covenants including non-competition, non-disclosure and non-solicitation of employees and (3) with respect to Mr. Homler, the payment of his relocation from the Pittsburgh, Pennsylvania area to the Clifton, New Jersey area. The Executives agree not to compete with us during the Employment Period and until the longer of (a) 12 months after the date of termination of employment (the Executive's last day of work for us) or (b) the period during which the Executive is receiving payments from us.

        In the event the Executive's employment is terminated by us other than for cause, or resignation by the Executive for good reason, the Employment Agreement provides for continued payment of Base Salary to which the Executive would have been entitled had he remained in the employ of us until the expiration of the Employment Period in effect immediately prior to the date of termination. Subject to the sole discretion of our Board of Directors or the Compensation Committee of the Board of Directors, we may pay to the Executive a prorated share of the Annual Bonus that he would have been entitled to had the Executive worked the full year during which the termination occurred.

        In the event the Executive's employment is terminated by us within six months following a "change in control" and other than for cause, the Employment Agreement provides that we shall continue to pay the Executive the Base Salary to which he would have been entitled for the greater of (1) the period had the Executive remained in the employ of us until the expiration of the Employment Period or (2) a two-year period following such date of termination.

        In May 2006, Mr. Coder purchased 3,000 shares of our parent's common stock for $150,000, and also received a fully vested option, outside of the stock option plan, to purchase 3,000 shares at an exercise price of $50.00 per share.

        Brian D. Silva resigned as Senior Vice President, Human Resources, Administration and Corporate Secretary effective February 27, 2006. Mr. Silva was not entitled to any severance under his employment agreement with us because he voluntarily terminated his employment with us.

        Jane Gilmartin ceased serving as Executive Vice President, Chief Merchandising Officer on March 24, 2006. We and Ms. Gilmartin have entered into a separation agreement and general release pursuant to which Ms. Gilmartin agreed to release us and our affiliates from any claims Ms. Gilmartin may have had, and we agreed to pay Ms. Gilmartin's severance and other entitlements under her employment agreement, including a cash lump sum severance payment equal to $1,522,500 representing two times her base salary plus two times her target annual bonus (45% of base salary) and a prorated annual bonus equal to $59,062.50.

        William T. Giles submitted his resignation as Executive Vice President, Chief Financial Officer on April 21, 2006, effective April 28, 2006. Mr. Giles was not entitled to any severance under his employment agreement with us because he voluntarily terminated his employment with us.

84

Severance Arrangements

Norman Axelrod

        Upon the consummation of the Merger, Norman Axelrod ceased to be Chairman of our board of directors and Chief Executive Officer, and his employment terminated on February 16, 2006. We are paying Mr. Axelrod's severance and other entitlements under his employment agreement. These entitlements include a payment equal to $4,924,530 representing 2.99 times his base salary and annual incentive compensation, $135,495 representing the pro rated portion of his annual cash incentive compensation and a pro rated portion of his annual equity grant at his target rates, medical and life coverage until he attains age 60 at no cost (and at his cost from age 60 to age 65), approximately $5,562,674 representing the defined benefit portion of his supplemental executive retirement program ("SERP"), $971,988 representing the defined contribution portion of his SERP, and his current interest under a frozen split dollar life insurance arrangement, estimated to be $443,449.

Jack E. Moore

        Jack E. Moore ceased serving as our President and Chief Operating Officer on January 12, 2006, and his employment terminated upon consummation of the Merger. We and Mr. Moore have entered into a separation and general release agreement pursuant to which Mr. Moore agreed to release us and our affiliates from any claims Mr. Moore may have had, and we agreed to pay Mr. Moore's severance and other entitlements under his employment agreement, including a cash lump sum severance payment equal to $2,419,000 representing 2.5 times his base salary plus 2 times his target annual bonus (80% of base salary), a prorated annual bonus equal to $39,333, continued health and life insurance benefits for up to two years, and a payment equal to $1,197,872 representing a gross-up payment to make him whole for golden parachute excise taxes imposed upon him.

Jane Gilmartin

        Jane Gilmartin ceased serving as Executive Vice President, Chief Merchandising Officer on March 24, 2006. We and Ms. Gilmartin have entered into a separation agreement and general release pursuant to which Ms. Gilmartin agreed to release us and our affiliates from any claims Ms. Gilmartin may have had, and we agreed to pay Ms. Gilmartin's severance and other entitlements under her employment agreement, including a cash lump sum severance payment equal to $1,522,500 representing two times her base salary plus two times her target annual bonus (45% of base salary) and a prorated annual bonus equal to $59,062.50.

85

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

        We own all of Linens 'n Things, Inc.'s issued and outstanding capital stock.

        The table below sets forth certain information regarding the beneficial ownership of our common stock with respect to each entity or person that is a beneficial owner of more than 5% of its outstanding common stock and beneficial ownership of its common stock by each director and executive officer and all directors and officers as a group, at May 31, 2006:

Name of Beneficial Owner	Number of Shares		Percentage
Linens Investors, LLC(1)	13,000,000	(2)(3)	99.3	%
Robert J. DiNicola(3)(4)	80,000	(3)	*
Francis M. Rowan(3)(4)	—		—
F. David Coder(4)	6,000		*
Robert Homler(4)	—		—
Peter P. Copses(5)	13,000,000	(2)(5)	99.3	%
Andrew S. Jhawar(5)	13,000,000	(2)(5)	99.3	%
Lee S. Neibart(6)	—	(2)(6)	—
Richard Baker(6)	—	(2)(6)	—
Michael A. Gatto(7)	—	(2)(7)	—
George G. Golleher(4)	—		—
Damian J. Giangiacomo(5)	—	(2)(5)	—	%
All officers and directors as a group (12 persons)(2)(8)	13,086,000		100	%

*

Less than 1% of the outstanding shares.

(1)

The address of Linens Investors, LLC ("Linens Investors") is c/o Apollo Management V, L.P., 10250 Constellation Boulevard, Los Angeles, California 90067.

(2)

Linens Investors is our principal stockholder. We are a special purpose entity that was created in connection with the Merger and are controlled by Apollo Linens Investors, LLC and its affiliates ("Apollo Linens Investors") which, together with NRDC Real Estate Advisors I LLC and Silver Point Capital Fund Investments LLC, and their respective affiliates, own all of the membership interests of Linens Investors.

(3)

Upon consummation of the Merger, Robert J. DiNicola purchased 40,000 shares of our common stock for $2.0 million, and also received a fully vested option to purchase the same number of shares for an additional $2.0 million. Mr. Coder holds a fully vested option to purchase 3,000 shares of our common stock for $150,000. A person is deemed to be the beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days.

As of May 31, 2006, our only stockholders were Robert J. DiNicola, F. David Coder and Linens Investors. In connection therewith, we and Linens Investors entered into a stockholders' agreement. See "Certain Relationships and Related Transactions—Stockholders' Agreement." Pursuant to the stockholders' agreement, Mr. DiNicola, Mr. Coder, and any subsequent stockholders, agreed to give Linens Investors a voting proxy to vote all of our shares held by such stockholder with respect to certain matters as set forth in the stockholders' agreement. As a result, Linens Investors may be deemed to be the beneficial owner of the shares of common stock held by the parties to the stockholders' agreement. Linens Investors expressly disclaims beneficial ownership of such shares of common stock held by each of the parties to the stockholders' agreement, except to the extent of its pecuniary interest in us.

(4)

The address for each of Messrs. DiNicola, Rowan, Coder, Homler and Golleher is c/o Linens 'n Things, Inc., 6 Brighton Road, Clifton, New Jersey 07015.

86

(5)

Apollo Linens Investors is controlled by its manager, Apollo Management V, L.P. Peter P. Copses and Andrew S. Jhawar, two of our directors, are affiliates of Apollo Management V, L.P., and therefore, may be deemed to be beneficial owners of the membership interests of Apollo Linens Investors. Each of Messrs. Copses and Jhawar disclaim beneficial ownership of any such interests in which he does not have a pecuniary interest. The address for each of Messrs. Copses, Jhawar and Giangiacomo is c/o Apollo Management V, L.P., 10250 Constellation Boulevard, Los Angeles, California 90067.

(6)

Lee S. Neibart and Richard Baker, two of our directors, are affiliates of NRDC Real Estate Advisors I LLC, and therefore, may be deemed to be beneficial owners of the membership interests of NRDC Real Estate Advisors I LLC. Each of Messrs. Neibart and Baker disclaim beneficial ownership of any such interests in which he does not have a pecuniary interest. The address for each of Messrs. Neibart and Baker is c/o NRDC Real Estate Advisors I LLC, 3 Manhattanville Road, Purchase, New York 10577.

(7)

Michael A. Gatto is an affiliate of Silver Point Capital Fund Investments LLC, and therefore, may be deemed to be the beneficial owner of the membership interests of Silver Point Capital Fund Investments LLC. Mr. Gatto disclaims beneficial ownership of any such interests in which he does not have a pecuniary interest. The address of Mr. Gatto is c/o Silver Point Capital Fund Investments LLC, 2 Greenwich Plaza, Greenwich, Connecticut 06830.

(8)

Includes shares held by Linens Investors.

87

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Management Services Agreement

        Upon consummation of the Merger, we entered into a management services agreement with Apollo Management V, L.P., NRDC Linens B LLC and Silver Point Capital Fund Investments LLC (the "Sponsors") (each of whom is an affiliate of us). Under this management services agreement, the Sponsors agree to provide to us certain investment banking, management, consulting, financial planning and real estate advisory services on an ongoing basis for a fee of $2.0 million per year. Under this management services agreement, Apollo Management V, L.P. will also agree to provide to us certain financial advisory and investment banking services from time to time in connection with major financial transactions that may be undertaken by us or our subsidiaries in exchange for fees customary for such services after taking into account Apollo Management V, L.P.'s expertise and relationships within the business and financial community. Under this management services agreement, we also agreed to provide customary indemnification. In addition, we agreed to pay a transaction fee of $15.0 million in the aggregate (plus reimbursement of expenses) to the Sponsors for financial advisory services rendered in connection with the Merger. These services included assisting us in structuring the Merger, taking into account tax considerations and optimal access to financing, and assisting in the negotiation of our material agreements and financing arrangements in connection with the Merger.

Stockholders' Agreement

        Our only stockholders are Robert J. DiNicola, F. David Coder and Linens Investors, LLC, a limited liability company owned by the Sponsors. In connection therewith, Linens Investors, LLC has entered into a stockholders' agreement with us that sets forth applicable provisions relating to the management and ownership of us and our subsidiaries. Pursuant to the stockholders' agreement, Mr. DiNicola and Mr. Coder agreed to give Linens Investors a voting proxy to vote all of our shares held by them with respect to certain matters as set forth in the stockholders' agreement. In addition, the stockholders' agreement contains customary drag along rights, tag along rights, registration rights, restrictions on the transfer of our common stock and an indemnity of the Sponsors.

88

DESCRIPTION OF CERTAIN INDEBTEDNESS

Asset-Based Revolving Credit Facility

        In connection with the Merger, as of February 14, 2006, we have an asset-based revolving credit facility (the "Credit Facility") that provided for senior secured financing of up to $600.0 million, subject to the borrowing base. The borrowing base is a formula based on certain eligible inventory and receivables, minus certain reserves. A portion of the Credit Facility, not to exceed $40.0 million, is also available to Linens 'n Things Canada Corp. subject to the Canadian borrowing base. The Credit Facility requires us to comply with financial ratio maintenance covenants if the excess availability under the Credit Facility, at any time, does not exceed $75 million and also contains certain customary affirmative covenants and events of default. The principal amount outstanding of the loans under the Credit Facility, plus interest accrued and unpaid thereon, will be due and payable in full at maturity, five years from the date of closing of the Merger.

        All obligations under the Credit Facility are unconditionally guaranteed by Linens Holding Co., our direct parent company, and certain of our existing and future domestic subsidiaries. All obligations under the Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of our assets and the assets of the Issuers and the subsidiary guarantors, including: (i) a first-priority security interest in inventory, accounts receivable, cash, securities and other general intangibles; and (ii) a second-priority security interest in equipment, intellectual property rights and related general intangibles and all of the capital stock of us and the capital stock of certain subsidiaries.

        Borrowings under the Credit Facility bear interest at a rate equal to, at our option, either (a) an alternate base rate determined by reference to the higher of (1) the base rate in effect on such day and (2) the federal funds effective rate plus 0.50% or (b) a LIBOR rate, with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin. The initial applicable margin for borrowings under the Credit Facility is 0% with respect to alternate base rate borrowings and 1.50% with respect to LIBOR borrowings. After the delivery of the financial statements for the first full fiscal quarter after the closing date, the applicable margin for borrowings under the Credit Facility will be subject to adjustment based on the excess availability under the Credit Facility. In addition to paying interest on outstanding principal under the Credit Facility, we are required to pay a commitment fee, initially 0.375% per annum, in respect of the unutilized commitments thereunder. After the delivery of financial statements for the first full fiscal quarter after the closing date, the commitment fee will be subject to adjustment based on the excess availability under the Credit Facility. We must also pay customary letter of credit fees and agency fees. We initiated borrowings under our Credit Facility on February 23, 2006 to meet our operational working capital needs. As of April 1, 2006, we had $81.6 million in borrowings under the Credit Facility.

        Management regularly reviews and evaluates its liquidity and capital needs. We experience peak periods for our cash needs generally during the second quarter and fourth quarter of the fiscal year. As our business continues to grow and our current store expansion plan is implemented, such peak periods may require increases in the amounts available under the Credit Facility from those currently existing and/or other debt or equity funding.

        Management currently believes that our cash flows from operations, our access to increases to the Credit Facility or additional capacity from new credit facilities will be sufficient to fund our expected capital expenditures, working capital and non-acquisition business expansion requirements as they become due.

89

DESCRIPTION OF EXCHANGE NOTES

        The old notes were issued, and the exchange notes will be issued, under an indenture, dated as of February 14, 2006 (the "Indenture"), among Linens 'n Things, Inc., Linens 'n Things Center, Inc., Linens Holding Co., The Bank of New York, as trustee (the "Trustee"), and the Initial Subsidiary Guarantors, as subsidiary guarantors. The terms of the old notes and the exchange notes (collectively, the "notes") include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939. The form and terms of the exchange notes and the old notes are identical in all material respects, except that the exchange notes will be registered under the Securities Act and will not contain terms with respect to transfer restrictions or additional interest upon a failure to fulfill certain of our obligations under the registration rights agreement.

        You can find the definitions of certain terms used in this description under the subheading "Certain Definitions." In this description, "Linens 'n Things, Inc." and the "Company" refer only to Linens 'n Things, Inc. and not to any of its subsidiaries, "Linens 'n Things Center, Inc." and the "Co-Issuer" refer only to Linens 'n Things Center, Inc. and not to any of its subsidiaries and the "Issuers" refers to the Company and the Co-Issuer.

        The following description is a summary of the material provisions of the indenture, the registration rights agreement, certain Note Lien Documents and the Intercreditor Agreement. It does not restate those agreements in their entirety. We urge you to read the indenture, the registration rights agreement, the Note Lien Documents and the Intercreditor Agreement, because they, and not this description, define your rights as holders of the notes. Copies of the indenture and the registration rights agreement are filed as exhibits to the registration statement to which this prospectus is a part. Certain defined terms used in this description but not defined below under "—Certain Definitions" have the meanings assigned to them in the indenture.

        The registered holder of a note will be treated as the owner of it for all purposes. Only registered holders will have rights under the indenture.

Brief Description of the Notes and the Note Guarantees

        The notes:

•

are general obligations of the Issuers;



•

are secured on a first-priority basis, equally and ratably with all obligations of the Issuers under any future Note Lien Debt, by Liens on Note Lien Collateral, which is substantially all of the assets of the Issuers and the Note Guarantors consisting of Intellectual Property, Equipment, documents of title related to Equipment, Note Lien General Intangibles and the Note Capital Stock Collateral (which consists of all of the Capital Stock in the Company and certain of the Company's Domestic Subsidiaries and 65% of the Capital Stock of the Foreign Subsidiaries owned directly by the Parent or its Domestic Subsidiaries) subject to certain Permitted Liens;



•

are secured on a second-priority basis, equally and ratably with all obligations of the Issuers under any future Note Lien Debt, by Liens on the Revolving Credit Collateral, subject to the Liens on the Revolving Credit Collateral securing the Issuers' obligations under the Revolving Credit Agreement and any future Revolving Credit Obligations that we may incur and certain Permitted Liens;



•

are effectively junior, to the extent of the value of the Revolving Credit Collateral, to the Issuers' obligations under the Revolving Credit Agreement and any future Revolving Credit Obligations that we may incur, which will be secured on a first-priority basis by the Revolving Credit Collateral;



•

are effectively junior to certain Permitted Liens, to the extent of the value of the assets subject to those Permitted Liens;

90

•

are pari passu in right of payment with all existing and future senior Indebtedness of the Issuers, including Indebtedness outstanding under the Revolving Credit Agreement;



•

are senior in right of payment to all existing and future subordinated indebtedness of the Issuers;



•

are effectively subordinated to all liabilities (including Trade Payables) and Preferred Stock of each Subsidiary of the Company that is not a Guarantor; and



•

are fully and unconditionally guaranteed by our parent, Linens Holding Co., and each of the Issuers' current and future Subsidiaries that guarantee the Revolving Credit Agreement except for the Canadian Subsidiaries of the Issuers.

        The Note Guarantees:

•

are general obligations of such Guarantor;



•

are secured on a first-priority basis, equally and ratably with all obligations of each Guarantor under any future Note Lien Debt, by Liens on Note Lien Collateral of such Guarantor, subject to certain Permitted Liens;



•

are secured on a second-priority basis, equally and ratably with all obligations of each Guarantor under any future Note Lien Debt, by the Liens on the Revolving Credit Collateral of such Guarantor, subject to Liens on the Revolving Credit Collateral securing the Guarantor's obligations under the Revolving Credit Agreement and any future Revolving Credit Obligations guaranteed by such Guarantor and certain Permitted Liens;



•

are effectively junior, to the extent of the value of the Revolving Credit Collateral that secures Revolving Credit Obligations, to each Guarantor's obligations under the Revolving Credit Agreement and any future Revolving Credit Obligations guaranteed by such Guarantor, which will be secured on a first-priority basis by Revolving Credit Collateral;



•

are effectively junior to certain Permitted Liens, to the extent of the value of the assets of the Guarantors subject to those Permitted Liens;



•

are pari passu in right of payment with all existing and future senior Indebtedness of each Guarantor, including Indebtedness outstanding under the Revolving Credit Agreement; and



•

are senior in right of payment to any subordinated Indebtedness of each Guarantor.

        The Note Lien Collateral consists of substantially all Intellectual Property, Equipment (whether or not constituting Fixtures), Note Lien General Intangibles, the Note Capital Stock Collateral, and other related assets of the Issuers and the Guarantors; but the Note Lien Collateral does not include the Revolving Credit Collateral, the Canadian Collateral and certain Excluded Assets. The Revolving Credit Collateral consists of substantially all of the remaining assets of our parent, Linens Holding Co., the Issuers and their Subsidiaries, including all Inventory, Accounts (including Payment Intangibles), Chattel Paper, Instruments (including Intercompany Notes of Subsidiaries), Letter of Credit Rights, Deposit Accounts (other than the Net Available Cash Account to the extent constituting a Deposit Account), Credit Card Processing Accounts and Securities Accounts (other than the Net Available Cash Account to the extent constituting a Securities Account), other Investment Property (other than Capital Stock Collateral), General Intangibles (other than Intellectual Property and Note Lien General Intangibles), the Revolving Credit Capital Stock Collateral and other related assets. The notes and the Revolving Credit Agreement (and the respective Guarantees thereof) will be secured by Liens on the Note Lien Collateral and the Revolving Credit Collateral, although the relative priority of such Liens is different on each Collateral Class. The Revolving Credit Agreement will also be secured by Liens on the Canadian Collateral. In addition, the Liens on the Note Capital Stock Collateral to secure the notes and the Note Guarantees may be released under certain circumstances.

        The notes and Note Guarantees are effectively subordinated to all Revolving Credit Obligations to the extent of the value of the Revolving Credit Collateral securing Revolving Credit Obligations.

91

Pursuant to the indenture, the Issuers will be permitted to Incur additional Indebtedness and designate such Indebtedness as Revolving Credit Obligations, subject to the Revolving Credit Facility Debt Cap. The Issuers also will be permitted to Incur additional Indebtedness and designate such Indebtedness as Note Lien Debt, subject to the limitations described in the definition of that term. The Incurrence by the Issuers or any of its Restricted Subsidiaries of any additional secured Indebtedness is also subject to the covenants described below under "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" and "—Certain Covenants—Liens."

        Linens Holding Co. and each of the current and future Subsidiaries of the Issuers that guarantee the Revolving Credit Agreement, except for the Canadian Subsidiaries of the Issuers, also have guaranteed the notes. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor Subsidiaries, the non-guarantor Subsidiaries will pay the holders of their debt (including the holders of the Revolving Credit Obligations) and their trade creditors before they will be able to distribute any of their assets to us. For the year ended December 31, 2005, and the three months ended April 1, 2006, the non-guarantor Subsidiaries had net sales of approximately $159.2 million and $36.5 million and income/(loss) from continuing operations of approximately $6.4 million and ($1.4) million, respectively. At April 1, 2006, the non-guarantor Subsidiaries had total assets of approximately $113.0 million.

        As of the date of the indenture, all of our Subsidiaries will be "Restricted Subsidiaries." However, under the circumstances described below under the captions "—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries" and the definition of "Unrestricted Subsidiary" under "—Certain Definitions," we will be permitted to designate certain of our other Subsidiaries as "Unrestricted Subsidiaries." Our Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the indenture. Our Unrestricted Subsidiaries will not guarantee the notes.

Principal, Maturity and Interest

        The Issuers will issue up to $650.0 million aggregate principal amount of exchange notes in this offering. The Issuers may issue additional notes under the indenture from time to time after this offering. Any issuance of additional notes is subject to all of the covenants in the indenture, including the covenant described below under the caption "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock." The notes and any additional notes subsequently issued under the indenture will be treated as a single class for all purposes under the indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase. The Issuers will issue notes in denominations of $2,000 and larger integral multiples of $1,000. The notes will mature on January 15, 2014.

        Interest on the notes will accrue at a per annum rate equal to the Applicable Eurodollar Rate from the most recent date to which interest has been paid or, if no interest has been paid, from February 14, 2006. The Applicable Eurodollar Rate will be reset quarterly. The Applicable Eurodollar Rate for the first quarterly period will be 10.34500%. The Issuers will pay interest on the notes quarterly, in arrears, every January 15, April 15, July 15 and October 15 of each year, commencing on April 15, 2006, to holders of record at the close of business on the immediately preceding January 1, April 1, July 1 and October 1, and at maturity.

        Interest on overdue principal and interest and Additional Interest, if any, will accrue at a rate that is 1% higher than the then applicable interest rate on the notes. Interest on the notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

        The interest rate on the notes will in no event be higher than the maximum rate permitted by New York law as the same may be modified by U.S. law of general application. All percentages resulting from the calculation of the Applicable Eurodollar Rate will be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage point being

92

rounded upwards (e.g., 9.876545% will be rounded to 9.87655%) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent, with one-half cent being rounded upwards. The Issuers will, upon the request of the holder of any note, provide the interest rate then in effect with respect to the notes.

Methods of Receiving Payments on the Notes

        If a holder of notes has given wire transfer instructions to the Issuers, the Issuers will pay all principal, interest and premium and Additional Interest, if any, on that holder's notes in accordance with those instructions. All other payments on the notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless the Issuers elect to make interest payments by check mailed to the noteholders at their address set forth in the register of holders.

Paying Agent and Registrar for the Notes

        The Trustee will initially act as paying agent and registrar. The Issuers may change the paying agent or registrar without prior notice to the holders of the notes, and any of the Issuers or their respective Subsidiaries may act as paying agent or registrar.

Transfer and Exchange

        A holder may transfer or exchange notes in accordance with the provisions of the indenture. The registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents in connection with a transfer of notes. Holders will be required to pay all taxes due on transfer. The Issuers will not be required to transfer or exchange any note selected for redemption. Also, the Issuers will not be required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed.

Note Guarantees

        The notes are guaranteed by Linens Holding Co. and each of the Issuers' current and future Subsidiaries that guarantee any portion of the Revolving Credit Agreement, other than solely a portion of the Revolving Credit Agreement with respect to which only one or more of the Canadian Subsidiaries of the Issuers is a borrower. These Note Guarantees are joint and several obligations of the Guarantors. The obligations under each Note Guarantee will be limited as necessary. See "Risk Factors—Risks Relating to the Notes—Fraudulent transfer statutes may limit your rights as a holder of the notes."

        The Note Guarantee of a Guarantor will be released:

(1)

in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) any of the Issuers or their respective Restricted Subsidiaries, if the sale or other disposition does not violate the "Asset Sale" provisions of the indenture;



(2)

in connection with any sale or other disposition of all of the Capital Stock of that Guarantor to a Person that is not (either before or after giving effect to such transaction) any of the Issuers or their respective Restricted Subsidiaries, if the sale or other disposition does not violate the "Asset Sale" provisions of the indenture;



(3)

if the Issuers designate any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the indenture; or



(4)

upon legal defeasance or satisfaction and discharge of the indenture as provided below under the captions "—Legal Defeasance and Covenant Defeasance" and "—Satisfaction and Discharge."

93

        See "—Repurchase at the Option of Holders—Asset Sales."

Optional Redemption

        At any time prior to January 15, 2008, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes issued under the indenture at a redemption price of 100% plus the Applicable Eurodollar Rate then in effect of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of an Equity Offering of Linens 'n Things, Inc. or Parent; provided that:

(1)

at least 65% of the aggregate principal amount of notes originally issued under the indenture (excluding notes held by the Issuers and their respective Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and



(2)

the redemption occurs within 90 days of the date of the closing of such initial public offering.

        In addition, at any time prior to January 15, 2008, the Issuers may redeem all or a part of the notes upon not less than 30 nor more than 60 days' notice, at a redemption price of 100% plus the Applicable Premium, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date).

        "Applicable Premium" means, with respect to a note at any redemption date, the greater of (i) 1.0% of the principal amount of such note and (ii) the excess of (A) the present value at such time of (1) the redemption price of such note at January 15, 2008, (such redemption price being described under "—Optional Redemption") plus (2) all required interest payments due on such note through January 15, 2008 assuming that the rate of interest is the rate of interest in effect on the date the notice of redemption is given, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the principal amount of such note.

        "Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) which has become publicly available at least two business days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source or similar market data)) most nearly equal to the period from the redemption date to January 15, 2008; provided, however, that if the period from the redemption date to January 15, 2008, is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to January 15, 2008 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

        On or after January 15, 2008, the Issuers may redeem all or a part of the notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any, on the notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on January 15 of the years indicated below, subject to the rights of holders of notes on the relevant record date to receive interest on the relevant interest payment date:

Year	Percentage
2008	102.00	%
2009	101.00	%
2010 and thereafter	100.00	%

94

        Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the notes or portions thereof called for redemption on the applicable redemption date.

Mandatory Redemption

        The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the notes.

Security

        Both the notes and the Revolving Credit Agreement (and the respective Guarantees thereof) are secured by Liens on the Note Lien Collateral and the Revolving Credit Collateral. The Collateral consists of substantially all of the assets of the Issuers and the Note Guarantors, other than Excluded Assets. The relative priority of the Liens securing the notes and the Revolving Credit Agreement will be different for each Collateral Class. The Note Lien Collateral consists of substantially all Intellectual Property, Equipment (whether or not constituting Fixtures), Note Lien General Intangibles, the Note Capital Stock Collateral, and other related assets of the Issuers and the Note Guarantors; but the Note Lien Collateral does not include the Revolving Credit Collateral, the Canadian Collateral and certain Excluded Assets. The Revolving Credit Collateral consists of substantially all of the remaining assets of our parent, Linens Holding Co., the Issuers and their Subsidiaries, including all Inventory, Accounts (including Payment Intangibles), Chattel Paper, Instruments (including Intercompany Notes of Subsidiaries), Letter of Credit Rights, Deposit Accounts (other than the Net Available Cash Account to the extent constituting a Deposit Account), Credit Card Processing Accounts and Securities Accounts (other than the Net Available Cash Account to the extent constituting a Securities Account), other Investment Property (other than Capital Stock Collateral), General Intangibles (other than Intellectual Property and Note Lien General Intangibles), the Revolving Credit Capital Stock Collateral and other related assets. The Capital Stock Collateral consists of all of the Capital Stock in the Company, all of the Capital Stock in certain of the Company's Domestic Subsidiaries and 65% of the Capital Stock of the Foreign Subsidiaries owned directly by the Parent or its Domestic Subsidiaries.

        The Liens on the Note Capital Stock Collateral to secure the notes and the Note Guarantees may be released in certain circumstances. As a result of the filing of the registration statement of which this prospectus is a part, the Issuers and Note Guarantors became subject to applicable SEC rules with respect to information required to be included in the prospectus. To the extent that the securities of any Issuer or Note Guarantor constitute collateral for the Notes and the value of the securities equals or exceeds 20% of the principal amount, or $130.0 million of the Notes, separate financial statements of the Issuer or Note Guarantor would be required under these SEC rules to be included in the prospectus. The Indenture provides, however, with respect to any direct or indirect subsidiary of Linens 'n Things, Inc., that the securities of the subsidiary are released from the lien on Capital Stock Collateral on the date that the lien triggers this separate financial statement requirement. Accordingly, for any subsidiary with securities that equal or exceed the 20% threshold, the lien on the capital stock securing the Notes has been released with respect to those securities. The lien on the capital stock of Linens 'n Things, Inc. remains in place.

        Security interests in respect of the specific items of Collateral described below have not been, and in the case of any after-acquired property consisting of the below property, will not be, perfected with respect to the notes:

•

Goods included in Collateral received by any Person for "sale or return" within the meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the extent of claims of creditors of such Person;



•

Money which has not been transferred to or deposited in a Deposit Account in which the Priority Lien Collateral Agent maintains "control" as described in the UCC and which does not constitute identifiable Cash Proceeds of other Collateral;

95

•

any Deposit Account (other than the Net Available Cash Account) containing an average daily balance not to exceed a certain dollar amount individually and in the aggregate for all such Deposit Accounts;



•

any Intellectual Property outside of the United States;



•

real property owned on the closing date of the Transactions; and



•

any other property or assets (other than Intellectual Property) in which a Lien cannot be perfected either automatically or by the filing of a financing statement under the UCC of the relevant jurisdiction, so long as the aggregate fair market value of all such property and assets does not at any one time exceed $5.0 million.

        The obligations of the Issuers with respect to the notes, the obligations of the Guarantors under the Note Guarantees, all other Note Lien Obligations and the performance of all other obligations of the Issuers and the Guarantors under the Note Documents are secured equally and ratably by:

•

first-priority Liens on the Note Lien Collateral; and



•

second-priority Liens on the Revolving Credit Collateral,

in each case, granted to the Note Lien Collateral Agent for the benefit of the holders of the Note Lien Obligations. The Liens on the Note Lien Collateral securing the Note Lien Obligations are senior in priority to the Liens on the Note Lien Collateral securing Revolving Credit Obligations, but are junior to all Permitted Liens. The Liens on the Revolving Credit Collateral securing the Note Lien Obligations are junior in priority to the Priority Liens on the Revolving Credit Collateral securing Revolving Credit Obligations and to all Permitted Liens.

        Conversely, the Revolving Credit Obligations are secured by:

•

second priority Liens on the Note Lien Collateral; and



•

first priority Liens on the Revolving Credit Collateral,

in each case, granted to the Revolving Credit Collateral Agent for the benefit of the holders of the Revolving Credit Obligations. The Liens on the Revolving Credit Collateral securing the Revolving Credit Obligations are senior in priority to the Liens on the Revolving Credit Collateral securing Note Lien Obligations. The Liens on the Note Lien Collateral securing the Revolving Credit Obligations are junior in priority to the Liens on the Note Lien Collateral securing Note Lien Obligations and to all Permitted Liens. The Revolving Credit Obligations are also secured by Liens on the Canadian Collateral, but the Note Lien Obligations are not.

        The indenture provides that, so long as the Note Lien Collateral Agent has not exercised its rights with respect to Collateral upon the occurrence and during the continuance of an Event of Default, the Issuers and the Note Guarantors have the right, as against the Note Lien Collateral Agent, Note Lien Representatives and holders of Note Lien Obligations:

•

to remain in possession and retain exclusive control of the Collateral, to conduct ordinary course activities with respect to the Collateral, to acquire, manufacture, process and sell Inventory and collect Receivables and expend the proceeds thereof, and to operate, alter or repair the Collateral and to collect, invest and dispose of any income therefrom; and



•

to sell or otherwise dispose of any property subject to the Note Liens, subject to the restrictions and obligations set forth below under the captions "—Repurchase at the Option of Holders—Asset Sales" and "—Certain Covenants—Merger, Consolidation or Sale of Assets."

The Issuers and the Note Guarantors have the right to obtain a release of items of Collateral upon any such sale or disposition or the occurrence of any of the other events or circumstances described under "—Intercreditor Agreement—Release of Liens on Collateral" and under "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes." The Note Lien Collateral Agent will release such Collateral from the Lien of the relevant Note Lien Security Document and

96

reconvey such Collateral to the Issuers and the Note Guarantors, so long as (i) such release complies with the Trust Indenture Act, if applicable and (ii) all conditions precedent to such release in the indenture and the Note Lien Security Documents have been complied with, each of (i) and (ii) to be evidenced by an opinion of counsel and an officers' certificate delivered to the Trustee and the Note Lien Collateral Agent (see "—Provisions of the Indenture Relating to Security—Compliance with the Trust Indenture Act").

Intercreditor Agreement

        On the date of the indenture, the Issuers and the Note Guarantors entered into the Intercreditor Agreement with the Revolving Credit Collateral Agent, the Trustee and the Note Lien Collateral Agent. The Intercreditor Agreement sets forth certain agreements between the holders of Liens on the Revolving Credit Collateral and the holders of Liens on the Note Lien Collateral.

Ranking of Liens

        The Intercreditor Agreement provides that, notwithstanding:

(1)

anything to the contrary contained in the Revolving Credit Loan Documents or the Note Lien Documents;



(2)

the time of incurrence of any of Note Lien Obligations or the Revolving Credit Obligations;



(3)

the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Note Lien Obligations granted on the Collateral or of any Liens securing the Revolving Credit Obligations granted on the Collateral;



(4)

any provision of any UCC, or any other applicable law;



(5)

any defect or deficiencies in, or failure to perfect, the Liens securing the Revolving Credit Obligations or Note Lien Obligations or any other circumstance whatsoever;

all Liens of the Revolving Credit Collateral Agent on the Revolving Credit Collateral, whether now or hereafter held by or on behalf of the Revolving Credit Collateral Agent or any Revolving Credit Claimholder or any agent or Trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Revolving Credit Collateral securing any Note Lien Obligations; and, conversely, all Liens of the Note Lien Collateral Agent or any Note Lien Representative on Note Lien Collateral, whether now or hereafter held by or on behalf of the Note Lien Collateral Agent, any Note Lien Representative, any Note Lien Claimholder or any agent or Trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Liens on the Note Lien Collateral securing any Revolving Credit Obligations. The indenture and the Revolving Credit Agreement impose limits on the aggregate amount of Note Lien Debt that may be secured by Liens on the Note Lien Collateral and the aggregate amount of Revolving Credit Obligations that may be secured by Liens on the Revolving Credit Collateral.

97

        The provisions described under this caption "—Ranking of Liens" are intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Note Lien Debt and Revolving Credit Obligations, each present and future Note Lien Collateral Agent, any Note Lien Representative and Revolving Credit Collateral Agent, in each case with respect to the applicable Collateral Class. No other Person will be entitled to rely on, have the benefit of or enforce those provisions. The Note Lien Representative of each future Series of Note Lien Debt will be required to deliver a Lien Sharing and Priority Confirmation to the Revolving Credit Collateral Agent, each Note Lien Representative and the Note Lien Collateral Agent at the time of incurrence of such Series of Note Lien Debt.

        In addition, the provisions described under this caption "—Ranking of Liens" are intended solely to set forth the relative ranking, as Liens, of the Liens on each Collateral Class securing Note Lien Debt as against the Liens on such Collateral Class securing Revolving Credit Obligations. Neither the notes nor any other Note Lien Obligations, nor any Revolving Credit Obligations, nor the exercise or enforcement of any right or remedy for the payment or collection thereof are intended to be, or will ever be by reason of the foregoing provision, in any respect subordinated, deferred, postponed, restricted or prejudiced.

Notice of Enforcement

        The Revolving Credit Collateral Agent, the Note Lien Collateral Agent and the Note Lien Representatives have agreed not to commence Enforcement until the earlier of date on which (A) an Enforcement Notice has been given to the Note Lien Collateral Agent or the Revolving Credit Collateral Agent, as the case may be and (B) any insolvency or liquidation proceeding is commenced by or against any Grantor that has not been dismissed.

Restrictions on Enforcement of Junior Liens

        Until the Discharge of Priority Lien Obligations with respect to a Collateral Class, whether or not any insolvency or liquidation proceeding has been commenced by or against any Grantor, the Junior Lien Collateral Agent and Junior Lien Claimholders:

•

will not exercise or seek to exercise any rights or remedies with respect to any Priority Liens on such Collateral Class (including the exercise of any right of setoff or any right under any Account Agreement, landlord waiver or bailee's letter or similar agreement or arrangement to which Junior Lien Collateral Agent or any Junior Lien Claimholder is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure);

provided, however, that the Junior Lien Collateral Agent may exercise any or all such rights or remedies after the passage of a period of at least 180 days has elapsed since the earlier of: (x) the date of the commencement of any insolvency or liquidation proceeding by or against any Grantor that has not been dismissed, or (y) the date on which the Junior Lien Collateral Agent first declares the existence of a Junior Lien Default, demands the repayment of all the principal amount of any Junior Lien Obligations; and the Priority Lien Collateral Agent has received notice from the Junior Lien Collateral Agent of such declaration of a Junior Lien Default (the "Junior Lien Standstill Period") (provided that the Revolving Credit Collateral Agent and Revolving Credit Claimholders may exercise rights set forth in the provisions described below under the caption "—Cooperation and Access with Respect to Revolving Credit Collateral");

provided, further, however, that in no event shall the Junior Lien Collateral Agent or any Junior Lien Claimholder exercise any rights or remedies with respect to the Priority Lien on such Collateral Class if, notwithstanding the expiration of the Junior Lien Standstill Period, any Priority Lien Collateral Agent or Priority Lien Claimholders shall have commenced and be

98

diligently pursuing the exercise of their rights or remedies with respect to all or any material portion of such Collateral Class (prompt notice of such exercise to be given to the Junior Lien Collateral Agent);

•

will not contest, protest or object to any foreclosure proceeding or action brought by any Priority Lien Collateral Agent or any Priority Lien Claimholder or any other exercise by any Priority Lien Collateral Agent or any Priority Lien Claimholder of any rights and remedies relating to such Collateral Class, whether under the Priority Lien Documents or otherwise; and



•

subject to their rights under first paragraph above and except as may be otherwise permitted by the Intercreditor Agreement, will not object to the forbearance by any Priority Lien Collateral Agent or the Priority Lien Claimholders from bringing or pursuing any Enforcement;

provided, however, that, in the case of the three paragraphs above, the Liens granted to secure the Junior Lien Obligations shall attach to any proceeds resulting from actions taken by any Priority Lien Collateral Agent or any Priority Lien Claimholder in accordance with the Intercreditor Agreement after application of such proceeds to the extent necessary to meet the requirements of a Discharge of Priority Lien Obligations.

        Notwithstanding the foregoing paragraph, each holder of Junior Liens on a Collateral Class may, subject to the rights of the holders of Permitted Liens:

(1)

file a claim or statement of interest with respect to the Junior Lien Obligations of any Grantor; provided that an insolvency or liquidation proceeding has been commenced by or against such Grantor;



(2)

take any action (not adverse to the priority status of the Priority Liens on such Collateral Class, or the rights of the Priority Lien Collateral Agent or any Priority Lien Claimholder to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on any of the Collateral (which, in the case of the Note Lien Collateral Agent and the Note Lien Representatives, shall not include the Canadian Collateral);



(3)

file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Junior Lien Claimholders, including any claims secured by the Priority Liens on such Collateral Class, if any, in each case in accordance with the terms of the Intercreditor Agreement;



(4)

file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any insolvency or liquidation proceeding or applicable non-bankruptcy law, in each case not prohibited by the terms of the Intercreditor Agreement;



(5)

vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, not prohibited by the terms of the Intercreditor Agreement, with respect to the Junior Lien Obligations;



(6)

exercise any of its rights or remedies with respect to any of the Priority Lien on such Collateral Class after the termination of the Junior Lien Standstill Period to the extent permitted by the Intercreditor Agreement; and



(7)

make a cash bid on all or any portion of the Priority Lien on such Collateral Class in any foreclosure proceeding or action.

        Subject to the provisions described below under the caption "—Provisions of the Indenture Relating to Security—Relative Rights," until the Discharge of Priority Lien Obligations with respect to

99

a Collateral Class, no holder of a Junior Lien Obligation, and neither Junior Lien Collateral Agent nor any Junior Lien Claimholder with respect to such Collateral Class will:

(1)

take any action that would hinder any exercise of remedies under the Priority Lien Documents or that is otherwise prohibited under the Intercreditor Agreement, including any sale, lease, exchange, transfer or other disposition of such Collateral Class, whether by foreclosure or otherwise;



(2)

exercise any rights the Junior Lien Collateral Agent and the Junior Lien Claimholders, as applicable, may have as a junior lien creditor or otherwise to object to the manner in which the Priority Lien Collateral Agent or the Priority Lien Claimholders seek to enforce or collect the Priority Lien Obligations or the Liens securing the Priority Lien Obligations granted in any of the Priority Lien Documents or undertaken in accordance with the Intercreditor Agreement, regardless of whether any action or failure to act by or on behalf of the Priority Lien Collateral Agent or Priority Lien Claimholders is adverse to the interest of the Junior Lien Claimholders;



(3)

assert that any covenant, agreement or restriction contained in any Junior Lien Document (other than the Intercreditor Agreement) shall be deemed to restrict in any way the rights and remedies of the Priority Lien Collateral Agent or the Priority Lien Claimholders with respect to the enforcement of the Priority Liens on such Collateral Class as set forth in the Intercreditor Agreement and the Priority Lien Documents;



(4)

seek (or support any other Person seeking) relief from the automatic stay or any other stay in any insolvency or liquidation proceeding in respect of such Collateral Class (other than to the extent such relief

is required to exercise the Revolving Credit Collateral Agent's rights under provisions described below under the caption "—Cooperation and Access with Respect to Revolving Credit Collateral"), without the prior written consent of the Priority Lien Collateral Agent;

(5)

contest (or support any other Person contesting):



(a)

any request by any Priority Lien Collateral Agent for adequate protection with respect to such Collateral Class; or



(b)

any objection by any Priority Lien Collateral Agent to any motion, relief, action or proceeding based on such Priority Lien Collateral Agent or the Priority Lien Claimholders claiming a lack of adequate protection with respect to such Collateral Class;



(6)

oppose or seek to challenge any claim by any Priority Lien Collateral Agent or any Priority Lien Claimholder for allowance in any insolvency or liquidation proceeding of Priority Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Lien securing any Priority Lien Claimholder's claim, without regard to the existence of the Lien of the Junior Lien Collateral Agent on behalf of the Junior Lien Claimholders on the Collateral; or



(7)

contest or support any other Person in contesting, in any proceeding (including any insolvency or liquidation proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any of the Priority Lien Claimholders in all or any part of the such Collateral Class, or the provisions of the Intercreditor Agreement.

Except as otherwise specifically set forth in the Intercreditor Agreement, the Note Lien Collateral Agent, the Note Lien Representatives, the Note Lien Claimholders, the Revolving Credit Collateral Agent and the Revolving Credit Claimholders may exercise rights and remedies as unsecured creditors against any Grantor that has guaranteed or granted Liens to secure the Note Lien Obligations and the

100

Revolving Credit Obligations, as the case may be, and may exercise rights and remedies with respect to the Note Lien Collateral and the Revolving Credit Collateral, as the case may be, in each case, in accordance with the terms of the Note Lien Documents and the Revolving Credit Loan Documents, as the case may be, and applicable law; provided, however, that in the event that any Priority Lien Claimholder becomes a judgment Lien creditor in respect of Junior Lien Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Priority Lien Debt, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Note Lien Obligations) as the other Liens securing the Revolving Credit Obligations are subject to this Agreement.

Waiver of Right of Marshalling

        The Intercreditor Agreement will provide that, with respect to a Collateral Class, the Junior Lien Collateral Agent, each Junior Lien Representative and the Junior Lien Claimholders with respect to such Collateral Class waive any and all rights to have such Collateral Class, or any part thereof, marshaled upon any foreclosure or other enforcement by the Priority Lien Collateral Agent of Priority Liens on such Collateral.

Insolvency or Liquidation Proceedings

        In any insolvency or liquidation proceeding and prior to the Discharge of Revolving Credit Obligations, if the Revolving Credit Collateral Agent shall, acting in accordance with the Revolving Credit Agreement, agree to permit:

(1)

the use of Cash Collateral other than the identifiable Cash Proceeds of any Note Lien Collateral on which a Lien has been granted to the Revolving Credit Collateral Agent pursuant to the Revolving Credit Loan Documents; or



(2)

any Grantor to obtain financing, whether from the Revolving Credit Claimholders or any other Person under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law ("DIP Financing"),

then each Note Lien Claimholder agrees to raise no objection to or contest such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) it is on commercially reasonable terms, (ii) the Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use or the DIP Financing that are materially prejudicial to their interests in the Note Lien Collateral (other than any Real Estate Assets upon which such Lien has not been perfected), and (iii) the terms of the DIP Financing (a) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document and (b) do not expressly require the liquidation of the Collateral prior to a default under the DIP Financing documentation or Cash Collateral order. To the extent the Liens securing the Revolving Credit Obligations are subordinated to or pari passu with such DIP Financing which meets the requirements of clauses (i) through (iii) above, the Note Lien Representative will subordinate any Liens in the Revolving Credit Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto) and will not request adequate protection or any other relief in connection therewith (except, as expressly agreed by the Revolving Credit Collateral Agent or to the extent permitted by the Intercreditor Agreement).

        In any insolvency or liquidation proceeding and prior to the Discharge of Note Lien Obligations, if the Note Lien Representatives shall, acting in accordance with the Note Lien Documents, agree to permit the use of Cash Collateral consisting solely of the identifiable Cash Proceeds of any Note Lien Collateral on which a Lien has been granted to the Note Lien Representatives pursuant to the Note Lien Documents; then each Revolving Credit Claimholder agrees that it will raise no objection to or

101

contest such Cash Collateral use so long as such Cash Collateral use meets the following requirements: (i) it is on commercially reasonable terms and (ii) Revolving Credit Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use that are materially prejudicial to their interests in the Note Lien Collateral.

        In any insolvency or liquidation proceeding and prior to the Discharge of Priority Lien Obligations, if a Priority Lien Representative shall, acting in accordance with the Priority Lien Documents, agree to permit a sale of Collateral Class that is subject to the Priority Liens free and clear of Liens and other claims, under Section 363 of the Bankruptcy Code or otherwise, then each Junior Lien Claimholder agrees that it will not raise any objection to or contest such sale or request adequate protection or any other relief in connection therewith (except, as expressly agreed by the Priority Lien Collateral Agent or to the extent permitted by the Intercreditor Agreement).

        Notwithstanding the above paragraphs and the provisions described above under the caption "—Restrictions on Enforcement of Junior Liens," in any insolvency or liquidation proceeding:

if the Revolving Credit Claimholders (or any subset thereof) are granted adequate protection with respect to the Revolving Credit Collateral in the form of additional collateral (even if such collateral is not of a type which would otherwise have constituted Revolving Credit Collateral) in connection with any Cash Collateral use or DIP Financing, then the Note Lien Collateral Agent, on behalf of itself or any of the Note Lien Claimholders, may seek or request adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional collateral, which Lien will be subordinated (except to the extent that the Note Lien Collateral Agent already had a Lien on such Collateral (in which case the priorities established by the Intercreditor Agreement shall apply)) to the Liens securing the Revolving Credit Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens of the Note Lien Collateral Agent on Revolving Credit Collateral; and

in the event any Note Lien Claimholder seeks or requests adequate protection in respect of Note Lien Collateral and such adequate protection is granted in the form of additional collateral (even if such collateral is not of a type which would otherwise have constituted Note Lien Collateral), then the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders each agrees that the Revolving Credit Collateral Agent may also be granted a Lien on the same additional collateral as security for the Revolving Credit Obligations and for any Cash Collateral use or DIP Financing provided by the Revolving Credit Claimholders, each Revolving Credit Collateral Agent and each Revolving Credit Claimholder agrees that any Lien on such additional collateral securing the Revolving Credit Obligations, shall be subordinated (except to the extent that the Revolving Credit Collateral Agent already had a Lien on such Collateral (in which case the priorities established by the Intercreditor Agreement shall apply)) to the Liens on such collateral securing the Note Lien Obligations, all on the same basis as the other Liens of the Revolving Credit Collateral Agent on Note Lien Collateral.

        Except as otherwise expressly set forth in the Intercreditor Agreement or in connection with the exercise of remedies with respect to (i) the Revolving Credit Collateral, nothing in the Intercreditor Agreement shall limit the rights of any Note Lien Claimholder from seeking adequate protection with respect to their rights in the Note Lien Collateral in any insolvency or liquidation proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise) or (ii) the Note Lien Collateral, nothing in the Intercreditor Agreement shall limit the rights of any Revolving Credit Claimholders from seeking adequate protection with respect to their rights in the Revolving Credit Collateral in any insolvency or liquidation proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise).

102

Application of Proceeds, Payments Over and Application of Payments

        The Intercreditor Agreement will provide that so long as the Discharge of Priority Lien Obligations has not occurred, whether or not any insolvency or liquidation proceeding has been commenced by or against any Grantor, all Collateral Class subject to a Priority Lien or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies by the Priority Lien Collateral Agent or other Priority Lien Claimholders, shall be applied by the Priority Lien Collateral Agent to the Priority Lien Obligations in such order as specified in the relevant Priority Lien Loan Documents.

        Unless and until both the Discharge of Revolving Credit Obligations and the Discharge of Note Lien Obligations have occurred, whether or not any insolvency or liquidation proceeding has been commenced by or against any Grantor, any Collateral or proceeds thereof received by any Revolving Credit Claimholder or any Note Lien Claimholder in connection with the exercise of any right or remedy (including set-off) relating to the Collateral in contravention of the Intercreditor Agreement shall be segregated and held in trust and forthwith paid over to the Revolving Credit Collateral Agent or Note Lien Collateral Agent, as appropriate in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Note Lien Collateral Agent and Revolving Credit Collateral Agent will each be authorized to make any such endorsements as agent for the other Person. That authorization is coupled with an interest and is irrevocable until both the Discharge of Revolving Credit Obligations and Discharge of Note Lien Obligations have occurred.

        Subject to the other terms of the Intercreditor Agreement, all payments received by (a) the Revolving Credit Claimholders may be applied, reversed and reapplied, in whole or in part, to the Revolving Credit Obligations to the extent provided for in the Revolving Credit Loan Documents; and (b) the Note Lien Claimholders may be applied, reversed and reapplied, in whole or in part, to the Note Lien Obligations to the extent provided for in the Note Lien Documents.

        If, in any insolvency or liquidation proceeding, the Revolving Credit Claimholders or the Note Lien Claimholders (the "Applicable Junior Lien Claimholders") receive pursuant to a plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations ("Junior Lien Reorganization Securities") in whole or in part on account of their junior Liens on the Note Lien Collateral or the Revolving Credit Collateral, as the case may be (such Collateral as to which the applicable Claimholders have a junior Lien, the "Applicable Junior Collateral") that are secured by Liens on such Applicable Junior Collateral, and the other Claimholders (the "Applicable Senior Lien Claimholders") receive pursuant to such plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations ("Senior Lien Reorganization Securities") in whole or in part on account of their Revolving Credit Obligations or Note Lien Obligations, as the case may be, that are secured by Liens on such Applicable Junior Collateral, then (i) the Applicable Junior Lien Claimholders shall be entitled to retain their Junior Lien Reorganization Securities and shall not be obligated to turnover same to any or all of the Applicable Senior Lien Claimholders, and (ii) to the extent the Junior Lien Reorganization Securities and the Senior Lien Reorganization Securities are secured by Liens upon the same Applicable Junior Collateral, the provisions of the Intercreditor Agreement will survive the distribution of such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and will apply with like effect to the Junior Lien Reorganization Securities and Senior Lien Reorganization Securities, to such Liens securing such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and to the distribution of proceeds of such Applicable Junior Collateral.

103

Enforcement With Respect To Capital Stock

        After the Release Date, the Revolving Credit Collateral Agent will not sell or dispose of any Revolving Credit Capital Stock Collateral pursuant to any Enforcement unless (i) the Discharge of Note Obligations has occurred; (ii) the Note Lien Collateral Agent and the Revolving Credit Collateral Agent have reached an agreement with respect to the distribution of the proceeds from any such disposition (and in which case the proceeds will be distributed between the Note Claimholders and the holders of Revolving Credit Obligations pursuant to such agreement; or (iii) the Note Lien Collateral Agent has requested that the Revolving Credit Collateral Agent sell or dispose of such Revolving Credit Capital Stock Collateral, provided, however, that the Revolving Credit Collateral Agent may refuse such request unless and until it is satisfied in its sole reasonable discretion that it has received from the Note Lien Collateral Agent adequate indemnity (as determined in the Revolving Credit Collateral Agent's sole reasonable discretion and which may include security or other payment assurances reasonably required by the Revolving Lien Collateral Agent) against all costs, expenses, losses, damages, actions, judgments, suits and liabilities in connection with or arising from such action.

        All net proceeds received by the Revolving Credit Collateral Agent from any such Enforcement pursuant to clause (iii) above shall be applied to payment of the Revolving Credit Obligations; provided, however, that the Revolving Credit Collateral Agent and the holders of Revolving Credit Obligations agree to subordinate their rights to receive from the sale or other disposition of Revolving Credit Collateral on which the Note Lien Collateral Agent has a perfected Lien to the Note Lien Claimholders in an amount equal to the net proceeds received from the Enforcement with respect to the Revolving Credit Capital Stock Collateral.

Release of Liens on Collateral

        The Intercreditor Agreement provides that:

(1)

If in connection with the exercise of any Revolving Credit Collateral Agent's remedies in respect of any Collateral as provided for in the Intercreditor Agreement, the Revolving Credit Collateral Agent, for itself and/or on behalf of any of the other Revolving Credit Claimholders, releases its Liens on any part of the Revolving Credit Collateral, then the Liens, if any, of the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, on the Collateral sold or disposed of in connection with such exercise, shall be automatically, unconditionally and simultaneously released. The Note Lien Collateral Agent, for itself and/or on behalf of any of the Note Lien Claimholders promptly shall execute and deliver to the Revolving Credit Collateral Agent or such Grantor such termination statements, releases and other documents as the Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.



(2)

If in connection with the exercise by any Note Lien Representative of remedies in respect of any Collateral as provided for in the Intercreditor Agreement, the Note Lien Collateral Agent, for itself and/or on behalf of any of the Note Lien Claimholders, releases all of its Liens on any part of the Note Lien Collateral, then the Liens, if any, of the Revolving Credit Collateral Agent, for itself and/or for the benefit of the Revolving Credit Claimholders, on the Collateral sold or disposed of in connection with such exercise, shall be automatically, unconditionally and simultaneously released. The Revolving Credit Collateral Agent, for itself and/or on behalf of any such Revolving Credit Claimholder shall promptly execute and deliver to the Note Lien Collateral Agent or such Grantor such termination statements, releases and other documents as the Note Lien Collateral Agent or such Grantor may request to effectively confirm such release.

        In addition, if in connection with any sale, lease, exchange, transfer or other disposition of any Collateral (collectively, a "Disposition") permitted under the terms of both the Revolving Credit Loan

104

Documents and the Note Lien Documents (including voluntary Dispositions of Revolving Credit Collateral by the respective Grantors after a Revolving Credit Default and voluntary Dispositions of Note Lien Collateral by the respective Grantors after a Note Lien Default), (i) the Revolving Credit Collateral Agent, for itself and/or on behalf of any of the Revolving Credit Claimholders, releases its Liens on any part of the Revolving Credit Collateral, in each case other than (A) in connection with the Discharge of Revolving Credit Obligations or (B) after the occurrence and during the continuance of a Note Lien Default, then the Liens, if any, of the Note Lien Representatives, for themselves and/or for the benefit of the Note Lien Claimholders, on such Collateral shall be automatically, unconditionally and simultaneously released, and (ii) any Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders, releases all of its Liens on any part of the Note Lien Collateral, in each case other than (A) in connection with the Discharge of Note Lien Obligations or (B) after the occurrence and during the continuance of a Revolving Credit Default, then the Liens, if any, of the Revolving Credit Collateral Agent, for itself and/or for the benefit of the Revolving Credit Claimholders, on such Collateral shall be automatically, unconditionally and simultaneously released. Each Revolving Credit Collateral Agent and the Note Lien Representative, each for itself and/or on behalf of any such Revolving Credit Claimholders or Note Lien Claimholder, as the case may be, promptly shall execute and deliver to the Note Lien Collateral Agent, Revolving Credit Collateral Agent or such Grantor such termination statements, releases and other documents as the Note Lien Collateral Agent, Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.

        Otherwise, the release of Liens on Collateral will be governed by the Note Lien Documents and the Revolving Credit Loan Documents, respectively, and not by the Intercreditor Agreement. See the provisions relating to release of Liens described above under "—Security" and below under "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes."

Amendment of Intercreditor Agreement and Other Security Documents

        The Intercreditor Agreement provides that no amendment, modification or waiver of any of the provisions of the Intercreditor Agreement shall be deemed to be made unless the same shall be in writing signed on behalf of Revolving Credit Collateral Agent and the Note Lien Collateral Agent or their respective authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time.

        The indenture provides that any amendment or supplement that purports to contractually subordinate the Note Liens on the Priority Collateral securing the Note Lien Obligations will be effective only with the consent of the holders of at least two-thirds in principal amount of the notes then outstanding, voting as a single class.

        The Intercreditor Agreement will not restrict the ability of the Issuers, the other Grantors and the Revolving Credit Collateral Agent to amend or supplement any other Revolving Credit Loan Document, or the ability of the Issuers, the other Grantors and the Note Lien Collateral Agent to amend or supplement any other Note Lien Document. The Note Lien Security Documents may be amended or supplemented as set forth under "—Provisions of the Indenture Relating to Security—Amendment of Note Lien Security Documents."

        The Revolving Credit Obligations and Note Lien Obligations may be Refinanced, in each case, without notice to, or the consent (except to the extent a consent is required to permit the Refinancing transaction under any Revolving Credit Document or any Note Lien Document) of the Revolving Credit Claimholders or the Note Lien Claimholders, as the case may be, all without affecting the Lien subordination or other provisions of the Intercreditor Agreement, provided, however, that the holders of such Refinancing debt bind themselves in an intercreditor joinder agreement or other writing,

105

reasonably acceptable to the Note Lien Collateral Agent and Revolving Credit Collateral Agent and addressed to the Note Lien Collateral Agent or Revolving Credit Collateral Agent, as the case may be, to the terms of the Intercreditor Agreement and any such amendment, supplement, modification or Refinancing shall be in accordance with the provisions of both the Revolving Credit Loan Documents and the Note Lien Documents.

Bailees for Perfection

        Revolving Credit Collateral Agent and each Note Lien Representative, as the case may be, agree to hold that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC (such Collateral being the "Pledged Collateral") as collateral agent for the Revolving Credit Claimholders and Note Lien Claimholders, as the case may be, and as bailee for the Revolving Credit Collateral Agent or the Note Lien Representatives, as the case may be, (such bailment being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of the UCC) and any assignee solely for the purpose of perfecting the security interest granted under the Revolving Credit Loan Documents and the Note Lien Documents, as applicable, subject to the terms and conditions of the Intercreditor Agreement.

Delivery of Collateral

        Upon the Discharge of Priority Lien Obligations, the Priority Lien Collateral Agent shall deliver to the Junior Lien Collateral Agent any Collateral and proceeds of Collateral held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Junior Lien Collateral Agent or any other Junior Lien Representative in such order as specified in the Junior Lien Documents.

Cooperation and Access with Respect to Revolving Credit Collateral

Consent to License to Use Equipment and Intellectual Property

        Each Note Lien Representative will grant (to the full extent of their respective rights and interests) the Revolving Credit Collateral Agent and its agents, representatives and designees (a) a nonexclusive, royalty free, rent free worldwide license or sublicense (subject to the terms of the underlying license) and lease to use all of the Note Lien Collateral including any computer or other data processing Equipment exclusive of Intellectual Property, to operate stores or distribution activities on the Real Estate Assets during any Enforcement Period, to collect all Accounts or amounts owing under Instruments or Chattel Paper, to copy, use or preserve any and all information relating to any of the Collateral, and to complete the manufacture, packaging and sale of Inventory and (b) a nonexclusive, royalty free worldwide license or sublicense (subject to the terms of the underlying license) (which will be binding on any successor or assignee of the Intellectual Property) to use any and all Intellectual Property at any time to in connection with its Enforcement; provided, however, the royalty free, rent free license and lease granted in clause (a) with respect to Equipment shall immediately expire upon the sale, lease, transfer or other disposition of such Equipment and provided further that on or after the 30th day following the termination of the Access Period with respect to the Primary Real Estate Assets, the Revolving Credit Collateral Agent, during the term of the above licenses, shall use any Trademarks of such licensed Intellectual Property solely in connection with (x) goods or services which the Revolving Credit Collateral Agent in good faith reasonably believes to be in an all material respects of at least the same level of quality offered by, and in a manner in which the Revolving Credit Collateral Agent in good faith reasonably believes to be in all material respects consistent with the practices of, one or more Grantors as of the date of the Enforcement Notice or (y) the disposition of damaged, obsolete or second-quality goods which dispositions the Revolving Credit Collateral Agent in good faith reasonably believes will not materially diminish the distinctiveness and quality characteristics associated

106

with such Intellectual Property or the validity thereof (it being understood and agreed that the Revolving Credit Collateral Agent and its agents, representatives and designees shall comply in all material respects with all laws pertaining to its use of Intellectual Property described hereunder, including notice requirements).

Access to Property to Process and Sell Inventory

        If any Note Lien Representative or any of its respective agents or representatives, or any third party pursuant to any Enforcement undertaken by any Note Lien Representative, or any receiver, shall obtain possession or physical control of any of the Primary Real Estate Assets or any of the Other Real Estate, such Note Lien Representative shall promptly notify the Revolving Credit Collateral Agent of that fact and the Revolving Credit Collateral Agent shall, within ten (10) Business Days thereafter, notify Note Lien Representative or, if applicable, any such third party (at such address to be provided by such Note Lien Representative, as applicable, in connection with the applicable Enforcement), as to whether the Revolving Credit Collateral Agent desires to exercise access rights under the Intercreditor Agreement, at which time the parties shall confer in good faith to coordinate with respect to the Revolving Credit Collateral Agent's exercise of such access rights. Access rights may apply to differing parcels of Other Real Estate at differing times (i.e. a Revolving Credit Collateral Agent may obtain possession of one store or distribution center at a different time than it obtains possession of other properties), in which case, a differing Access Period may apply to each such property.

        Upon delivery of notice to the relevant Note Lien Representative, the Access Period shall commence for all of the Primary Real Estate Assets or the subject parcel of Other Real Estate. During the Access Period and for any period prior to an Access Period when the Revolving Credit Collateral Agent may have had access and/or use of any Note Lien Collateral (e.g. pursuant to access granted by a landlord of any Real Estate Asset), the Revolving Credit Collateral Agent and its agents, representatives and designees shall have a non-exclusive right to have such access to, and a rent free right to use, the Note Lien Collateral for the purpose of arranging for and effecting the sale or disposition of Revolving Credit Collateral, including the production, completion, packaging, shipping and other preparation of such Revolving Credit Collateral for sale or disposition. During any such Access Period (or period prior to an Access Period), the Revolving Credit Collateral Agent and its representatives (and persons employed on its behalf), may continue to operate, service, maintain, process and sell the Revolving Credit Collateral, as well as to engage in bulk sales or other liquidations of Revolving Credit Collateral. Revolving Credit Collateral Agent shall take proper care of any Note Lien Collateral that is used by it during the Access Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by it or its agents, representatives or designees and comply with all applicable laws in connection with its use or occupancy of the Note Lien Collateral. The Revolving Credit Claimholders shall indemnify and hold harmless the relevant Note Lien Claimholders for any injury or damage to Persons or property caused by the acts or omissions of Persons under its control. Revolving Credit Collateral Agent and each Note Lien Representative shall cooperate and use reasonable efforts to ensure that their activities during the Access Period as described above do not interfere materially with the activities of the other as described above, including the right of any Note Lien Representative to commence foreclosure of the Note Lien Mortgages or to show the Note Lien Collateral to prospective purchasers and to ready the Note Lien Collateral for sale.

Grantor Consent

        The Companies and the other Grantors will agree with the Note Lien Representatives that Revolving Credit Collateral Agent shall have access, during the Access Period, as described in the Intercreditor Agreement and each such Grantor that owns any of the Mortgaged Premises will grant a non-exclusive easement in gross over its property to permit the uses by Revolving Credit Collateral

107

Agent contemplated by the Intercreditor Agreement. Each Note Lien Representative will consent to such easement.

Exercise of Remedies—Set Off and Tracing of and Priorities in Proceeds.

        The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders, each will acknowledge and agree that, to the extent any such Person exercises its rights of setoff against any Grantors' Deposit Accounts, Credit Card Processing Accounts, Securities Accounts or other assets, the amount of such setoff shall be deemed to be the Revolving Credit Collateral to be held and distributed pursuant to the provisions described above under the caption "—Application of Proceeds, Payments Over and Application of Payments"; provided, however, that the foregoing shall not apply to any setoff by any such Person against any Note Lien Collateral (including funds in any Net Available Cash Account) to the extent applied to payment of Note Lien Debt. The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders will agree that prior to an issuance of an Enforcement Notice all funds deposited under Account Agreements and then applied to the Revolving Credit Obligations shall be treated as Revolving Credit Collateral and, unless the Revolving Credit Collateral Agent have actual knowledge to the contrary, any claim that payments made to Revolving Credit Collateral Agent through the Deposit Accounts, Credit Card Processing Accounts or Securities Accounts that are subject to Account Agreements are proceeds of or otherwise constitute Note Lien Collateral, are waived. The Revolving Credit Collateral Agent, Revolving Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each will agree that, prior to an issuance of an Enforcement Notice, any proceeds of Collateral, whether or not deposited under Account Agreements, which are used by any Grantor to acquire other property which is Collateral shall not (as among the Revolving Credit Collateral Agent, the Note Lien Collateral Agent, the Note Lien Representatives and the various Claimholders) be treated as proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired. The Revolving Credit Collateral Agent, Revolving Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each will agree that after an issuance of an Enforcement Notice, each such Person shall cooperate in good faith to identify the proceeds of the Revolving Credit Collateral and the Note Lien Collateral, as the case may be (it being agreed that after an issuance of an Enforcement Notice, unless the Revolving Credit Collateral Agent has actual knowledge to the contrary, all funds deposited under Account Agreements and then applied to the Revolving Credit Obligations shall be presumed to be Revolving Credit Collateral (a presumption that can be rebutted by the Note Lien Collateral Agent); provided, however, that neither any Revolving Credit Claimholder nor any Note Lien Claimholder shall be liable or in any way responsible for any claims or damages from conversion of the Revolving Credit Collateral or Note Lien Collateral, as the case may be (it being understood and agreed that (A) the only obligation of any Revolving Credit Claimholder is to pay over to the Note Lien Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Revolving Credit Claimholder received that have been identified as proceeds of the Note Lien Collateral and (B) the only obligation of any Note Lien Claimholder is to pay over to the Revolving Credit Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Note Lien Claimholder received that have been identified as proceeds of the Revolving Credit Collateral. Each of the Revolving Credit Collateral Agent and the Note Lien Collateral Agent may request from the other an accounting of the identification of the proceeds of Collateral (and the Revolving Credit Collateral Agent and the Note Lien Collateral Agent, as the case may, upon which such request is made shall deliver such accounting reasonably promptly after such request is made).

108

Provisions of the Indenture Relating to Security

Enforcement of Note Liens

        The indenture and the Note Lien Security Documents provide that, upon the occurrence and during the continuance of an Event of Default, the Trustee may pursue any available remedy, including directing the Note Lien Collateral Agent to enforce the Note Liens securing the notes, subject to the provisions described above under the caption "Intercreditor Agreement—Restrictions on Enforcement of Junior Liens" and to the provisions of the indenture governing the Trustee's duties and rights generally; and the Trustee will be subject to such instructions as may be given to it by the Holders of a majority in outstanding principal amount of the notes to direct (and in its sole discretion and without the consent of the holders of the notes may direct) on behalf of the holders of the notes as the Note Lien Debt Representative with respect to the notes, the Note Lien Collateral Agent to take all actions it deems necessary or appropriate in order to:

(1)

foreclose upon or otherwise enforce any or all of the Note Liens;



(2)

enforce any of the terms of the Note Lien Security Documents; or



(3)

collect and receive payment of any and all of the Note Lien Obligations.

Release of Liens in Respect of Notes

        The indenture provides that the Note Liens upon the Collateral will be released and no longer secure the notes outstanding under the indenture or any other Note Lien Obligations, and the right of the holders of the notes and such other Note Lien Obligations to the benefits and proceeds of the Note Liens on the Collateral will terminate and be discharged:

(1)

upon satisfaction and discharge of the indenture as set forth under the caption "—Satisfaction and Discharge";



(2)

upon a Legal Defeasance or Covenant Defeasance of the notes as set forth under the caption "—Legal Defeasance and Covenant Defeasance";



(3)

upon payment in full of all notes outstanding under the indenture and all outstanding Note Lien Obligations due and payable under the indenture at the time the notes are paid in full and discharged;



(4)

in whole or in part, with the consent of the Holders of a majority in aggregate principal amount of the notes in accordance with the provisions described below under the caption "—Amendment, Supplement and Waiver";



(5)

upon the taking of Collateral by eminent domain, condemnation or in similar circumstances;



(6)

in the case of Note Liens on Collateral owned by any Note Guarantor, upon the release of the Guarantee of such Note Guarantor in accordance with the provisions of the indenture described under "—Note Guarantees";



(7)

as to any Collateral that is sold, transferred or otherwise disposed of by the Issuers or any Note Guarantor to a Person that is not (either before or after such sale, transfer or disposition) the Issuers or a Restricted Subsidiary of the Issuers (i) in a transaction or other circumstance that is not prohibited by the provisions of the indenture described above under the caption "—Repurchase at the Option of Holders—Asset Sales," at the time of such sale, transfer or other disposition or to the extent of the interest sold, transferred or otherwise disposed of or (ii) in connection with the enforcement of a Permitted Lien so long as the Lien attaches to the Proceeds of such enforcement action; provided that

109

the Liens on the Collateral will not be released pursuant to clause (i) of this provision if the sale or disposition is subject to the covenant described below under the caption "—Certain Covenants—Merger, Consolidation or Sale of Assets";

(8)

as to any Collateral owned by a Note Guarantor all of the Capital Stock of which is being sold, transferred or otherwise disposed of, to a Person that is not (either immediately before or after giving effect to such transaction) the Issuers or a Restricted Subsidiary in a transaction that is not prohibited by the provisions of the indenture described below under the caption "—Repurchase at the Option of Holders—Asset Sales," at the time of such sale, transfer or other disposition;



(9)

as to any Revolving Credit Collateral securing Revolving Credit Obligations upon any release of such Collateral pursuant to the terms of the Revolving Credit Loan Documents;



(10)

as to any Collateral consisting of Note Capital Stock Collateral, on the Release Date; or



(11)

upon release of Collateral as set forth under the caption "—Intercreditor Agreement—Release of Liens on Collateral."

        The Note Lien Security Documents provide that the Liens securing the Note Lien Debt will extend to the Proceeds of any sale of Collateral. As a result, the Note Liens will apply to the Proceeds of any such Collateral received in connection with any sale or other disposition of assets described in the preceding paragraph.

Equal and Ratable Sharing of Collateral by Holders of Note Lien Debt

        The indenture provides that, notwithstanding:

(1)

anything to the contrary contained in the Note Lien Security Documents;



(2)

the time of incurrence of any Series of Note Lien Debt;



(3)

the order or method of attachment or perfection of any Liens securing any Series of Note Lien Debt;



(4)

the time or order of filing or recording of financing statements, mortgages or other documents filed or recorded to perfect any Lien upon any Collateral;



(5)

the time of taking possession or control over any Collateral;



(6)

that any Note Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien; or



(7)

the rules for determining priority under any law governing relative priorities of Liens:



(a)

all Note Liens granted at any time by the Issuers or any Note Guarantor will secure, equally and ratably, all present and future Note Lien Obligations; and



(b)

all Proceeds of all Note Liens granted at any time by the Issuers or any Note Guarantor will be allocated and distributed equally and ratably on account of the Note Lien Debt and other Note Lien Obligations.

        This section is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Note Lien Obligations, each present and future Note Lien Representative and the Note Lien Collateral Agent as holder of Note Liens. The Note Lien Representative of each future Series of Note Lien Debt will be required to deliver a Lien Sharing and Priority Confirmation to the Note Lien Collateral Agent and the Trustee at the time of incurrence of such Series of Note Lien Debt.

110

Relative Rights

        Nothing in the Note Lien Documents will:

(1)

impair, as between the Issuers and the holders of the notes, the obligation of the Issuers to pay principal of, premium and interest and additional interest, if any, on the notes in accordance with their terms or any other obligation of the Issuers or any Note Guarantor;



(2)

affect the relative rights of holders of notes as against any other creditors of the Issuers or any Note Guarantor (other than holders of Revolving Credit Liens or other Note Liens);



(3)

restrict the right of any holder of notes to sue for payments that are then due and owing (but not enforce any judgment in respect thereof against any Collateral to the extent specifically prohibited by the provisions described above under the captions "—Intercreditor Agreement—Restrictions on Enforcement of Junior Liens" or "—Intercreditor Agreement—Insolvency or Liquidation Proceedings");



(4)

restrict or prevent any holder of notes or other Note Lien Obligations, the Note Lien Collateral Agent or any Note Lien Representative from exercising any of its rights or remedies upon a Default or Event of Default not specifically restricted or prohibited by the provisions described above under the captions "—Intercreditor Agreement—Restrictions on Enforcement of Junior Liens" or "—Intercreditor Agreement—Insolvency or Liquidation Proceedings"; or



(5)

restrict or prevent any holder of notes or other Note Lien Obligations, the Note Lien Collateral Agent or any Note Lien Representative from taking any lawful action in an insolvency or liquidation proceeding not specifically restricted or prohibited by the provisions described above under the captions "—Intercreditor Agreement—Restrictions on Enforcement of Junior Liens" or "—Intercreditor Agreement—Insolvency or Liquidation Proceedings."

Compliance with Trust Indenture Act

        To the extent applicable, the Issuers will cause TIA §313(b), relating to reports, and TIA §314(d), relating to the release of property or securities subject to the Lien of the Note Lien Security Documents, to be complied with. Any certificate or opinion required by TIA §314(d) may be made by an Officer of the Issuers except in cases where TIA §314(d) requires that such certificate or opinion be made by an independent Person, which Person will be an independent engineer, appraiser or other expert selected by or reasonably satisfactory to the Trustee. Notwithstanding anything to the contrary in this paragraph, the Issuers will not be required to comply with all or any portion of TIA §314(d) if it determines, in good faith based on advice of counsel (which may be internal counsel), that under the terms of TIA §314(d) and/or any interpretation or guidance as to the meaning thereof of the SEC and its staff, including "no action" letters or exemptive orders, all or any portion of TIA §314(d) is inapplicable to one or a series of released Collateral. In the case where the Issuers determine that the TIA is not applicable, the Issuers shall deliver an opinion of counsel and an officers' certificate to the Trustee and the Note Lien Collateral Agent to the effect that the TIA does not apply to the release of Collateral and that all conditions precedent to such release in the indenture and the Note Lien Security Documents (including the Intercreditor Agreement) have been complied with.

Further Assurances; Insurance

        The indenture and the Note Lien Security Documents provide that each of the Issuers and the Guarantors will do or cause to be done all acts that the Note Lien Collateral Agent from time to time may reasonably request or as necessary to assure and confirm that the Note Lien Collateral Agent holds, for the benefit of the holders of Note Lien Obligations, duly created and enforceable and (except with respect to Excluded Perfection Collateral) perfected Note Liens upon the Collateral (including any property or assets (other than Excluded Perfection Collateral) that are acquired or

111

otherwise become Collateral after the notes are issued), in each case, as contemplated by, and with the Lien priority and perfection required under, the Note Lien Documents.

        At any time and from time to time, each of the Issuers and the Guarantors will promptly execute, acknowledge and deliver such security documents, instruments, certificates, notices and other documents, and take such other actions that are necessary to or that the Note Lien Collateral Agent may reasonably request to create, perfect, protect, assure or enforce the Liens and benefits intended to be conferred, in each case as contemplated by, and with the Lien priority and perfection required under, the Note Lien Documents for the benefit of the holders of Note Lien Obligations.

        The Issuers and the Guarantors will:

(1)

keep their properties insured at all times by financially sound and reputable insurers in such amounts and against such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies in the same or similar business and, in any event, insuring the Collateral against loss by fire, explosion or theft or other risks as may be required by the Note Lien Security Documents;



(2)

maintain such other insurance as may be required by law; and



(3)

maintain title insurance on real property Collateral to the extent required by the Note Lien Security Documents.

        The Issuers and the Guarantors will furnish to the Note Lien Collateral Agent all information reasonably requested by it as to their property and liability insurance carriers. The Note Lien Security Documents will provide that the Note Lien Collateral Agent, on behalf of holders of Note Lien Debt, be named as an additional insured and/or loss payee in respect of casualty insurance for Note Lien Collateral property, with a waiver of subrogation, and 30 days' notice of any cancellation of or material change to all insurance policies of the Issuers and the Guarantors required by the Note Lien Security Documents. Any payments received by the Note Lien Collateral Agent in its capacity as additional insured and/or loss payee in respect of such insurance shall be deposited by it into the Net Available Cash Account and may be applied by the Issuers and their respective Restricted Subsidiaries in accordance with the provisions of the indenture described in the fourth paragraph under the caption "—Repurchase at the Option of Holders—Asset Sales."

Amendment of Note Lien Security Documents

        The Note Lien Security Documents (other than the Intercreditor Agreement) provide that no amendment or supplement to the provisions of any such Note Lien Security Document will be effective without the approval of the Note Lien Collateral Agent acting as directed by the Required Note Lien Debtholders, except that:

(1)

any amendment or supplement that has the effect solely of:



(a)

adding or maintaining Collateral;



(b)

securing additional Note Lien Debt that was otherwise permitted by the terms of the Note Lien Documents to be secured by the Collateral;



(c)

preserving, perfecting or establishing the priority of the Liens thereon or the rights of the Note Lien Collateral Agent therein; provided that the Note Liens remain Priority Liens on the Note Lien Collateral;



(d)

releasing Liens on Collateral securing Note Lien Obligations in accordance with the requirements set forth in the applicable Note Lien Documents referenced above under the caption "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes," under the caption "—Intercreditor Agreement—Release of Liens on

112

Collateral" and, if applicable, the provisions of any other Note Lien Document governing any other Series of Note Lien Debt that regulates the release of Collateral;

(e)

curing any ambiguity, omission, defect or inconsistency; provided that such amendment or supplement does not adversely affect any security interest in Collateral securing the Note Lien Obligations or perfection thereof or the rights of any holder of Note Lien Debt, any Note Lien Representative or the Note Lien Collateral Agent, subject to the provisions of the Note Lien Security Documents;



(f)

adding to the covenants of the Grantors for the benefit of the holders of Note Lien Debt or to surrender any right or power conferred upon the Grantors;



(g)

making any change that does not adversely affect any security interest in Collateral securing the Note Lien Obligations or perfection thereof or the rights of any holder of Note Lien Debt, any Note Lien Representative or the Note Lien Collateral Agent, subject to the provisions of the Note Lien Security Documents; or



(h)

conforming the text of the Note Lien Security Documents to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of such Note Lien Security Document,

will become effective when executed and delivered by the Issuers or any other applicable Guarantor party thereto and the Note Lien Collateral Agent acting without any direction by the holders of Note Lien Obligations;

(2)

no amendment or supplement that reduces, impairs or adversely affects the right of any holder of Note Lien Obligations:



(a)

to vote its outstanding Note Lien Debt with respect to Note Lien Collateral as to any matter described as subject to direction by the Required Note Lien Debtholders (or amends the provisions of this clause (2) or the definitions of "Required Note Lien Debtholders");



(b)

to share equally and ratably with the holders of all Note Lien Obligations in the Proceeds of enforcement of or realization on any Collateral as described above under "Intercreditor Agreement—Application of Proceeds, Payments Over and Application of Payments" and "—Provisions of the Indenture Relating to Security—Equal and Ratable Sharing of Collateral by Holders of Note Lien Debt"; or



(c)

to require that Note Liens be released only as set forth in the provisions described above under the caption "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes,"

will become effective without the consent of the requisite percentage or number of holders of each Series of Note Lien Debt so affected under the applicable Note Lien Document; and

(3)

no amendment or supplement that imposes any obligation upon the Note Lien Collateral Agent or any Note Lien Representative or adversely affects the rights of the Note Lien Collateral Agent or any Note Lien Representative, in its individual capacity as such, will become effective without the consent of the Note Lien Collateral Agent or such Note Lien Representative, respectively.

        In connection with executing any amendment or supplement to the Note Lien Documents, the Note Collateral Agent shall be entitled to rely on an opinion of counsel and an officers' certificate to the effect that all conditions precedent to the execution of such amendment or supplement have been complied with, and such amendment or supplement is authorized or permitted by the Note Lien Documents.

113

        Any amendment or supplement to the provisions of the Note Lien Security Documents that releases Liens on Collateral securing Note Lien Debt will be effective only in accordance with the requirements set forth in the applicable Note Lien Documents referenced above under the caption "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes," under the caption "—Intercreditor Agreement—Release of Liens on Collateral" and, if applicable, the provisions of any other Note Lien Document governing any other Series of Note Lien Debt that regulates the release of Collateral. Any amendment or supplement that results in the Note Lien Collateral Agent's Liens upon the Collateral no longer securing the notes and the other Obligations under the indenture may only be effected in accordance with the provisions described above under the caption "—Provisions of the Indenture Relating to Security—Release of Liens in Respect of Notes" or under the caption "—Intercreditor Agreement—Release of Liens on Collateral."

Repurchase at the Option of Holders

Change of Control

        If a Change of Control occurs, each holder of notes will have the right to require the Issuers to repurchase all or any part (equal to $2,000 or a larger integral multiple of $1,000) of that holder's notes pursuant to a Change of Control Offer on the terms set forth in the indenture. In the Change of Control Offer, the Issuers will offer a Change of Control payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and Additional Interest, if any, on the notes repurchased to the date of purchase, subject to the rights of holders of notes on the relevant record date to receive interest due on the relevant interest payment date. Within 20 days following any Change of Control, the Issuers will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the indenture and described in such notice. The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the indenture, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the indenture by virtue of such compliance.

        On the Change of Control payment date, the Issuers will, to the extent lawful:

(1)

accept for payment all notes or portions of notes properly tendered pursuant to the Change of Control Offer;



(2)

deposit with the paying agent an amount equal to the Change of Control payment in respect of all notes or portions of notes properly tendered; and



(3)

deliver or cause to be delivered to the Trustee the notes properly accepted together with an officers' certificate stating the aggregate principal amount of notes or portions of notes being purchased by the Issuers.

        The paying agent will promptly mail or wire to each holder of notes properly tendered the Change of Control payment for such notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any. The Issuers will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

        The provisions described above that require the Issuers to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of the indenture

114

are applicable. Except as described above with respect to a Change of Control, the indenture does not contain provisions that permit the holders of the notes to require that the Issuers repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction.

        The Issuers will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the indenture applicable to a Change of Control Offer made by the Issuers and purchases all notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to the indenture as described above under the caption "—Optional Redemption," unless and until there is a default in payment of the applicable redemption price.

        The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of the Issuers and their respective Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require the Issuers to repurchase its notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Issuers and their respective Subsidiaries taken as a whole to another Person or group may be uncertain.

Asset Sales

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, consummate an Asset Sale unless:

(1)

such Issuer (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and



(2)

at least 75% of the consideration received in the Asset Sale by such Issuer or Restricted Subsidiary consists of cash or Cash Equivalents. For purposes of this provision, each of the following will be deemed to be cash:



(a)

any liabilities, as shown on the Issuers' most recent consolidated balance sheet, of such Issuer or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Note Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation or similar agreement that releases such Issuer or Restricted Subsidiary from further liability;



(b)

any securities, notes or other obligations received by such Issuer or Restricted Subsidiary from such transferee that are converted, sold or exchanged by such Issuer or Restricted Subsidiary into cash or Cash Equivalents within 180 days after such Asset Sale, to the extent of the cash or Cash Equivalents received in that conversion, sale or exchange; and



(c)

any stock, property or assets of the kind referred to in clauses (2) or (4) of the next paragraph of this covenant.

        Other than with respect to an Asset Sale of Note Lien Collateral, within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Issuers (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds at its option:

(1)

to repay (i) Credit Facilities or (ii) Indebtedness used to finance the acquisition of the assets subject of the Asset Sale incurred within 12 months prior to such Asset Sale and, in the case of each of clauses (i) and (ii), if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;

115

(2)

to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of the Issuers;



(3)

to make a capital expenditure;



(4)

to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business; or



(5)

to enter into a binding written agreement to acquire any stock or assets of the kind referred to in the foregoing clauses (2) or (4) if the acquisition of such stock or assets, as the case may be, is consummated within 180 days of such binding written agreement.

        Pending the final application of any Net Proceeds in accordance with the foregoing, the Issuers may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the indenture.

        In the case of an Asset Sale of Note Lien Collateral the Issuers (or the Restricted Subsidiary that owned the sold assets, as the case may be) shall promptly deposit the Net Proceeds of such disposition into a segregated Net Available Cash Account, under the control of the Note Lien Collateral Agent, that includes only proceeds from the disposition of Note Lien Collateral and interest earned thereon (a "Net Available Cash Account") and is free from all other Liens (other than Junior Liens), all on terms and pursuant to arrangements reasonably satisfactory to the Note Lien Collateral Agent in its reasonable determination (which may include, at the Note Lien Collateral Agent's reasonable request, customary officer's certificates and opinions of counsel and shall include release provisions requiring the Note Lien Collateral Agent to release deposits in the Net Available Cash Account as requested to permit the Issuers or their respective Restricted Subsidiaries to apply such Net Proceeds in the manner described below, unless the Note Lien Collateral Agent has received written notice that an Event of Default has occurred and is continuing from the Trustee or the holders of at least 25% in aggregate principal amount of notes then outstanding), and an amount equal to 100% of the Net Proceeds from such disposition is applied by the Issuers (or such Restricted Subsidiary, as the case may be), to the extent the Issuers or such Restricted Subsidiary elects, to reinvest in Additional Assets constituting Note Lien Collateral to be owned by the Issuers or a Guarantor, and the Note Lien Collateral Agent shall promptly be granted a perfected first priority security interest on all such assets as Note Lien Collateral under the Note Lien Security Documents to secure the notes on terms and pursuant to arrangements reasonably satisfactory to the Note Lien Collateral Agent in its reasonable determination (which may include, at the collateral agent's reasonable request, customary officer's certificates and legal opinions); provided that, notwithstanding the foregoing the Issuers or such Restricted Subsidiary may reinvest such Net Proceeds in Additional Assets that do not constitute Note Lien Collateral in an aggregate amount not to exceed $25.0 million since the Closing Date.

        In addition, upon receipt of any Net Proceeds from a Casualty Event with respect to Note Lien Collateral, the Issuers (or the Restricted Subsidiary that owned those assets, as the case may be) shall treat such Net Proceeds as if it were proceeds of a disposition of Note Lien Collateral and apply such proceeds in accordance with the preceding paragraph.

        Any Net Proceeds from Asset Sales or a Casualty Event with respect to Collateral that are not applied or invested as provided above will constitute "Excess Collateral Proceeds." When the aggregate amount of Excess Collateral Proceeds exceeds $15.0 million, within 10 days thereof, the Issuers will make an Collateral Sale Offer to all holders of notes and may make an offer to all holders of other Indebtedness of the Issuers that is Note Lien Debt containing provisions similar to those set forth in the indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other Note Lien Debt that may be purchased out of the Excess Proceeds (provided that in no event shall the Issuers offer to purchase

116

such other Note Lien Debt of the Issuers at a purchase price in excess of 101% of its principal amount, plus accrued and unpaid interest, if any, thereon); provided, however, that to the extent the Excess Collateral Proceeds relate to Asset Sales or a Casualty Event with respect to Revolving Credit Collateral, the Issuers may, prior to making a Collateral Disposition Offer, make a permanent prepayment with respect to the maximum principal amount of indebtedness that is secured by such Collateral on a first-priority basis that may be prepaid out of such Excess Collateral Proceeds (and in the case of a prepayment of revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto) at a price not in excess of 101% of its principal amount, plus accrued and unpaid interest to, if any, thereon to the date of prepayment and any amounts applied to make such a prepayment shall not constitute Excess Collateral Proceeds. The offer price of the notes in any Collateral Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, and will be payable in cash, and the offer or redemption price for such other Note Lien Debt shall be as set forth in the related documentation governing such Note Lien Debt. If any Excess Proceeds remain after consummation of a Collateral Sale Offer, the Issuers may use those Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and other Note Lien Debt tendered into such Collateral Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the notes and the Company or such other applicable person shall select such other Note Lien Debt to be purchased on a pro rata basis. Upon completion of each Collateral Sale Offer, the amount of Excess Proceeds will be reset at zero.

        Any Net Proceeds from Asset Sales other than with respect to Collateral that are not applied or invested as provided above will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million, within 10 days thereof, the Issuers will make an Asset Sale Offer to all holders of notes and may make an offer to all holders of other pari passu Indebtedness of the Issuers containing provisions similar to those set forth in the indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other pari passu Indebtedness of the Issuers that may be purchased out of the Excess Proceeds (provided that in no event shall the Issuers offer to purchase such other pari passu Indebtedness of the Issuers at a purchase price in excess of 101% of its principal amount (without premium), plus accrued and unpaid interest and liquidated damages, if any, thereon). The offer price of the notes in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, and will be payable in cash, and the offer or redemption price for such other Indebtedness shall be as set forth in the related documentation governing such Indebtedness. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Issuers may use those Excess Proceeds for any purpose not otherwise prohibited by the indenture. If the aggregate principal amount of notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the notes and the Company or such other applicable person shall select such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

        The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the indenture, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the indenture by virtue of such compliance.

        The agreements governing the Revolving Credit Agreement contain, and future agreements may contain, prohibitions of certain events, including events that would constitute a Change of Control or

117

an Asset Sale. The exercise by the holders of notes of their right to require the Issuers to repurchase the notes upon a Change of Control or an Asset Sale could cause a default under these other agreements, even if the Change of Control or Asset Sale itself does not, due to the financial effect of such repurchases on the Issuers. In the event a Change of Control or Asset Sale occurs at a time when the Issuers are prohibited from purchasing notes, the Issuers could seek the consent of their lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If the Issuers do not obtain a consent or repay those borrowings, the Issuers will remain prohibited from purchasing notes. In that case, the Issuers' failure to purchase tendered notes would constitute an Event of Default under the indenture. Finally, the Issuers' ability to pay cash to the holders of notes upon a repurchase may be limited by their then existing financial resources. See "Risk Factors—Risks Relating to the Notes—We may not be able to make the change of control offer required by the indenture."

Selection and Notice

        If less than all of the notes are to be redeemed at any time, the Trustee will select notes for redemption as follows:

(1)

if the notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or



(2)

if the notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the Trustee deems fair, appropriate and practicable.

        No notes of $2,000 or less can be redeemed in part. Notices of redemption will be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the notes or a satisfaction and discharge of the indenture. Notices of redemption may not be conditional.

        If any note is to be redeemed in part only, the notice of redemption that relates to that note will state the portion of the principal amount of that note that is to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder of notes upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of notes called for redemption.

Certain Covenants

Restricted Payments

        The Issuers will not, and will not permit any of their Restricted Subsidiaries to, directly or indirectly:

(1)

declare or pay any dividend or make any other payment or distribution on account of the Issuers' or any of their respective Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuers or any of their respective Restricted Subsidiaries) or to the direct or indirect holders of the Issuers' or any of their respective Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock or preferred stock of Subsidiaries) of the Issuers and other than dividends or distributions payable to the Issuers or a Restricted Subsidiary of the Issuers);



(2)

purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Issuers) any Equity Interests of the

118

Issuers or any direct or indirect parent of the Issuers held by Persons other than the Issuers or their respective Restricted Subsidiaries;

(3)

make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Issuers or any Guarantor that is contractually subordinated to the notes or to any Note Guarantee (excluding any intercompany Indebtedness between or among the Issuers and any of their respective Restricted Subsidiaries), except (x) a payment of interest or principal at the Stated Maturity thereof or (y) a payment, purchase, redemption, defeasance or other acquisition or retirement for value of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of payment, purchase, redemption, defeasance, acquisition or retirement; or



(4)

make any Restricted Investment

(all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment:

(1)

no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment;



(2)

Linens 'n Things, Inc. would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock;" and



(3)

such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuers and their respective Restricted Subsidiaries since the date of the indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7), (8), (9), (10), (11) or (12) of the next succeeding paragraph), is less than the sum, without duplication, of:



(a)

50% of the Consolidated Net Income of Linens 'n Things, Inc. for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the indenture to the end of the Issuers' most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit); plus

(b)

100% of the aggregate net cash proceeds and the Fair Market Value of assets received by Linens 'n Things, Inc. since the date of the indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of Linens 'n Things, Inc. (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Linens 'n Things, Inc. that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of Linens 'n Things, Inc.); plus

(c)

100% of the aggregate amount received in cash and the Fair Market Value of property and marketable securities received by means of (x) the sale or other disposition (other than to any of the Issuers or their respective Restricted Subsidiaries) of Restricted Investments made by any of the Issuers or their respective Restricted Subsidiaries and

119

repurchases and redemptions of such Restricted Investments from any of the Issuers or their respective Restricted Subsidiaries and repayments of loans or advances which constitute Restricted Investments by any of the Issuers or their respective Restricted Subsidiaries or (y) the sale (other than to any of the Issuers or their respective Restricted Subsidiaries) of the Capital Stock of an Unrestricted Subsidiary or a distribution from an Unrestricted Subsidiary (other than to the extent it constituted a Permitted Investment); plus

(d)

to the extent that any Unrestricted Subsidiary of the Issuers designated as such after the date of the indenture is redesignated as a Restricted Subsidiary after the date of the indenture, the lesser of (i) the Fair Market Value of the Issuers' Investment in such Subsidiary as of the date of such redesignation or (ii) such Fair Market Value as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary after the date of the indenture (other than to the extent it constituted a Permitted Investment); plus

(e)

50% of any dividends received by any of the Issuers or their respective Restricted Subsidiaries after the date of the indenture from an Unrestricted Subsidiary of the Issuers, to the extent that such dividends were not otherwise included in the Consolidated Net Income of Linens 'n Things, Inc. for such period.

        So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit:

(1)

the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend or redemption payment would have complied with the provisions of the indenture;



(2)

the making of any Restricted Payment in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Linens 'n Things, Inc.) of, Equity Interests of Linens 'n Things, Inc. (other than Disqualified Stock) or from the substantially concurrent contribution of common equity capital to Linens 'n Things, Inc.; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded from clause (3)(b) of the preceding paragraph;



(3)

the repurchase, redemption, defeasance or other acquisition or retirement for value of Indebtedness of any of the Issuers or the Guarantors that is contractually subordinated to the notes or to any Note Guarantee with the net cash proceeds from a substantially concurrent incurrence of Permitted Refinancing Indebtedness;



(4)

the payment of any dividend (or, in the case of any partnership or limited liability company, any similar distribution) by a Restricted Subsidiary of Linens 'n Things, Inc. to the holders of its Equity Interests on a pro rata basis;



(5)

the repurchase, redemption or other acquisition or retirement for value of, or dividends or distributions to any direct or indirect parent of the Issuers to allow any direct or indirect parent of the Issuers to repurchase, redeem or acquire, any Equity Interests of any of the Parent, the Issuers or any intermediate holding company between the Parent and the Issuers held by any current or former officer, director or employee of any of Parent, the Issuers or their respective Restricted Subsidiaries pursuant to any equity subscription agreement, stock option agreement, shareholders' agreement or similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $2.5 million in any twelve-month period plus the aggregate net cash proceeds received by the Issuers after the date of the indenture from the issuance of such Equity Interests to, or

120

the exercise of options to purchase such Equity Interests by, any current or former director, officer, partner, consultant or employee of Parent, the Issuers or their respective Restricted Subsidiaries (provided that the amount of such net cash proceeds received by the Issuers and utilized pursuant to this clause (5) for any such repurchase, redemption, acquisition or retirement will be excluded from clause (3)(b) of the preceding paragraph); and provided, further, that amounts available pursuant to this clause (5) during any twelve-month period may be carried forward and utilized in succeeding twelve-month periods);

(6)

loans or advances to employees made in the ordinary course of business of any of the Issuers or their respective Restricted Subsidiaries in an aggregate principal amount not to exceed $1.0 million at any one time outstanding;



(7)

the repurchase of Equity Interests deemed to occur upon the exercise of stock options to the extent such Equity Interests represent a portion of the exercise price of those stock options;



(8)

the declaration and payment of regularly scheduled or accrued dividends to holders of any class or series of Disqualified Stock of any of the Issuers or their respective Restricted Subsidiaries issued on or after the date of the indenture in accordance with the applicable Fixed Charge Coverage Ratio test described below under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock";



(9)

any Permitted Payments to Parent;



(10)

any payments made in connection with the Transactions pursuant to the Acquisition Agreement and any other agreements or documents related to the Transactions and set forth on a schedule provided to the Initial Purchasers on or prior to the closing date of the Transactions (without giving effect to subsequent amendments, waivers or other modifications to such agreements or documents) or as otherwise described in the prospectus;



(11)

the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Indebtedness of any of the Issuers or a Guarantor that is contractually subordinated to the notes or any Note Guarantee (i) at a purchase price not greater than 101% of the principal amount of such contractually subordinated Indebtedness in the event of a Change of Control in accordance with provisions similar to the provisions of the indenture described above under the caption "—Repurchase at the Option of Holders—Change of Control" or (ii) at a purchase price not greater than 101% of the principal amount thereof in accordance with provisions similar to the provisions of the indenture described above under the caption "—Repurchase at the Option of Holders—Asset Sales"; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Issuers have made the Change of Control Offer or Asset Sale Offer, as applicable, as provided in such covenant with respect to the notes and has completed the repurchase or redemption of all notes validly tendered for payment in connection with such Change of Control Offer or Asset Sale Offer; and



(12)

other Restricted Payments in an aggregate amount not to exceed $25.0 million since the date of the indenture.

        The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by such Issuer or Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair Market Value of any assets or securities that are required to be valued by this covenant will be determined by the Boards of Directors of the Issuers whose resolution with respect thereto will be delivered to the Trustee. The Boards of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the Fair Market Value exceeds $20.0 million.

121

        For purposes of determining compliance with this covenant, if a Restricted Payment meets the criteria of more than one of the exceptions described in clauses (1) through (12) above or is entitled to be made according to the first paragraph of this covenant, Linens 'n Things, Inc. may, in its sole discretion, classify the Restricted Payment in any manner that complies with this covenant.

Incurrence of Indebtedness and Issuance of Preferred Stock

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Linens 'n Things, Inc. will not issue any Disqualified Stock and will not permit any of their respective Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that (x) Linens 'n Things, Inc. may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if the Fixed Charge Coverage Ratio for Linens 'n Things, Inc. most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period and (y) Linens 'n Things Center, Inc. may incur Indebtedness (including Acquired Debt) or issue preferred stock, and Linens 'n Things Center, Inc.'s Subsidiaries that are Guarantors may incur Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed Charge Coverage Ratio for Linens 'n Things Center, Inc.'s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock or such preferred stock is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been incurred or the Disqualified Stock or the preferred stock had been issued, as the case may be, at the beginning of such four-quarter period.

        The first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"):

(1)

Indebtedness of the Issuers or their respective Restricted Subsidiaries under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) not to exceed the greater of (A) $600.0 million and (B) the amount of the Borrowing Base as of the date of such incurrence;



(2)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Indebtedness existing on the date of the indenture;



(3)

the incurrence by the Issuers and the Guarantors of Indebtedness represented by the notes and the related Note Guarantees to be issued on the date of the indenture and the exchange notes and the related Note Guarantees to be issued pursuant to the registration rights agreement;



(4)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing, whether or not incurred at the time of such cost or acquisition, all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment used in the business of any of the Issuers or their respective Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4) that are at any one time

122

outstanding not to exceed the greater of (A) $15.0 million or (B) 1% of Consolidated Net Tangible Assets;

(5)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by the indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (12) of this paragraph;



(6)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of intercompany Indebtedness between or among any of the Issuers and their respective Restricted Subsidiaries; provided, however, that:



(x)

if an Issuer or a Guarantor is the obligor on such Indebtedness and the payee is not an Issuer or a Guarantor, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the notes, in the case of an Issuer, or the Note Guarantee, in the case of a Guarantor; and



(y)

(i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than any of the Issuers or their respective Restricted Subsidiaries and (ii) any sale or other transfer of any such Indebtedness to a Person that is not any of the Issuers or their respective Restricted Subsidiaries, will be deemed, in each case, to constitute an incurrence of such Indebtedness by such Issuer or Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);



(7)

the issuance by any of the Issuers' Restricted Subsidiaries to any of the Issuers or their respective Restricted Subsidiaries of shares of preferred stock; provided, however, that:



(x)

any subsequent issuance or transfer of Equity Interests that results in any such preferred stock being held by a Person other than an Issuer or any of their respective Restricted Subsidiaries; and



(y)

any sale or other transfer of any such preferred stock to a Person that is not an Issuer or any of their respective Restricted Subsidiaries,

will be deemed, in each case, to constitute an issuance of such preferred stock by such Restricted Subsidiary that was not permitted by this clause (7);

(8)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Hedging Obligations in the ordinary course of business;



(9)

the Guarantee by an Issuer or any of the Guarantors of Indebtedness of an Issuer or their respective Restricted Subsidiaries that was permitted to be incurred by another provision of this covenant; provided that if the Indebtedness being guaranteed is subordinated to or pari passu with the notes, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;



(10)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Indebtedness in respect of workers' compensation claims, self-insurance obligations, bankers' acceptances, performance and surety bonds or similar types of obligations in the ordinary course of business;



(11)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds, so long as such Indebtedness is covered within five business days of being incurred;

123

(12)

Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by, or merged into, any of the Issuers or their respective Restricted Subsidiaries (other than Indebtedness incurred (a) to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by an Issuer or (b) otherwise in connection with, or in contemplation of, such acquisition); provided, however, that at the time such Restricted Subsidiary is acquired by an Issuer, such Issuer would have been able to incur $1.00 of additional Indebtedness pursuant to the first paragraph of this covenant after giving effect to the incurrence of such Indebtedness pursuant to this clause (12);



(13)

Indebtedness arising from agreements of Linens 'n Things, Inc. or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by Linens 'n Things, Inc. and their respective Restricted Subsidiaries in connection with such disposition; and



(14)

the incurrence by any of the Issuers or their respective Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (14), not to exceed $50.0 million.

        The Issuers will not incur, and will not permit any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Issuers or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness will be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Issuers solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

        For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (14) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Issuers will be permitted, in its sole discretion, to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this covenant. Indebtedness under Credit Facilities outstanding on the date on which notes are first issued and authenticated under the indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of the Issuers as accrued. Notwithstanding any other provision of this covenant, the maximum amount of Indebtedness that the Issuers or any Restricted Subsidiary may incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

124

        The amount of any Indebtedness outstanding as of any date will be:

(1)

the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;



(2)

the principal amount of the Indebtedness, in the case of any other Indebtedness; and



(3)

in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:



(a)

the Fair Market Value of such assets at the date of determination; and



(b)

the amount of the Indebtedness of the other Person.

Liens

        The Issuers will not and will not permit any of their respective Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer to exist any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, provided that the Issuers and their respective Restricted Subsidiaries may incur Liens (in addition to Permitted Liens) securing Indebtedness on property or assets that are not Note Lien Collateral if:

(1)

in the case of any Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the notes, the notes are secured by a Lien on such property or assets that is senior in right of priority to such Liens; and



(2)

in the case of all Liens securing other Indebtedness, the notes are equally and ratably secured by a Lien on such property or assets.

Dividend and Other Payment Restrictions Affecting Subsidiaries

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1)

pay dividends or make any other distributions on its Capital Stock to any of the Issuers or their respective Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to any of the Issuers or their respective Restricted Subsidiaries;



(2)

make loans or advances to any of the Issuers or their respective Restricted Subsidiaries; or



(3)

sell, lease or transfer any of its property or assets to any of the Issuers or their respective Restricted Subsidiaries.

        However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(1)

agreements as in effect on the date of the indenture (including the Revolving Credit Loan Documents) and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not materially more restrictive, taken as a whole, with respect to such encumbrances or restrictions than those contained in those agreements on the date of the indenture;



(2)

the indenture, the notes, the Note Lien Documents and the Note Guarantees;



(3)

applicable law, rule, regulation or order;

125

(4)

any instrument governing Indebtedness or Capital Stock of a Person acquired by any of the Issuers or their respective Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the property or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the indenture to be incurred;



(5)

customary non-assignment provisions in contracts and licenses entered into in the ordinary course of business;



(6)

purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of the preceding paragraph;



(7)

any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending the sale or other disposition;



(8)

Liens, including real estate mortgages, permitted to be incurred under the provisions of the covenant described above under the caption "—Liens" that limit the right of the debtor to dispose of the assets subject to such Liens;



(9)

provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into with the approval of the Issuers' Boards of Directors, which limitation is applicable only to the assets that are the subject of such agreements;



(10)

agreements governing Indebtedness permitted to be incurred pursuant to the covenant described under "—Incurrence of Indebtedness and Issuance of Preferred Stock"; provided that the terms of the agreements (i) are not materially more restrictive, taken as a whole, with respect to such encumbrances or restrictions than those in the Revolving Credit Agreement or the indenture on the date of the indenture and (ii) do not restrict any Restricted Subsidiaries not so restricted on the date of the indenture;



(11)

restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and



(12)

encumbrances or restrictions under any agreement, amendment, modification, restatement, renewal, supplement, refunding, replacement or refinancing that extends, renews, refinances or replaces the agreements containing the encumbrances or restrictions in the foregoing clauses (2), (4), (6) or (8) or in this clause (12), provided that the terms and conditions of any such encumbrances or restrictions are not materially more restrictive, taken as a whole, than those contained in the agreements, being amended, modified, restated, renewed, supplemented, refunded, replaced or refinanced.

Merger, Consolidation or Sale of Assets

        Neither of the Issuers will, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not such Issuer is the surviving Person); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of it and their respective Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person, unless:

(1)

either: (a) such Issuer is the surviving Person; or (b) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a Person organized or existing

126

under the laws of the United States, any state of the United States or the District of Columbia;

(2)

the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, conveyance or other disposition has been made assumes all the obligations of such Issuer under the notes, the indenture, the registration rights agreement and the Note Lien Security Documents pursuant to agreements reasonably satisfactory to the Trustee;



(3)

immediately after such transaction, no Default or Event of Default exists;



(4)

such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer), or to which such sale, assignment, transfer, conveyance or other disposition has been made would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, either (A) be permitted to incur at least $1.00 of additional Indebtedness pursuant to the applicable Fixed Charge Coverage Ratio test of such Issuer set forth in the first paragraph of the covenant described above under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock" or (B) the applicable Fixed Charge Coverage Ratio of such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer) would be greater than the applicable Fixed Charge Coverage Ratio of such Issuer immediately prior to such transaction;



(5)

each Guarantor (unless it is the other party to the transactions above, in which case clause (1) shall apply) shall have by supplemental indenture confirmed that its Note Guarantee shall apply to such Person's obligations in respect of the indenture and the notes and its obligations under the registration rights agreement shall continue to be in effect, if applicable; and



(6)

such Issuer or the Person formed by or surviving any such consolidation or merger (if other than such Issuer), or to which such sale, assignment, transfer, conveyance or other disposition has been made shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that such consolidation or merger or sale, assignment, transfer, conveyance or other disposition and such supplemental indenture (if any) comply with the indenture and the Note Lien Security Documents and that all relevant conditions precedent in the indenture and the Note Lien Security Documents shall have been satisfied.

        In addition, the Issuers will not permit any Guarantor to consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets to, any Person unless:

(1)

the resulting, surviving or transferee Person (the "Successor Guarantor") will be a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such Person (if not such Guarantor) will expressly assume, the indenture, the registration rights agreement and the Note Lien Security Documents pursuant to agreements reasonably satisfactory to the Trustee, all the obligations of such Guarantor under its Note Guarantee and the registration rights agreement (if applicable), respectively; and



(2)

immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default shall have occurred and be continuing.

Notwithstanding the foregoing:

(a)

any Guarantor may consolidate with, merge into or transfer all or substantially all of its assets to the Issuers or any Restricted Subsidiary so long as such Restricted Subsidiary

127

becomes a Guarantor and any Restricted Subsidiary other than a Guarantor may consolidate with, merge into or transfer all or substantially all of its assets to the Issuers or any other Restricted Subsidiary;

(b)

any Issuer or Guarantor may merge with or into, or convey, transfer or lease all or substantially all its assets to, an Affiliate incorporated solely for the purpose of reincorporating or reforming such Issuer or Guarantor in another jurisdiction, and any Issuer may merge with or into, or convey, transfer or lease all or substantially all of its assets to, the other Issuer or a Restricted Subsidiary so long as all assets of such Issuer immediately prior to such transaction are owned by the Person formed by or surviving any such consolidation or merger, or to which such sale, assignment, transfer, conveyance or other disposition has been made immediately after the consummation thereof and clause (2) of the first paragraph of this provision has been complied with; and



(c)

any Guarantor may consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its assets so long as the transactions comply with the release provisions set forth in the second paragraph of the section entitled "—Note Guarantees."

        In addition, the Issuers will not, directly or indirectly, lease all or substantially all of their properties and assets and the property and assets of their Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.

        In the event of any transaction described in and complying with the conditions listed in this covenant in which any Issuer or Guarantor is not the continuing entity, the successor Person formed or remaining or to which such transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, such Issuer or Guarantor, as the case may be, and such Issuer or Guarantor, as the case may be, would be discharged from all obligations and covenants under the indenture and the notes or its Note Guarantee, as the case may be, and the registration rights agreement (if applicable).

Transactions with Affiliates

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate of any Issuer (each, an "Affiliate Transaction"), unless:

(1)

the Affiliate Transaction is on terms that are no less favorable to such Issuer or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by such Issuer or such Restricted Subsidiary with an unrelated Person; and



(2)

the Issuers deliver to the Trustee:



(a)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $15.0 million, a resolution of the Board of Directors of the Company set forth in an officers' certificate certifying that such Affiliate Transaction complies with this covenant and either (x) that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors of the Company, or (y) a copy of an opinion as to the fairness to such Issuer or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing; and



(b)

with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $30.0 million, a copy of an opinion as to

128

the fairness to such Issuer or such Restricted Subsidiary of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

        The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1)

any employment or consulting agreement, employee benefit plan, officer or director indemnification agreement, severance agreement or any similar arrangement entered into by the Issuers or any of their respective Restricted Subsidiaries in the ordinary course of business and payments pursuant thereto and the issuance of Capital Stock of the Issuers (other than Disqualified Stock) to directors and employees pursuant to stock option or stock ownership plans, in each case, approved in good faith by the Board of Directors of such Issuer;



(2)

transactions between or among the Issuers and/or their respective Restricted Subsidiaries;



(3)

transactions with a Person (other than an Unrestricted Subsidiary of an Issuer) that is an Affiliate of such Issuer solely because such Issuer owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;



(4)

payment of reasonable directors' fees, compensation benefits or indemnity to directors;



(5)

any issuance of Equity Interests (other than Disqualified Stock) of Linens 'n Things, Inc. to Affiliates of Linens 'n Things, Inc.;



(6)

Restricted Payments that do not violate the provisions of the indenture described above under the caption "—Restricted Payments" or any Permitted Investment;



(7)

transactions pursuant to any registration rights agreement with the shareholders of Parent or any direct or indirect parent of the Company, on customary terms;



(8)

written agreements entered into or assumed in connection with acquisitions of other businesses with Persons who were not Affiliates prior to such transactions approved by a majority of the Boards of Directors of the Issuers;



(9)

any payments made in connection with the Transactions pursuant to the Acquisition Agreement and any other agreements or documents related to the Transactions and set forth on a schedule provided to the Initial Purchasers on or prior to the closing date of the Transactions (without giving effect to any subsequent amendments, waivers or modifications to such agreements or documents) or as otherwise described in the prospectus;



(10)

(a) payment of annual management fees to the Sponsors in an aggregate amount not to exceed, during any consecutive 12-month period, $2.0 million, (b) the payment of fees to the Sponsors for financial advisory and investment banking services rendered to Parent and its respective Restricted Subsidiaries in connection with acquisitions, securities offerings and other financings and similar significant corporate transactions in customary and reasonable amounts for such transactions, and (c) reimbursement of reasonable out-of-pocket expenses incurred by the Sponsors in connection with the services described in clauses (a) and (b) above;



(11)

loans or advances to employees made in the ordinary course of business of any of the Issuers or their respective Restricted Subsidiaries in an aggregate principal amount not to exceed $1.0 million at any one time outstanding; and



(12)

any Permitted Payments to Parent.

129

Business Activities

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, engage in any business other than Permitted Businesses, except to such extent as would not be material to Linens 'n Things, Inc. and their respective Restricted Subsidiaries taken as a whole.

Additional Note Guarantees

        If after the date of the indenture, any Subsidiary of an Issuer issues a Guarantee of any of the Indebtedness under the Revolving Credit Agreement, other than the Guarantees thereof existing on the Closing Date, then subject to certain exceptions that Subsidiary will become a Guarantor and execute a supplemental indenture and deliver an opinion of counsel satisfactory to the Trustee within 10 business days of the date on which it was acquired or created; provided that any Domestic Subsidiary that constitutes an Immaterial Subsidiary need not become a Guarantor until such time as it ceases to be an Immaterial Subsidiary.

        The form of the Note Guarantee will be attached as an exhibit to the indenture.

Designation of Restricted and Unrestricted Subsidiaries

        The Board of Directors of the applicable Issuer may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by such Issuer and its respective Restricted Subsidiaries in the Subsidiary designated as Unrestricted will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under the covenant described above under the caption "—Restricted Payments" or under one or more clauses of the definition of Permitted Investments, as determined by the Issuers. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

        Any designation of a Subsidiary of the Issuers as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors of the applicable Issuer giving effect to such designation and an officers' certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption "—Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of the indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Issuers as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock," the Issuers will be in default of such covenant. The Board of Directors of the applicable Issuer may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Issuers; provided that such designation will be deemed to be an incurrence of Indebtedness by such Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption "—Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.

Payments for Consent

        The Issuers will not, and will not permit any of their respective Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for

130

or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement.

Reports

        Whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, the Issuers will furnish to the holders of notes, within the time periods specified in the SEC's rules and regulations:

(1)

all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if Linens 'n Things, Inc. were required to file such reports; and



(2)

all current reports that would be required to be filed with the SEC on Form 8-K if Linens 'n Things, Inc. were required to file such reports.

        The availability of the foregoing materials on the SEC's Electronic Data Gathering and Retrieval service or on the Issuers' website shall be deemed to satisfy the Issuers' delivery obligation.

        All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on Linens 'n Things, Inc.'s consolidated financial statements by Linens 'n Things, Inc.'s certified registered public accounting firm. In addition, following the consummation of the exchange offer contemplated by the registration rights agreement, Linens 'n Things, Inc. will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.

        Notwithstanding the foregoing, the requirements referred to in clauses (1) and (2) above may be satisfied prior to the commencement of the exchange offer or the effectiveness of the shelf registration statement each as contemplated by the registration rights agreement by filing the exchange offer registration statement and/or shelf registration statement, and any amendments thereto, with the SEC, with such information that satisfies Regulation S-K and Regulation S-X under the Securities Act within the time periods specified in the rules and regulations applicable to each of the reports referred to in clauses (1) and (2) above.

        If, at any time after consummation of the exchange offer contemplated by the registration rights agreement, Linens 'n Things, Inc. is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, Linens 'n Things, Inc. will nevertheless continue filing the reports specified in the preceding paragraphs of this covenant with the SEC within the time periods specified above unless the SEC will not accept such a filing. Linens 'n Things, Inc. will not take any action for the purpose of causing the SEC not to accept any such filings. If, notwithstanding the foregoing, the SEC will not accept the Issuers' filings for any reason, Linens 'n Things, Inc. will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if Linens 'n Things, Inc. were required to file those reports with the SEC.

        In addition, the Issuers and the Guarantors agree that, for so long as any notes remain outstanding, if at any time they are not required to file with the SEC the reports required by the preceding paragraphs, they will furnish to the holders of notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

        In the event that (1) the rules and regulations of the SEC permit Linens 'n Things, Inc. and any direct or indirect parent company of Linens 'n Things, Inc. to report at such parent entity's level on a

131

consolidated basis and (2) such parent entity of Linens 'n Things, Inc. holds no assets other than cash, Cash Equivalents and the Capital Stock of Linens 'n Things, Inc., the information and reports required by this covenant may be those of such parent company on a consolidated basis.

Events of Default and Remedies

        Each of the following is an "Event of Default":

(1)

default for 30 days in the payment when due of interest on, or Additional Interest, if any, with respect to, the notes;



(2)

default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the notes;



(3)

failure by the Issuers or any of their respective Restricted Subsidiaries to comply with the provisions described under the captions "—Repurchase at the Option of Holders—Change of Control," "—Repurchase at the Option of Holders—Asset Sales" or "—Certain Covenants—Merger, Consolidation or Sale of Assets";



(4)

failure by the Issuers or any of their respective Restricted Subsidiaries for 30 days after notice to the Issuers by the Trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding voting as a single class to comply with any of the agreements described under "—Certain Covenants—Restricted Payments" and "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock";



(5)

failure by the Issuers or any of their respective Restricted Subsidiaries for 60 days after notice to the Issuers by the Trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding voting as a single class to comply with any of the other agreements in the indenture;



(6)

default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuers or any of their respective Restricted Subsidiaries (or the payment of which is guaranteed by the Issuers or any of their respective Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the date of the indenture, if that default:



(a)

is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or



(b)

results in the acceleration of such Indebtedness prior to its express maturity,

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $10.0 million or more;

(7)

failure by the Issuers or any of their respective Restricted Subsidiaries to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $10.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;



(8)

except as permitted by the indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee;

132

(9)

certain events of bankruptcy or insolvency described in the indenture with respect to the Issuers or any of their respective Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; or



(10)

the occurrence of any of the following:



(a)

except as permitted by the indenture, any Note Lien Security Document is held to be unenforceable or invalid in any respect by a court of competent jurisdiction (and such holding remains unstayed for a period of 30 days) or otherwise ceases for any reason to be fully enforceable for a period of 30 days after notice thereof is delivered to the Issuers by the Trustee or the holders of at least 25% in aggregate principal amount of notes then outstanding; provided that it will not be an Event of Default under this clause (10)(a) if the sole result of the failure of one or more of any such Note Lien Security Documents to be fully enforceable is that (x) any Note Lien purported to be granted thereunder purports to encumber Collateral that has been released in accordance with the terms of the Indenture and the Note Lien Security Documents or (y) any Note Lien purported to be granted thereunder on Collateral having, individually or in the aggregate, a Fair Market Value not more than $20.0 million, ceases to be an enforceable and perfected Priority Lien (in the case of Note Lien Collateral, subject only to Permitted Liens) or Junior Lien (in the case of Revolving Credit Collateral, subject only to Credit Facility Liens and Permitted Liens), as and to the extent required by the applicable Note Lien Security Documents;



(b)

any Note Lien purported to be granted under any Note Lien Security Document on Collateral, individually or in the aggregate, having a Fair Market Value in excess of $20.0 million ceases to be an enforceable and perfected Priority Lien (in the case of Note Lien Collateral, subject only to Permitted Liens) or Junior Lien (in the case of Revolving Credit Collateral, subject only to Credit Facility Liens and Permitted Liens), as and to the extent required by the applicable Note Lien Security Documents, for a period of 30 days after notice thereof is delivered to the Issuers by the Trustee or the holders of at least 25% in aggregate principal amount of notes then outstanding; or



(c)

any Issuer or Guarantor, or any Person acting on behalf of any of them, denies or disaffirms, in writing, any obligation of any Issuer or Guarantor set forth in or arising under any Note Lien Security Document, except to the extent of any Note Lien purported to be granted thereunder which purports to encumber Collateral that has been released in accordance with the terms of the Indenture and the Note Lien Security Documents.

        In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Issuers, any Restricted Subsidiary of the Issuers that is a Significant Subsidiary or any group of Restricted Subsidiaries of the Issuers that, taken together, would constitute a Significant Subsidiary, all outstanding notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the then outstanding notes may declare all the notes to be due and payable immediately.

        Subject to certain limitations, holders of a majority in aggregate principal amount of the then outstanding notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from holders of the notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest or premium or Additional Interest, if any.

133

        Subject to the provisions of the indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the indenture at the request or direction of any holders of notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest or Additional Interest, if any, when due, no holder of a note may pursue any remedy with respect to the indenture or the notes unless:

(1)

such holder has previously given the Trustee notice that an Event of Default is continuing;



(2)

holders of at least 25% in aggregate principal amount of the then outstanding notes have requested the Trustee to pursue the remedy;



(3)

such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense;



(4)

the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and



(5)

holders of a majority in aggregate principal amount of the then outstanding notes have not given the Trustee a direction inconsistent with such request within such 60-day period.

        The holders of a majority in aggregate principal amount of the then outstanding notes by notice to the Trustee may, on behalf of the holders of all of the notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the indenture except a continuing Default or Event of Default in the payment of interest or premium or Additional Interest, if any, on, or the principal of, the notes.

        The Issuers are required to deliver to the Trustee annually a statement regarding compliance with the indenture. Upon becoming aware of any Default or Event of Default, the Issuers are required to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

        No director, officer, employee, incorporator or stockholder of the Issuers or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under the notes, the indenture, the Note Guarantees or the Note Lien Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Legal Defeasance and Covenant Defeasance

        The Issuers may at any time, at the option of its Board of Directors evidenced by a resolution set forth in an officers' certificate, elect to have all of its obligations discharged with respect to the outstanding notes and all obligations of the Guarantors discharged with respect to their Note Guarantees ("Legal Defeasance") except for:

(1)

the rights of holders of outstanding notes to receive payments in respect of the principal of, or interest or premium and Additional Interest, if any, on, such notes when such payments are due from the trust referred to below;



(2)

the Issuers' obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust;

134

(3)

the rights, powers, trusts, duties and immunities of the Trustee, and the Issuers' and the Guarantors' obligations in connection therewith; and



(4)

the Legal Defeasance provisions of the indenture.

        In addition, Linens 'n Things, Inc. may, at its option and at any time, elect to have the obligations of Linens 'n Things, Inc. and the Guarantors released with respect to certain covenants (including its obligation to make Change of Control Offers and Asset Sale Offers) that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default and Remedies" will no longer constitute an Event of Default with respect to the notes.

        In order to exercise either Legal Defeasance or Covenant Defeasance:

(1)

Linens 'n Things, Inc. must irrevocably deposit with the Trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium and Additional Interest, if any, on, the outstanding notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and Linens 'n Things, Inc. must specify whether the notes are being defeased to such stated date for payment or to a particular redemption date;



(2)

in the case of Legal Defeasance, Linens 'n Things, Inc. must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that (a) Linens 'n Things, Inc. has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel will confirm that, the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;



(3)

in the case of Covenant Defeasance, Linens 'n Things, Inc. must deliver to the Trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of the outstanding notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;



(4)

no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which Linens 'n Things, Inc. or any Guarantor is a party or by which Linens 'n Things, Inc. or any Guarantor is bound;



(5)

such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the indenture) to which Linens 'n Things, Inc. or any of their respective Subsidiaries is a party or by which Linens 'n Things, Inc. or any of their respective Subsidiaries is bound;

135

(6)

Linens 'n Things, Inc. must deliver to the Trustee an officers' certificate stating that the deposit was not made by Linens 'n Things, Inc. with the intent of preferring the holders of notes over the other creditors of Linens 'n Things, Inc. with the intent of defeating, hindering, delaying or defrauding any creditors of Linens 'n Things, Inc. or others; and



(7)

Linens 'n Things, Inc. must deliver to the Trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Amendment, Supplement and Waiver

        Except as provided below, the indenture or the notes or the Note Guarantees may be amended or supplemented with the consent of the holders of at least a majority in aggregate principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing Default or Event of Default or compliance with any provision of the indenture or the notes or the Note Guarantees may be waived with the consent of the holders of a majority in aggregate principal amount of the then outstanding notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). In addition, any amendment to, or waiver of, the provisions of the indenture or any Note Lien Security Document that has the effect of releasing one or more of the Guarantors from its Guarantee or of releasing all or substantially all of the Collateral from the Liens securing the notes will, unless otherwise permitted in accordance with the indenture, require the consent of the Holders of a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes).

        Without the consent of each holder of notes affected, an amendment, supplement or waiver may not (with respect to any notes held by a non-consenting holder):

(1)

reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver;



(2)

reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption "—Repurchase at the Option of Holders");



(3)

reduce the rate of or change the time for payment of interest, including default interest, on any note;



(4)

waive a Default or Event of Default in the payment of principal of, or interest or premium, or Additional Interest, if any, on, the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the then outstanding notes and a waiver of the payment default that resulted from such acceleration);



(5)

make any note payable in money other than that stated in the notes;



(6)

make any change in the provisions of the indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of, or interest or premium or Additional Interest, if any, on, the notes;



(7)

waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption "—Repurchase at the Option of Holders");



(8)

release any Guarantor from any of its obligations under its Note Guarantee or the indenture, except in accordance with the terms of the indenture; or

136

(9)

make any change in the preceding amendment and waiver provisions.

        Notwithstanding the preceding, without the consent of any holder of notes, the Issuers, the Guarantors and the Trustee may amend or supplement the indenture, the notes or the Note Guarantees:

(1)

to cure any ambiguity, defect or inconsistency;



(2)

to provide for uncertificated notes in addition to or in place of certificated notes;



(3)

to provide for the assumption of the Issuers' or a Guarantor's obligations to holders of notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuers' or such Guarantor's assets, as applicable;



(4)

to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the indenture of any such holder;



(5)

to comply with requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act;



(6)

to conform the text of the indenture, the Note Guarantees or the notes to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of the indenture, the Note Guarantees or the notes;



(7)

to provide for the issuance of additional notes in accordance with the limitations set forth in the indenture as of the date of the indenture; or



(8)

to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee with respect to the notes or to add a Lien on additional Collateral to secure the notes or the Guarantees.

Satisfaction and Discharge

        The indenture will be discharged and will cease to be of further effect as to all notes issued thereunder, when:

(1)

either:



(a)

all notes that have been authenticated, except lost, stolen or destroyed notes that have been replaced or paid and notes for whose payment money has been deposited in trust and thereafter repaid to the Issuers, have been delivered to the Trustee for cancellation; or



(b)

all notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the notes not delivered to the Trustee for cancellation for principal, premium and Additional Interest, if any, and accrued interest to the date of maturity or redemption;



(2)

no Default or Event of Default has occurred and is continuing on the date of the deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a

137

default under, any other instrument to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound;

(3)

the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under the indenture; and



(4)

the Issuers have delivered irrevocable instructions to the Trustee under the indenture to apply the deposited money toward the payment of the notes at maturity or on the redemption date, as the case may be.

        In addition, the Issuers must deliver an officers' certificate and an opinion of counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Concerning the Trustee

        The Trustee shall comply with the provisions of TIA §311. The holders of a majority in aggregate principal amount of the then outstanding notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The indenture provides that in case an Event of Default occurs and is continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any holder of notes, unless such holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Additional Information

        Anyone who receives this prospectus may obtain a copy of the indenture and registration rights agreement without charge by writing to Attention: Chief Financial Officer, Linens 'n Things, Inc., 6 Brighton Road, Clifton, New Jersey 07015.

Registration Rights

        The following is a summary of the material provisions of the registration rights agreement. You should read the registration rights agreement, which is filed as an exhibit to the registration statement to which this prospectus is a part.

        The issuers have agreed with the initial purchasers of the old notes, for the benefit of the holders thereof, that they will use their reasonable efforts, at their cost, to file and cause to become effective a registration statement with respect to an exchange offer to exchange the old notes for an issue of exchange notes with terms identical to the old notes (except that the exchange notes will not bear legends restricting transfer).

        This exchange offer is being made to satisfy our obligations under the registration rights agreement.

        In the event that applicable interpretations of the staff of the Securities and Exchange Commission do not permit the issuers to effect the exchange offer, or under other specified circumstances, the issuers will, at their cost, use their reasonable efforts to cause to become effective a shelf registration statement with respect to resales of the old notes. The issuers will use their reasonable efforts to keep such shelf registration statement effective until the expiration of up to two years after February 14, 2006, or such shorter period that will terminate when all old notes covered by the shelf registration statement have been sold pursuant to the shelf registration statement. The issuers will, in the event of such a shelf registration, provide to each holder of old notes copies of the prospectus, notify each holder of old notes when the shelf registration statement for the old notes has become effective and

138

take certain other actions as are required to permit resales of the old notes. A holder of old notes that sells its old notes pursuant to the shelf registration statement (1) generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, (2) will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales, (3) may be restricted from selling its Notes during certain blackout periods and (4) will be bound by the provisions of the registration rights agreement that are applicable to such a holder (including indemnification obligations).

Certain Definitions

        Set forth below are certain defined terms used in the indenture. Reference is made to the indenture for a full disclosure of all defined terms used therein, as well as any other capitalized terms used herein for which no definition is provided.

"Access Period" means (a) with respect to all Primary Real Estate Assets, the period, after the commencement of an Enforcement Period, which begins, with respect to all Primary Real Estate Assets, on the day that a Revolving Credit Collateral Agent provides the Note Lien Collateral Agent with the notice of its election to request access with respect to all Primary Real Estate Assets pursuant to the Intercreditor Agreement and ends on the earliest of (i) the 180th day after such Revolving Credit Collateral Agent obtains the ability to use, take physical possession of, remove or otherwise control the use or access to the Revolving Credit Collateral located on the Primary Real Estate Assets following Enforcement plus such number of days, if any, after such Revolving Credit Collateral Agent obtains access to such Revolving Credit Collateral that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Revolving Credit Collateral located on the Primary Real Estate Assets or (ii) the date on which all or substantially all of the Revolving Credit Collateral located on the Primary Real Estate Assets is sold, collected or liquidated or (iii) the date on which the Discharge of Revolving Credit Obligations occurs and (b) with respect to each parcel of Other Real Estate, the period, after the commencement of an Enforcement Period, which begins, with respect to such parcel of Other Real Estate, on the day that a Revolving Credit Collateral Agent provides the Note Lien Collateral Agent with the notice of its election to request access with respect to such parcel of Other Real Estate pursuant to the Intercreditor Agreement and ends on the earliest of (i) the 180th day after such Revolving Credit Collateral Agent obtains the ability to use, take physical possession of, remove or otherwise control the use or access to the Revolving Credit Collateral located on such to the Revolving Credit Collateral located on such Other Real Estate following Enforcement plus such number of days, if any, after such Revolving Credit Collateral Agent obtains access to such Revolving Credit Collateral that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Revolving Credit Collateral located on such Other Real Estate or (ii) the date on which all or substantially all of the Revolving Credit Collateral located on such Other Real Estate is sold, collected or liquidated or (iii) the date on which the Discharge of Revolving Credit Obligations occurs.

"Accounts" means all now present and future "accounts" and "payment intangibles" (in each case, as defined in Article 9 of the UCC).

"Acquired Debt" means Indebtedness (i) of a Person or any of their respective Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case whether or not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary or such acquisition. Acquired Debt shall be deemed to have been incurred, with respect to clause (i) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (ii) of the preceding sentence, on the date of consummation of such acquisition of assets.

139

"Acquisition Agreement" means the Agreement and Plan of Merger among Linens Merger Sub Co., the Parent and Linens 'n Things, Inc., dated as of November 8, 2005, as the same may be amended, modified or supplemented from time to time.

"Additional Interest" means all Additional Interest then owing pursuant to the registration rights agreement.

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.

"Applicable Eurodollar Rate" means, for each quarterly period during which any note is outstanding subsequent to the initial quarterly period, 562.5 basis points over the rate per annum determined by Linens 'n Things, Inc. (notice of such rate to be sent to the Trustee by Linens 'n Things, Inc. on the date of determination thereof) equal to the arithmetic mean (rounded upward, if necessary, to the nearest 1/100th of 1%) of the offered rates for deposits in U.S. dollars for a period of three months that appears on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined below) at approximately 11:00 a.m., London, England time, on the second full Business Day preceding the first day of such quarterly period; provided, however, that (i) if no comparable term for a quarterly period is available, the Applicable Eurodollar Rate for the relevant quarterly period shall be determined using the weighted average of the offered rates for the two terms most nearly corresponding to such quarterly period and (ii) if there shall at any time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page, "Applicable Eurodollar Rate" shall mean, with respect to each day during the relevant quarterly period, the rate per annum equal to the rate at which Bear, Stearns & Co. Inc. or one of its affiliate banks is offered deposits in U.S. dollars at approximately 11:00 a.m., London, England time, two Business Days prior to the first day of such quarterly period in the London interbank market for delivery on the first day of such quarterly period for a period of three months, in amounts equal to $1.0 million. "Telerate British Bankers Assoc. Interest Settlement Rates Page" shall mean the display designated as Page 3750 (or other appropriate page if dollars do not appear on such page) on the Telerate System Incorporated Service (or such other page as may replace such page on such service for the purpose of displaying the rates at which dollar deposits are offered by leading banks in the London interbank deposit market). Notwithstanding the foregoing, the Applicable Eurodollar Rate for the initial quarterly period shall be 10.34500%.

"Asset Sale" means:

(1)

the sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of Linens 'n Things, Inc. and its respective Restricted Subsidiaries taken as a whole will be governed by the provisions of the indenture described above under the caption "—Repurchase at the Option of Holders—Change of Control" and/or the provisions described above under the caption "—Certain Covenants—Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant; and



(2)

the issuance or sale of Equity Interests in any of the Issuers' Restricted Subsidiaries.

        Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

(1)

any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $5.0 million;

140

(2)

a transfer of assets between or among the Issuers and their respective Restricted Subsidiaries;



(3)

an issuance of Equity Interests by a Restricted Subsidiary of Linens 'n Things, Inc. to Linens 'n Things, Inc. or to a Restricted Subsidiary of Linens 'n Things, Inc.;



(4)

the sale or lease of products, services or accounts receivable in the ordinary course of business and any sale or other disposition of damaged, worn-out or obsolete (or otherwise unsuitable for use in connection with the business of Linens 'n Things, Inc. and their respective Restricted Subsidiaries) assets in the ordinary course of business;



(5)

the sale or other disposition of cash or Cash Equivalents;



(6)

a Restricted Payment that does not violate the covenant described above under the caption "—Certain Covenants—Restricted Payments" or is a Permitted Investment;



(7)

dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;



(8)

the granting of a Lien permitted by the indenture;



(9)

the unwinding of any Hedging Obligations;



(10)

licenses, leases or subleases of property in the ordinary course of business which do not materially interfere with the business of Linens 'n Things, Inc. and their respective Restricted Subsidiaries;



(11)

the sale or other disposition of Equity Interests of or any Investment in an Unrestricted Subsidiary;



(12)

(i) a sale and leaseback transaction relating to a retail store acquired, constructed or developed by any of the Issuers or their respective Restricted Subsidiaries after the date of the indenture entered into within 18 months of the date of consummation of the acquisition or completion of the construction or development, as the case may be, or (ii) a sale and leaseback transaction relating to the Company's corporate headquarters located at 6 Brighton Road, Clifton, New Jersey 07015; and



(13)

the sale of Permitted Investments (other than sales of Capital Stock of any of the Issuers' Restricted Subsidiaries) made by the Issuers or any Restricted Subsidiary after the date of the indenture, if such Permitted Investments were (a) received in exchange for, or purchased out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Linens 'n Things, Inc.) of, Capital Stock of Linens 'n Things, Inc. (other than Disqualified Stock) or (b) received in the form of, or were purchased from the proceeds of, a substantially concurrent contribution of common equity capital to Linens 'n Things, Inc.

"Asset Sale Offer" has the meaning assigned to that term in the indenture governing the notes.

"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.

"beneficial owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms "beneficially owns" and "beneficially owned" have a corresponding meaning.

141

"Board of Directors" means:

(1)

with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board of directors;



(2)

with respect to a partnership, the board of directors of the general partner of the partnership;



(3)

with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and



(4)

with respect to any other Person, the board or committee of such Person serving a similar function.

"Borrowing Base" means, as of any date of determination, an amount equal to:

(1)

85% of the face amount of all Receivables owned by the Issuers and their respective Restricted Subsidiaries as reported in accordance with GAAP on the Issuers' consolidated balance sheet (or notes thereto) as of the end of the most recent fiscal quarter preceding such determination date for which financial statements are available, excluding Receivables that were more than 90 days past due as of such balance sheet date; plus

(2)

75% of the book value of all Inventory owned by the Issuers and their respective Restricted Subsidiaries as reported in accordance with GAAP on the Issuers' consolidated balance sheet (or notes thereto) as of the end of the most recent fiscal quarter preceding such determination date for which financial statements are available;

it being understood that the Receivables and Inventories of an acquired business may be included if such acquisition has been completed on or prior to the date of determination.

"Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

"Canadian" means as to any Person, a Person that is created or organized under the laws of Canada or a Province or territory of Canada.

"Canadian Collateral" means the assets of Linens 'n Things Canada Corp. and Canadian Subsidiaries of the Parent covered by one or more Security Documents (as defined in the Revolving Credit Agreement) and any other assets of Linens 'n Things Canada Corp. or Canadian Subsidiaries of Linens Holding Co., real or personal, tangible or intangible, now existing or hereafter acquired, that may at any time be or become subject to a Lien in favor of the Canadian Revolving Credit Collateral Agent (as defined in the Intercreditor Agreement) and all or some of the other Revolving Credit Claimholders.

"Capital Lease Obligation" means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

"Capital Stock" means:

(1)

in the case of a corporation, corporate stock;



(2)

in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;



(3)

in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

142

(4)

any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

"Capital Stock Collateral" means all of the following property of the Company and each Grantor now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest:

(1)

all of the Capital Stock in the Company and its Domestic Subsidiaries (including, without limitation, Bloomington MN, L.T., Inc., LNT, Inc., LNT Services, Inc., LNT West, Inc., Vendor Finance, LLC, LNT Leasing II, LLC, LNT Leasing III, LLC, LNT Virginia LLC, LNT Merchandising Company LLC and Citadel LNT, LLC);



(2)

65% of the Capital Stock of the Foreign Subsidiaries owned directly by the Parent or its Domestic Subsidiaries;



(3)

Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and



(4)

substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

"Cash Equivalents" means:

(1)

United States dollars;



(2)

securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than six months from the date of acquisition;



(3)

certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any lender party to any Credit Facility or any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B" or better;



(4)

repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;



(5)

commercial paper having one of the two highest ratings obtainable from Moody's or S&P and, in each case, maturing within one year after the date of acquisition; and



(6)

investment funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

"Cash Management Obligations" means all monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise of the Issuers or any of their respective Subsidiaries arising out of any cash management, clearing house, wire transfer, depository or investment services provided by any lender under any Credit Facility or an Affiliate of such lender.

"Cash Proceeds" means all Proceeds of any Collateral received by any Grantor consisting of cash and Cash Equivalents.

143

"Casualty Event" means any taking under power of eminent domain or similar proceeding and any insured loss (excluding business interruption), in each case relating to property or other assets that constitute Note Lien Collateral.

"Change of Control" means the occurrence of any of the following:

(1)

the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Linens 'n Things, Inc. or the Parent and their respective Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d) of the Exchange Act) other than a Sponsor or a Related Party of a Sponsor; provided that the transfer of 100% of the Voting Stock of Linens 'n Things, Inc. or the Parent to a Person that has an ownership structure identical to that of Linens 'n Things, Inc. or the Parent, as the case may be, prior to such transfer, such that Linens 'n Things, Inc. or the Parent, as the case may be, becomes a wholly owned Subsidiary of such Person, shall not be treated as a Change of Control for purposes of the indenture;



(2)

the adoption of a plan relating to the liquidation or dissolution of Linens 'n Things, Inc.;



(3)

after an initial public offering of Linens 'n Things, Inc. or the Parent, the first day on which a majority of the members of the Board of Directors of Linens 'n Things, Inc. or the Parent are not Continuing Directors;



(4)

prior to an initial public offering of Common Stock of Linens 'n Things, Inc. or the Parent, (A) the Sponsors or their Related Persons cease to be the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of Linens 'n Things, Inc. or the Parent, including, without limitation, as a result of the issuance of securities of Linens 'n Things, Inc. or the Parent, any merger, consolidation, liquidation or dissolution of Linens 'n Things, Inc. or the Parent, any direct or indirect transfer of securities by any Sponsor or Related Party or otherwise and (B) the Sponsors or their Related Parties do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of Linens 'n Things, Inc. or the Parent; or



(5)

on or subsequent to an initial public offering of Common Stock of Linens 'n Things, Inc. or the Parent, any event occurs the result of which is that (A) any "person" or "group" of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Sponsors or their Related Parties, is or becomes the beneficial owner, directly or indirectly, of more than 35% of the Voting Stock of Linens 'n Things, Inc. or the Parent and (B) the Sponsors and their Related Parties beneficially own, directly or indirectly, in the aggregate a lesser percentage of the total voting power of the Voting Stock of Linens 'n Things, Inc. or the Parent, as the case may be, (or its successor by merger, consolidation or purchase of all or substantially all of its assets) than such other person or group and do not have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of Linens 'n Things, Inc. or the Parent or such successor.

"Change of Control Offer" has the meaning assigned to that term in the indenture governing the notes.

"Chattel Paper" means all "chattel paper" as defined in Article 9 of the UCC, including, without limitation, "electronic chattel paper" or "tangible chattel paper," as each term is defined in Article 9 of the UCC.

"Collateral" means all of the assets and property of any Grantor, whether real, personal or mixed, constituting Note Lien Collateral or Revolving Credit Collateral.

144

"Collateral Agent" means:

(1)

with respect to holders of Note Lien Obligations, the Note Lien Collateral Agent; and



(2)

with respect to holders of Revolving Credit Obligations, the Revolving Credit Collateral Agent.

"Collateral Class," as used with respect to Collateral, means the Note Lien Collateral or the Revolving Credit Collateral, as applicable.

"Collateral Records" means all books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

"Collateral Sale Offer" has the meaning assigned to that term in the indenture governing the notes.

"Collateral Support" means all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

"Commercial Tort Claims" means all "commercial tort claims" as defined in Article 9 of the UCC.

"Consolidated Cash Flow" means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

(1)

provision for taxes based on income or profits of such Person and their respective Restricted Subsidiaries for such period and any applicable franchise or property taxes (calculated in each case based on income) to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus

(2)

the Fixed Charges of such Person and their respective Restricted Subsidiaries for such period, to the extent that such Fixed Charges were deducted in computing such Consolidated Net Income; plus

(3)

the amount of any restructuring charges or reserves (which for the avoidance of doubt, shall include without limitation retention, escheat, severance, relocation, excess pension charges, contract termination costs, including future lease commitments) deducted in such period in computing Consolidated Net Income (excluding any such items to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period); plus

(4)

cash received pursuant to tenant allowances from landlords; plus

(5)

for any quarter in the period beginning October 3, 2004 and ending December 31, 2005, all adjustments to net income (or loss) used in connection with the calculation of "Adjusted EBITDA" for the 52 weeks ended October 1, 2005 (as set forth in this prospectus under Note (3) to the section entitled "Prospectus Summary—Summary Historical and Pro Forma Consolidated Financial and Operating Data") to the extent such adjustments are not fully reflected in the period being measured and continue to be applicable to such Person; plus

(6)

depreciation, amortization (including amortization of intangibles and any amortization of straight line rent expense in excess of cash rent expense but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (including charges related to the write-off of goodwill or intangibles as a result of impairment, in each case as required by SFAS No. 142 or SFAS No. 144 but excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period

145

or amortization of a prepaid cash expense that was paid in a prior period) of such Person and their respective Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus

(7)

annual management fees and fees for financial advisory and investment banking services rendered to Linens 'n Things, Inc. and their respective Restricted Subsidiaries in connection with acquisitions, securities offerings and other financings and similar significant corporate transactions in customary and reasonable amounts for such transactions paid to the Sponsors in an aggregate amount not to exceed, during any consecutive 12-month period, $2.0 million to the extent such amount was deducted in computing such Consolidated Net Income; minus

(8)

non-cash items increasing such Consolidated Net Income (including the amortization of tenant allowances received) for such period, other than the accrual of revenue in the ordinary course of business; minus

(9)

the amount of cash rent expense in excess of amortization of straight line rent expense,

in each case, on a consolidated basis and determined in accordance with GAAP.

        Notwithstanding the preceding sentence, clauses (1) and (3) through (6) relating to amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (1) and (3) through (6) are in excess of those necessary to offset a net loss of a Restricted Subsidiary that is not a Guarantor or if such Restricted Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to the Issuers by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Restricted Subsidiary or its stockholders.

"Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and their respective Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

(1)

the Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash (or converted into cash) to the specified Person or a Restricted Subsidiary of the Person;



(2)

the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; provided that if any such dividend or distribution is actually received it will be included for the purposes of this definition;



(3)

any increase in amortization and depreciation or any one-time non-cash charges resulting from purchase accounting in connection with any acquisition that is consummated on or after the date of the Indenture (including the Transactions) will be excluded;



(4)

accruals and reserves that are established within 12 months of the closing of the Transactions and that are required to be established in accordance with GAAP shall be excluded;

146

(5)

the cumulative effect of a change in accounting principles will be excluded;



(6)

any net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of indebtedness will be excluded;



(7)

non-cash gains, losses, income and expenses resulting from fair value accounting required by Statement of Financial Accounting Standards No. 133 and related interpretations will be excluded; and



(8)

any fees, expenses and charges relating to the Transactions up to an aggregate of $81.0 million will be excluded (whenever paid).

"Consolidated Net Tangible Assets" of any Person means, as of any date of determination, the sum of the assets of such Person after eliminating intercompany items, determined on a consolidated basis in accordance with GAAP, including appropriate deductions for any minority interest in tangible assets of such Person's Subsidiaries, less (without duplication) (i) the net book value of all of its licenses, patents, patent applications, copyrights, trademarks, trade names, goodwill, non-compete agreements or organizational expenses and other like intangibles shown on the balance sheet of Linens 'n Things, Inc. and their respective Restricted Subsidiaries as of the most recent date for which such a balance sheet is available, (ii) unamortized Indebtedness discount and expenses, (iii) all reserves for depreciation, obsolescence, depletion and amortization of its properties and all other proper reserves related to assets which in accordance with GAAP have been provided by such Person and (iv) all current liabilities.

"Continuing Directors" means, as of any date of determination, any member of the Board of Directors of Linens 'n Things, Inc. who:

(1)

was a member of such Board of Directors on the date of the indenture; or



(2)

was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.

"Copyright Licenses" means any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Copyrights (whether the applicable Grantor is licensee or licensor thereunder).

"Copyrights" means, collectively, with respect to each Grantor, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished) and all copyright registrations and applications made by such Grantor, in each case, whether now owned or hereafter created or acquired by or assigned to such Grantor, and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof.

"Credit Card Processing Accounts" means any accounts which are not Deposit Accounts or Securities Accounts and which are maintained by or with a person which conducts the processing of credit card payments for any of the Grantors, including all amounts reflecting any reserves or other amounts owing to any of the Grantors and which may be maintained by such processors pursuant to the respective card processing agreements.

147

"Credit Facilities" means, one or more debt facilities (including, without limitation, the Revolving Credit Agreement) or commercial paper facilities, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

"Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

"Deposit Accounts" means all "deposit accounts" as defined in Article 9 of the UCC of any applicable jurisdiction and, in any event including any demand, time, savings, passbook or like account maintained with a depositary institution.

"Discharge of Note Lien Obligations" means, except to the extent otherwise expressly provided in the Intercreditor Agreement:

(1)

termination or expiration of all commitments to extend credit that would constitute Note Lien Debt;



(2)

payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any insolvency or liquidation proceeding, whether or not such interest would be allowed in such insolvency or liquidation proceeding), on all Indebtedness outstanding under the Note Lien Documents and constituting Note Lien Debt;



(3)

discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (B) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Note Lien Document) of all outstanding letters of credit constituting Note Lien Debt; and



(4)

payment in full in cash of all other Note Lien Obligations that are outstanding and unpaid at the time the Note Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).

        If a Discharge of Note Lien Obligations occurs prior to the termination of the Intercreditor Agreement in accordance with the Intercreditor Agreement, to the extent that additional Note Lien Obligations are incurred or Note Lien Obligations are reinstated in accordance with the Intercreditor Agreement, the Discharge of Note Lien Obligations shall (effective upon the incurrence of such additional Note Lien Obligations or reinstatement of such Note Lien Obligations, as applicable) be deemed to no longer be effective.

"Discharge of Revolving Credit Obligations" means, except to the extent otherwise expressly provided in the Intercreditor Agreement:

(1)

termination or expiration of all commitments, if any, to extend credit that would constitute Revolving Credit Obligations;



(2)

payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the Revolving Credit Loan Documents and constituting Revolving Credit Obligations;



(3)

termination or cash collateralization (in an amount and manner reasonably satisfactory to the Revolving Credit Collateral Agent, but in no event greater than 105% of the aggregate

148

undrawn face amount) of all letters of credit issued under the Revolving Credit Loan Documents and constituting Revolving Credit Obligations; and

(4)

payment in full in cash of all other Revolving Credit Obligations that are outstanding and unpaid at the time the Indebtedness constituting such Revolving Credit Obligations is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).

        If a Discharge of Revolving Credit Obligations occurs prior to the termination of the Intercreditor Agreement in accordance with the Intercreditor Agreement, to the extent that additional Revolving Credit Obligations are incurred or Revolving Credit Obligations are reinstated in accordance with the Intercreditor Agreement, the Discharge of Revolving Credit Obligations shall (effective upon the incurrence of such additional Revolving Credit Obligations or reinstatement of such Revolving Credit Obligations, as applicable) be deemed to no longer be effective.

"Discharge of Priority Lien Obligations" means:

(1)

with respect to Priority Liens on Note Lien Collateral, the Discharge of Note Lien Obligations; and



(2)

with respect to Priority Liens on Revolving Credit Collateral, the Discharge of Revolving Credit Obligations.

"Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require Linens 'n Things, Inc. to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that Linens 'n Things, Inc. may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such provisions are not more favorable to the holders of such Capital Stock than the provisions in the indenture described above under the caption "—Repurchase at the Option of Holders." The amount of Disqualified Stock deemed to be outstanding at any time for purposes of the indenture will be the maximum amount that Linens 'n Things, Inc. and their respective Restricted Subsidiaries may become obligated to pay upon the maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock, exclusive of accrued dividends.

"Documents" means all "documents" as defined in Article 9 of the UCC.

"Domestic Subsidiary" means any Restricted Subsidiary of Linens 'n Things, Inc. that was formed under the laws of the United States or any state of the United States or the District of Columbia.

"Enforcement" means, collectively or individually for any one of the Revolving Credit Collateral Agent or the Note Lien Collateral Agent when a Revolving Credit Default or a Note Lien Default, as the case may be, has occurred and is continuing, any action taken by such Person to repossess, or exercise any remedies with respect to, any material amount of Collateral (other than Canadian Collateral) or commence the judicial enforcement of any of the rights and remedies under the Revolving Credit Loan Documents or the Note Lien Documents or under any applicable law with respect to the Collateral, but in all cases excluding (i) the demand of the repayment of all the principal amount of any Obligations, (ii) the imposition of a default rate or late fee and (iii) the collection and application of, or the delivery of any activation notice with respect to, Accounts or other monies

149

deposited from time to time in Deposit Accounts, Credit Card Processing Accounts or Securities Accounts against the Revolving Credit Obligations pursuant to the Revolving Credit Loan Documents; provided, however, the foregoing exclusion set forth in clause (iii) shall immediately cease to apply upon the earlier of (x) the Revolving Credit Collateral Agent' delivery of written notice to the Borrowers that such exclusion no longer applies, (y) the lapse of ten (10) consecutive Business Days after a Revolving Credit Default in which no "Revolving Loans" or "Special Agent Advances" are made and no "Letters of Credit" are issued (in each case, as defined in the Revolving Credit Agreement), and (z) the termination of the Revolving Commitments pursuant to Section 8.1 (or any other applicable provision) of the Revolving Credit Agreement.

"Enforcement Notice" means a written notice delivered, at a time when a Revolving Credit Default or Note Lien Default has occurred and is continuing, by either the Revolving Credit Collateral Agent or the Note Lien Collateral Agent to the other such Person announcing that an Enforcement Period has commenced, specifying the relevant event of default, stating the current balance of the Revolving Credit Obligations or the current balances owing with respect to Note Lien Obligations, as the case may be, and requesting the current balance owing of the Revolving Credit Obligations or Note Lien Obligations, as the case may be.

"Enforcement Period" means the period of time following the receipt by either the Revolving Credit Collateral Agent or the Note Lien Collateral Agent of an Enforcement Notice from the other until either (i) in the case of an Enforcement Period commenced by the Note Lien Collateral Agent, the Discharge of Note Lien Obligations, or (ii) in the case of an Enforcement Period commenced by the Revolving Credit Collateral Agent, the Discharge of Revolving Credit Obligations, or (iii) the Revolving Credit Collateral Agent or the Note Lien Collateral Agent (as applicable) agree in writing to terminate the Enforcement Period.

"Equipment" means: (i) all "equipment" (as defined in Article 9 of the UCC), (ii) all trade-fixtures, sales displays, lighting, shelving, signage and "fixtures" (as defined in Article 9 of the UCC) and (iii) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, wherever located and whether now or hereafter existing.

"Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

"Equity Offering" means any public or private sale of Capital Stock (other than Disqualified Stock) of the Company or any of its direct or indirect parent companies, other than: (a) public offerings with respect to the Company's or any direct or indirect parent company's common stock registered on Form S-4 or Form S-8 or (b) an issuance to any Subsidiary of the Company.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Excluded Assets" means any of the following property to the extent that and for as long as such grant of a security interest therein:

(1)

is prohibited by any Requirement of Law; provided that (a) such property shall cease to be an Excluded Asset immediately and automatically (without need for any further grant or act) at such time as the condition described in this clause (1) ceases to exist and (b) to the extent severable, all such rights that are not subject to the applicable condition described in clause (1) in respect of such property shall not constitute an Excluded Asset;



(2)

requires a filing with or consent from any Governmental Authority pursuant to any Requirement of Law that has not been made or obtained;



(3)

constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any lease, license or agreement, except to the extent that such

150

Requirement of Law or provisions of any such lease, license or agreement is ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC to prevent the attachment of the security interest granted hereunder; provided that such lease, license, contract, property right or agreement will cease to be an Excluded Asset and will become subject to the Lien granted under the security documents, immediately and automatically, at such time as the grant of a Lien under the security documents no longer constitutes or results in a breach, termination or default under any lease, license, contract, property right or agreement;

(4)

is in any other property or assets (other than Intellectual Property) in which a Lien cannot be perfected either automatically or by the filing of a financing statement under the UCC of the relevant jurisdiction, so long as the aggregate fair market value of all such property and assets does not at any one time exceed $5.0 million; and



(5)

any "intent-to-use" applications for trademark or service mark registration filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051(b), unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been properly filed and finally accepted by the Patent and Trademark Office, to the extent that any assignment of an "intent-to-use" application prior to such filing would violate the Lanham Act, whereupon such application shall be automatically subject to the security interest granted to secure the obligations under the notes, and will be deemed to be included in the collateral.

"Fair Market Value" means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the relevant Issuer or Restricted Subsidiary, which determination shall be conclusive (unless otherwise provided in the indenture).

"Fixed Charge Coverage Ratio" means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of their respective Restricted Subsidiaries incurs, assumes, guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness (other than ordinary working capital borrowings) or issues, repurchases or redeems preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of preferred stock, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable four-quarter reference period.

        In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

(1)

acquisitions that have been made by the specified Person or any of their respective Restricted Subsidiaries, including through mergers or consolidations, or any Person or any of their respective Restricted Subsidiaries acquired by the specified Person or any of their respective Restricted Subsidiaries, and including any related financing transactions and including increases in ownership of Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect (in accordance with Regulation S-X under the Securities Act) as if they had occurred on the first day of the four-quarter reference period;



(2)

the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

151

(3)

the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of their respective Restricted Subsidiaries following the Calculation Date;



(4)

any Person that is a Restricted Subsidiary on the Calculation Date (or would become a Restricted Subsidiary on such Calculation Date in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed to have been a Restricted Subsidiary at all times during such four-quarter period;



(5)

any Person that is not a Restricted Subsidiary on the Calculation Date (or would cease to be a Restricted Subsidiary on such Calculation Date in connection with the transaction requiring determination of such Consolidated Cash Flow) will be deemed not to have been a Restricted Subsidiary at any time during such four-quarter period; and



(6)

if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months).

"Fixed Charges" means, with respect to any specified Person for any period, the sum, without duplication, of:

(1)

the consolidated interest expense of such Person and their respective Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates, but excluding amortization of debt issuance costs; plus

(2)

the consolidated interest expense of such Person and their respective Restricted Subsidiaries that was capitalized during such period; plus

(3)

any interest on Indebtedness of another Person that is guaranteed by such Person or one of their respective Restricted Subsidiaries or secured by a Lien on assets of such Person or one of their respective Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

(4)

the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of preferred stock of such Person or any of their respective Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of Linens 'n Things, Inc. (other than Disqualified Stock) or to any of the Issuers of their respective Restricted Subsidiaries, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP.

"Foreign Subsidiary" means any Restricted Subsidiary of Linens 'n Things, Inc. that is not a Domestic Subsidiary.

"GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the indenture.

152

"Grantors" means Parent, the Issuers, Linens 'n Things Canada Corp, each Guarantor and each other Person that has or may from time to time execute and deliver a Security Document (as defined in the Revolving Credit Agreement) or a Note Lien Security Document or as a Person granting a Lien or other interest in its property to secure any of the Obligations.

"Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

"Guarantors" means each of:

(1)

Linens Holding Co., Bloomington MN, L.T., Inc., LNT, Inc., LNT Services, Inc., LNT West, Inc., Vendor Finance, LLC, LNT Leasing II, LLC, LNT Leasing III, LLC, LNT Virginia LLC, LNT Merchandising Company LLC and Citadel LNT, LLC; and



(2)

any other Subsidiary of Linens 'n Things, Inc. that executes a Note Guarantee in accordance with the provisions of the indenture,

and their respective successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the indenture.

"Hedge Agreements" means any:

(1)

interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements and other agreements or arrangements designed for the purpose of fixing, hedging or swapping interest rate risk;



(2)

other agreements or arrangements designed to manage interest rates or interest rate risk; and



(3)

other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

"Hedging Obligations" means, with respect to any specified Person, the obligations of such Person under any Hedge Agreement.

"Immaterial Subsidiary" means, as of any date, any Restricted Subsidiary whose total assets, as of that date, are less than $100,000 and whose total revenues for the most recent 12-month period do not exceed $100,000; provided that a Restricted Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise provides direct credit support for any Indebtedness of the Issuers.

"Indebtedness" means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

(1)

in respect of borrowed money;



(2)

evidenced by bonds, notes, debentures or similar instruments;



(3)

in respect of banker's acceptances or letters of credit (other than obligations with respect to letters of credit securing obligations (other than obligations described in (1) or (2) above or (4) below) entered into in the ordinary course of business of such Person to the extent such letters of credit are not drawn upon);



(4)

representing Capital Lease Obligations;

153

(5)

representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or



(6)

representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) but only to the extent of the lesser of (x) the Fair Market Value of the assets subject to such Lien, or (y) the amount of the Indebtedness secured by such Lien and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

"Instruments" means all "instruments" as defined in Article 9 of the UCC.

"Intellectual Property" means, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses.

"Intercreditor Agreement" means the Intercreditor Agreement, dated as of the date of the indenture, among the Issuers, the Guarantors, the Revolving Credit Collateral Agent, and the Note Lien Collateral Agent, as amended, supplemented or otherwise modified from time to time.

"Intercompany Notes of Subsidiaries" means all indebtedness owing by any of the Company's Subsidiaries to the Company or any of the Company's other Subsidiaries, whether or not represented by a note or an agreement.

"Inventory" mean all present and future "inventory" (as defined in Article 9 of the UCC) and, in any event, includes, without limitation, all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor's business; the purchaser's interest in any goods being manufactured pursuant to any contract or other arrangement with a supplier, all goods in transit from suppliers (whether or not evidenced by a document of title) and all goods in which any Grantor has an interest in mass or a joint or other interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, all computer programs embedded in any goods and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

"Investment Property" means the collective reference to all "investment property" as such term is defined in Section 9-102(a)(49) of the New York UCC (other than Equity Interests).

"Investments" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the form of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Linens 'n Things, Inc. or any Restricted Subsidiary of Linens 'n Things, Inc. sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Linens 'n Things, Inc. such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of Linens 'n Things, Inc., Linens 'n Things, Inc. will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Issuers' Investments in such Person that were not sold or disposed of in an amount determined as provided in the penultimate paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments." The acquisition by Linens 'n Things, Inc. or any Restricted Subsidiary of Linens 'n Things, Inc. of a Person

154

that holds an Investment in a third Person will be deemed to be an Investment by Linens 'n Things, Inc. or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the penultimate paragraph of the covenant described above under the caption "—Certain Covenants—Restricted Payments." Except as otherwise provided in the indenture, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

"Junior Lien" means:

(1)

with respect to Note Lien Collateral, the Revolving Credit Liens; and



(2)

with respect to Revolving Credit Collateral, the Note Liens.

"Junior Lien Collateral Agent" means, with respect to any Collateral and the Junior Liens thereon, the Revolving Credit Collateral Agent or the Note Lien Collateral Agent, as applicable, on behalf of the holders of the Junior Liens thereon.

"Junior Lien Debt" means:

(1)

with respect to Note Lien Collateral, Revolving Credit Obligations; and



(2)

with respect to Revolving Credit Collateral, Note Lien Debt.

"Junior Lien Documents" means:

(1)

with respect to Note Lien Collateral, the Revolving Credit Loan Documents; and



(2)

with respect to Revolving Credit Collateral, the Note Lien Documents.

"Junior Lien Obligations" means:

(1)

with respect to Note Lien Collateral, the Revolving Credit Obligations; and



(2)

with respect to Revolving Credit Collateral, the Note Lien Obligations.

"Junior Lien Representative" means:

(1)

with respect to Note Lien Collateral, each Revolving Credit Lien Representative; and



(2)

with respect to Revolving Credit Collateral, each Note Lien Representative.

"Letter of Credit Right" means "letter-of-credit right" as defined in Article 9 of the UCC.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

"Lien Sharing and Priority Confirmation" means the written agreement of the holders of any Series of Note Lien Debt, as set forth in the indentures, credit agreement or other agreement governing such Series of Note Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt and Note Lien Debt, each existing and future Note Lien Representative and each existing and future holder of "Permitted Liens" (as defined in the Indenture):

(1)

that all Note Lien Obligations will be and are secured Equally and Ratably by all Note Liens at any time granted by the Company or any other Guarantor to secure any Obligations in respect of such Series of Note Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Note Lien Debt, and that all such Note Liens will be enforceable

155

by the Note Lien Collateral Agent for the benefit of all holders of Note Lien Obligations Equally and Ratably;

(2)

that the holders of Obligations in respect of such Series of Note Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Note Liens and the order of application of proceeds from the enforcement of Note Liens;



(3)

consenting to and directing the Note Lien Collateral Agent to perform its obligations under the Security Documents; and



(4)

consenting to the terms of this Agreement.

"Moody's" means Moody's Investors Service, Inc.

"Mortgaged Premises" means any real property which shall now or hereafter be subject to a Note Lien Mortgage.

"Net Available Cash Account" means any Deposit Account or Securities Account established by the Company or any other Grantor in accordance in accordance with the requirements of the covenant set forth above under the caption "—Repurchase of the Option of Holders—Asset Sales" and which does not contain proceeds of Inventory, Accounts, Chattel Paper, Instruments, Investment Property (other than Capital Stock Collateral) or General Intangibles and which has been identified in writing to the Revolving Credit Collateral Agent as such at the time that proceeds from any sale of Note Lien Collateral shall be deposited pending final application in accordance with such covenant. into which the proceeds from any disposition of Note Lien Collateral shall be deposited pending final application in accordance with such covenant.

"Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:

(1)

any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any asset sale; or (b) the disposition of any securities by such Person or any of their respective Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of their respective Restricted Subsidiaries; and



(2)

any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.

"Net Proceeds" means the aggregate cash proceeds received by any of the Issuers of their respective Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees and discounts, and sales commissions, and any other fees and expenses, including, without limitation, relocation expenses incurred as a result of the Asset Sale, taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.

"Non-Recourse Debt" means Indebtedness:

(1)

as to which none of the Issuers or any of their respective Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;

156

(2)

no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of any of the Issuers of their respective Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and



(3)

as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of any of the Issuers of their respective Restricted Subsidiaries.

"Note Capital Stock Collateral" means, except as provided below, all of the following property of the Company and each Grantor now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest:

(1)

until the Release Date (A) all of the Capital Stock in the Company, Vendor Finance, LLC, LNT Virginia LLC, LNT Merchandising Company LLC, Citadel LNT, LLC and the Company's hereafter acquired Domestic Subsidiaries; and (B) 65% of the Capital Stock of the Foreign Subsidiaries owned directly by the Parent or its Domestic Subsidiaries;



(2)

Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and



(3)

substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

"Note Claimholders" means, at any relevant time, the holders of the Note Obligations, including holders of notes and the Note Lien Representatives.

"Note Guarantee" means the Guarantee by each Guarantor of the Issuers' obligations under the indenture and the notes, executed pursuant to the provisions of the indenture.

"Note Lien" means a Lien granted by a security document to the Note Lien Collateral Agent, at any time, upon any property of the Issuers or any Guarantor to secure Note Lien Obligations.

"Note Lien Collateral" means all now owned or hereafter acquired by the Issuers and the note guarantors:

(1)

any Net Available Cash Account;



(2)

Equipment;



(3)

Real Estate Assets;



(4)

documents of title related to Equipment;



(5)

Intellectual Property;



(6)

Note Lien General Intangibles;



(7)

Note Capital Stock Collateral;



(8)

Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and



(9)

substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

157

provided, however, that the term "Note Lien Collateral" shall include Instruments or Chattel Paper to the extent such Instruments or Chattel Paper constitute identifiable proceeds of Note Lien Collateral and other identifiable proceeds (including lease payments under leases of Equipment) of Note Lien Collateral are deposited or held in any such Deposit Accounts, Credit Card Processing Accounts or Securities Accounts after an Enforcement Notice but shall not, in any event, include the Canadian Collateral and the Excluded Assets.

"Note Lien Collateral Agent" means The Bank of New York, in its capacity as collateral agent under the Note Lien Security Documents, together with its successors in such capacity.

"Note Lien Debt" means:

(1)

the notes issued on the date of the Indenture and notes issued under the Indenture in exchange therefor in accordance with the Registration Rights Agreement, and in each case the Note Guarantees thereof by the Guarantors; and



(2)

any other Indebtedness of the Issuers (including Additional Notes) that is secured equally and ratably with the notes by a Note Lien that was permitted to be incurred and so secured under each applicable Secured Debt Document and the Note Guarantees thereof by the Guarantors; provided that:



(a)

the net proceeds are used to refund, refinance, replace, defease, discharge or otherwise acquire or retire other Note Lien Debt; or



(b)

on the date of incurrence of such Indebtedness, after giving pro forma effect to the incurrence thereof and the application of the proceeds therefrom, the aggregate principal amount of Note Lien Debt outstanding does not exceed $725.0 million;

provided further, in the case of any Indebtedness referred to in clause (2) of this definition:

(i)

on or before the date on which such Indebtedness is incurred by the Issuers, such Indebtedness is designated by the Issuers in an Officer's Certificate delivered to each Note Lien Representative. the Note Lien Collateral Agent and the Credit Facility Collateral Agent, as "Note Lien Debt" for the purposes of the Indenture and the Intercreditor Agreement; provided that no Series of Secured Debt may be designated as both Note Lien Debt and Credit Facility Lien Debt;



(ii)

such Indebtedness is governed by an Indenture, credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and



(iii)

all requirements set forth in the Intercreditor Agreement as to the confirmation, grant or perfection of the Note Lien Collateral Agent's Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (iii) will be conclusively established if the Issuers delivers to the Note Lien Collateral Agent and the Credit Facility Collateral Agent an Officer's Certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is "Note Lien Debt").

"Note Lien Default" means an "Event of Default" (as defined in any of the Note Documents), which is no longer subject to any applicable cure or notice period.

"Note Lien Documents" means, collectively, the Note Documents, the indenture, credit agreement or other agreement governing each other Series of Note Lien Debt, and the Note Lien Security Documents.

158

"Note Lien General Intangibles" means all General Intangibles pertaining to the other items of property included within clauses (2), (3), (4), (5) and (7) of the definition of Note Lien Collateral, including, without limitation, all contingent rights with respect to warranties on Equipment.

"Note Lien Mortgages" means a collective reference to each mortgage, deed of trust and other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Note Lien Obligations or (except for this Agreement) under which rights or remedies with respect to any such Liens are governed.

"Note Lien Obligations" means Note Lien Debt and all other Obligations in respect thereof.

"Note Lien Representative" means:

(1)

in the case of each Series of the Notes, the Note Lien Collateral Agent; or



(2)

in the case of any other Series of Note Lien Debt, the Trustee, agent or representative of the holders of such Series of Note Lien Debt who maintains the transfer register for such Series of Note Lien Debt and is appointed as a Note Lien Representative (for purposes related to the administration of the Security Documents) pursuant to an indenture, credit agreement or other agreement governing such Series of Note Lien Debt, together with its successors in such capacity.

"Note Lien Security Documents" means the Intercreditor Agreement, each Lien Sharing and Priority Confirmation with respect to Note Lien Obligations, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements. control agreements or other grants or transfers for security executed and delivered by the Issuers or any Guarantor creating (or purporting to create) a Note Lien upon Collateral in favor of the Note Lien Collateral Agent to secure Note Lien Obligations, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms and the provisions described above under the caption "—Intercreditor Agreement—Amendment of Intercreditor Agreement and Other Security Documents."

"Note Secured Party" means the Trustee and the holders of notes (together with any other holders of Note Lien Obligations).

"Obligations" means all obligations of every nature of each Grantor from time to time owed to any agent or Trustee, the Revolving Credit Claimholders, the Note Claimholders or any of them or their respective Affiliates, in each case under the Revolving Credit Loan Documents or the Note Lien Documents, whether for principal, interest or payments for early termination of Hedge Agreements, fees, expenses, indemnification or otherwise and all guarantees of any of the foregoing.

"Other Real Estate" means any Real Estate Asset which is not Mortgaged Premises.

"Parent" means Linens Holding Co.

"Patent Licenses" means all present and future agreements providing for the granting of any right in or to Patents (whether the applicable Grantor is licensee or licensor thereunder).

"Patents" means, collectively, with respect to each Grantor, all letters patent issued or assigned to, and all patent applications and registrations made by, such Grantor (whether established or registered or recorded in the United States or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, and rights to obtain any of the foregoing, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present

159

or future infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future infringements thereof.

"Payment Intangibles" means all "payment intangibles" as defined in Article 9 of the UCC.

"Permitted Business" means any business which is the same as or related, ancillary or complementary to, or a reasonable extension, development or expansion of, any of the businesses of the Issuers and their respective Restricted Subsidiaries on the date of the indenture.

"Permitted Investments" means:

(1)

any Investment in Linens 'n Things, Inc. or in a Restricted Subsidiary of Linens 'n Things, Inc.;



(2)

any Investment in Cash Equivalents;



(3)

any Investment by any of the Issuers or their respective Restricted Subsidiaries in a Person (and any Investment held by such Person), if as a result of such Investment:



•

such Person becomes a Restricted Subsidiary of the Issuers; or



•

such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, any of the Issuers or their respective Restricted Subsidiaries;



(4)

any Investment existing on or made prior to the date of the indenture;



(5)

any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "—Repurchase at the Option of Holders—Asset Sales";



(6)

any acquisition of assets or Capital Stock solely in exchange for, or for the net cash proceeds of, the issuance of Equity Interests (other than Disqualified Stock) of Linens 'n Things, Inc.;



(7)

any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of any of the Issuers of their respective Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;



(8)

Investments represented by Hedging Obligations;



(9)

endorsements of negotiable instruments and documents in the ordinary course of business;



(10)

pledges or deposits permitted under clause (12) of the definition of Permitted Liens;



(11)

payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;



(12)

receivables owing to the Issuers or any Restricted Subsidiary if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms as the Issuers or such Restricted Subsidiary deems reasonable under the circumstances;



(13)

loans or advances to employees made in the ordinary course of business of any of the Issuers or their respective Restricted Subsidiaries in an aggregate principal amount not to exceed $1.0 million at any one time outstanding;



(14)

repurchases of the notes; and

160

(15)

other Investments in any Person other than an Affiliate of Linens 'n Things, Inc. having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (15) that are at any one time outstanding not to exceed $35.0 million.

"Permitted Liens" means:

(1)

Liens on Collateral held by the Note Lien Collateral Agent equally and ratably securing (a) the notes to be issued on the date of the Indenture and all related Note Lien Obligations and (b) all other Note Lien Debt, subject to the limits thereon set forth in the definition thereof, and all related Note Lien Obligations;



(2)

Liens on Collateral and Liens on other Excluded Assets to the extent such Excluded Assets would not constitute Note Lien Collateral if not classified as Excluded Assets, in each case held by the Credit Facility Collateral Agent securing Credit Facility Lien Obligations; provided that:



(a)

without otherwise limiting the amount secured by such Liens insofar as they attach to any property other than Revolving Credit Collateral or secure Credit Facility Lien Obligations that are not Indebtedness, such Liens shall not be permitted to the extent such Liens secure the amount by which the aggregate principal amount of all Indebtedness (including all fixed and contingent reimbursement obligations in respect of letters of credit but excluding Hedging Obligations and Cash Management Obligations) secured by such Liens insofar as they attach to Revolving Credit Collateral exceeds the Revolving Credit Facility Debt Cap; and



(b)

all such Liens on Collateral are subject to the Intercreditor Agreement;



(3)

Liens in favor of the Issuers or the Guarantors;



(4)

Liens on property of a Person existing at the time such Person is merged with or into or consolidated with any of the Issuers of their respective Subsidiaries; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with such Issuer or Subsidiary;



(5)

Liens on property (including Capital Stock) existing at the time of acquisition of the property by any of the Issuers of their respective Subsidiaries; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition;



(6)

Liens or deposits to secure the performance by a Person under workers' compensation laws, unemployment insurance laws or other statutory obligations, surety or appeal bonds, performance bonds or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits as security for import or custom duties or other obligations of a like nature, in each case incurred in the ordinary course of business;



(7)

Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled "—Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets acquired with or financed by such Indebtedness;



(8)

Liens existing on the date of the indenture;



(9)

Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and

161

diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(10)

Liens imposed by law, such as carriers', warehousemen's, landlord's and mechanics' Liens;



(11)

judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;



(12)

Liens arising solely by virtue of any statutory or common law provision relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (a) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Issuers or any of their respective Restricted Subsidiaries in excess of those set forth by regulations promulgated by the Federal Reserve Board and (b) such deposit account is not intended by the Issuers or any Restricted Subsidiary to provide collateral to the depository institution;



(13)

Liens on insurance policies and the proceeds thereof securing the financing of the premiums with respect thereto to the extent permitted hereunder;



(14)

purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business;



(15)

survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;



(16)

Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the indenture; provided, however, that:



(a)

the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and



(b)

the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;



(17)

Liens securing Hedging Obligations so long as the related Indebtedness is, and is permitted to be under the Indenture, secured by a Lien on the same property securing such Hedging Obligation; and



(18)

Liens incurred with respect to obligations that do not exceed $30.0 million at any one time outstanding.

"Permitted Payments to Parent" means, without duplication as to amounts:

(1)

payments to the Parent to permit the Parent to pay reasonable accounting, legal and administrative expenses of the Parent when due, in an aggregate amount not to exceed $3.0 million per annum;

162

(2)

for so long as Linens 'n Things, Inc. is a member of a group filing a consolidated or combined tax return with the Parent, payments to the Parent in respect of an allocable portion of the tax liabilities of such group, including estimated taxes, that is attributable to Linens 'n Things, Inc. and its Subsidiaries ("Tax Payments"). The Tax Payments shall not exceed the lesser of (i) the amount of the relevant tax (including any penalties and interest and estimated taxes) that Linens 'n Things, Inc. would owe if Linens 'n Things, Inc. were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of Linens 'n Things, Inc. and such Subsidiaries from other taxable years and (ii) the net amount of the relevant tax that the Parent actually owes to the appropriate taxing authority. Any Tax Payments received from Linens 'n Things, Inc. shall be paid over to the appropriate taxing authority within 30 days of the Parent's receipt of such Tax Payments or refunded to Linens 'n Things, Inc. and any refunds received by Parent in respect of Tax Payments shall be refunded to Linens 'n Things, Inc.; and



(3)

fees and expenses related to any equity offering or other financing of any direct or indirect parent of Linens 'n Things, Inc.

"Permitted Refinancing Indebtedness" means any Indebtedness of any of the Issuers of their respective Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of any of the Issuers of their respective Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1)

the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);



(2)

such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;



(3)

if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and



(4)

such Indebtedness is incurred either by the Issuers or the Restricted Subsidiaries who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

"Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

"Primary Real Estate Asset" means Mortgaged Premises, distribution centers and warehouses and corporate headquarters and administrative offices.

"Priority Liens" means:

(1)

with respect to Note Lien Collateral, the Note Liens; and



(2)

with respect to Revolving Credit Collateral, the Revolving Credit Liens.

163

"Priority Lien Collateral Agent" means, with respect to any Collateral and the Priority Liens thereon, the Note Lien Collateral Agent or the Revolving Credit Collateral Agent, as applicable, on behalf of the holders of the Priority Liens thereon.

"Priority Lien Debt" means:

(1)

with respect to Priority Liens on Note Lien Collateral, the Note Lien Debt; and



(2)

with respect to Priority Liens on Revolving Credit Collateral, the Revolving Credit Obligations.

"Priority Lien Documents" means:

(1)

with respect to Note Lien Collateral; and



(2)

with respect to Revolving Credit Collateral, the Revolving Credit Loan Documents.

"Priority Lien Obligations" means:

(1)

with respect to Note Lien Collateral, the Note Lien Obligations: and



(2)

with respect to Revolving Credit Collateral, the Revolving Credit Obligations.

"Priority Lien Representative" means, with respect to Note Lien Collateral, each Note Lien Representative.

"Proceeds" shall mean all "proceeds" as defined in Article 9 of the UCC including, in any event all dividends, returns of capital and other distributions from Investment Property and all collection thereon and payments with respect thereto.

"Real Estate Asset" means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Grantor in any real property.

"Receivable" means any right to payment, whether or not arising in connection with goods sold or leased or for services rendered and including any right to payment arising out of the use of a credit or charge card, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including all Accounts); provided that, for purposes of the definitions of "Receivables Entity," "Receivables Financing" and "Receivables Subsidiary," the term "Receivables" shall mean a right to receive payment arising from a sale or lease of goods or services by a Person pursuant to an arrangement with another Person pursuant to which such other Person is obligated to pay for goods or services under terms that permit the purchase of such goods and services on credit.

"Receivables Records" shall mean (i) all original copies of all documents, instruments or other writings or electronic records or other Records evidencing the Receivables, (ii) all books, correspondence, credit or other files, Records, ledger sheets or cards, invoices, and other papers relating to Receivables, including, without limitation, all tapes, cards, computer tapes. computer discs, computer runs, record keeping systems and other papers and documents relating to the Receivables, whether in the possession or under the control of the Grantor or any computer bureau or agent from time to time acting for the Grantor or otherwise, (iii) all evidences of the filing of financing statements and the registration of other instruments in connection therewith, and amendments, supplements or other modifications thereto, notices to other creditors or secured parties, and certificates, acknowledgments, or other writings, including, without limitation, lien search reports, from filing or other registration officers, (iv) all credit information, reports and memoranda relating thereto and (v) all other written or nonwritten forms of information related in any way to the foregoing or any Receivable.

164

"Related Party" means:

(1)

any controlling stockholder, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Sponsor; or



(2)

any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Sponsors and/or such other Persons referred to in the immediately preceding clause (1).

"Release Date" means the earlier of (1) the date on which the Lien on Capital Stock Collateral is released pursuant to the indenture; or (2) with respect to any Subsidiary of the Company, the date on which the Lien on Capital Stock Collateral relating to such Subsidiary triggers a separate reporting requirement with respect to such Subsidiary pursuant to Rule 3-16 of Regulation S-X.

"Required Note Lien Debtholders" means, at any time, the holders of a majority in aggregate principal amount of all Note Lien Debt then outstanding. For purposes of this definition. Note Lien Debt registered in the name of, or beneficially owned by, the Issuers or any Affiliate of the Issuers will be deemed not to be outstanding.

"Restricted Investment" means an Investment other than a Permitted Investment.

"Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

"Revolving Credit Agreement" means that certain Revolving Credit Agreement, to be dated the date of the indenture, among Linens 'n Things, Inc., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, Linens Holding Co., the other guarantors party thereto, UBS AG, Stamford Branch, as US Administrative Agent and US Co-Collateral Agent, UBS AG, Toronto Branch, as Canadian Administrative Agent and Canadian Co-Collateral Agent, Bear Stearns Corporate Lending Inc. as Syndication Agent, Wachovia Capital Finance, Inc., as US Co-Collateral Agent and Wachovia Capital Finance, Inc. as Canadian Co-Collateral Agent, and the lenders party thereto from time to time, providing for up to $600.0 million of revolving credit borrowings (which may increase to up to $700.0 million of revolving credit borrowings), including any related notes, Guarantees, collateral documents, instruments and agreements executed in connection therewith, and, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

"Revolving Credit Capital Stock Collateral" means all of the Capital Stock Collateral other than the Note Capital Stock Collateral.

"Revolving Credit Default" means an "Event of Default" (as defined in the Revolving Credit Agreement).

"Revolving Credit Collateral" means all now owned or hereafter acquired Collateral other than the Note Lien Collateral, including, without limitation:

(1)

all Accounts;



(2)

all Chattel Paper;



(3)

all Instruments (including Intercompany Notes of Subsidiaries);



(4)

all Letter of Credit Rights;



(5)

all Deposit Accounts (other than the Net Available Cash Account, to the extent that it constitutes a Deposit Account), Credit Card Processing Accounts and Securities Accounts

165

(other than the Net Available Cash Account, to the extent it constitutes a Securities Account), and all other Investment Property (other than Capital Stock Collateral), including all cash, marketable securities, securities entitlements, financial assets and other funds held in or on deposit in any of the foregoing;

(6)

all Inventory or documents of title, customs receipts, insurance certificates, shipping documents and other written materials related to the purchase or import of any Inventory;



(7)

all General Intangibles (other than Intellectual Property and Note Lien General Intangibles) and all rights under Hedge Agreements;



(8)

all Revolving Credit Capital Stock Collateral;



(9)

all Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent not primarily related to Note Lien Collateral; and



(10)

substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

provided, however, that to the extent that Instruments or Chattel Paper constitute identifiable proceeds of Note Lien Collateral or other identifiable proceeds of Note Lien Collateral are deposited or held in any such Deposit Accounts, Credit Card Processing Accounts or Securities Accounts after an Enforcement Notice, then (as provided in the Intercreditor Agreement) such Instruments, Chattel Paper or other identifiable proceeds shall be treated as Note Lien Collateral.

"Revolving Credit Collateral Agent" means, at any time, the Person serving at such time as an "Administrative Agent" or a "Collateral Agent" (including as a "Co-Collateral Agent") under the Revolving Credit Agreement or any other representative then most recently designated in accordance with the applicable provisions of the Revolving Credit Agreement, together with its successors in such capacity.

"Revolving Credit Facility Debt Cap" means, as of any date, an aggregate principal amount equal to the sum of (a) the aggregate principal amount of Indebtedness permitted to be Incurred under clause (1) of the second paragraph of "Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" (regardless of the amount actually Incurred) as of such date, plus (b) the principal amount of Indebtedness permitted to be Incurred under clause (14) of the second paragraph of "Certain Covenants—Incurrence of Indebtedness and Issuance of Preferred Stock" (regardless of the amount actually Incurred) as of such date.

"Revolving Credit Lien" means a Lien on Collateral granted by a Revolving Credit Loan Document to the Revolving Credit Collateral Agent, at any time, upon any property of the Issuers or any Guarantor to secure Revolving Credit Obligations.

"Revolving Credit Loan Documents" means the Revolving Credit Agreement, the Security Documents (as defined in the Revolving Credit Agreement) and the other Loan Documents (as defined in the Revolving Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Revolving Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Revolving Credit Obligations, including any intercreditor or joinder agreement among holders of Revolving Credit Obligations, to the extent such are effective at the relevant time, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with the Revolving Credit Collateral Agent and lenders from time to time party to the Revolving Credit Agreement or other agents and lenders or otherwise), in each case in accordance with the provisions of the Intercreditor Agreement.

166

"Revolving Credit Obligations" means all Obligations outstanding under the Revolving Credit Agreement and the other Revolving Credit Loan Documents. "Revolving Credit Obligations" shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Revolving Credit Loan Document whether or not the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.

"S&P" means Standard & Poor's Ratings Group.

"SEC" means the U.S. Securities and Exchange Commission.

"Secured Debt" means all Note Lien Debt and all Credit Facility Lien Debt.

"Securities Accounts" means all present and future "securities accounts" (as defined in Article 8 of the UCC), including all monies, "uncertificated securities," and "securities entitlements" (as defined in Article 8 of the UCC) contained therein.

"Series of Note Lien Debt" means, severally, the notes and each other issue or series of Note Lien Debt for which a single transfer register is maintained.

"Series of Priority Lien Debt" means, with respect to the Note Lien Collateral, each Series of Note Lien Debt and, with respect to the Revolving Credit Collateral, each Series of Revolving Credit Obligations.

"Series of Secured Debt" means each Series of Note Lien Debt and each Series of Revolving Credit Obligations.

"Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, other than a Subsidiary that is a Significant Subsidiary solely due to clause (3) of such definition, as such Regulation is in effect on the date of the indenture.

"Sponsors" means Apollo Management V, L.P., Apollo Management VI, L.P., NRDCReal Estate Advisors I, LLC, National Realty & Development Corp., NRDCLinens B LLC and Silver Point Capital LP, and their respective Affiliates wholly owned or directly or indirectly managed by any of them.

"Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the date of the indenture (including any sinking fund payment), and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

"Subsidiary" means, with respect to any specified Person:

(1)

any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers or Trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and



(2)

any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

"TIA" means the Trust Indenture Act of 1939, as amended from time to time.

167

"Trademark Licenses" means any and all present and future agreements providing for the granting of any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder).

"Trademarks" means, collectively, with respect to each Grantor, all trademarks, service marks, slogans, logos, certification marks, trade dress, uniform resource locations (URL's), domain names, corporate names, trade names and other source or business identifiers, whether registered or unregistered, owned by or assigned to such Grantor and all registrations and applications for the foregoing (whether statutory or common law and whether established or registered in the United States, any State thereof, or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof.

"Transactions" has the meaning set forth in "Prospectus Summary—The Transactions."

"Trustee" means The Bank of New York or its successors under the indenture.

"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in the State of New York, or where the context requires, each other applicable jurisdiction.

"Unrestricted Subsidiary" means any Subsidiary of Linens 'n Things, Inc. that is designated by the Board of Directors of Linens 'n Things, Inc. as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

(1)

has no Indebtedness other than Non-Recourse Debt;



(2)

except as permitted by the covenant described above under the caption "—Certain Covenants—Transactions with Affiliates," is not party to any agreement, contract, arrangement or understanding with Linens 'n Things, Inc. or any Restricted Subsidiary of Linens 'n Things, Inc. unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Linens 'n Things, Inc. or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Linens 'n Things, Inc.;



(3)

is a Person with respect to which neither Linens 'n Things, Inc. nor any of their respective Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; and



(4)

has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Linens 'n Things, Inc. or any of their respective Restricted Subsidiaries.

"Voting Stock" of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

"Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1)

the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by



(2)

the then outstanding principal amount of such Indebtedness.

168

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

        The following is a summary of the material United States federal income tax consequences of exchanging old notes for exchange notes in the exchange offer and of the ownership and disposition of the exchange notes offered hereby, but does not purport to be a complete analysis of all potential tax considerations relating to the exchange offer or the exchange notes. The United States federal income tax considerations set forth below are based upon currently existing provisions of the Internal Revenue Code of 1986, as amended, or the Code, applicable Treasury Regulations, judicial authority, and current administrative rulings and pronouncements of the Internal Revenue Service, or the IRS, as of the date of this prospectus. There can be no assurance that the IRS will not take a contrary view, and no ruling from the IRS has been, or will be, sought on the issues discussed in this summary. Legislative, judicial or administrative changes or interpretations may be forthcoming that could alter or modify the statements and conclusions set forth herein. Any such changes or interpretations may be retroactive and could affect the tax consequences discussed below.

        This summary does not address all potential United States federal tax considerations, such as estate and gift tax considerations, that may be relevant to particular holders of exchange notes and does not address foreign, state or local tax consequences. This summary is limited to persons that acquired the old notes in the initial offering at their original issue price, are exchanging old notes for exchange notes in the exchange offer and will hold the exchange notes as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). This summary does not address the federal income tax consequences to taxpayers who may be subject to special tax treatment, including, without limitation:

•

persons subject to the alternative minimum tax;



•

banks, insurance companies, or other financial institutions;



•

small business investment companies;



•

dealers in securities or currencies;



•

certain former citizens or residents of the United States;



•

broker-dealers;



•

partnerships or other pass-through entities for United States federal income tax purposes;



•

traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;



•

United States holders (as defined below) whose functional currency is not the United States dollar;



•

tax-exempt organizations;



•

persons that hold the old notes or will hold the exchange notes as part of a position in a straddle, or as part of a hedging, conversion, or other integrated investment transaction; or



•

persons deemed to sell the exchange notes under the constructive sale provisions of the Code.

        If a partnership or other entity taxable as a partnership for United States federal income tax purposes holds the exchange notes, the United States federal income tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership.

THIS SUMMARY OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. EACH PROSPECTIVE PARTICIPANT IS URGED TO CONSULT ITS TAX ADVISOR WITH RESPECT TO THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX LAWS WITH RESPECT TO

169

ITS PARTICULAR SITUATION AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE UNITED STATES FEDERAL ESTATE OR GIFT TAX RULES OR UNDER THE LAWS OF ANY FOREIGN, STATE OR LOCAL JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

Consequences of Exchanging Old Notes for Exchange Notes

        The exchange of your old notes for exchange notes in the exchange offer should not constitute a taxable exchange for federal income tax purposes. Accordingly, the exchange offer should have no federal income tax consequences to you. Your federal income tax basis in the exchange notes should be the same as your federal income tax basis in your old notes and your holding period for federal income tax purposes in the exchange notes will include your holding period in the old notes you exchanged for the exchange notes.

Consequences to United States Holders of Exchange Notes Ownership

        United States Holders.    The discussion in this section will apply to you if you are a United States holder. A United States holder is a beneficial owner of the exchange notes who or which is:

•

an individual who is a citizen or resident of the United States;



•

a corporation, including any entity treated as a corporation for United States federal income tax purposes, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;



•

an estate if its income is subject to United States federal income taxation regardless of its source; or



•

a trust if (a) a United States court can exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions, or (b) such trust was in existence and was treated as a United States person on August 20, 1996, and has in effect a valid election to be treated as a domestic trust for United States federal income tax purposes.

        Interest and Original Issue Discount.    If you are a United States holder, stated interest on the exchange notes will be reportable by you as ordinary income at the time it accrues or is received in accordance with your regular method of accounting for United States federal income tax purposes. Thus, if you are on the accrual method of accounting for United States federal income tax purposes, stated interest on the exchange notes will be reportable by you as ordinary income at the time it accrues. If you are on the cash method of accounting for United States federal income tax purposes, stated interest on the exchange notes will be taxable to you as ordinary income at the time it is received.

        Because the stated redemption price of the notes will not exceed their issue price by more than a de minimis amount for federal income tax purposes, no portion of the original issue discount, or OID, on the notes will be reportable by a United States holder as ordinary income on a current basis, unless the United States holder makes an affirmative election to accrue such OID (and all stated interest and any market discount) into income on a constant interest basis.

        We believe that the likelihood, as of the issue date of the old notes, that additional interest would become payable on the old notes as a result of a failure to timely consummate a registered exchange offer for the notes or cause a shelf registration statement for resales of the notes to be declared effective was remote. Accordingly, we will take the position that United States holders are not required, prior to such additional interest becoming payable, to take the potential for such additional interest into account in determining their income from the old notes. Our determination that there was, as of the issue date, only a remote likelihood of additional interest is binding on each United States holder

170

unless such holder explicitly discloses in the manner required by applicable Treasury regulations that such holder's determination is different from ours. The IRS may disagree with our position regarding the likelihood of additional interest on the old notes, in which case the timing of a United States holder's recognition of income on the notes could be affected.

        Sale, Exchange, Retirement or Other Disposition of the Exchange Notes.    If you are a United States holder, you generally will recognize taxable gain or loss upon the sale, exchange, retirement at maturity or other disposition of an exchange note in an amount equal to the difference between the amount of cash plus the fair market value of all property received on such disposition (except to the extent such cash or property is attributable to accrued interest not previously included in gross income, which is treated as ordinary income) and your adjusted tax basis in the exchange note. In general, your adjusted tax basis in an exchange note will be equal the price paid for the old note increased by the amounts of any market discount previously included in income by you and reduced by any amortized bond premium deducted, and by any principal payments received, by you. In general, gain or loss recognized on the sale, exchange, retirement or other disposition of an exchange note will be capital gain or loss, except to the extent of any accrued market discount which you have not previously included in income, and will generally be long-term capital gain or loss if at the time of sale, exchange, retirement or other disposition of an exchange note, such exchange note has been held for more than one year. The deductibility of capital losses is subject to limitations.

        Information Reporting and Backup Withholding.    You may be subject to backup withholding, currently at a rate of twenty-eight percent (28%), with respect to certain reportable payments, including interest payments and, under certain circumstances, principal payments on the exchange notes and payments of the proceeds of the sale or other disposition of exchange notes, if you, among other things:

•

fail to furnish a social security number or other taxpayer identification number certified under penalties of perjury within a reasonable time after the request for the taxpayer identification number;



•

furnish an incorrect taxpayer identification number;



•

fail to report interest properly; or



•

under certain circumstances, fail to provide a certified statement, signed under penalties of perjury, that the taxpayer identification number furnished is the correct number and that you are not subject to backup withholding.

        Any amount withheld from a payment to you under the backup withholding rules is creditable against your income tax liability and may entitle you to a refund provided that the requisite information is timely furnished to the IRS. Backup withholding does not apply, however, if you properly establish your eligibility for an exemption from backup withholding. We will report to you and to the IRS the amount of any reportable payments for each calendar year and the amount of tax withheld, if any, with respect to the reportable payments.

Consequences to Non-United States Holders of Exchange Note Ownership

        Non-United States Holders.    The discussion in this section will apply to you if you are a Non-United States holder. A Non-United States holder is a beneficial owner of the exchange notes that is neither a United States holder as defined in "—Consequences to United States Holders—United States Holders" above nor a partnership for United States federal income tax purposes.

        Interest Income.    If you are a Non-United States holder, interest paid or accrued on the exchange notes will not be subject to United States federal income tax or withholding tax if the interest is not

171

effectively connected with the conduct of a trade or business within the United States by you and each of the following conditions are met:

•

you do not actually or constructively own 10% or more of the total combined voting power of all classes of our voting stock;



•

you are not a controlled foreign corporation that is related to us through stock ownership;



•

you are not a bank whose receipt of interest on the notes is described in Section 881(c)(3)(A) of the Code; and



•

either (A) you certify, under penalties of perjury and in a statement provided to us or our paying agent (on IRS Form W-8BEN or substitute form), that you are not a "United States person" and provide your name and address or (B) a securities clearing organization, bank, or other financial institution that holds customers' securities in the ordinary course of its trade or business certifies, under penalties of perjury, that it or a qualified intermediary has received the certification and information described in (A) above from you and furnishes us or our paying agent with a copy thereof. With respect to exchange notes held by a foreign partnership, under current law, the certification may be provided by the foreign partnership (which certification may be made on IRS Form W-8IMY or substitute form). However, unless the foreign partnership has entered into a withholding agreement with the IRS, the foreign partnership will be required, in addition to providing IRS Form W-8IMY, to attach an appropriate certification by each partner on IRS Form W-8BEN. Look-through rules apply in the case of tiered partnerships.

        If you do not qualify for an exemption from United States federal withholding tax under this paragraph, then, unless income on the exchange notes is effectively connected with your conduct of a United States trade or business, interest on the exchange notes will be subject to United States federal withholding tax at a rate of 30%, or such lower rate as may be provided for in an applicable income tax treaty. You will be required to provide a United States taxpayer identification number and comply with applicable certification requirements if you seek to claim an exemption from, or reduced rate of, withholding under an income tax treaty. Special rules apply in the case of exchange notes held through intermediaries. Prospective participants should consult their tax advisors regarding the certification requirements for non-United States persons.

        If you are a Non-United States holder engaged in a trade or business in the United States, and if interest on the exchange notes (or gain realized on its sale, exchange, retirement or other disposition) is effectively connected with the conduct of such trade or business (or, if a tax treaty applies, is attributable to a permanent establishment or fixed base maintained by you in the United States), you will generally be subject to United States income tax on such effectively connected income in the same manner as if you were a United States holder. In addition, if you are a foreign corporation, you may be subject to a 30% branch profits tax (unless reduced or eliminated by an applicable treaty) on your effectively connected earnings and profits for the taxable year, subject to certain adjustments. If income on the exchange notes held by you is effectively connected with the conduct of a United States trade or business, you will generally be exempt from withholding tax if you provide to us or our withholding agent a properly executed IRS Form W-8ECI to claim an exemption from withholding tax.

        Gain On Disposition.    If you are a Non-United States holder, generally you will not be subject to United States federal income tax or withholding tax on gain recognized on a sale, exchange, retirement or other disposition of the exchange notes unless (i) the gain is effectively connected with the conduct of a trade or business within the United States by you (or, if a tax treaty applies, is attributable to a permanent establishment or fixed based maintained by you in the United States) or (ii) you are a nonresident alien individual who is present in the United States for 183 or more days during the taxable year and certain other conditions are met.

172

        Information Reporting and Backup Withholding.    If you are a Non-United States holder, payments of interest to you with respect to which the requisite certification, as described above, has been received (or for which an exemption has otherwise been established) will not be subject to either information reporting or backup withholding, unless we or our paying agent have actual knowledge or reason to know that you are a United States person or that the conditions of any other exemption are not in fact satisfied.

        Information reporting and backup withholding requirements will apply, however, to the gross proceeds paid to you on the disposition of exchange notes by or through a United States office of a United States or foreign broker, unless you certify to the broker under penalties of perjury as to your name, address and status as a foreign person or otherwise establishes an exemption. Information reporting requirements, but generally not backup withholding, will also apply to a payment of the proceeds of a disposition of exchange notes by or through a foreign office of a United States broker or foreign broker with certain types of relationships to the United States unless the broker has documentary evidence in its files that you are not a United States person, and the broker has no actual knowledge or reason to know to the contrary, or you establish an exemption. Neither information reporting nor backup withholding generally will apply to a payment of the proceeds of a disposition of notes by or through a foreign office of a foreign broker not subject to the preceding sentence.

        Backup withholding is not an additional tax. Any amount withheld from a payment to you under the backup withholding rules is creditable against your actual United States federal income tax liability and may entitle you to a refund, provided the requisite information is timely furnished to the IRS.

173

PLAN OF DISTRIBUTION

        Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for old notes where such old notes were acquired as a result of market-making activities or other trading activities. We have agreed that, for a period of 180 days after the consummation of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until     •    , 2006 all dealers effecting transactions in the exchange notes may be required to deliver a prospectus.

        We will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transaction:

•

in the over-the-counter market;



•

in negotiated transactions;



•

through the writing of options on the new notes; or



•

a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices.

        Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. Any broker-dealer that resells exchange notes that were received by it for its own account in the exchange offer and any broker-dealer that participates in a distribution of those exchange notes may be deemed to be an underwriter within the meaning of the Securities Act and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, including the delivery of a prospectus that contains information with respect to any selling holder required by the Securities Act in connection with any resale of the new notes. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        Furthermore, any broker-dealer that acquired any of the old notes directly from us:

•

may not rely on the applicable interpretation of the staff of the SEC's position contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan, Stanley and Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983); and



•

must also be named as a selling noteholder in connection with the registration and prospectus delivery requirements of the Securities Act relating to any resale transaction.

        For a period of 180 days after the expiration of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the old notes) other than commissions or concessions of any broker-dealer and will indemnify the holders of the old notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

174

CERTAIN ERISA MATTERS

        The following is a summary of certain considerations associated with the purchase of the notes by (1) employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or ERISA (collectively "Similar Laws"), and (2) entities whose underlying assets are considered to include "plan assets" of any such plan, account or arrangement (each a "Plan").

General Fiduciary Matters

        ERISA imposes certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA (an "ERISA Plan") and ERISA and the Code prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.

        In considering participating or not participating in the exchange offer of a portion of the assets of any Plan, a fiduciary should determine whether the participation is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Laws relating to a fiduciary's duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Prohibited Transaction Issues

        Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are "parties in interest," within the meaning of ERISA, or "disqualified persons," within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of notes (or the exchange notes) by an ERISA Plan with respect to which the Issuers, the initial purchasers or the guarantors are considered parties in interest or disqualified persons may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or "PTCEs," that may apply to the acquisition and holding of the notes. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers, although there can be no assurance that all of the conditions of any such exemptions will be satisfied.

        Because of the foregoing, the notes (and exchange notes) should not be purchased or held by any person investing "plan assets" of any Plan, unless such purchase and holding (and the exchange of notes for exchange notes) will not constitute a non-exempt prohibited transaction under ERISA and the Code or similar violation of any applicable Similar Laws.

175

Representation

        Accordingly, by acceptance of a note (or an exchange note), each purchaser and subsequent transferee will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser or transferee to acquire and hold the notes (or the exchange notes) constitutes assets of any Plan or (ii) the purchase and holding of the notes (and the exchange of notes for exchange notes) by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws.

        The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the notes (and holding the notes or exchange notes) on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of the notes (or the exchange notes).

176

LEGAL MATTERS

        Certain legal matters as to the validity and enforceability of the issuance of the exchange notes and certain legal matters in connection with this exchange offer will be passed upon for us by Gardere Wynne Sewell LLP, Dallas, Texas, in reliance upon local counsel where necessary.

EXPERTS

        The consolidated financial statements of Linens 'n Things, Inc. and subsidiaries as of December 31, 2005 and January 1, 2005, and for each of the years in the three-year period ended December 31, 2005, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

        The audit report covering the December 31, 2005 financial statements refers to a change, in fiscal 2004, in the method of accounting for vendor allowance arrangements to conform to the requirements of Emerging Issues Task Form Issue No. 02-16.

177

INDEX TO FINANCIAL STATEMENTS

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Linens Holding Co.

        We have audited the accompanying consolidated balance sheets of Linens 'n Things, Inc. and subsidiaries as of December 31, 2005 and January 1, 2005, and the related consolidated statements of operations, shareholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Linens 'n Things, Inc. and subsidiaries as of December 31, 2005 and January 1, 2005, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

        As discussed in note 2 to the consolidated financial statements, in fiscal 2004, the Company changed its method of accounting for vendor allowance arrangements to conform to the requirements of Emerging Issues Task Force Issue No. 02-16.

/s/ KPMG LLP

New York, New York
March 17, 2006, except as to
Note 15 which is as of July 6, 2006

F-2

LINENS 'N THINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

			December 31, 2005			January 1, 2005
Assets
	Current assets:
		Cash and cash equivalents	$	158,158		$	204,009
		Accounts receivable		43,561			25,766
		Inventories		787,283			715,184
		Prepaid expenses and other current assets		17,425			38,335
		Current deferred taxes		2,033			685
	Total current assets			1,008,460			983,979
		Property and equipment, net		612,247			578,816
		Goodwill		18,126			18,126
		Deferred charges and other non-current assets, net		12,001			10,963
Total assets			$	1,650,834		$	1,591,884
Liabilities and Shareholders' Equity
	Current liabilities:
		Accounts payable	$	267,582		$	245,635
		Accrued expenses and other current liabilities		199,024			212,644
		Current deferred taxes		4,401			6,014
	Total current liabilities			471,007			464,293
		Deferred income taxes and other long-term liabilities		329,964			318,238
	Total liabilities			800,971			782,531
	Shareholders' equity:
		Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding		—			—
		Common stock, $0.01 par value; 135,000,000 shares authorized; 45,653,954 shares issued and 45,389,975 shares outstanding at December 31, 2005; 45,460,467 shares issued and 45,200,896 shares outstanding at January 1, 2005		457			455
		Additional paid-in capital		376,730			372,627
		Retained earnings		476,896			440,914
		Accumulated other comprehensive gain		3,287			2,619
		Treasury stock, at cost; 263,979 shares at December 31, 2005 and 259,571 shares at January 1, 2005		(7,507	)		(7,262	)
	Total shareholders' equity			849,863			809,353
Total liabilities and shareholders' equity			$	1,650,834		$	1,591,884

See accompanying Notes to Consolidated Financial Statements.

F-3

LINENS 'N THINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

		Fiscal Year Ended
		December 31, 2005			January 1, 2005			January 3, 2004
Net sales		$	2,694,742		$	2,661,469		$	2,395,272
Cost of sales, including buying and distribution costs			1,595,394			1,589,700			1,426,880
Gross profit			1,099,348			1,071,769			968,392
Selling, general and administrative expenses			1,037,521			970,479			846,826
Operating profit			61,827			101,290			121,566
	Interest income		(894	)		(542	)		(169	)
	Interest expense		4,860			3,903			4,001
Interest expense, net			3,966			3,361			3,832
Income before income taxes			57,861			97,929			117,734
Provision for income taxes			21,879			37,408			44,975
Net income		$	35,982		$	60,521		$	72,759
Per share of common stock:
Basic
Net income		$	0.79		$	1.34		$	1.65
Weighted-average shares outstanding			45,293			45,055			44,225
Diluted
Net income		$	0.79		$	1.32		$	1.62
Weighted-average shares outstanding			45,702			45,804			44,847

See accompanying Notes to Consolidated Financial Statements.

F-4

LINENS 'N THINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
COMPREHENSIVE INCOME

	Common Stock
					Additional Paid-in Capital		Retained Earnings		Foreign Currency Translation Adjustment			Treasury Stock
	Shares		Amount												Total
	(in thousands, except number of shares)
Balance at January 4, 2003	44,065,960		$	444	$	346,251	$	307,634	$	(386	)	$	(7,210	)	$	646,733
Net income	—			—		—		72,759		—			—			72,759
Currency translation adjustment	—			—		—		—		1,777			—			1,777
Comprehensive income																74,536
Common stock issued under stock incentive plans and related tax benefits	729,904			6		16,232		—		—			—			16,238
Increase in treasury stock, net	(2,245	)		—		—		—		—			(130	)		(130	)
Balance at January 3, 2004	44,793,619			450		362,483		380,393		1,391			(7,340	)		737,377
Net income	—			—		—		60,521		—			—			60,521
Currency translation adjustment	—			—		—		—		1,228			—			1,228
Comprehensive income																61,749
Common stock issued under stock incentive plans and related tax benefits	408,212			5		10,144		—		—			—			10,149
Increase in treasury stock, net	(935	)		—		—		—		—			78			78
Balance at January 1, 2005	45,200,896			455		372,627		440,914		2,619			(7,262	)		809,353
Net income	—			—		—		35,982		—			—			35,982
Currency translation adjustment	—			—		—		—		668			—			668
Comprehensive income																36,650
Common stock issued under stock incentive plans and related tax benefits	193,487			2		4,103		—		—			—			4,105
Increase in treasury stock, net	(4,408	)		—		—		—		—			(245	)		(245	)
Balance at December 31, 2005	45,389,975		$	457	$	376,730	$	476,896	$	3,287		$	(7,507	)	$	849,863

See accompanying Notes to Consolidated Financial Statements.

F-5

LINENS 'N THINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

				Fiscal Year Ended
				December 31, 2005			January 1, 2005			January 3, 2004
Cash flows from operating activities:
	Net income			$	35,982		$	60,521		$	72,759
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			90,270			81,318			71,348
		Deferred income taxes			(11,265	)		(1,112	)		37,126
		Loss on disposal of assets			1,433			2,209			1,265
		Loss on fixed asset impairment writedown			4,059			900			760
		Federal tax benefit from common stock issued under stock incentive plans			492			1,500			2,614
		Changes in assets and liabilities:
			(Increase) decrease in accounts receivable		(17,704	)		3,851			(4,914	)
			Increase in inventories		(70,657	)		(11,997	)		(90,885	)
			Decrease (increase) in prepaid expenses and other current assets		20,569			(6,033	)		(8,429	)
			Increase in deferred charges and other non-current assets		(1,231	)		(4,899	)		(622	)
			Increase (decrease) in accounts payable		21,411			(5,431	)		46,275
			Increase in accrued expenses and other liabilities		4,842			56,514			23,595
	Net cash provided by operating activities				78,201			177,341			150,892
Cash flows from investing activities:
	Additions to property and equipment				(127,582	)		(119,052	)		(113,296	)
Cash flows from financing activities:
	Proceeds from common stock issued under stock incentive plans				3,614			8,649			13,624
	(Increase) decrease in treasury stock				(245	)		78			(130	)
	Decrease in short-term borrowings				—			—			(2,119	)
	Net cash provided by financing activities				3,369			8,727			11,375
	Effect of exchange rate changes on cash and cash equivalents				161			864			553
Net (decrease) increase in cash and cash equivalents					(45,851	)		67,880			49,524
Cash and cash equivalents at beginning of year					204,009			136,129			86,605
Cash and cash equivalents at end of year				$	158,158		$	204,009		$	136,129
Supplemental disclosure of cash flow information
Cash paid during the year for:
	Interest (net of amounts capitalized)			$	4,851		$	4,018		$	3,888
	Income taxes			$	32,809		$	20,407		$	11,545

See accompanying Notes to Consolidated Financial Statements.

F-6

LINENS 'N THINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business

        Linens 'n Things, Inc. and its subsidiaries (collectively the "Company") operate in one segment, the retail industry, and had 542 stores in 47 states across the United States and in six provinces in Canada as of the fiscal year ended December 31, 2005. The Company's stores offer a broad assortment of home textiles, housewares and home accessories, carrying both national brands and private label goods.

2. Summary of Significant Accounting Policies

Basis of Presentation

        The Consolidated Financial Statements include those of Linens 'n Things, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

        As a result of the Transaction, described in Note 16, Subsequent Events, a new entity ("successor entity") was formed with an effective date of February 14, 2006, consisting of Linens Holding Co. and subsidiaries. Immediately following the Transaction, the Company became a wholly owned subsidiary of Linens Holding Co.

        The accompanying Consolidated Financial Statements are those of Linens 'n Things Inc. and its subsidiaries. The Company has not presented separate financial statements for Linens Holding Co. and its subsidiaries or Linens 'n Things Center, Inc. and its subsidiaries (collectively, the issuers as described in Note 15) because management has determined that the differences in such financial statements are minor.

Reclassifications and Immaterial Adjustments

        Prior period amounts, within the 2003 Consolidated Statement of Cash Flows, related to the classification of accrued property and equipment purchases have been reclassified to conform with the 2005 presentation. Additionally, subsequent to the reporting of the 2005 consolidated financial statements, the Company determined an accrual for inventory in-transit was not properly reflected in the 2003 Consolidated Statement of Cash Flows. The following reclassification and immaterial adjustments, which have no impact on previously reported operating cash flow totals, has been reflected in the 2003 Consolidated Statement of Cash Flows:

Consolidated Statement of Cash Flow:	As Previously Reported			As Reclassified or Corrected
	(In thousands)
Increase in inventories	$	(82,266	)	$	(90,885	)
Increase in accounts payable		31,194			46,275
Increase in accrued expense		30,057			23,595

Fiscal Periods

        The Company utilizes a 52/53-week period ending on the Saturday nearest the last day of December. Accordingly, fiscal 2005 was a 52-week period that ended December 31, 2005 ("fiscal 2005"), fiscal 2004 was a 52-week period that ended January 1, 2005 ("fiscal 2004") and fiscal 2003 was a 52-week period that ended January 3, 2004 ("fiscal 2003").

F-7

Revenue Recognition

        The Company recognizes revenue at the time merchandise is purchased by customers at its retail stores or when shipped for merchandise purchased from its website or ordered by telephone. Shipping terms for merchandise purchased from its website or ordered by telephone are FOB shipping point and title passes to the customer upon delivery of the merchandise to the carrier. Shipping and handling fees billed to customers in a sale transaction are included in sales.

        Revenue from gift cards, gift certificates and merchandise credits are recognized when redeemed. As part of the Company's private-label credit card ("PLCC") program, when customers purchase merchandise using their PLCC they earn points that enable them to receive future free or discounted merchandise once they reach certain purchase thresholds. The value of these points is accrued for on each PLCC purchase net of an estimate for points never to be redeemed. The resulting net value of these points is reflected as a decrease in cost of sales in the Consolidated Statements of Operations.

        Provisions for estimated future sales returns are recorded in the period that the related sales are recorded. The Company determines the amount of provision based on historical information. Sales discounts, coupons, cash rebates and other similar incentives are recorded as a reduction of sales revenue in the period when the related sales are recorded. The Company periodically offers rebate programs in which customers receive either a check or a gift card upon receipt of an approved rebate claim form. For each respective rebate promotion, the Company accrues for over the promotion period the total amount eligible to be disbursed. During the period when the related qualifying sales subject to rebate are recorded, the Company records cash rebates earned as a reduction of sales revenue and gift cards to be awarded as an increase to cost of sales in the Consolidated Statements of Operations.

Inventories

        Inventories consist of the cost of finished goods merchandise purchased from domestic and foreign vendors, including inbound freight and other importation costs, product development costs and certain vendor allowances. Inventories are carried at the lower of cost or market; cost is determined by the retail inventory method of accounting. Amounts are removed from inventory at the average cost method.

Deferred Rent

        The Company accrues for scheduled rent increases contained in its leases on a straight-line basis over the expected lease term, beginning when the Company first obtains possession of the premises, including cancelable option periods in those instances where exercising such options is reasonably assured.

Store Opening and Closing Costs

        New store opening costs are charged to expense as incurred. Certain legal and construction-related overhead costs are capitalized. Store opening costs primarily include rent, store payroll and general operating costs incurred prior to the store opening.

        Prior to the adoption of Statement of Financial Accounting Standards No. 146 ("SFAS No. 146"), "Accounting for Costs Associated with Exit or Disposal Activities," in the event a store was closed before its lease expired, the remaining lease obligation, less anticipated sublease rental income, and

F-8

asset impairment charges related to improvements and fixtures, inventory writedowns, and other miscellaneous closing costs, were provided for in the period in which management determined to close the store. In fiscal 2001, the Company recorded a pre-tax restructuring and asset impairment charge of $37.8 million related to the closing of certain under-performing stores (see Note 3). As of December 31, 2005 and January 1, 2005, the Company had $5.4 million and $9.0 million, respectively, remaining related to this reserve related primarily to lease obligations.

        The Company has adopted the provisions of SFAS No. 146 for exit or disposal activities, if any, initiated after December 31, 2002. SFAS No. 146 requires the Company to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan.

Financial Instruments

        Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected in the Consolidated Financial Statements at carrying values which approximate fair value due to the short-term nature of these instruments.

Cash and Cash Equivalents

        Cash equivalents are considered to be those securities with maturities of three months or less when purchased. The Company's cash management program utilizes zero balance disbursement accounts. Accordingly, outstanding checks have been reclassified to Accounts Payable or Accrued Expenses and Other Current Liabilities in the Consolidated Balance Sheets. Such outstanding checks included in Accounts Payable totaled $67.2 million and $17.9 million at December 31, 2005 and January 1, 2005, respectively, and outstanding checks included in Accrued Expenses and Other Current Liabilities totaled $29.5 million and $43.8 million at December 31, 2005 and January 1, 2005, respectively.

Property and Equipment

        Property and equipment are stated at cost. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets (40 years for buildings and 5 to 15 years for furniture, fixtures and equipment). Capitalized software costs are amortized on a straight-line basis over their estimated useful lives of 3 to 5 years, beginning in the year placed in service. Leasehold improvements are amortized over the expected lease term, including cancelable option periods in those instances where exercising such options is reasonably assured.

        Maintenance and repairs are charged directly to expense as incurred. Major renewals or replacements are capitalized after making the necessary adjustments to the asset and accumulated depreciation accounts of the items renewed or replaced.

Impairment of Long-Lived Assets (including Goodwill)

        In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets," long-lived assets, such as property and equipment and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash

F-9

flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount that the carrying value of the asset exceeds the fair value of the asset.

        Goodwill and intangible assets that have indefinite useful lives are tested annually for impairment. These assets are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value. For goodwill, the impairment determination is made at the reporting unit level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of the goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation, in accordance with FASB Statement No. 141, Business Combinations. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill.

Deferred Charges

        Deferred charges, principally lease acquisition fees, are amortized on a straight-line basis, generally over the expected lease term, beginning when the Company first obtains possession of the premises, including cancelable option periods in those instances where exercising such option is reasonably assured.

Goodwill and Other Intangible Assets

        Goodwill represents the excess of costs over fair value of assets of businesses acquired. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142, "Goodwill and Other Intangible Assets." Intangible assets with estimable useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets."

Costs of Sales

        In addition to the cost of inventory sold, the Company includes its buying and distribution expenses in its cost of sales. Buying expenses include all direct and indirect costs to procure merchandise. Distribution expenses include the cost of operating the Company's distribution centers and freight expense related to transporting merchandise.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses ("SG&A") in the Consolidated Statements of Operations include store payroll and selling expenses, store occupancy costs, advertising and other corporate expenses.

F-10

Vendor Allowances

        The Company receives various types of allowances from its merchandise vendors, which are based on negotiated terms, to cover costs such as freight expense, damages and markdowns and advertising. These allowances are recorded as an offset to the expense as incurred or when the merchandise is sold, as applicable, and is reflected as a reduction of cost of sales in accordance with the provisions of the Emerging Issues Task Force Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF 02-16"), issued by the Financial Accounting Standards Board ("FASB") in January 2003.

        EITF 02-16 states that cash consideration received from a vendor is presumed to be a reduction of the prices of the vendor's products or services and should, therefore, be characterized as a reduction of cost of merchandise sold when recognized in the Company's Consolidated Statement of Operations. That presumption may be overcome when the consideration is either a reimbursement of specific, incremental and identifiable costs incurred to sell the vendor's products, or a payment for assets or services delivered to the vendor. EITF 02-16 was effective for contracts entered into or modified after December 31, 2002. This issue did not have a material impact on the Company's fiscal 2003 Consolidated Financial Statements as substantially all of the Company's vendor contracts in effect during fiscal 2003 were entered into prior to December 31, 2002. Beginning in the first quarter of fiscal 2004, as vendor agreements were initiated or modified, the Company applied the method of accounting for vendor allowances pursuant to EITF 02-16. In connection with the implementation of EITF 02-16, the Company treats certain funds received from vendors as a reduction to the cost of inventory and, as a result, these funds are recognized as a reduction to cost of merchandise sold when the inventory is sold. Vendor allowances, which are reflected as a reduction of inventory, and vendor purchase discounts are amortized to reduce cost of sales on an inventory turn basis. Accordingly, certain funds received from vendors, which were historically reflected as a reduction of advertising expense in SG&A or cost of sales, are now treated as a reduction of cost of inventory as the advertising allowances received are presumed to be reductions to the cost of inventory under EITF 02-16 when the costs cannot be determined as incremental and specifically identifiable. The accounting for vendor allowances in accordance with EITF 02-16 reduced the Company's operating profit and net income for fiscal 2004 by $21.5 million and $13.3 million, respectively.

Advertising Costs

        The Company expenses the production costs of advertising at the commencement date of the advertisement. Advertising costs, recorded as a component of selling, general and administrative expenses, were $114.0 million, $103.5 million and $95.0 million for fiscal 2005, fiscal 2004 and fiscal 2003, respectively. Prior to the implementation of EITF 02-16 in fiscal 2004, fiscal 2003 advertising costs were reduced by vendor credits totaling $24.7 million.

Income Taxes

        Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to estimated taxable income to be realized in the years in which those temporary differences are

F-11

expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in statutory tax rates is recognized in income in the period that includes the enactment date.

Stock-Based Compensation

        The Company grants stock options and restricted stock units for a fixed number of shares to employees and directors. The exercise prices of the stock options are equal to the fair market value of the underlying shares at the date of grant. The Company has adopted the disclosure provisions of Statement No. 123 "Accounting for Stock-Based Compensation" ("SFAS No. 123") and has not adopted the recognition provisions of SFAS No. 123. In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of SFAS No. 123" ("SFAS No. 148"). In accordance with the provisions of SFAS No. 148, the Company elected not to adopt the fair value based method of accounting for its stock-based compensation plans, but continues to apply the recognition and measurement principles of Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. Accordingly, the Company does not recognize compensation expense for stock option grants and amortizes restricted stock unit grants at fair market value at the date of grant over specified vesting periods in the accompanying Consolidated Financial Statements. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company has complied with the disclosure requirements of SFAS No. 148.

        For fiscal years ended 2005, 2004 and 2003, the Company accounted for stock options using the intrinsic value method prescribed under APB No. 25, and accordingly, no compensation cost has been recognized in connection with stock option grants in the accompanying Consolidated Financial Statements.

        Compensation cost charged against income for the Company's restricted stock unit grants was $1.2 million, $0.5 million and $0.8 million for fiscal years 2005, 2004 and 2003, respectively.

        In December 2004 the FASB issued SFAS No. 123 (Revised 2004), "Share-Based Payment" ("SFAS No. 123 (Revised 2004)"). Effective for the first quarter of fiscal 2006, SFAS No. 123 (Revised 2004) will require the Company to recognize the grant-date fair value of stock options grants as compensation expense in the Consolidated Statements of Operations.

F-12

        Set forth below are the Company's net income and net income per share presented "as reported" and as if compensation cost had been recognized in accordance with the provisions of SFAS No. 148:

		Fiscal Year Ended
		2005		2004		2003
		(in millions, except per share data)
Net income:
As reported		$	36.0	$	60.5	$	72.8
Add: Stock-based employee compensation expense included in net income as reported, net of tax			0.8		0.3		0.5
			36.8		60.8		73.3
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects			7.3		8.6		11.4
Pro forma		$	29.5	$	52.2	$	61.9
Net income per share of common stock:
Basic:
	As reported	$	0.79	$	1.34	$	1.65
	Pro forma	$	0.65	$	1.16	$	1.40
Diluted:
	As reported	$	0.79	$	1.32	$	1.62
	Pro forma	$	0.65	$	1.16	$	1.40

        The effects of applying SFAS No. 148 in this disclosure are not necessarily indicative of future amounts.

        The fair value of each stock option grant and restricted stock unit grant is estimated on the date of grant using the Black-Scholes option-pricing model using the following assumptions for grants:

	Fiscal Year Ended
	2005		2004		2003
Expected life (years)	3.9		5.0		5.7
Expected volatility	35.2	%	43.5	%	40.7	%
Risk-free interest rate	4.0	%	3.6	%	1.5	%
Expected dividend yield	0.0	%	0.0	%	0.0	%

        The weighted-average fair value of options granted as of December 31, 2005, January 1, 2005 and January 3, 2004 was $8.24, $10.48 and $12.19, respectively. The weighted-average fair value of restricted stock units granted as of December 31, 2005, January 1, 2005 and January 3, 2004 was $6.87, $12.81 and $13.48, respectively.

Earnings Per Share

        The Company presents earnings per share on a "basic" and "diluted" basis. Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding during

F-13

the period. Diluted earnings per share is computed by dividing net income by the weighted-average number of shares outstanding adjusted for dilutive common stock equivalents.

        The calculation of basic and diluted earnings per share ("EPS") for fiscal 2005, 2004 and 2003 is as follows (in thousands, except per share amounts):

		Fiscal Year Ended
		2005		2004		2003
Net income		$	35,982	$	60,521	$	72,759
Average shares outstanding:
Basic			45,293		45,055		44,225
Effect of outstanding stock options and restricted stock unit grants			409		749		622
Diluted			45,702		45,804		44,847
Earnings per share
	Basic	$	0.79	$	1.34	$	1.65
	Diluted	$	0.79	$	1.32	$	1.62

        Options for which the exercise price was greater than the average market price of common shares as of the fiscal years ended 2005, 2004 and 2003 were not included in the computation of diluted earnings per share as the effect would be antidilutive. These consisted of options totaling 2,732,000 shares, 1,638,000 shares and 2,430,000 shares, respectively.

Use of Estimates in the Preparation of Financial Statements

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts and timing of revenues and of expenses during the reporting period. The Company bases its estimates on historical experience and on other assumptions that it believes to be relevant under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company's management believes the following critical accounting estimates involve such significant judgments and estimates inherent in the preparation of the Consolidated Financial Statements.

        Valuation of Inventory:    Inventories are valued using the lower of cost or market value, determined by the retail inventory method ("RIM"). Under RIM, the valuation of inventories at cost and the resulting gross margins are calculated by applying a calculated cost-to-retail ratio to the retail value of inventories. RIM is an averaging method that is used in the retail industry due to its practicality. Inherent in RIM calculation are certain significant management judgments and estimates including, among others, merchandise mark-on, mark-up, markdowns and shrinkage based on historical experience between the dates of physical inventories, all of which significantly impact the ending inventory valuation at cost. The methodologies utilized by the Company in its application of RIM are consistent for all periods presented. Such methodologies include the development of the cost-to-retail ratios, the

F-14

development of shrinkage reserves and the accounting for price changes. At any one time, inventories include items that have been written down to the Company's best estimate of their realizable value. Factors considered in estimating realizable value include the age of merchandise and anticipated demand. Actual realizable value could differ materially from this estimate based upon future customer demand or economic conditions.

        Sales Returns:    The Company estimates future sales returns and records a provision in the period that the related sales are recorded based on historical return rates. Should actual returns differ from the Company's estimates, the Company may be required to revise the recorded provision for future sales returns. As such, estimating sales returns requires management judgment as to changes in preferences and quality of products being sold, among other things; therefore, these estimates may vary materially in the future. The sales returns calculations are regularly compared with actual return experience. In preparing the Company's financial statements for fiscal 2005 and fiscal 2004, the Company's sales returns reserve was approximately $7.1 million and $7.4 million, respectively.

        Impairment of Assets:    The Company reviews goodwill for possible impairment at least annually. Impairment losses are recognized when the implied fair value of goodwill is less than its carrying value. The Company also periodically evaluates long-lived assets other than goodwill for indicators of impairment. The Company's judgments regarding the existence of impairment indicators are based on market conditions and operational performance. Future events could cause the Company to conclude that impairment indicators exist and that the value of long-lived assets and goodwill is impaired. During fiscal years 2005, 2004 and 2003, the Company determined that the carrying value of certain store assets exceeded their related estimated future undiscounted cash flows. As a result, the Company reduced the carrying value of fixed assets by approximately $4.1 million, $0.9 million and $0.8 million for fiscal years 2005, 2004 and 2003, respectively, with the related impairment loss recorded in SG&A. At the end of fiscal 2005 and fiscal 2004, the Company's net value for property and equipment was approximately $612.2 million and $578.8 million, respectively, and goodwill was $18.1 million for fiscal years 2005 and 2004.

        Store Closure Costs:    Prior to the adoption of SFAS No. 146, the Company recorded estimated store closure costs, such as fixed asset write-offs, estimated lease commitment costs net of estimated sublease income, markdowns for inventory that will be sold below cost, and other miscellaneous store closing costs, in the period in which management determined to close a store. Such estimates may be subject to change should actual costs differ. In fiscal 2001, the Company recorded a pre-tax restructuring and asset impairment charge of $37.8 million ($23.7 million after-tax) related to the closing of certain under-performing stores. As of December 31, 2005 and January 1, 2005, the Company had $5.4 million and $9.0 million, respectively, remaining related to this reserve. The Company continues to negotiate the lease buyouts or sublease agreements for certain of these stores. Final settlement of these reserves is predominantly a function of negotiations with unrelated third parties, and, as such, these estimates may be subject to change in the future. For the remaining three stores for which an acceptable buyout or sublease agreement has not yet been negotiated and entered into, the Company is considering other alternatives, including reopening one or more of the stores.

        The Company has adopted the provisions of SFAS No. 146 for exit or disposal activities, if any, initiated after December 31, 2002. SFAS No. 146 requires the Company to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Although the Company believes the adoption of SFAS No. 146 does not impact

F-15

the consolidated financial position or results of operations, it can be expected to impact the timing of liability recognition associated with future exit activities, if any.

        Self-Insurance:    The Company purchases third party insurance for worker's compensation, medical, auto and general liability costs that exceed certain levels for each type of insurance program. The Company is responsible for the payment of claims under these insured excess limits. The Company establishes accruals for its insurance programs based on available claims data and historical trend and experience, as well as loss development factors prepared by third party actuaries. Workers compensation and general liability accruals are recorded at their net present value. In preparing the estimates, the Company also considers the nature and severity of the claims, analysis provided by third party claims administrators, as well as current legal, economic and regulatory factors.

        The Company evaluates the accrual and the underlying assumptions periodically and makes adjustments as needed. The ultimate cost of these claims may be greater than or less than the established accrual. While the Company believes that the recorded amounts are adequate, there can be no assurance that changes to management's estimates will not occur due to limitations inherent in the estimate process. In the event the Company determines the accruals should be increased or reduced, the Company would record such adjustments in the period in which such determination is made.

        The accrued obligation for these self-insurance programs was approximately $15.3 million for fiscal year 2005 and $14.5 million for fiscal year 2004.

        Litigation:    The Company records an estimated liability related to various claims and legal actions arising in the ordinary course of business, which is based on available information and advice from outside counsel where applicable. As additional information becomes available, the Company assesses the potential liability related to its pending claims and may adjust its estimates accordingly.

3. Restructuring and Asset Impairment Charge

        In fiscal 2001, the Company developed and committed to a strategic initiative designed to improve store performance and profitability. This initiative called for the closing of certain under-performing stores, which did not meet the Company's profit objectives. In connection with this initiative, the Company recorded a pre-tax restructuring and asset impairment charge of $37.8 million ($23.7 million after-tax) in the fourth quarter of fiscal 2001. A pre-tax reserve of $20.5 million was established for estimated lease commitments for stores to be closed. The reserve considers estimated sublease income. Because all of the stores were leased, the Company is not responsible for the disposal of property other than fixtures. A pre-tax writedown of $9.5 million was recorded as a reduction in property and equipment for fixed asset impairments for these stores. The fixed asset impairments represent fixtures and leasehold improvements. A pre-tax reserve of $4.0 million was established for other estimated miscellaneous store closing costs. Additionally, a pre-tax charge of $3.8 million was recorded in cost of sales for estimated inventory markdowns below cost for the stores to be closed. Certain components of the restructuring charge were based on estimates and may be subject to change in the future. The Company has closed all of the initially identified stores other than one store, which the Company decided to keep open and whose reserve was reversed.

F-16

        As of December 31, 2005 the Company has $5.4 million remaining in the 2001 restructuring and asset impairment charge. The following table displays a roll forward of the activity for fiscal years 2005 and 2004, and the reserves remaining as of December 31, 2005 ($ in millions):

	Remaining at 1/03/04		Fiscal 2004 Usage			Remaining at 1/01/05		Fiscal 2005 Usage			Remaining at 12/31/05
Lease commitments	$	15.6	$	(6.6	)	$	9.0	$	(3.6	)	$	5.4
	$	15.6	$	(6.6	)	$	9.0	$	(3.6	)	$	5.4

        The fiscal 2005 and 2004 usage primarily consists of payments for lease commitments. The 2005 activity also includes the reversal of estimated lease commitment costs of approximately $4.3 million as these reserves were not needed, offset by an increase to lease commitment costs of approximately $5.8 million due to changes in estimates based on current negotiations. The 2004 activity also includes the reversal of estimated lease commitment costs of approximately $1.1 million as these reserves were not needed, offset by an increase to lease commitment costs by approximately $1.8 million due to changes in estimates based on current negotiations. The net changes in the restructuring reserve have been reflected within SG&A on the Consolidated Statements of Operations. The restructuring reserve balance is included in Accrued Expenses and Other Current Liabilities in the Consolidated Balance Sheets.

4. Accounts Receivable

	Fiscal Year Ended
Accounts receivable consisted of the following (in thousands):
	2005		2004
Credit card settlements due	$	27,007	$	16,538
Due from landlords		8,778		5,431
Other		7,776		3,797
	$	43,561	$	25,766

        The Company's bad debt experience has historically been insignificant and accordingly, a minimal allowance for doubtful accounts has been established for these receivables.

        Amounts due from landlords are allowances provided by landlords recorded as deferred rent credits included in Deferred Income Taxes and Other Long-Term Liabilities on the Consolidated Balance Sheets. Deferred rent credits are amortized as a reduction of rent expense over the expected lease term, including cancelable option periods in those instances where exercising such options is reasonably assured.

        Other includes approximately $2.2 million resulting from the VISA/MasterCard antitrust litigation settlement which has been included in the fourth quarter of fiscal 2005 as a reduction of selling, general and administrative expenses in the Consolidated Statements of Operations.

F-17

5. Property and Equipment

		Fiscal Year Ended
Property and equipment consisted of the following (in thousands):
		2005		2004
Land		$	1,480	$	1,480
Building			6,080		6,080
Furniture, fixtures and equipment			608,307		556,822
Leasehold improvements			417,005		371,095
Computer software			34,762		26,152
Construction-in-progress			9,109		—
			1,076,743		961,629
Less:
	Accumulated depreciation and amortization		464,496		382,813
		$	612,247	$	578,816

        Depreciation expense was approximately $90.1 million, $80.8 million and $70.9 million for fiscal 2005, fiscal 2004 and fiscal 2003, respectively.

6. Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts Payable

        The Company maintains a trade payables program with General Electric Capital Corporation ("GECC") under which GECC pays participating Company suppliers the amount due from the Company in advance of the original due date. In exchange for the earlier payment, these suppliers accept a discounted payment. On the original due date of the payables, the Company pays GECC the full amount. Pursuant to the agreement, any favorable economics realized by GECC for transactions under this program are shared with the Company. The Company recognizes the total vendor discount realized by GECC as a reduction of the cost of inventory in the Consolidated Balance Sheets and records the share of the vendor discount due GECC as interest expense in the Consolidated Statements of Operations.

        GECC and the Company have determined to terminate the trade payables program effective January 13, 2006. As of December 31, 2005, the Company paid all amounts outstanding under the program. As of January 1, 2005, the Company owed approximately $65.0 million to GECC under this program. The Company, at its discretion, may continue to offer early payment options to suppliers in exchange for discounted payments.

        In addition, included in accounts payable are amounts for gift card liabilities of $35.8 million and $30.5 million as of December 31, 2005 and January 1, 2005, respectively. Gift cards that are not expected to be redeemed are recorded as a reduction to selling, general and administrative expense in the Consolidated Statements of Operations. Such amounts recognized for fiscal 2005, 2004 and 2003 amounted to $2.8 million, $5.3 million and $2.5 million, respectively.

F-18

Accrued Expenses and Other Current Liabilities

	Fiscal Year Ended
Accrued expenses and other current liabilities consisted of the following (in thousands):
	2005		2004
Other taxes payable	$	35,602	$	33,123
Income taxes payable		29,181		31,381
Salaries and employee benefits		24,518		22,376
Other		109,723		125,764
	$	199,024	$	212,644

        Included in "other" is miscellaneous store operating and corporate office accrued expenses.

7. Short-Term Borrowing Arrangements

        In November 2004, the Company entered into a $250 million senior revolving credit facility agreement (the "Credit Agreement") with third party institutional lenders which expires November 23, 2009. The Credit Agreement allows for up to $50 million of additional unsecured indebtedness under lines of credit outside of the Credit Agreement ("Additional Indebtedness"). Additional Indebtedness includes a new unsecured credit facility in the amount of $34 million which the Company entered into in July 2005 covering its Canadian operations. This credit facility expires July 29, 2008. The Credit Agreement replaced the $150 million senior revolving credit facility amended June 2002, which allowed for up to $40 million in borrowings from additional lines of credit outside the agreement (the "2002 Credit Agreement").

        Under the Credit Agreement, interest on all borrowings is determined based upon several alternative rates, including a fixed margin above LIBOR. The Credit Agreement contains certain financial covenants, including those relating to the maintenance of a minimum tangible net worth, a minimum fixed charge coverage ratio and a maximum leverage ratio. As of December 31, 2005, the Company was in compliance with its covenants under the Credit Agreement. Under the Credit Agreement, the amount of dividends that the Company may pay may not exceed the sum of $50 million plus, on a cumulative basis, an amount equal to 25% of the consolidated net income for each fiscal quarter, commencing with the fiscal quarter ending April 3, 2004. The Company has never paid cash dividends and does not currently anticipate paying cash dividends in the future. As of December 31, 2005, the Company had no borrowings under the Credit Agreement and no borrowings under the Additional Indebtedness. At various times throughout fiscal 2005 and 2004, the Company borrowed against its Credit Agreement and the 2002 Credit Agreement, respectively, for working capital needs. The Company also had $98.9 million of letters of credit outstanding as of December 31, 2005, which included standby letters of credit issued primarily under the Credit Agreement and import letters of credit used for merchandise purchases. The Company is not obligated under any formal or informal compensating balance requirements.

F-19

8. Deferred Income Taxes and Other Long-Term Liabilities

	Fiscal Year Ended
Deferred income taxes and other long-term liabilities consisted of the following (in thousands):
	2005		2004
Deferred income taxes	$	54,416	$	62,720
Deferred rent		74,262		69,390
Deferred rent credit		189,020		176,975
Mortgage note payable		2,076		2,196
Other		10,190		6,957
	$	329,964	$	318,238

        Deferred rent represents the unamortized accrual for scheduled rent increases contained in the Company's leases and deferred rent credits represent the unamortized portion of landlord allowances. Mortgage note payable represents an 8.25% fixed-rate mortgage note on the land and building of one of the Company's closed stores. Under the mortgage note terms, the Company is required to make 96 equal payments of principal and interest, with a final principal payment of approximately $1.6 million in August 2012.

9. Leases

        The Company has non-cancelable operating leases, primarily for retail stores, which expire through 2029. The leases generally contain renewal options for periods ranging from 5 to 20 years in total and require the Company to pay costs such as real estate taxes and common area maintenance. Contingent rentals are paid based on a percentage of net sales as defined by lease agreements. Rental expense, net of landlord allowance amortization of $21.6 million, $20.0 million and $17.3 million for fiscal years 2005, 2004 and 2003, respectively, and sublease rentals, for all operating leases was as follows (in thousands):

		Fiscal Year Ended
		2005		2004		2003
Minimum rentals		$	249,210	$	228,575	$	204,110
Contingent rentals			—		17		34
			249,210		228,592		204,144
Less:
	Sublease rentals		4,489		3,599		2,903
		$	244,721	$	224,993	$	201,241

F-20

        At fiscal year end 2005, the future minimum rental payments required under operating leases and the future minimum sublease rentals excluding lease obligations for closed stores resulting from the 2001 restructuring and asset impairment charge were as follows (in thousands):

Fiscal Year
2006	$	278,241
2007		282,852
2008		282,452
2009		280,745
2010		275,949
Thereafter		1,298,567
	$	2,698,806
Total future minimum sublease rentals	$	39,303

        As of December 31, 2005 the Company had fully executed leases for 28 stores planned to open in fiscal years 2006 and 2007, for which aggregate minimum rental payments over the term of the leases is approximately $158.4 million. The table above includes payments for stores that had fully executed leases as of December 31, 2005.

        The Company also has assigned property at a retail location in which the Company guarantees the payment of rent over the specified lease term in the event of non-performance. As of December 31, 2005, the maximum potential amount of future payments the Company could be required to make under such guarantee is approximately $0.7 million.

10. Stock Incentive Plans

        The Company has adopted the 2004 Stock Award and Incentive Plan (the "2004 Plan"). The 2004 Plan provides for the granting of options, restricted stock unit grants and other stock-based awards (collectively, "awards") to key employees and non-employee directors. The 2004 Plan replaced both the Company's 2000 Stock Award and Incentive Plan (the "2000 Plan") and the Broad-Based Equity Plan. The 2000 Plan replaced both the Company's 1996 Incentive Compensation Plan (the "1996 Plan") and the 1996 Non-Employee Directors' Stock Plan (the "Directors' Plan"). Therefore, no future awards will be made under the 2000 Plan, the Broad-Based Equity Plan, the 1996 Plan or the Directors' Plan (collectively, the "Prior Plans"), although outstanding awards under the Prior Plans will continue to be in effect. The Company has also adopted the New Hire Authorization. The New Hire Authorization provides for the granting of awards as an inducement to a person being retained for employment by the Company.

        Under the 2004 Plan, an aggregate of 4,000,000 shares (plus any shares under outstanding awards under the Prior Plans which become available for further grants) was authorized for issuance of awards. Under the New Hire Authorization, an aggregate of 500,000 shares was authorized.

        Stock options under the 2004 Plan and the New Hire Authorization are granted with exercise prices at the fair market value of the underlying shares at the date of grant. The right to exercise options generally commences one to five years after the grant date, and the options expire between five to ten years after the grant date. Restrictions on restricted stock unit grants lapse over vesting periods

F-21

of up to five years. Restricted stock unit grants are considered outstanding as of the grant date for purposes of computing diluted EPS and are considered outstanding upon vesting for purposes of computing basic EPS.

        At fiscal year end 2005, 7,500 restricted stock unit grants were outstanding under the 2000 Plan. During fiscal 2005, 3,750 restricted stock unit grants were released, no restricted stock unit grants were awarded and no restricted stock unit grants were canceled.

        At fiscal year end 2005, 9,850 restricted stock unit grants were outstanding under the Broad-Based Equity Plan. During 2005, 4,135 restricted stock unit grants were released, no restricted stock unit grants were awarded and no restricted stock unit grants were canceled.

        At fiscal year end 2005, 118,066 restricted stock unit grants were outstanding under the 2004 Plan. During 2005, 16,733 restricted stock unit grants were released, 72,299 restricted stock unit grants were awarded and no restricted stock unit grants were canceled.

        At fiscal year end 2005, 20,000 restricted stock unit grants were outstanding under the New Hire Authorization. During 2005, 5,000 restricted stock unit grants were released, no restricted stock unit grants were awarded and no restricted stock unit grants were canceled.

        At fiscal year end 2005, 1,151,673 stock options were outstanding under the 1996 Plan. During fiscal 2005, no stock options were granted, 69,275 stock options were exercised, 18,070 stock options were canceled, and 1,151,673 stock options were exercisable at fiscal year end 2005 under the 1996 Plan.

        At fiscal year end 2005, 48,800 stock options were outstanding under the Directors' Plan. During fiscal 2005, no stock options were granted, no stock options were exercised, no stock options were canceled, and 48,800 stock options were exercisable at fiscal year end 2005 under the Directors' Plan.

        At fiscal year end 2005, 1,463,796 stock options were outstanding under the 2000 Plan. During fiscal 2005, no stock options were granted, 10,425 stock options were exercised, 538 stock options were canceled, and 1,455,131 stock options were exercisable at fiscal year end 2005 under the 2000 Plan.

        At fiscal year end 2005, 1,470,638 stock options were outstanding under the Broad-Based Equity Plan. During fiscal 2005, no stock options were granted, 79,043 stock options were exercised, 237,234 stock options were canceled, and 1,209,142 stock options were exercisable at fiscal year end 2005 under the Broad-Based Equity Plan.

        At fiscal year end 2005, 1,246,690 stock options were outstanding under the 2004 Plan. During fiscal 2005, 135,290 stock options were granted, no stock options were exercised, 108,195 stock options were canceled, and 782,231 options were exercisable at fiscal year end 2005 under the 2004 Plan.

        At fiscal year end 2005, 450,000 stock options were outstanding under the New Hire Authorization. During fiscal 2005, 150,000 stock options were granted, no stock options were exercised, no stock options were canceled, and 120,000 stock options were exercisable at fiscal year end 2005 under the New Hire Authorization.

F-22

        The following tables summarize information about stock option transactions for the 2004 Plan, the New Hire Authorization, and the Prior Plans:

	Number of Shares	Weighted- Average Exercise Price
Balance at January 4, 2003	5,347,248	$	23.21
Options granted	1,056,625	$	27.13
Options exercised	717,652	$	17.70
Options canceled	370,397	$	23.19
Balance at January 3, 2004	5,315,824	$	24.72
Options granted	1,534,695	$	25.56
Options exercised	381,946	$	20.46
Options canceled	399,486	$	27.54
Balance at January 1, 2005	6,069,087	$	25.02
Options granted	285,290	$	25.22
Options exercised	158,743	$	16.95
Options canceled	364,037	$	25.79
Balance at December 31, 2005	5,831,597	$	25.20
Options Exercisable as of:
January 3, 2004	3,102,033	$	25.06
January 1, 2005	3,412,039	$	24.76
December 31, 2005	4,766,977	$	25.09

	Options Outstanding
Range of Exercise Price	Outstanding as of December 31, 2005	Weighted-Average Remaining Contractual Life (in years)	Weighted-Average Exercise Price
$  7.75-$11.50	60,400	0.9	$	8.08
$11.51-$17.25	4,300	1.5	$	13.76
$17.26-$21.50	1,220,574	5.1	$	19.88
$21.51-$25.75	2,108,575	4.6	$	24.34
$25.76-$32.50	2,386,748	4.4	$	28.88
$32.51-$48.75	51,000	5.3	$	36.79
Total	5,831,597	4.6	$	25.20

F-23

	Options Exercisable
Range of Exercise Price	Exercisable as of December 31, 2005	Weighted-Average Exercise Price
$  7.75-$11.50	60,400	$	8.08
$11.51-$17.25	4,300	$	13.76
$17.26-$21.50	1,195,809	$	19.87
$21.51-$25.75	1,554,044	$	24.27
$25.76-$32.50	1,907,599	$	29.31
$32.51-$48.75	44,825	$	37.07
Total	4,766,977	$	25.09

11. Employee Benefit Plans

        The Company has a 401(k) plan for its US employees and an employee savings plan for its Canadian employees. Company contributions to the two plans amounted to approximately $1.4 million, $1.4 million and $1.2 million for fiscal years 2005, 2004 and 2003, respectively.

        Effective July 1, 1999, the Company established a Supplemental Executive Retirement Program ("SERP"). The SERP, which in part is funded with the cash surrender values of certain life insurance policies owned by the Company, provides eligible executives with supplemental pension benefits, in addition to amounts received under the Company's 401(k) benefit plan. Under the terms of the SERP, upon termination of employment with the Company, eligible participants will be entitled to benefits determined under the SERP beginning at or after age 55. The SERP has three components: (i) a defined benefit component, (ii) a split dollar insurance component, which is frozen due to limitations imposed by the Sarbanes-Oxley Act prohibiting the Company from paying premiums into the policy beginning with the 2003 premium payment and (iii) a new defined contribution component, which was established in 2004 because of the restrictions on further premium payments under the split dollar insurance arrangement. This new component is designed to provide, together with the defined benefit component and the frozen split dollar policy, total projected benefits similar to what would have been provided if the split dollar insurance arrangement had not been frozen. Currently, only the Company's Chairman and Chief Executive Officer is a participant under the SERP, although additional participants could be added in the future. The Company recorded expenses related to the SERP of approximately $220,000, $170,000 and $875,000 for fiscal years 2005, 2004 and 2003, respectively. Included in fiscal 2003 SERP expense is $784,000 related to the departure of a former executive.

12. Income Taxes

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax

F-24

purposes. Significant components of the Company's deferred tax assets and liabilities were as follows (in thousands):

Fiscal Year Ended		2005		2004
Deferred tax assets:
	Employee benefits	$	6,481	$	4,917
	Lease termination costs		2,140		3,393
	State NOL		5,911		3,183
	Other		1,618		1,372
Total deferred tax assets			16,150		12,865
Deferred tax liabilities:
	Inventories	$	9,762	$	11,921
	Property and equipment		61,594		68,993
	Other		1,578		—
Total deferred tax liabilities			72,934		80,914
Net deferred tax liability		$	56,784	$	68,049

        Deferred tax assets at December 31, 2005 include state net operating loss carryforward ("NOL") of approximately $125.4 million, expiring at various dates between 2006 and 2021. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowances of $0.9 million at December 31, 2005. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

        At December 31, 2005 and January 1, 2005, the net deferred tax liability was included in the Consolidated Balance Sheets as follows (in thousands):

Fiscal Year Ended	2005			2004
Current deferred asset	$	2,033		$	685
Current deferred liability		(4,401	)		(6,014	)
Non-Current deferred tax liability		(54,416	)		(62,720	)
Net deferred tax liability	$	56,784		$	68,049

F-25

        The components of income before income taxes comprised the following:

	Fiscal Year Ended
(in thousands):
	2005		2004		2003
Domestic	$	49,356	$	91,989	$	113,102
Foreign		8,505		5,940		4,632
Total	$	57,861	$	97,929	$	117,734

        The provision for income taxes comprised the following for:

		Fiscal Year Ended
(in thousands):
		2005			2004			2003
Current:
	U.S. Federal	$	21,516		$	28,212		$	5,835
	U.S. State		8,526			8,932			612
	Non-U.S.		3,102			1,376			1,402
			33,144			38,520			7,849
Deferred:
	U.S. Federal		(6,578	)		2,971			32,600
	U.S. State		(3,654	)		(4,977	)		4,264
	Non-U.S.		(1,033	)		894			262
			(11,265	)		(1,112	)		37,126
Total		$	21,879		$	37,408		$	44,975

        The Company has not recognized any United States tax expense on its undistributed international earnings since it has an intention to reinvest the earnings outside the United States for the foreseeable future. These undistributed earnings total approximately $19.4 million at December 31, 2005. The Company did not repatriate any of its foreign earnings under the provisions of the American Jobs Creation Act of 2004.

        The following is a reconciliation between the statutory Federal income tax rate and the effective rate for:

	Fiscal Year Ended
	2005		2004		2003
Effective tax rate	37.8	%	38.2	%	38.2	%
State income taxes, net of federal benefit	(5.5	)	(2.6	)	(2.7	)
Foreign taxes	1.6		(0.3	)	(0.1	)
Other	1.1		(0.3	)	(0.4	)
Statutory Federal income tax rate	35.0	%	35.0	%	35.0	%

F-26

13. Commitments and Contingencies

        On November 8, 2005, the Company announced that it entered into a definitive agreement (the "Merger Agreement") to be acquired by a company newly formed and controlled by Apollo Management, L.P. ("Apollo"), on behalf of itself and its managed funds, together with certain investors; NRDC Real Estate Advisors I, LLC and Silver Point Capital Fund Investments LLC. Under the terms of the agreement, Linens "n Things' stockholders are to receive $28.00 per share in cash. All outstanding options to purchase shares of common stock, restricted shares and deferred shares of common stock of the Company will be canceled and converted into the right to receive $28.00 per restricted share, deferred share or share of common stock underlying such option less, in the case of options, the exercise price thereof, without interest. The Merger Agreement contains certain termination rights and provides that, upon the termination of the Merger Agreement under specified circumstances, the Company may be required to pay Apollo a termination fee equal to $27 million and expenses up to $5 million. The debt financing for the transaction is subject to various conditions, including the Company achieving EBITDA of not less than $140 million for the full 2005 fiscal year and comparable net sales of not less than negative 6% for the 2005 fourth quarter, as well as other customary conditions for a leveraged acquisition financing. The debt financing commitments define EBITDA as net earnings before interest, taxes, depreciation and amortization, with other specified adjustments.

        The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement and the debt financing commitment letters, which are each filed as exhibits to the Company's Form 8-K filed with the Securities and Exchange Commission on November 9, 2005.

        The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management the ultimate disposition of these matters is not expected to have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

F-27

14. Summary of Quarterly Results (unaudited)

(in thousands, except per share data)	First Quarter			Second Quarter			Third Quarter		Fourth Quarter		Fiscal Year
Net sales
2005	$	570,946		$	573,317		$	629,268	$	921,211	$	2,694,742
2004	$	552,800		$	578,749		$	654,196	$	875,724	$	2,661,469
Gross profit
2005		236,393			236,943			258,315		367,697		1,099,348
2004		221,246			232,676			269,106		348,741		1,071,769
Operating (loss) profit
2005		(5,761	)		(8,759	)		2,807		73,540		61,827
2004		(1,042	)		1,201			28,442		72,689		101,290
Net (loss) income
2005		(4,074	)		(5,932	)		1,024		44,964		35,982
2004		(1,112	)		97			17,175		44,361		60,521
Net (loss) income per share
Basic(1)
2005	$	(0.09	)	$	(0.13	)	$	0.02	$	0.99	$	0.79
2004	$	(0.02	)	$	—		$	0.38	$	0.98	$	1.34
Diluted(1)
2005	$	(0.09	)	$	(0.13	)	$	0.02	$	0.98	$	0.79
2004	$	(0.02	)	$	—		$	0.38	$	0.97	$	1.32

(1)

Net income per share amounts for each quarter are required to be computed independently and may not equal the amount computed for the fiscal year.

15. Supplemental Condensed Consolidating Financial Information

      As part of the Transactions as discussed in Note 16, Subsequent Events, Linens "n Things, Inc. and Linens "n Things Center, Inc. (collectively, the "Co-Issuers"), issued $650 million aggregate principal amount of Senior Secured Floating Rate Notes due 2014 (the "Notes"). The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the Company, and by each of the Company's direct and indirect subsidiaries that guarantee the Company's new asset-based revolving credit facility except for its Canadian subsidiaries. The Company's Canadian subsidiaries (the "Non-Guarantors") are not guarantors of the Notes.

        The following tables present the supplemental condensed consolidating financial information for the Co-Issuers, the Guarantors (excluding the Co-Issuers which is also a Guarantor but is separately presented) and the Non-Guarantors together with eliminations, as of and for the periods indicated. The company has not presented separate financial statements and other disclosures concerning the Guarantors because management has determined that such information is not material to investors. The accounting policies for Co-Issuers, Guarantors, and Non-Guarantors are the same as those described for the Company in the Summary of Significant Accounting Policies. The consolidating financial information may not necessarily be indicative of results of operations or financial position had the Guarantors operated as independent entities.

        Income tax expense has been provided on the combined Co-Issuer and Guarantor subsidiaries based on actual effective tax rates.

F-28

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
December 31, 2005
(In Thousands)

	Co-Issuers			Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	136,569		$	8,718	$	12,871	$	—		$	158,158
Accounts receivable		361			39,757		3,443		—			43,561
Inventories		15,105			725,856		46,322		—			787,283
Prepaid expenses and other current assets		84			15,368		1,973		—			17,425
Current deferred taxes		—			1,789		244		—			2,033
Total current assets		152,119			791,488		64,853		—			1,008,460
Property and equipment, net		9,974			561,271		41,002		—			612,247
Goodwill		—			18,126		—		—			18,126
Intercompany receivables		—			856,999		—		(856,999	)		—
Intercompany notes receivable		1,096,991			—		23,306		(1,120,297	)		—
Investment in subsidiaries		490,933			—		—		(490,933	)		—
Deferred charges and other noncurrent assets, net		332			11,466		203		—			12,001
Total assets	$	1,750,349		$	2,239,350	$	129,364	$	(2,468,229	)	$	1,650,834
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(16	)	$	249,399	$	18,199	$	—		$	267,582
Accrued expenses and other current liabilities		43,824			144,840		10,360		—			199,024
Current deferred taxes		222			4,179		—		—			4,401
Total current liabilities		44,030			398,418		28,559		—			471,007
Intercompany payable		848,054			—		8,945		(856,999	)		—
Intercompany notes payable		—			1,073,800		46,497		(1,120,297	)		—
Deferred income taxes and other long-term liabilities		8,402			302,713		18,849		—			329,964
Total liabilities		900,486			1,774,931		102,850		(1,977,296	)		800,971
Total shareholders' equity		849,863			464,419		26,514		(490,933	)		849,863
Total liabilities and shareholders' equity	$	1,750,349		$	2,239,350	$	129,364	$	(2,468,229	)	$	1,650,834

F-29

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
January 1, 2005
(In Thousands)

	Co-Issuers			Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	174,973		$	13,122	$	15,914	$	—		$	204,009
Accounts receivable		757			23,489		1,520		—			25,766
Inventories		14,500			657,005		43,679		—			715,184
Prepaid expenses and other current assets		85			36,854		1,396		—			38,335
Current deferred taxes		—			—		685		—			685
Total current assets		190,315			730,470		63,194		—			983,979
Property and equipment, net		8,314			536,527		33,975		—			578,816
Goodwill		—			18,126		—		—			18,126
Intercompany receivable		—			39,120		—		(39,120	)		—
Intercompany notes receivable		201,527			—		22,574		(224,101	)		—
Investment in subsidiaries		468,110			—		—		(468,110	)		—
Deferred charges and other noncurrent assets, net		424			10,406		133		—			10,963
Total assets	$	868,690		$	1,334,649	$	119,876	$	(731,331	)	$	1,591,884
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(13	)	$	231,837	$	13,811	$	—		$	245,635
Accrued expenses and other current liabilities		31,464			172,545		8,635		—			212,644
Current deferred taxes		71			5,943		—		—			6,014
Total current liabilities		31,522			410,325		22,446		—			464,293
Intercompany payable		21,213			—		17,907		(39,120	)		—
Intercompany notes payable		—			179,065		45,036		(224,101	)		—
Deferred income taxes and other long-term liabilities		6,603			295,639		15,996		—			318,238
Total liabilities		59,338			885,029		101,385		(263,221	)		782,531
Total shareholders' equity		809,352			449,620		18,491		(468,110	)		809,353
Total liabilities and shareholders' equity	$	868,690		$	1,334,649	$	119,876	$	(731,331	)	$	1,591,884

F-30

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	73,754		$	2,461,747		$	159,241		$	—		$	2,694,742
Cost of sales, including buying and distribution costs		42,647			1,467,510			85,237			—			1,595,394
Gross profit		31,107			994,237			74,004			—			1,099,348
Selling, general and administrative expenses		18,963			954,111			64,447			—			1,037,521
Operating profit		12,144			40,126			9,557			—			61,827
Interest income		(14,301	)		(11	)		(157	)		13,575			(894	)
Interest expense		1,944			15,282			1,209			(13,575	)		4,860
Interest (income) expense, net		(12,357	)		15,271			1,052			—			3,966
Income before income taxes		24,501			24,855			8,505			—			57,861
Provision for income taxes		9,834			9,977			2,068			—			21,879
Net income	$	14,667		$	14,878		$	6,437		$	—		$	35,982

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE FISCAL YEAR ENDED JANUARY 1, 2005

(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales	$	76,451		$	2,461,026		$	123,992		$	—		$	2,661,469
Cost of sales, including buying and distribution costs		45,150			1,475,001			69,549			—			1,589,700
Gross profit		31,301			986,025			54,443			—			1,071,769
Selling, general and administrative expenses		20,092			903,033			47,354			—			970,479
Operating profit		11,209			82,992			7,089			—			101,290
Interest income		(17,187	)		(4,192	)		(43	)		20,880			(542	)
Interest expense		—			23,683			1,100			(20,880	)		3,903
Interest (income) expense, net		(17,187	)		19,491			1,057			—			3,361
Income before income taxes		28,396			63,501			6,032			—			97,929
Provision for income taxes		10,856			24,247			2,305			—			37,408
Net income	$	17,540		$	39,254		$	3,727		$	—		$	60,521

F-31

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE FISCAL YEAR ENDED JANUARY 3, 2004
(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	73,349		$	2,237,506		$	84,417	$	—		$	2,395,272
Cost of sales, including buying and distribution costs		44,038			1,333,775			49,067		—			1,426,880
Gross profit		29,311			903,731			35,350		—			968,392
Selling, general and administrative expenses		19,121			797,911			29,794		—			846,826
Operating profit		10,190			105,820			5,556		—			121,566
Interest income		(42,220	)		(22,221	)		—		64,272			(169	)
Interest expense		30,377			36,852			1,044		(64,272	)		4,001
Interest (income) expense, net		(11,843	)		14,631			1,044		—			3,832
Income before income taxes		22,033			91,189			4,512		—			117,734
Provision for income taxes		8,417			34,835			1,723		—			44,975
Net income	$	13,616		$	56,354		$	2,789	$	—		$	72,759

F-32

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash inflows (outflows) from operating activities:
Net income	$	14,667		$	14,878		$	6,437		$	—		$	35,982
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,453			83,749			5,068			—			90,270
Deferred income taxes		2,162			(12,810	)		(617	)		—			(11,265	)
Loss on disposal of assets		35			1,360			38			—			1,433
Loss on fixed asset impairment		—			4,059			—			—			4,059
Federal tax benefit from issuance of common stock under stock incentive plans		492			—			—			—			492
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		396			(16,268	)		(1,832	)		—			(17,704	)
Increase in inventories		(605	)		(68,851	)		(1,201	)		—			(70,657	)
Decrease (increase) in prepaid expenses and other current assets		1			21,486			(918	)		—			20,569
Decrease (increase) in deferred charges and other noncurrent assets		25			(1,122	)		(134	)		—			(1,231	)
(Decrease) increase in accounts payable		(2	)		17,561			3,852			—			21,411
Increase (decrease) in accrued expenses and other liabilities		12,149			(11,374	)		4,067			—			4,842
Net cash provided by operating activities		30,773			32,668			14,760			—			78,201
Cash outflows from investing activities:
Additions to property and equipment		(9,663	)		(106,530	)		(11,389	)		—			(127,582	)
Addition to investment in subsidiary		(919	)		—			—			919			—
Net cash (used in) provided by investing activities		(10,582	)		(106,530	)		(11,389	)		919			(127,582	)
Cash inflows (outflows) from financing activities:
Proceeds from common stock under stock incentive plans		3,614			—			919			(919	)		3,614
Inter-company movements		(62,042	)		69,536			(7,494	)		—			—
Increase in treasury stock		(167	)		(78	)		—			—			(245	)
Net cash (used in) provided by financing activities		(58,595	)		69,458			(6,575	)		(919	)		3,369
Effect of exchange rate changes on cash and cash equivalents		—			—			161			—			161
Net decrease in cash and cash equivalents		(38,404	)		(4,404	)		(3,043	)		—			(45,851	)
Cash and cash equivalents at beginning of period		174,973			13,122			15,914			—			204,009
Cash and cash equivalents at end of period	$	136,569		$	8,718		$	12,871		$	—		$	158,158

F-33

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JANUARY 1, 2005
(In Thousands)

	Co-Issuers			Guarantors			Non- Guarantors			Eliminations			Consolidated
Cash inflows (outflows) from operating activities:
Net income	$	17,540		$	39,254		$	3,727		$	—		$	60,521
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,079			76,342			3,897			—			81,318
Deferred income taxes		2,016			(4,023	)		895			—			(1,112	)
Loss on disposal of assets		17			2,188			4			—			2,209
Loss on fixed asset impairment		—			900			—			—			900
Federal tax benefit from issuance of common stock under stock incentive plans		1,500			—			—			—			1,500
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(2	)		4,742			(889	)		—			3,851
Decrease (increase) in inventories		322			(3,548	)		(8,771	)		—			(11,997	)
Increase in prepaid expenses and other current assets		(38	)		(4,640	)		(1,355	)		—			(6,033	)
Decrease (increase) in deferred charge and other noncurrent assets		87			(4,531	)		(455	)		—			(4,899	)
(Decrease) increase in accounts payable		(7	)		(5,647	)		223			—			(5,431	)
Increase in accrued expenses and other liabilities		16,043			34,819			5,652			—			56,514
Net cash provided by operating activities		38,557			135,856			2,928			—			177,341
Cash outflows from investing activities:
Additions to property and equipment		(605	)		(108,773	)		(9,674	)		—			(119,052	)
Addition to investment in subsidiary		(28,063	)		—			—			28,063			—
Net cash (used in) provided by investing activities		(28,668	)		(108,773	)		(9,674	)		28,063			(119,052	)
Cash inflows (outflows) from financing activities:
Proceeds from common stock under stock incentive plans		8,649			26,020			2,043			(28,063	)		8,649
Inter-company movements		35,189			(48,341	)		13,152			—			—
Increase in treasury stock		(56	)		134			—			—			78
Net cash provided by (used in) financing activities		43,782			(22,187	)		15,195			(28,063	)		8,727
Effect of exchange rate changes on cash and cash equivalents		—			—			864			—			864
Net increase in cash and cash equivalents		53,671			4,896			9,313			—			67,880
Cash and cash equivalents at beginning of period		121,302			8,226			6,601			—			136,129
Cash and cash equivalents at end of period	$	174,973		$	13,122		$	15,914		$	—		$	204,009

F-34

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE FISCAL YEAR ENDED JANUARY 3, 2004

(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash inflows (outflows) from operating activities:
Net income	$	13,616		$	56,354		$	2,789		$	—		$	72,759
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,224			67,721			2,403			—			71,348
Deferred income taxes		(1,228	)		38,930			(576	)		—			37,126
Loss on disposal of assets		1			1,264			—			—			1,265
Loss on fixed asset impairment		—			760			—			—			760
Federal tax benefit from issuance of common stock under stock incentive plans		2,614			—			—			—			2,614
Changes in assets and liabilities:
Increase in accounts receivable		(104	)		(4,757	)		(53	)		—			(4,914	)
Decrease (increase) in inventories		67			(85,718	)		(5,234	)		—			(90,885	)
Decrease (increase) in prepaid expenses and other current assets		4			(5,543	)		(2,890	)		—			(8,429	)
Decrease (increase) in deferred charges and other noncurrent assets		89			(358	)		(353	)		—			(622	)
Increase in accounts payable		—			42,176			4,099			—			46,275
(Decrease) increase in accrued expenses and other liabilities		(21,646	)		40,811			4,430			—			23,595
Net cash (used in) provided by operating activities		(5,363	)		151,640			4,615			—			150,892
Cash outflows from investing activities:
Additions to property and equipment		(733	)		(108,110	)		(4,453	)		—			(113,296	)
Addition to investment in subsidiary		(168	)		—			—			168			—
Net cash (used in) provided by investing activities		(901	)		(108,110	)		(4,453	)		168			(113,296	)
Cash inflows (outflows) from financing activities:
Proceeds from common stock under stock incentive plans		13,624			—			168			(168	)		13,624
Intercompany movements		36,451			(42,964	)		6,513			—			—
Increase in treasury stock		158			(288	)		—			—			(130	)
Decrease in short-term borrowings		—			—			(2,119	)		—			(2,119	)
Net cash provided by (used in) financing activities		50,233			(43,252	)		4,562			(168	)		11,375
Effect of exchange rate changes on cash and cash equivalents		—			—			553			—			553
Net increase in cash and cash equivalents		43,969			278			5,277			—			49,524
Cash and cash equivalents at beginning of period		77,333			7,948			1,324			—			86,605
Cash and cash equivalents at end of period	$	121,302		$	8,226		$	6,601		$	—		$	136,129

F-35

16. Subsequent events

        On November 8, 2005, Linens Merger Sub Co. and its parent company, Linens Holding Co., entered into an Agreement and Plan of Merger with the Company governing a merger (the "Merger") pursuant to which each share of common stock of the Company (other than shares held in treasury or owned by Linens Merger Sub Co., its parent company or any affiliate of Linens Merger Sub Co. and other than shares held by stockholders who properly demand and perfect appraisal rights) would be converted into the right to receive $28.00 in cash, without interest, for aggregate consideration of approximately $1.3 billion. The Merger was structured as a reverse subsidiary merger, and on February 14, 2006, Linens Merger Sub Co. was merged with and into the Company, with the Company as the surviving corporation. As the surviving corporation in the Merger, the Company assumed by operation of law all of the rights and obligations of Linens Merger Sub Co., including $650 million of notes (the "Notes") and the related indenture. Linens 'n Things Center, Inc., a direct wholly owned subsidiary of the Company, was a co-issuer of the Notes.

        Affiliates of Apollo Management, L.P., National Realty & Development Corp. and Silver Point Capital Fund Investments LLC (the "Sponsors") collectively contributed approximately $648.0 million as equity to Linens Merger Sub Co. immediately prior to the Merger.

        The Sponsors financed the purchase of the Company and paid related fees and expenses through the offering of the Notes, the equity investment described above and excess cash on hand at the Company. The Company did not draw on its new asset-based revolving credit facility at closing.

        The aforementioned transactions, including the Merger and its payment of any costs related to these transactions, are collectively referred to herein as the "Transactions." In connection with the Transactions, the Company incurred significant indebtedness and became highly leveraged.

        Immediately following the Merger, the Company became a wholly owned subsidiary of Linens Holding Co. Linens Holding Co. is an entity that was formed in connection with the Transactions and has no assets or liabilities other than the shares of Linens Merger Sub Co. and its rights and obligations under and in connection with the merger agreement with the Company and the equity commitment letters and debt financing commitment letters provided in connection with the Transactions.

        The closing of the Merger occurred simultaneously with:

•

the closing of the Note offering;



•

the closing of the Company's new $600.0 million asset-based revolving credit facility;



•

the termination of the Company's existing $250.0 million unsecured revolving credit facility and CAD $40.0 million unsecured credit facility agreements; and



•

the equity investments described above.

        The consummation of the Note offering was conditioned upon the consummation of the Merger, the closing of the Company's new asset-based revolving credit facility and the equity investments described above, all of which were completed on February 14, 2006.

        Set forth below is a summary of the terms of the Notes:

        The Notes bear interest at a per annum rate equal to LIBOR plus 5.625%, which is paid every three months on January 15, April 15, July 15 and October 15, commencing April 15, 2006. The interest rate on the Notes is reset quarterly. The Notes mature on January 15, 2014.

F-36

        The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the Company's parent, Linens Holding Co., and by each of the Company's direct and indirect subsidiaries that guarantee the Company's new asset-based revolving credit facility except for its Canadian subsidiaries (collectively, the "Guarantors").

        The Notes and guarantees are secured by first-priority liens, subject to permitted liens, on all of the Company's and the Guarantors' equipment, intellectual property rights and related general intangibles and all of its capital stock and the capital stock of certain subsidiaries. The lien on capital stock may be released under certain circumstances. The Notes and guarantees will also be secured by second-priority liens, subject to permitted liens, on all of the Company's and the guarantors' inventory, accounts receivable, cash, securities and other general intangibles.

        If the Company sells certain assets or experiences specific kinds of changes in control, the Company must offer to repurchase the Notes. The Company may, at its option, redeem the Notes at any time on or after January 15, 2008 at pre-determined prices. Prior to January 15, 2008, the Company may, at its option, redeem up to 35% of the Notes with the proceeds of certain sales of its equity or of its parent. Prior to January 15, 2008, the Company may, at its option, redeem the Notes at a price equal to 100% of the principal amount of the Notes plus a "make-whole" premium.

        The Company's new asset-based revolving credit facility (the "Credit Facility") provides senior secured financing of up to $600.0 million, subject to a borrowing base. The borrowing base is a formula based on certain eligible inventory and receivables, minus certain reserves. A portion of the Credit Facility, not to exceed $40.0 million, is also available to Linens 'n Things Canada Corp. subject to the Canadian borrowing base. The Credit Facility requires the Company to comply with financial ratio maintenance covenants if the excess availability under the Credit Facility, at any time, does not exceed $75 million and also contains certain customary affirmative covenants and events of default. The principal amount outstanding of the loans under the Credit Facility, plus interest accrued and unpaid thereon, will be due and payable in full at maturity, five years from the date of closing of the Transactions.

        All obligations under the Credit Facility are unconditionally guaranteed by Linens Holding Co., the Company's direct parent company, and certain of its existing and future domestic subsidiaries. All obligations under the Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the Company's assets and the assets of Linens Holding Co. and the subsidiary guarantors, including: (i) a first-priority security interest in inventory, accounts receivable, cash, securities and other general intangibles; and (ii) a second-priority security interest in equipment, intellectual property rights and related general intangibles and all of the capital stock of the Company and the capital stock of certain subsidiaries.

        Borrowings under the Credit Facility bear interest at a rate equal to, at the Company's option, either (a) an alternate base rate determined by reference to the higher of (1) the base rate in effect on such day and (2) the federal funds effective rate plus 0.50% or (b) a LIBOR rate, with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an applicable margin. The initial applicable margin for borrowings under the Credit Facility is 0% with respect to alternate base rate borrowings and 1.50% with respect to LIBOR borrowings. After the delivery of the financial statements for the first full fiscal quarter after the closing date, the applicable margin for borrowings under the Credit Facility will be subject to adjustment based on the excess

F-37

availability under the Credit Facility. In addition to paying interest on outstanding principal under the Credit Facility, the Company is required to pay a commitment fee, initially 0.375% per annum, in respect of the unutilized commitments thereunder. After the delivery of financial statements for the first full fiscal quarter after the closing date, the commitment fee will be subject to adjustment based on the excess availability under the Credit Facility. The Company must also pay customary letter of credit fees and agency fees. The Company initiated borrowings under its Credit Facility on February 23, 2006 to meet its operational working capital needs.

        As a result of the Merger, all of the Company's issued and outstanding capital stock was acquired by Linens Holding Co. At such time, investment funds associated with or designated by the Sponsors acquired approximately 99.7% of the common stock of Linens Holding Co. through an investment vehicle controlled by Apollo Management V, L.P., or one of its affiliates, and Robert J. DiNicola, the Company's new Chairman and Chief Executive Officer, acquired the remaining 0.3%.

        Upon consummation of the Transactions, the Company delisted its shares of common stock from the New York Stock Exchange (the "NYSE") and deregistered under Section 12 of the Securities Exchange Act of 1934. The last day of trading on the NYSE was February 14, 2006.

        Total fees and expenses related to the Transactions are estimated by the Company to be approximately $103.0 million, which includes $15.0 million of non-cash transaction-related expenses. Such fees include commitment, placement, financial advisory and other transaction fees as well as legal, accounting and other professional fees.

        The acquisition of Linens 'n Things, Inc. is being accounted for as a business combination using the purchase method of accounting. As a result, the assets and liabilities will be assigned new values, which will be fair value basis.

F-38

LINENS HOLDING CO. (AND PREDECESSOR)

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

			Predecessor Entity						Successor Entity
			April 2, 2005			December 31, 2005			April 1, 2006
Assets
	Current assets:
		Cash and cash equivalents	$	75,271		$	158,158		$	15,033
		Accounts receivable		30,186			43,561			42,646
		Inventories		765,929			787,283			827,779
		Prepaid expenses and other current assets		39,364			17,425			66,676
		Current deferred taxes		800			2,033			179
	Total current assets			911,550			1,008,460			952,313
	Property and equipment, net of accumulated depreciation of $403,286, $464,496 and $13,684 at April 2, 2005, December 31, 2005 and April 1, 2006, respectively			569,329			612,247			601,805
	Identifiable intangible assets, net			1,442			1,301			159,979
	Goodwill			18,126			18,126			277,264
	Deferred financing cost and other noncurrent assets, net			9,409			10,700			36,089
Total assets			$	1,509,856		$	1,650,834		$	2,027,450
Liabilities and Shareholders' Equity
	Current liabilities:
		Accounts payable	$	238,598		$	267,582		$	251,767
		Accrued expenses and other current liabilities		133,259			199,024			173,048
		Current deferred taxes		5,722			4,401			3,880
		Asset-based revolving credit facility		—			—			81,601
	Total current liabilities			377,579			471,007			510,296
	Senior secured notes and other long-term debt, net of current portion			2,123			2,076			652,059
	Deferred income taxes and other long-term liabilities			324,142			327,888			234,911
Total liabilities				703,844			800,971			1,397,266
Shareholders' equity:
	Preferred stock of Predecessor Entity, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding			—			—			—
	Common stock of Predecessor Entity, $0.01 par value; 135,000,000 shares authorized; 45,505,967 shares issued and 45,245,626 shares outstanding at April 2, 2005; and 45,653,954 shares issued and 45,389,975 shares outstanding at December 31, 2005			455			457			—
	Common stock of Successor Entity, $0.01 par value; 15,000,000 shares authorized; 13,000,000 shares issued and outstanding at April 1, 2006			—			—			130
	Additional paid-in capital			373,665			376,730			648,192
	Retained earnings (deficit)			436,840			476,896			(17,572	)
	Accumulated other comprehensive income (loss)			2,436			3,287			(566	)
	Treasury stock of LNT, at cost; 260,341 shares at April 2, 2005; and 263,979 shares at December 31, 2005			(7,384	)		(7,507	)		—
	Total shareholders' equity			806,012			849,863			630,184
Total liabilities and shareholders' equity			$	1,509,856		$	1,650,834		$	2,027,450

See accompanying Notes to Condensed Consolidated Financial Statements

F-39

LINENS HOLDING CO. (AND PREDECESSOR)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)

(Unaudited)

		Predecessor Entity						Successor Entity
		Thirteen Weeks Ended April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006
Net sales		$	570,946		$	284,971		$	307,845
Cost of sales, including buying and distribution costs			334,553			180,675			189,068
Gross profit			236,393			104,296			118,777
Selling, general and administrative expenses			242,154			174,138			137,761
Operating loss			(5,761	)		(69,842	)		(18,984	)
	Interest income		(495	)		(668	)		(86	)
	Interest expense		1,218			—			9,987
Interest expense (income), net			723			(668	)		9,901
Loss before benefit for income taxes			(6,484	)		(69,174	)		(28,885	)
Benefit for income taxes			(2,410	)		(21,270	)		(11,313	)
Net loss		$	(4,074	)	$	(47,904	)	$	(17,572	)

See accompanying Notes to Condensed Consolidated Financial Statements

F-40

LINENS HOLDING CO. (AND PREDECESSOR)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
(Unaudited)

				Predecessor Entity
										Successor Entity
				Thirteen Weeks Ended April 2, 2005
							January 1 to February 13, 2006			February 14 to April 1, 2006
Cash flows from operating activities:
Net loss				$	(4,074	)	$	(47,904	)	$	(17,572	)
	Adjustments to reconcile net loss to net cash used in operating activities:
		Depreciation and amortization			21,176			12,642			15,022
		Deferred income taxes			2,296			(6,646	)		(6,968	)
		Share-based compensation			233			12,484			709
		Loss on disposal of assets			86			—			73
		Changes in assets and liabilities, net of effect of acquisition:
			(Increase) decrease in accounts receivable		(4,425	)		(2,240	)		3,157
			Increase in inventories		(51,128	)		(31,886	)		(8,711	)
			Increase in prepaid expenses and other current assets		(880	)		(12,153	)		(37,104	)
			Decrease in identifiable intangible assets, net, deferred financing cost and other noncurrent assets, net		61			9,623			1,138
			(Decrease) increase in accounts payable		(6,930	)		7,244			(23,030	)
			Decrease in accrued expenses and other liabilities, net		(73,837	)		(6,310	)		(59,288	)
Net cash used in operating activities					(117,422	)		(65,146	)		(132,574	)
Cash flows from investing activities:
	Acquisition of the Company, net of cash acquired(1)				—			—			(1,205,502	)
	Additions to property and equipment				(12,027	)		(7,776	)		(8,571	)
Net cash used in investing activities					(12,027	)		(7,776	)		(1,214,073	)
Cash flows from financing activities:
	Issuance of common stock to Linens Investors LLC				—			—			650,000
	Issuance of floating rate notes				—			—			650,000
	Financing and direct acquisition costs				—			—			(19,866	)
	Issuance of common stock under stock incentive plans				904			—			—
	Federal tax benefit from common stock issued under stock incentive plans				135			4,298			—
	Increase in short-term borrowings				—			—			81,620
	(Increase) decrease in treasury stock				(122	)		674			—
Net cash provided by financing activities					917			4,972			1,361,754
Effect of exchange rate changes on cash and cash equivalents				$	(206	)	$	125		$	(74	)
Net (decrease) increase in cash and cash equivalents				$	(128,738	)	$	(67,825	)	$	15,033
Cash and cash equivalents at beginning of period					204,009			158,158			—
Cash and cash equivalents at end of period				$	75,271		$	90,333		$	15,033
Cash paid during the year for:
	Interest (net of amounts capitalized)			$	1,288		$	135		$	47
	Income taxes			$	27,981		$	57		$	22,090

(1)

In connection with the Merger, net cash settlements of approximately $20.0 million and $4.4 million for stock options and restricted stock units, respectively, are included in "Acquisition of the Company, net of cash acquired"

See accompanying Notes to Condensed Consolidated Financial Statements

F-41

LINENS HOLDING CO. (AND PREDECESSOR)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Acquisition of Linens 'n Things, Inc. by Linens Holding Co.

        On November 8, 2005, Linens Merger Sub Co. and its parent company, Linens Holding Co. (the "Company"), entered into an Agreement and Plan of Merger with Linens 'n Things, Inc. governing a merger (the "Merger") pursuant to which each share of common stock of Linens 'n Things, Inc. (other than shares held in treasury or owned by Linens Merger Sub Co., its parent company or any affiliate of Linens Merger Sub Co. and other than shares held by stockholders who properly demand and perfect appraisal rights) would be converted into the right to receive $28.00 in cash, without interest, for aggregate consideration of approximately $1.3 billion. The Merger was structured as a reverse subsidiary merger, and on February 14, 2006 Linens Merger Sub Co. was merged with and into Linens 'n Things, Inc., with Linens 'n Things, Inc. as the surviving corporation. As the surviving corporation in the Merger, Linens 'n Things, Inc. assumed by operation of law all of the rights and obligations of Linens Merger Sub Co., including $650 million aggregate principal amount of Senior Secured Floating Rate Notes (the "Notes") due 2014 of Linens 'n Things, Inc. and Linens 'n Things Center, Inc. and the related indenture. Linens 'n Things Center, Inc., a direct wholly owned subsidiary of Linens 'n Things, Inc., was a co-issuer of the Notes.

        Affiliates of Apollo Management, L.P., National Realty & Development Corp. and Silver Point Capital Fund Investments LLC (the "Sponsors") collectively contributed approximately $648 million as equity to Linens Merger Sub Co. immediately prior to the Merger.

        The Sponsors financed the purchase of Linens 'n Things, Inc. and paid related fees and expenses through the offering of the Notes, the equity investment described above and excess cash on hand at Linens 'n Things, Inc. Linens 'n Things, Inc. did not draw on its new asset-based revolving credit facility at closing.

        The aforementioned transactions, including the Merger and payment of any costs related to these transactions, are collectively referred to herein as the "Transactions." In connection with the Transactions, Linens 'n Things, Inc. incurred significant indebtedness and became highly leveraged.

        Immediately following the Merger, Linens 'n Things, Inc. became a wholly owned subsidiary of Linens Holding Co. Linens Holding Co. is an entity that was formed in connection with the Transactions and has no assets or liabilities other than the shares of Linens Merger Sub Co. and its rights and obligations under and in connection with the merger agreement with Linens 'n Things, Inc. and the equity commitment letters and debt financing commitment letters provided in connection with the Transactions.

        The closing of the Merger occurred simultaneously with:

•

the closing of the Note offering;



•

the closing of Linens 'n Things, Inc.'s new $600 million asset-based revolving credit facility;



•

the termination of Linens 'n Things, Inc.'s existing $250 million unsecured revolving credit facility and CAD $40 million unsecured credit facility agreements; and



•

the equity investments described above.

        The consummation of the Note offering was conditioned upon the consummation of the Merger, the closing of Linens 'n Things, Inc.'s new asset-based revolving credit facility and the equity investments described above, all of which were completed on February 14, 2006.

F-42

        Set forth below is a summary of the terms of the Notes:

        The Notes bear interest at a per annum rate equal to LIBOR plus 5.625%, which is paid every three months on January 15, April 15, July 15 and October 15, commencing April 15, 2006. The interest rate on the Notes is reset quarterly. The Notes mature on January 15, 2014.

        The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the Company and by each of the Company's direct and indirect subsidiaries that guarantee Linens 'n Things, Inc.'s new asset-based revolving credit facility except for its Canadian subsidiaries (collectively, the "Guarantors").

        The Notes and guarantees are secured by first-priority liens, subject to permitted liens, on all of the Company's and the Guarantors' equipment, intellectual property rights and related general intangibles and all of its capital stock and the capital stock of certain subsidiaries. The lien on capital stock may be released under certain circumstances. The Notes and guarantees will also be secured by second-priority liens, subject to permitted liens, on all of the Company's and the guarantors' inventory, accounts receivable, cash, securities and other general intangibles.

        If the Company sells certain assets or experiences specific kinds of changes in control, the Company must offer to repurchase the Notes. The Company may, at its option, redeem the Notes at any time on or after January 15, 2008 at pre-determined prices. Prior to January 15, 2008, the Company may, at its option, redeem up to 35% of the Notes with the proceeds of certain sales of its equity or of its subsidiaries. Prior to January 15, 2008, the Company may, at its option, redeem the Notes at a price equal to 100% of the principal amount of the Notes plus a "make-whole" premium.

        The Company's new asset-based revolving credit facility (the "Credit Facility") provides senior secured financing of up to $600 million, subject to a borrowing base. The borrowing base is a formula based on certain eligible inventory and receivables, minus certain reserves. A portion of the Credit Facility, not to exceed $40 million, is also available to Linens 'n Things Canada Corp. subject to the Canadian borrowing base. The Credit Facility requires the Company to comply with financial ratio maintenance covenants if the excess availability under the Credit Facility, at any time, does not exceed $75 million and also contains certain customary affirmative covenants and events of default. The principal amount outstanding of the loans under the Credit Facility, plus interest accrued and unpaid thereon, will be due and payable in full at maturity, five years from February 14, 2006, the date of closing of the Transactions.

        All obligations under the Credit Facility are unconditionally guaranteed by Linens Holding Co. and certain of its existing and future domestic subsidiaries. All obligations under the Credit Facility, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the Company's assets and the subsidiary guarantors, including: (i) a first-priority security interest in inventory, accounts receivable, cash, securities and other general intangibles; and (ii) a second-priority security interest in equipment, intellectual property rights and related general intangibles and all of the capital stock of the Company and the capital stock of certain subsidiaries.

        Borrowings under the Credit Facility bear interest at a rate equal to, at the Company's option, either (a) an alternate base rate determined by reference to the higher of (1) the base rate in effect on such day and (2) the federal funds effective rate plus 0.50% or (b) a LIBOR rate, with respect to any Eurodollar borrowing, determined by reference to the costs of funds for U.S. dollar deposits for the interest period relevant to such borrowing adjusted for certain additional costs, in each case plus an

F-43

applicable margin. The initial applicable margin for borrowings under the Credit Facility is 0% with respect to alternate base rate borrowings and 1.50% with respect to LIBOR borrowings. After the delivery of the financial statements for the first full fiscal quarter after the closing date, the applicable margin for borrowings under the Credit Facility will be subject to adjustment based on the excess availability under the Credit Facility. In addition to paying interest on outstanding principal under the Credit Facility, the Company is required to pay a commitment fee, initially 0.375% per annum, in respect of the unutilized commitments thereunder. After the delivery of financial statements for the first full fiscal quarter after the closing date, the commitment fee will be subject to adjustment based on the excess availability under the Credit Facility. The Company must also pay customary letter of credit fees and agency fees. The Company initiated borrowings under its Credit Facility on February 23, 2006 to meet its operational working capital needs.

        As a result of the Merger, all of Linens 'n Things, Inc.'s issued and outstanding capital stock was acquired by Linens Holding Co. At such time, investment funds associated with or designated by the Sponsors acquired approximately 99.7% of the common stock of Linens Holding Co. through an investment vehicle controlled by Apollo Management V, L.P., or one of its affiliates, and Robert J. DiNicola, the new Chairman and Chief Executive Officer of Linens 'n Things, Inc., acquired the remaining 0.3%.

        Upon consummation of the Transactions, Linens 'n Things, Inc. delisted its shares of common stock from the New York Stock Exchange (the "NYSE") and deregistered under Section 12 of the Securities Exchange Act of 1934. The last day of trading on the NYSE was February 14, 2006.

        Total fees and expenses related to the Transactions were approximately $107 million, inclusive of approximately $23 million of direct acquisition costs of the Company and $36 million of deferred financing costs. Such fees include commitment, placement, financial advisory and other transaction fees as well as legal, accounting and other professional fees. Deferred financing costs of approximately $11 million relates to the asset-based revolving credit facility which are amortized over five years and $25 million relates to the Notes, which are amortized over eight years.

        The acquisition of Linens 'n Things, Inc. is being accounted for as a business combination using the purchase method of accounting, whereby the purchase price (including liabilities assumed) was preliminarily allocated to the assets acquired based on their estimated fair market values at the date of acquisition. Independent third-party appraisers were engaged to perform valuations of certain of the tangible and intangible assets acquired.

        The Company has not yet completed the evaluation and allocation of the purchase price as the appraisal associated with the valuation of certain assets and liabilities is not yet complete. The Company does not believe that the appraisal or its estimate of certain contingencies will materially modify the preliminary purchase price allocation.

        As a result of the consummation of the Transactions, a new entity ("successor entity") was formed with an effective date of February 14, 2006, consisting of Linens Holding Co. and Subsidiaries. The condensed consolidated financial statements presented as of April 2, 2005 and December 31, 2005, and for the 13-week period ended April 2, 2005 and for the period January 1 to February 13, 2006 are shown under the "predecessor entity" caption, consisting of Linens 'n Things, Inc. and Subsidiaries. The condensed consolidated financial statements for the successor entity as of April 1, 2006 and for the period February 14 to April 1, 2006 show the operations of the successor entity, Linens Holding Co.

F-44

and Subsidiaries. As a result of the consummation of the transactions, the consolidated financial statements for the period after February 13, 2006 are presented on a different basis than that for the periods before February 14, 2006 as a result of the application of purchase accounting as of February 14, 2006 and therefore are not comparable.

        A reconciliation of the preliminary purchase price adjustments recorded in connection with the Transactions is presented below (in thousands):

			Predecessor Entity
								Successor Entity February 14, 2006
			February 13, 2006		Transaction Adjustments
			(Unaudited)		(Unaudited)			(Unaudited)
Assets
	Current assets:
		Cash and cash equivalents	$	90,333	$	(15,701	)	$	74,632
		Accounts receivable		45,833		—			45,833
		Inventories		819,600		—			819,600
		Prepaid expenses and other current assets		29,499		—			29,499
		Current deferred taxes		132		—			132
	Total current assets			985,397		(15,701	)		969,696
	Property and equipment, net			607,787		(57	)		607,730
	Identifiable intangible assets, net			—		161,018			161,018
	Goodwill			18,126		259,309			277,435
	Deferred financing cost and other noncurrent assets, net			2,355		34,896			37,251
Total assets			$	1,613,665	$	439,465		$	2,053,130
Liabilities and Shareholders' Equity
	Current liabilities:
		Accounts payable	$	274,997	$	—		$	274,997
		Accrued expenses and other current liabilities		195,467		39,388	(1)		234,855
		Current deferred taxes		8,176		—			8,176
	Total current liabilities			478,640		39,388			518,028
	Senior secured notes and other long-term debt, net of current portion			2,068		650,000			652,068
	Deferred income taxes and other long-term liabilities			312,549		(77,128	)(2)		235,421
Total liabilities				793,257		612,260			1,405,517
Shareholders' equity				820,408		(172,795	)		647,613
Total liabilities and shareholders' equity			$	1,613,665	$	439,465		$	2,053,130

(1)

Represents an accrual for unpaid transaction expenses.

(2)

Consists of the following purchase accounting adjustments:

Unfavorable leases	$	20,000
Deferred rents		(250,020	)
Deferred income taxes		152,892
	$	(77,128	)

F-45

        The unaudited pro forma results of operations provided below for the thirteen weeks ended April 2, 2005 and April 1, 2006 are presented as though the Transactions had occurred at the beginning of the periods presented, after giving effect to purchase accounting adjustments relating to depreciation and amortization of the revalued assets, interest expense associated with the Notes and the Credit Facility and other acquisition-related adjustments in connection with the Transactions. The pro forma results of operations are not necessarily indicative of the combined results that would have occurred had the Transactions been consummated at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

	Thirteen Weeks Ended
	April 2, 2005			April 1, 2006
(In Thousands)	(Unaudited)			(Unaudited)
Net sales	$	570,946		$	592,816
Loss before benefit for income taxes	$	(37,565	)	$	(69,396	)
Net loss	$	(22,971	)	$	(41,967	)

2. Basis of Presentation

        The accompanying Condensed Consolidated Financial Statements are unaudited. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of successor entity Linens Holding Co. and its subsidiaries and predecessor entity Linens 'n Things, Inc. and subsidiaries, as of April 1, 2006 and April 2, 2005 and the results of operations for the respective periods then ended and cash flows for the respective periods then ended as presented in the unaudited statements. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Because of the seasonality of the specialty retailing business, operating results of the Company on a quarterly or interim basis may not be indicative of operating results for the full year.

        These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the fiscal year ended December 31, 2005 included in the Company's predecessor entity's Annual Report on Form 10-K Equivalent for Linens 'n Things, Inc. posted on the Linens 'n Things, Inc. website on March 21, 2006 under "Noteholder Information." All significant intercompany accounts and transactions have been eliminated.

        Certain prior period amounts have been reclassified to conform with the current period's presentation.

        The accompanying Condensed Consolidated Financial Statements are those of Linens Holding Co. and its subsidiaries. The Company has not presented separate financial statements for Linens 'n Things Inc. and its subsidiaries or Linens 'n Things Center, Inc. and its subsidiaries (collectively, the issuers as described in Note 13) because management has determined that the differences in such financial statements are minor.

F-46

3. Stock-based Compensation

        On January 1, 2006, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 123 (Revised 2004), "Share-Based Payment" ("SFAS No. 123 (Revised 2004)"), requiring the recognition of compensation cost for all equity classified awards granted, modified or settled after the effective date and for the unvested portion of awards outstanding as of the effective date using the fair-value measurement method. SFAS No. 123 (Revised 2004) revises SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees."

        The Company recognizes the cost of all employee stock options on a straight-line attribution basis over their respective vesting periods, net of estimated forfeitures. The Company has selected the modified prospective method of transition; accordingly, prior periods have not been restated. Prior to adopting SFAS No. 123 (Revised 2004), the Company applied the recognition and measurement principles of APB Opinion No. 25 and related interpretations. All employee stock options were granted at or above the grant date market price. Accordingly, the Company did not recognize compensation expense for stock option grants. Restricted stock units granted at fair market value at the date of grant are amortized over specified vesting periods in the accompanying Condensed Consolidated Financial Statements.

Share-based Compensation Plans—Predecessor Entity

        Prior to the completion of the Merger, the Company granted stock options and restricted stock units for a fixed number of shares to employees and directors under share-based compensation plans. The exercise prices of the stock options were equal to the fair market value of the underlying shares at the date of grant. Compensation expense for restricted stock awards was measured at fair value on the date of grant based on the number of shares granted and the quoted market price of the Company's common stock. Such value was recognized as expense over the vesting period of the award adjusted for actual forfeitures.

        Upon completion of the Merger and in accordance with the terms of the stock plans, all of the outstanding stock options became fully vested and immediately exercisable. Each option was exercised, equal to the excess of $28.00 over the underlying stock option exercise price, less applicable withholding taxes. Each restricted stock unit award was exercised at $28.00 in cash, without interest, less applicable withholding taxes.

F-47

        The following is a summary of activity under the stock option plans that were in effect upon adoption of SFAS 123 (Revised 2004) through the effective date of the Merger, when all of the stock options and restricted stock units were exercised:

		Predecessor Entity
Plan		Outstanding at January 1, 2006	Exercised	Outstanding at February 14, 2006
Stock options
	1996 Plan	1,151,673	1,151,673	—
	Directors' Plan	48,800	48,800	—
	2000 Plan	1,463,796	1,463,796	—
	Broad-based Equity Plan	1,470,638	1,470,638	—
	2004 Plan	1,246,690	1,246,690	—
	New Hire Authorization	450,000	450,000	—
Total options outstanding		5,831,597	5,831,597	—
Weighted average exercise price per option		$25.20	$25.20	—
Weighted average remaining contractual term per option		4.6 years		—
Options exercisable at period end:
	Number of options			—
	Weighted average exercise price			—
	Weighted average remaining contractual term			—
Restricted stock units
	2000 Plan	7,500	7,500	—
	Broad-based Equity Plan	9,850	9,850	—
	2004 Plan	118,066	118,066	—
	New Hire Authorization	20,000	20,000	—
Total units outstanding		155,416	155,416	—
Weighted average fair market value per unit at date of award		$25.71	$25.71	—
Weighted average remaining contractual term for restrictions		2.9 years		—

(1)

Based on $28.00 per share, in accordance with the Merger.

        The 2004 Stock Award and Incentive Plan (the "2004 Plan") provided for the granting of options, restricted stock unit grants and other stock-based awards (collectively, "awards") to key employees and non-employee directors. The 2004 Plan replaced both the Company's 2000 Stock Award and Incentive Plan (the "2000 Plan") and the Broad-Based Equity Plan. The 2000 Plan replaced both the Company's 1996 Incentive Compensation Plan (the "1996 Plan") and the 1996 Non-Employee Directors' Stock Plan (the "Directors' Plan"). Therefore, no future awards were made under the 2000 Plan, the Broad-Based Equity Plan, the 1996 Plan or the Directors' Plan (collectively, the "Prior Plans"), although outstanding awards under the Prior Plans continued to be in effect. The New Hire Authorization provided for the granting of awards as an inducement to a person being retained for employment by the Company.

F-48

        Under the 2004 Plan, an aggregate of 4,000,000 shares (plus any shares under outstanding awards under the Prior Plans which become available for further grants) was authorized for issuance of awards. Under the New Hire Authorization, an aggregate of 500,000 shares was authorized.

        Stock options under the 2004 Plan and the New Hire Authorization were granted with exercise prices at the fair market value of the underlying shares at the date of grant. The right to exercise options generally commenced one to five years after the grant date, and the options expired between five to ten years after the grant date. Restrictions on restricted stock unit grants lapsed over vesting periods of up to five years.

        The weighted-average grant date fair value of options and restricted stock units granted during the thirteen weeks ended April 2, 2005 was $10.59 and $23.55, respectively. There were no share-based grants during the period January 1, 2006 to February 14, 2006 (predecessor entity).

        The total intrinsic value of stock options exercised during the thirteen weeks ended April 2, 2005 was approximately $349,000 and no restricted stock units were converted into common stock. The total intrinsic value of each stock option and restricted stock unit exercised due to the Merger was approximately $20.0 million and $4.4 million, respectively, for the period January 1, 2006 to February 14, 2006 (predecessor entity).

        The following is a summary of the activity for nonvested stock option grants and restricted stock unit awards as of February 14, 2006 and the changes for the period January 1, 2006 to February 14, 2006:

	Predecessor Entity
	Stock Options				Restricted Stock Units
	Options		Fair Value(1)		Units		Fair Value(1)
Nonvested at January 1, 2006	1,064,620		$	10.59	155,416		$	25.71
Grants	—			—	—			—
Vested(2)	(1,060,940	)	$	10.59	(155,416	)	$	25.71
Cancelled	(3,680	)	$	11.12	—			—
Nonvested at February 14, 2006	—			—	—			—

(1)

Represents the weighted-average grant date fair value per share-based unit, using the Black-Scholes option-pricing model for stock options and the average high/low market price of the Company's common stock for restricted stock units.

(2)

All of the share-based units became immediately vested on the date of the Merger.

        The total fair value of stock options vested during the thirteen-week period ended April 2, 2005 was approximately $0.4 million and no restricted stock units vested. The total fair value of stock options and restricted stock units vested during the period from January 1, 2006 to February 14, 2006 (predecessor entity) was approximately $11.2 million and $4.0 million, respectively.

        The compensation cost that has been charged against income for restricted stock unit grants was $0.2 million for the thirteen weeks ended April 2, 2005. No compensation cost was recognized for stock option grants.

        As of December 31, 2005, there was approximately $9.3 million and $3.2 million of total unrecognized compensation cost related to stock option grants and restricted stock unit awards,

F-49

respectively, under the stock option plans. The consummation of the Merger accelerated the recognition of compensation cost, and, accordingly, all of this cost was included in selling, general and administrative expense in the Condensed Consolidated Statements of Operations in the period from January 1, 2006 to February 13, 2006 (predecessor entity).

Share-based Compensation Plans—Successor Entity

        On February 14, 2006, the board of directors (the "Board") and stockholders of Linens Holding Co. adopted the Linens Holding Co. Stock Option Plan (the "Plan"). The Plan provides employees or directors of the Company or its subsidiaries who are in a position to contribute to the long-term success of these entities, with options to acquire shares in the Company to aid in attracting, retaining and motivating persons of outstanding ability. The Plan was amended in March 2006 to increase the number of shares of common stock, par value less than $0.01 per share, of Linens Holding (the "Common Stock") available for issuance under the Plan to 1,157,298 shares.

        As of April 1, 2006, 737,446 stock options were outstanding as detailed below:

        (1) On March 27, 2006, the Compensation Committee approved the grant of stock options under the Plan to the following executive officers:

Name and Principal Position	Number of Stock Options Granted
Robert J. DiNicola, Chairman and Chief Executive Officer	281,946
William T. Giles, Executive Vice President, Chief Financial Officer	25,000
F. David Coder, Executive Vice President, Store Operations	25,000

        The Compensation Committee also approved the granting of a total of 365,500 stock option awards under the Plan to certain other employees of the Company. The stock options granted under the Plan to each optionee are equally divided between a "Time Option" and a "Performance Option," as those terms are defined in the standard form of option grant letter. The stock options have an exercise price of $50.00 per share, the estimated fair market value of the underlying shares at the date of grant, and expire seven years after the date of grant. Time Options become vested and exercisable in four equal installments on each of February 14, 2007, February 14, 2008, February 14, 2009, and February 14, 2010. With respect to Performance Options and as provided for and defined in the standard form of grant letter, the stock options become vested and exercisable in two equal installments from a measurement date if, on such measurement date, the value per share equals or exceeds a target stock price.

        (2) On March 23, 2006, the Board approved a grant to Robert J. DiNicola, the Chairman and Chief Executive Officer of Linens "n Things, Inc., of a non-qualified stock option to purchase 40,000 shares of Common Stock outside of the Plan. These stock options also have an exercise price of $50.00 per share and are fully vested and immediately exercisable on the date of grant.

F-50

        The following is a summary of share-based option activity for the period February 14, 2006 to April 1, 2006:

		Successor Entity
		Outstanding at February 14, 2006	Grants	Outstanding at April 1, 2006
Stock options granted under the Plan
	Executive officers	—	331,946	331,946
	Certain other employees	—	365,500	365,500
		—	697,446	697,446
Stock options granted outside of the Plan
	Robert J. DiNicola, Chairman and Chief Executive Officer	—	40,000	40,000
Total options outstanding		—	737,446	737,446
Weighted average exercise price per option		—	$50.00	$50.00
Weighted average remaining contractual term per option		—		7.0 years
Options exercisable at period end:
	Number of options			40,000
	Weighted average exercise price			$50.00
	Weighted average remaining contractual term			7.0 years

        There are no provisions in the Plan for the issuance of restricted stock units.

        The weighted-average grant date fair value of options granted during the period from February 14, 2006 to April 1, 2006 (successor entity) was approximately $17.43.

        There were no stock option exercises during the period February 14, 2006 to April 1, 2006 (successor entity).

        The following is a summary of the activity for nonvested stock option grants as of April 1, 2006 and the changes for the period February 14, 2006 to April 1, 2006:

	Successor Entity Stock Options
	Options		Fair Value(1)
Nonvested at February 14, 2006	—		$	—
Grants	737,446		$	17.43
Vested	(40,000	)	$	16.67
Nonvested at April 1, 2006	697,446		$	17.47

(1)

Represents the weighted-average grant date fair value per option, using the Monte Carlo simulation option-pricing model for Performance Options, and the Black-Scholes option-pricing model for Time Options.

        The total fair value of stock options vested during the period from February 14, 2006 to April 1, 2006 (successor entity) was approximately $0.7 million.

F-51

        As of April 1, 2006, there was approximately $11.2 million of total unrecognized compensation cost related to stock option grants both under and outside the Plan. This cost is expected to be recognized over a remaining weighted-average period of 3.7 years. The compensation cost that has been charged against income for stock option grants was $0.7 million and was included in selling, general and administrative expense in the Condensed Consolidated Statements of Operations in the period from February 14, 2006 to April 1, 2006 (successor entity).

        Prior to the adoption of SFAS 123 (Revised 2004) the Company used the Black-Scholes option-pricing model for estimating the fair value for all options granted. In the first quarter of 2006, the Company, with the assistance of an independent third party, used the Monte Carlo simulation option-pricing model for estimating the fair value of Performance Options and the Black-Scholes option-pricing model for Time Options. This change was made in order to provide a better estimate of fair value. The Monte Carlo option-pricing model is particularly useful in the valuation of options with complicated features that make them difficult to value through a straight-forward Black-Scholes style computation.

        Presented below is a comparative summary of valuation assumptions for the indicated periods:

					Successor Entity
	Predecessor Entity				February 14 to April 1, 2006 (Monte Carlo Simulation and Black-Scholes)
Valuation Assumptions:	Thirteen Weeks Ended April 2, 2005 (Black-Scholes)			January 1 to February 14, 2006 (Black-Scholes)
Weighted-average fair value of options granted	$	10.59		No Grants		N/A
Weighted-average calculated value of options granted		N/A		No Grants	$	17.43
Expected volatility		41.1	%	No Grants		N/A	(1)
Weighted-average volatility		41.1	%	No Grants		38.3%	(1)
Weighted-average expected term (in years)		5.0		No Grants		3.8
Dividend yield		0.0	%	No Grants		0.0	%
Weighted-average risk-free interest rate		4.1	%	No Grants		4.7	%
Weighted average expected annual forfeiture		2.3	%	No Grants		4.4	%

(1)

The Company used the average of the historical volatility of each of the component companies included in the Standard & Poors Specialty Retail Index as a substitute for expected volatility.

        The Company utilized historical optionee behavioral data to estimate the option exercise and termination rates used in the Black-Scholes option-pricing model prior to the adoption of SFAS 123 (Revised 2004). The expected term of the options represents the period of time the options were expected to be outstanding based on historical trends. Expected volatility was based on the historical volatility of the common stock of Linens 'n Things, Inc. for a period approximating the expected life. The Company has never paid dividends, and, accordingly, the dividend yield is zero. The risk-free interest rate within the expected term was based on the U.S. Treasury yield curve in effect at the time of grant.

F-52

        For the period subsequent to the adoption of SFAS 123 (Revised 2004) it is not possible for the Company, a non-public entity, to make a reasonable estimate of fair value of options granted as it is not practicable for the Company to make a reasonable estimate of its common stock volatility. Accordingly, the Company is required to use an alternative measurement method. Under the alternative measurement method, a nonpublic entity uses a calculated volatility, determined by applying the historical volatility of an appropriate index of public entities, as an input to the valuation models. The Company used the Standard & Poors Specialty Retail Index for a period approximating the expected term as this index most closely approximates the Company's applicable operating industry. Expected term of share options granted represents the period of time that the options grants are expected to be outstanding. The Company is not expected to pay dividends, and, accordingly, the dividend yield is zero. The risk-free interest rate within the expected term was based on the U.S. Treasury yield curve in effect at the time of grant.

        Prior to the adoption of SFAS No. 123 (Revised 2004) the Company complied with the disclosure requirements of SFAS No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of SFAS No. 123" ("SFAS No. 148"). SFAS No. 148 required prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

        Set forth below are the Company's net loss presented "as reported" and as if compensation cost had been recognized in accordance with the provisions of SFAS No. 148 for the indicated periods:

		Predecessor Entity						Successor Entity
(In thousands)		Thirteen Weeks Ended April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006
Net loss:
	As reported	$	(4,074	)	$	(47,904	)	$	(17,572	)
	Add: stock-based employee compensation expense included in net loss as reported, net of related tax effects(1)		146			8,651			431
			(3,928	)		(39,253	)		(17,141	)
	Deduct: total stock-based employee compensation expense determined under the fair value based method of accounting for all awards, net of related tax effects		1,611			8,651			431
	Pro forma	$	(5,539	)	$	(47,904	)	$	(17,572	)

(1)

Stock-based employee compensation expense included in net loss as reported, net of related tax effects, is detailed as follows:

		Predecessor Entity				Successor Entity
(In thousands)		Thirteen Weeks Ended April 2, 2005		January 1 to February 13, 2006		February 14 to April 1, 2006
Compensation expense:
	Stock option grants	$	—	$	9,305	$	709
	Restricted stock units		233		3,179		—

F-53

			233			12,484			709
Benefit for income taxes:
	Stock option grants		—			(2,857	)		(278	)
	Restricted stock units		(87	)		(976	)		—
			(87	)		(3,833	)		(278	)
Stock-based employee compensation expense, net of related tax effects		$	146		$	8,651		$	431

4. Short-Term Borrowing Arrangements

        In February 2006, the Company entered into a new senior secured asset-based revolving credit facility agreement (the "Credit Facility") with third party institutional lenders which expires February 14, 2011. The Credit Facility provides senior secured financing of up to $600 million, subject to a borrowing base consisting of certain eligible inventory and receivables, minus certain reserves. A portion of the Credit Facility, not to exceed $40 million, is also available to a Canadian subsidiary of the Company subject to the Canadian borrowing base. The Credit Facility replaced the $250 million senior revolving credit facility amended November 2004, which allowed for up to $50 million in borrowings from additional lines of credit outside the agreement, including CAD $40 million covering the Company's Canadian operations (the "2004 Credit Agreement").

        Under the Credit Facility, interest on all borrowings is determined, at the Company's option, on either of two alternative rates, specifically (1) a variable margin above LIBOR or (2) a variable margin above the federal funds effective rate plus 0.50%. In addition to paying interest on outstanding principal under the Credit Facility, the Company is required to pay a variable rate commitment fee in respect of the unutilized commitments thereunder. The Credit Facility requires the Company to comply with financial ratio maintenance covenants if the excess availability under the Credit Facility, at any time, does not exceed $75 million and also contains certain restrictive covenants including the Company's ability to pay dividends, which the Company has never paid in the past, and certain customary affirmative covenants and events of default. During the period February 14 to April 1, 2006 the Company always maintained excess availability above $75 million. As of April 1, 2006, the Company had $81.6 million in borrowings under the Credit Facility at an average interest rate of 6.3%. Such borrowings have been classified as short-term as of April 1, 2006 as the Company has the ability and intent to pay these borrowings from existing current assets. At various times during the thirteen weeks ended April 1, 2006 the Company borrowed against its Credit Facility and the 2004 Credit Agreement, respectively, for working capital needs. During the thirteen weeks ended April 2, 2005 the Company did not borrow against the 2004 Credit Agreement. The Company also had $106.0 million of letters of credit outstanding as of April 1, 2006, which included standby letters of credit issued primarily under the Credit Facility and import letters of credit used for merchandise purchases. The Company is not obligated under any formal or informal compensating balance requirements.

F-54

5. Comprehensive Loss

        Comprehensive loss for the thirteen weeks ended April 2, 2005 and April 1, 2006 is as follows (in thousands):

	Predecessor Entity						Successor Entity
	Thirteen Weeks Ended April 2, 2005			January 1 to February 13, 2006			February 14 to April 1, 2006
Net loss	$	(4,074	)	$	(47,904	)	$	(17,572	)
Other comprehensive (loss) income—foreign currency translation adjustment		(183	)		253			(566	)
Comprehensive loss	$	(4,257	)	$	(47,651	)	$	(18,138	)

6. 2001 Restructuring and Asset Impairment Charge

        In fiscal 2001, the Company developed and committed to a strategic initiative designed to improve store performance and profitability. This initiative called for the closing of certain under-performing stores, which did not meet the Company's profit objectives. In connection with this initiative, the Company recorded a pre-tax restructuring and asset impairment charge of $37.8 million ($23.7 million after-tax) in the fourth quarter of fiscal 2001. A pre-tax reserve of $20.5 million was established for estimated lease commitments for stores to be closed. The reserve considers estimated sublease income. Because all of the stores were leased, the Company is not responsible for the disposal of property other than fixtures. A pre-tax writedown of $9.5 million was recorded as a reduction in property and equipment for fixed asset impairments for these stores. The fixed asset impairments represent fixtures and leasehold improvements. A pre-tax reserve of $4.0 million was established for other estimated miscellaneous store closing costs. Additionally, a pre-tax charge of $3.8 million was recorded in cost of sales for estimated inventory markdowns below cost for the stores to be closed. Certain components of the restructuring charge were based on estimates and may be subject to change in the future. The Company has closed all of the initially identified stores other than one store, which the Company decided to keep open and whose reserve was reversed.

        The following table displays a roll forward of the activity and significant components since December 31, 2005, and the reserve remaining as of April 1, 2006:

		Predecessor Entity					Successor Entity
(in millions)		Remaining at December 31, 2005		Usage 2006			Remaining at April 1, 2006
		(Audited)		(Unaudited)			(Unaudited)
Cash components:
	Lease commitments	$	5.4	$	(1.2	)	$	4.2
Total		$	5.4	$	(1.2	)	$	4.2

        The restructuring reserve balance is included in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet. The 2006 usage primarily consists of payments for lease commitments. The 2006 activity also includes the reversal of estimated lease commitment costs of

F-55

approximately $55,000 which were not needed, offset by an increase to lease commitment costs of approximately $130,000 due to changes in estimates based on current negotiations.

7. Identifiable Intangible Assets

        In connection with the Transactions, the Company's intangible assets were revalued with the assistance of an independent third party. The carrying amount and accumulated amortization of identifiable intangible assets consisted of the following:

		Predecessor Entity						Successor Entity
(in thousands)		April 2, 2005			December 31, 2005			April 1, 2006
		(Unaudited)			(Audited)			(Unaudited)
Intangible assets subject to amortization:
	Credit card customer relationships	$	—		$	—		$	10,136
	Customer list		—			—			406
	Favorable leases		2,900			2,900			27,788
			2,900			2,900			38,330
	Less: accumulated amortization		(1,458	)		(1,599	)		(1,039	)
Total intangible assets subject to amortization			1,442			1,301			37,291
Total indefinite-lived trademarks			—			—			122,688
Total identifiable intangible assets		$	1,442		$	1,301		$	159,979

        Customer list has an estimated life of 5 years, credit card customer relationships have an estimated life of 3 years and favorable leases have an average estimated life of 5 years. For the thirteen weeks ended April 2, 2005, the period January 1 to February 13, 2006 and the period February 14 to April 1, 2006, amortization expense of $47,000, $25,000 and $1.1 million, respectively, was recorded by the Company and is included in selling, general and administrative expenses in the Condensed Consolidated Statement of Operations.

        The following is a summary table representing the remaining amortization of identifiable intangible asset, net, with definitive lives, by year (in thousands):

Fiscal Year	Amortization
2006	$	6,494
2007		7,983
2008		7,039
2009		3,519
2010		2,799
2011 and thereafter		9,457
Total	$	37,291

8. Guarantees

        The Company has assigned property at a retail location in which the Company guarantees the payment of rent over the specified lease term in the event of non-performance. As of April 1, 2006, the

F-56

maximum potential amount of future payments the Company could be required to make under such guarantee is approximately $0.7 million.

9. Accounts Payable

        Accounts payable includes amounts for gift card liabilities of $25.6 million, $35.8 million and $32.6 million as of April 2, 2005, December 31, 2005 and April 1, 2006, respectively. Gift cards that are not expected to be redeemed are recorded as a reduction to selling, general and administrative expense in the Condensed Consolidated Statements of Operations. Such amounts recognized for the thirteen weeks ended April 2, 2005, the period January 1 to February 13, 2006 and the period February 14 to April 1, 2006 amounted to $0.8 million, $0.5 million and $0.6 million, respectively.

10. Senior Secured Notes and Other Long-Term Debt

        Senior secured notes and other long-term debt consists of the following (in thousands):

		Predecessor Entity						Successor Entity
		April 2, 2005			December 31, 2005			April 1, 2006
		(Unaudited)			(Audited)			(Unaudited)
Senior secured floating rate notes due 2014		$	—		$	—		$	650,000
Mortgage note payable			2,182			2,139			2,124
			2,182			2,139			652,124
Less: current portion of mortgage note payable			(59	)		(63	)		(65	)
	Total	$	2,123		$	2,076		$	652,059

        Senior secured floating rate notes due 2014 consists of $650 million aggregate principal amount of Senior Secured Floating Rate Notes due 2014 of Linens "n Things, Inc. and Linens "n Things Center, Inc.

        The Notes bear interest at a per annum rate equal to LIBOR plus 5.625%, which is paid every three months on January 15, April 15, July 15 and October 15, commencing April 15, 2006. The interest rate on the Notes is reset quarterly. The Notes mature on January 15, 2014. As of April 1, 2006 the interest rate on the Notes was 10.3%.

        The Notes are guaranteed on a senior basis by the Company and by certain of the Company's domestic subsidiaries (collectively, the "Note Guarantors"), and are secured by first-priority liens on all of the Company's and Note Guarantors' equipment, intellectual property rights and related general intangibles and all of its capital stock and the capital stock of certain subsidiaries and by second-priority liens on the Company's and the Note Guarantors' inventory, accounts receivable, cash, securities and other general intangibles.

        If the Company sells certain assets or experiences specific kinds of changes in control, the Company must offer to repurchase the Notes. The Company may, at its option, redeem the Notes at any time on or after January 15, 2008 at pre-determined prices. Prior to January 15, 2008, the Company may, at its option, redeem up to 35% of the Notes with the proceeds of certain sales of its equity or of its subsidiaries. Prior to January 15, 2008, the Company may, at its option, redeem the Notes at a price equal to 100% of the principal amount of the Notes plus a "make-whole" premium.

F-57

        Mortgage note payable represents an 8.2% fixed-rate mortgage note on the land and building of one of the Company's closed stores. Under the mortgage note terms, the Company is required to make 96 equal payments of principal and interest, with a final principal payment of approximately $1.6 million in August 2012.

11. Income Taxes

        For the Predecessor Entity period January 1 to February 13, 2006, the effective tax rate of 30.7% is lower than the statutory federal rate of 35.0% primarily due to non-deductible transaction costs. The Successor Entity estimated effective tax rate for the period February 14 to April 1, 2006 was 39.2%. This exceeds the statutory federal tax rate of 35.0% primarily due to expected deferred state tax benefits. Purchase accounting adjustments resulted in an increase to net deferred tax liabilities of $152,892 as indicated in the table below (in thousands):

Component	Pretax Purchasing Accounting Adjustment			Tax Rate		Deferred Tax (Asset) Liability
Trademarks	$	122,688		39.2%	(1)	$	48,094
Deferred rent and deferred rent credits		233,016		39.2	%		91,342
Other intangibles		16,847		39.2	%		6,604
Valuation allowance for state tax loss carryovers, net of federal benefit		8,214		N/A			8,214
Deferred rent and deferred rent credits—Canada		17,002		35.5%	(2)		6,035
Preliminary estimate of deductible portion of certain capitalized transaction costs		(17,855	)	39.2	%		(7,000	)
Other							(397	)
Total						$	152,892

(1)

Includes federal rate of 35.0% plus blended state rate of 4.2%, net of federal benefit.

(2)

Includes Canadian federal and provincial taxes.

12. Related Party Transactions

Management Services Agreement

        Upon consummation of the Merger, the Company entered into a management services agreement with Apollo Management V, L.P., NRDC Linens B LLC and Silver Point Capital Fund Investments LLC (each of whom is an affiliate of the Company). Under this management services agreement, the Sponsors agreed to provide to the Company certain investment banking, management, consulting, financial planning and real estate advisory services on an ongoing basis for a fee of $2.0 million per year. Under this management services agreement, Apollo Management V, L.P. also agreed to provide to the Company certain financial advisory and investment banking services from time to time in connection with major financial transactions that may be undertaken by it or its subsidiaries in exchange for fees customary for such services after taking into account Apollo Management V, L.P.'s expertise and relationships within the business and financial community. Under this management services agreement, the Company also agreed to provide customary indemnification. In addition, the

F-58

Company paid a transaction fee of $15.0 million in the aggregate (plus reimbursement of expenses) to the Sponsors for financial advisory services rendered in connection with the Merger. This fee has been included as part of the purchase price. These services included assisting the Company in structuring the Merger, taking into account tax considerations and optimal access to financing, and assisting in the negotiation of the Company's material agreements and financing arrangements in connection with the Merger.

Stockholders' Agreement

        The only stockholders of the Company are Robert J. DiNicola and Linens Investors, LLC, a limited liability company owned by the Sponsors. In connection therewith, Linens Investors, LLC has entered into a stockholders' agreement with the Company that sets forth applicable provisions relating to the management and ownership of the Company and its subsidiaries. In addition, the stockholders' agreement contains customary drag along rights, tag along rights, registration rights, restrictions on the transfer of the Company's common stock and an indemnity of the Sponsors.

13. Supplemental Condensed Consolidating Financial Information

        On February 14, 2006 Linens 'n Things, Inc. and Linens 'n Things Center, Inc. (collectively, the "Issuers"), issued $650 million aggregate principal amount of Senior Secured Floating Rate Notes due 2014 in a private offering. The Notes are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the Company, and by each of the Company's direct and indirect subsidiaries that guarantee the Company's new asset-based revolving credit facility except for its Canadian subsidiaries. The Company's Canadian subsidiaries (the "Non-Guarantors") are not guarantors of the Notes.

        The following tables present the supplemental condensed consolidating financial information for the Company (Parent), the Issuers, the Guarantors (excluding the Company which is also a Guarantor but is separately presented) and the Non-Guarantors, together with eliminations, as of and for the periods indicated. The company has not presented separate financial statements and other disclosures concerning the Guarantors because management has determined that such information is not material to investors. The accounting policies for Parent, Co-Issuers, Guarantors, and Non-Guarantors are the same as those described for the Company in the Summary of Significant Accounting Policies. The financial information may not necessarily be indicative of results of operations or financial position had the Guarantors operated as independent entities.

        The information as of April 1, 2006 and for the period February 14 to April 1, 2006 presents the financial position and operations, respectively, of the Successor Entity. The information as of April 2, 2005 and December 31, 2005, and for the 13-week period ended April 2, 2005 and the period January 1 to February 13, 2006 presents the financial position and operations, respectively, of the Predecessor Entity.

F-59

(Predecessor Entity)

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

APRIL 2, 2005

(In Thousands)

	Co-Issuers			Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	53,256		$	10,688	$	11,327	$	—		$	75,271
Accounts receivable		578			27,035		2,573		—			30,186
Inventories		14,439			705,630		45,860		—			765,929
Prepaid expenses and other current assets		90			37,856		1,418		—			39,364
Current deferred taxes		—			—		800		—			800
Total current assets		68,363			781,209		61,978		—			911,550
Property and equipment, net		7,734			527,665		33,930		—			569,329
Identifiable intangible assets, net		398			923		121		—			1,442
Goodwill		—			18,126		—		—			18,126
Intercompany receivables		73,742			—		—		(73,742	)		—
Intercompany notes receivable		201,320			—		22,366		(223,686	)		—
Investment in subsidiaries		462,033			—		—		(462,033	)		—
Deferred financing cost and other noncurrent assets, net		1			9,401		7		—			9,409
Total assets	$	813,591		$	1,337,324	$	118,402	$	(759,461	)	$	1,509,856
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(14	)	$	222,446	$	16,166	$	—		$	238,598
Accrued expenses and other current liabilities		(1,358	)		131,219		3,398		—			133,259
Current deferred taxes		252			5,470		—		—			5,722
Total current liabilities		(1,120	)		359,135		19,564		—			377,579
Intercompany notes payable		—			179,065		44,621		(223,686	)		—
Intercompany payable		—			54,911		18,831		(73,742	)		—
Senior secured notes and other long-term debt, net of current portion		—			2,123		—		—			2,123
Deferred income taxes and other long-term liabilities		8,699			297,772		17,671		—			324,142
Total liabilities		7,579			893,006		100,687		(297,428	)		703,844
Total shareholders' equity		806,012			444,318		17,715		(462,033	)		806,012
Total liabilities and shareholders' equity	$	813,591		$	1,337,324	$	118,402	$	(759,461	)	$	1,509,856

F-60

(Predecessor Entity)
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2005
(In Thousands)

	Co-Issuers(1)			Guarantors(1)		Non-Guarantors(1)		Eliminations(1)			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	136,569		$	8,718	$	12,871	$	—		$	158,158
Accounts receivable		361			39,757		3,443		—			43,561
Inventories		15,105			725,856		46,322		—			787,283
Prepaid expenses and other current assets		84			15,368		1,973		—			17,425
Current deferred taxes		—			1,789		244		—			2,033
Total current assets		152,119			791,488		64,853		—			1,008,460
Property and equipment, net		9,974			561,271		41,002		—			612,247
Identifiable intangible assets, net		331			861		109		—			1,301
Goodwill		—			18,126		—		—			18,126
Intercompany receivable		—			856,999		—		(856,999	)		—
Intercompany notes receivable		1,096,991			—		23,306		(1,120,297	)		—
Investment in subsidiaries		490,933			—		—		(490,933	)		—
Deferred financing cost and other noncurrent assets, net		1			10,605		94		—			10,700
Total assets	$	1,750,349		$	2,239,350	$	129,364	$	(2,468,229	)	$	1,650,834
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	(16	)	$	249,399	$	18,199	$	—		$	267,582
Accrued expenses and other current liabilities		43,824			144,840		10,360		—			199,024
Current deferred taxes		222			4,179		—		—			4,401
Total current liabilities		44,030			398,418		28,559		—			471,007
Intercompany payable		848,054			—		8,945		(856,999	)		—
Intercompany notes payable		—			1,073,800		46,497		(1,120,297	)		—
Senior secured notes and other long-term debt, net of current portion		—			2,076		—		—			2,076
Deferred income taxes and other long-term liabilities		8,402			300,637		18,849		—			327,888
Total liabilities		900,486			1,774,931		102,850		(1,977,296	)		800,971
Total shareholders' equity		849,863			464,419		26,514		(490,933	)		849,863
Total liabilities and shareholders' equity	$	1,750,349		$	2,239,350	$	129,364	$	(2,468,229	)	$	1,650,834

(1)

Certain amounts have been corrected by amounts, which in the opinion of management are deemed to be immaterial from the disclosure in the original reported condensed consolidated financial statements. See the details of such corrections at the end of this footnote.

F-61

(Successor Entity)

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

April 1, 2006

(In Thousands)

	Parent		Co-Issuers			Guarantors		Non-Guarantors		Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	—	$	660		$	7,682	$	6,691	$	—		$	15,033
Accounts receivable		—		517			39,303		2,826		—			42,646
Inventories		—		15,052			762,621		50,106		—			827,779
Prepaid expenses and other current assets		—		31,541			31,814		3,321		—			66,676
Current deferred taxes		—		—			—		179		—			179
Total current assets		—		47,770			841,420		63,123		—			952,313
Property and equipment, net		—		9,749			550,385		41,671		—			601,805
Identifiable intangible assets, net		—		839			157,123		2,017		—			159,979
Goodwill		—		7,607			253,418		16,239		—			277,264
Intercompany receivable		—		—			722,106		—		(722,106	)		—
Intercompany notes receivable		—		1,096,963			—		23,278		(1,120,241	)		—
Investment in subsidiaries		630,185		907,569			—		—		(1,537,754	)		—
Deferred financing cost and other noncurrent assets, net		—		35,200			776		113		—			36,089
Total assets	$	630,185	$	2,105,697		$	2,525,228	$	146,441	$	(3,380,101	)	$	2,027,450
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	—	$	(11	)	$	232,998	$	18,780		—		$	251,767
Accrued expenses and other current liabilities		—		23,740			142,346		6,962		—			173,048
Current deferred taxes		—		173			3,707		—		—			3,880
Asset-based revolving credit facility		—		79,823			64		1,714		—			81,601
Total current liabilities		—		103,725			379,115		27,456		—			510,296
Intercompany notes payable		—		—			1,073,800		46,441		(1,120,241	)		—
Intercompany payable		—		713,020			—		9,086		(722,106	)		—
Senior secured notes and other long-term debt, net of current portion		—		650,000			2,059		—		—			652,059
Deferred income taxes and other long-term liabilities		—		8,768			216,780		9,363		—			234,911
Total liabilities		—		1,475,513			1,671,754		92,346		(1,842,347	)		1,397,266
Total shareholders' equity		630,185		630,184			853,474		54,095		(1,537,754	)		630,184
Total liabilities and shareholders' equity	$	630,185	$	2,105,697		$	2,525,228	$	146,441	$	(3,380,101	)	$	2,027,450

F-62

(Predecessor Entity)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE 13-WEEK PERIOD ENDED APRIL 2, 2005
(In Thousands)

		Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales		$	16,265		$	526,228		$	28,453		$	—		$	570,946
Cost of sales, including buying and distribution costs			9,359			309,624			15,570			—			334,553
Gross profit			6,906			216,604			12,883			—			236,393
Selling, general and administrative expenses			4,671			224,047			13,436			—			242,154
Operating income (loss)			2,235			(7,443	)		(553	)		—			(5,761	)
	Interest income		(867	)		(10	)		(49	)		431			(495	)
	Interest expense		5			1,170			474			(431	)		1,218
Interest (income) expense, net			(862	)		1,160			425			—			723
Income (loss) before income taxes			3,097			(8,603	)		(978	)		—			(6,484	)
Provision (benefit) for income taxes			1,166			(3,262	)		(314	)		—			(2,410	)
Net income (loss)		$	1,931		$	(5,341	)	$	(664	)	$	—		$	(4,074	)

(Predecessor Entity)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE PERIOD JANUARY 1, 2006 TO FEBRUARY 13, 2006
(In Thousands)

		Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Net sales		$	7,684		$	259,826		$	17,461		$	—		$	284,971
Cost of sales, including buying and distribution costs			4,749			165,927			9,999			—			180,675
Gross profit			2,935			93,899			7,462			—			104,296
Selling, general and administrative expenses			2,119			163,511			8,508			—			174,138
Operating income (loss)			816			(69,612	)		(1,046	)		—			(69,842	)
	Interest income		(2,374	)		(139	)		(14	)		1,859			(668	)
	Interest expense		—			1,730			129			(1,859	)		—
Interest (income) expense, net			(2,374	)		1,591			115			—			(668	)
Income (loss) before income taxes			3,190			(71,203	)		(1,161	)		—			(69,174	)
Provision (benefit) for income taxes			976			(21,822	)		(424	)		—			(21,270	)
Net income (loss)		$	2,214		$	(49,381	)	$	(737	)	$	—		$	(47,904	)

F-63

(Successor Entity)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE PERIOD FEBRUARY 14, 2006 TO APRIL 1, 2006

(In Thousands)

		Parent		Co-Issuers			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net sales			—	$	8,160		$	280,656		$	19,029		—		$	307,845
Cost of sales, including buying and distribution costs			—		4,700			175,213			9,155		—			189,068
Gross profit			—		3,460			105,443			9,874		—			118,777
Selling, general and administrative expenses			—		3,221			123,874			10,666		—			137,761
Operating income (loss)			—		239			(18,431	)		(792	)	—			(18,984	)
	Interest income		—		(17,414	)		(81	)		(21	)	17,430			(86	)
	Interest expense		—		10,014			17,148			255		(17,430	)		9,987
Interest (income) expense, net			—		(7,400	)		17,067			234		—			9,901
Income (loss) before income taxes			—		7,639			(35,498	)		(1,026	)	—			(28,885	)
Provision (benefit) for income taxes			—		3,009			(13,982	)		(340	)	—			(11,313	)
Net income (loss)		$	—	$	4,630		$	(21,516	)	$	(686	)	—		$	(17,572	)

F-64

(Predecessor Entity)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE 13-WEEK PERIOD ENDED APRIL 2, 2005
(In Thousands)

	Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash inflows (outflows) from operating activities:
Net income (loss)	$	1,931		$	(5,341	)	$	(664	)	$	—		$	(4,074	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		297			19,777			1,102			—			21,176
Deferred income taxes		2,286			(65	)		75			—			2,296
Stock based compensation		233			—			—			—			233
Loss on disposal of assets		—			86			—			—			86
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		179			(3,547	)		(1,057	)		—			(4,425	)
Decrease (increase) in inventories		62			(48,625	)		(2,565	)		—			(51,128	)
Increase in prepaid expenses and other current assets		(5	)		(824	)		(51	)		—			(880	)
Decrease (increase) in deferred financing cost and other noncurrent assets		26			82			(47	)		—			61
(Decrease) increase in accounts payable		—			(9,391	)		2,461			—			(6,930	)
Decrease in accrued expenses and other liabilities		(33,218	)		(37,329	)		(3,290	)		—			(73,837	)
Net cash used in operating activities		(28,209	)		(85,177	)		(4,036	)		—			(117,422	)
Cash outflows from investing activities:
Additions to property and equipment		(108	)		(10,564	)		(1,355	)		—			(12,027	)
Addition to investment in subsidiary		(127	)								127			—
Net cash (used in) provided by investing activities		(235	)		(10,564	)		(1,355	)		127			(12,027	)
Cash inflows (outflows) from financing activities:
Issuance of common stock under stock incentive plans		904			—			127			(127	)		904
Federal tax benefit from issuance of common stock under stock incentive plans		135			—			—			—			135
Inter-company movements		(94,312	)		93,429			883			—			—
Increase in treasury stock		—			(122	)		—			—			(122	)
Net cash (used in) provided by financing activities		(93,273	)		93,307			1,010			(127	)		917
Effect of exchange rate changes on cash and cash equivalents		—			—			(206	)		—			(206	)
Net decrease in cash and cash equivalents		(121,717	)		(2,434	)		(4,587	)		—			(128,738	)
Cash and cash equivalents at beginning of period		174,973			13,122			15,914			—			204,009
Cash and cash equivalents at end of period	$	53,256		$	10,688		$	11,327			—		$	75,271

F-65

(Predecessor Entity)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 2006 TO FEBRUARY 13, 2006
(In Thousands)

	Co-Issuers(1)			Guarantors(1)			Non-Guarantors(1)			Eliminations		Consolidated
Cash inflows (outflows) from operating activities:
Net income (loss)	$	2,214		$	(49,381	)	$	(737	)	$	—	$	(47,904	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		203			11,662			777			—		12,642
Deferred income taxes		(730	)		(6,029	)		113			—		(6,646	)
Shared based compensation expense		12,484			—			—			—		12,484
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(288	)		(2,582	)		630			—		(2,240	)
Decrease (increase) in inventories		687			(30,481	)		(2,092	)		—		(31,886	)
(Increase) decrease in prepaid expenses and other current assets		(250	)		(12,595	)		692			—		(12,153	)
Decrease in deferred financing cost and other noncurrent assets		11			9,558			54			—		9,623
(Decrease) increase in accounts payable		(1	)		8,465			(1,220	)		—		7,244
(Decrease) increase in accrued expenses and other liabilities		(27,640	)		25,490			(4,160	)		—		(6,310	)
Net cash used in operating activities		(13,310	)		(45,893	)		(5,943	)		—		(65,146	)
Cash outflows from investing activities:
Additions to property and equipment		(30	)		(5,430	)		(2,316	)		—		(7,776	)
Net cash used in investing activities		(30	)		(5,430	)		(2,316	)		—		(7,776	)
Cash inflows (outflows) from financing activities:
Federal tax benefit from common stock issued under stock incentive plan		4,298			—			—			—		4,298
Intercompany cash movements		(52,158	)		49,564			2,594			—		—
Common stock offering		—			—			—
Decrease in treasury stock		—			674			—			—		674
Net cash (used in) provided by financing activities		(47,860	)		50,238			2,594			—		4,972
Effect of exchange rate changes on cash and cash equivalents		—			—			125			—		125
Net decrease in cash and cash equivalents		(61,200	)		(1,085	)		(5,540	)		—		(67,825	)
Cash and cash equivalents at beginning of period		136,569			8,718			12,871			—		158,158
Cash and cash equivalents at end of period	$	75,369		$	7,633		$	7,331		$	—	$	90,333

(1)

Certain amounts have been corrected by amounts, which in the opinion of management are deemed to be immaterial from the disclosure in the original reported condensed consolidated financial statements. See the details of such corrections at the end of this footnote.

F-66

(Successor Entity)

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE PERIOD FEBRUARY 14, 2006 TO APRIL 1, 2006

(In Thousands)

	Parent			Co-Issuers			Guarantors			Non-Guarantors			Eliminations			Consolidated
Cash inflows (outflows) from operating activities:
Net income (loss)	$	—		$	4,630		$	(21,516	)	$	(686	)	$	—		$	(17,572	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		—			242			13,906			874			—			15,022
Deferred income taxes		—			5,605			(12,333	)		(240	)		—			(6,968	)
Share-based compensation		—			—			709			—			—			709
Loss on disposal of assets		—			—			73			—			—			73
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		—			132			3,035			(10	)		—			3,157
Increase in inventories		—			(633	)		(6,284	)		(1,794	)		—			(8,711	)
Increase in prepaid expenses and other current assets		—			(31,208	)		(3,850	)		(2,046	)		—			(37,104	)
Decrease (increase) in intangible assets, deferred financing cost and other noncurrent assets		—			1,231			29			(122	)		—			1,138
Increase (decrease) in accounts payable		—			6			(24,865	)		1,829			—			(23,030	)
(Decrease) increase in accrued expenses and other liabilities		—			(34,973	)		(25,725	)		1,410			—			(59,288	)
Net cash used in operating activities		—			(54,968	)		(76,821	)		(785	)		—			(132,574	)
Cash inflow (outflows) from investing activities:
Acquisition of Company, net of cash acquired		—			(1,220,465	)		7,632			7,331			—			(1,205,502	)
Investment in Linens 'n Things, Inc.		(650,000	)		—			—			—			650,000			—
Additions to property and equipment		—			(19	)		(8,197	)		(355	)		—			(8,571	)
Net cash (used in) provided by investing activities		(650,000	)		(1,220,484	)		(565	)		6,976			650,000			(1,214,073	)
Cash inflows (outflows) from financing activities:
Issuance of common stock to Linens Investors LLC		650,000			—			—			—			—			650,000
Investment from Parent		—			650,000			—			—			(650,000	)		—
Issuance of floating rate notes		—			650,000			—			—			—			650,000
Financing and direct acquisition costs		—			(19,866	)		—			—			—			(19,866	)
Intercompany movement		—			(83,845	)		85,004			(1,159	)		—			—
Increase in borrowings		—			79,823			64			1,733			—			81,620
Net cash provided by (used in) financing activities		650,000			1,276,112			85,068			574			(650,000	)		1,361,754
Effect of exchange rate changes on cash and cash equivalents		—			—			—			(74	)		—			(74	)
Net increase in cash and cash equivalents		—			660			7,682			6,691			—			15,033
Cash and cash equivalents at beginning of period		—			—			—			—			—			—
Cash and cash equivalents at end of period	$	—		$	660		$	7,682		$	6,691		$	—		$	15,033

F-67

The following corrections, in the opinion of Management, are deemed immaterial by the Company as these adjustments are primarily made between the Co-Issuers and the Guarantors or between categories within the same entity. These adjustments do not materially impact the Non-Guarantors, Co-Issuers and Guarantors financial statements and do not impact the consolidated totals. Subsequent to the reporting of the condensed consolidating financial statements for the quarterly period ended April 1, 2006, it was determined by the Company that the tax provision was booked only to the Guarantors subsidiary in fiscal 2004 and fiscal 2005 instead of the Co-Issuers, Guarantors, and Non-Guarantors. In addition, a short-term cash investment of $35.6 million was booked to the Guarantors entity instead of the Co-Issuers entity and an adjustment was made to reflect the proper balances. It was also determined that $0.7 million of expense reported on the Parent entity for the quarterly period ended April 1, 2006 was related to the Guarantors entity. It was also determined that certain costs associated with buying and distribution were charged to Selling, General and Administrative Expenses instead of Cost of Goods Sold within the entities.

        The following table shows the overall impact of the adjustment to the stated line items in order to properly correct the tax provision, related taxes payable accounts, Cost of Sales, Selling, General and Administrative Expenses, and cash balances between component Parent, Co-Issuers, Guarantors and Non-Guarantors subsidiaries:

		Previously Reported			As Corrected
		(In thousands)
Parent
	Supplemental Condensed Consolidating Statement of Cash Flows for the period February 14, 2006 to April 1, 2006
	Net loss	$	(709	)	$	—
	Share-based compensation		709			—
	Supplemental Condensed Consolidating Statement of Operations for the period February 14, 2006 to April 1, 2006
	Selling, general and administrative expenses		709			—
	Operating loss		(709	)		—
	Loss before income taxes		(709	)		—
	Net loss		(709	)		—
Co-Issuers
	Supplemental Condensed Consolidating Balance Sheet at December 31, 2005
	Cash and cash equivalents		101,000			136,569
	Current deferred taxes		1,789			—
	Total current assets		118,339			152,119
	Investment in subsidiaries		481,216			490,933
	Total assets		1,706,851			1,750,349
	Accrued expenses and other current liabilities		33,970			43,824
	Total current liabilities		34,176			44,030
	Intercompany payable		814,410			848,054
	Total liabilities		856,989			900,486
	Total liabilities and shareholders' equity		1,706,851			1,750,349

F-68

Supplemental Condensed Consolidating Balance Sheet at April 1, 2006
Prepaid expenses and other current assets	$	619		$	31,541
Investment in subsidiaries		907,446			907,569
Total current assets		16,848			47,770
Total assets		2,074,652			2,105,697
Accrued expenses and other current liabilities		(7,305	)		23,740
Total current liabilities		72,680			103,725
Total liabilities		1,444,468			1,475,513
Total liabilities and shareholders' equity		2,074,652			2,105,697
Supplemental Condensed Consolidating Statement of Operations for the 13-Week Period Ended April 2, 2005
Cost of sales, including buying and distribution costs		9,135			9,359
Gross profit		7,130			6,906
Selling, general and administrative expenses		4,895			4,671
Supplemental Condensed Consolidating Statement of Operations for the Period January 1, 2006 to February 13, 2006
Cost of sales, including buying and distribution costs		4,625			4,749
Gross profit		3,059			2,935
Selling, general and administrative expenses		2,243			2,119
Supplemental Condensed Consolidating Statement of Operations for the Period February 14, 2006 to April 1, 2006
Cost of sales, including buying and distribution costs		4,565			4,700
Gross profit		3,595			3,460
Selling, general and administrative expenses		3,356			3,221
Provision for income taxes		2,887			3,009
Net income		4,752			4,630
Supplemental Condensed Consolidating Statement of Cash Flows for the period January 1, 2006 to February 13, 2006
Deferred income taxes		1,058			(730	)
Decrease in accrued expenses and other liabilities		(17,785	)		(27,640	)
Net cash used in operating activities		(1,667	)		(13,310	)
Intercompany cash movements		(28,232	)		(52,158	)
Net cash used in financing activities		(23,934	)		(47,860	)
Net decrease in cash and cash equivalents		(25,631	)		(61,200	)
Cash and cash equivalents at beginning of period		101,000			136,569
Supplemental Condensed Consolidating Statement of Cash Flows for the period February 14, 2006 to April 1, 2006
Net income		4,752			4,630
Increase in prepaid expense and other current assets		(286	)		(31,208	)
Decrease in accrued expenses and other liabilities		(66,017	)		(34,973	)

F-69

Guarantors
	Supplemental Condensed Consolidating Balance Sheet at December 31, 2005
	Cash and cash equivalents	$	44,287	$	8,718
	Current deferred taxes		—		1,789
	Total current assets		825,268		791,488
	Intercompany receivable		823,410		856,999
	Total assets		2,239,541		2,239,350
	Accrued expenses and other current liabilities		154,711		144,840
	Total current liabilities		408,289		398,418
	Total liabilities		1,784,802		1,774,931
	Total shareholders' equity		454,739		464,419
	Total liabilities and shareholders' equity		2,239,541		2,239,350
	Supplemental Condensed Consolidating Balance Sheet at April 2, 2005
	Prepaid expenses and other current assets		37,679		37,856
	Total current assets		781,032		781,209
	Property and equipment, net		527,842		527,665
	Supplemental Condensed Consolidating Balance Sheet at April 1, 2006
	Prepaid expenses and other current assets		40,163		31,814
	Total current assets		849,769		841,420
	Total assets		2,533,577		2,525,228
	Accrued expenses and other current liabilities		150,818		142,346
	Total current liabilities		387,587		379,115
	Total liabilities		1,680,226		1,671,754
	Total shareholders' equity		853,351		853,474
	Total liabilities and shareholders' equity		2,533,577		2,525,228
	Supplemental Condensed Consolidating Statement of Operations for the 13-Week Period Ended April 2, 2005
	Cost of sales, including buying and distribution costs		310,131		309,624
	Gross profit		216,097		216,604
	Selling, general and administrative expenses		223,540		224,047
	Supplemental Condensed Consolidating Statement of Operations for the Period January 1, 2006 to February 13, 2006
	Cost of sales, including buying and distribution costs		166,224		165,927
	Gross profit		93,602		93,899
	Selling, general and administrative expenses		163,214		163,511

F-70

	Supplemental Condensed Consolidating Statement of Operations for the Period February 14, 2006 to April 1, 2006
	Cost of sales, including buying and distribution costs	$	175,536		$	175,213
	Gross profit		105,120			105,443
	Selling, general and administrative expenses		122,842			123,874
	Operating loss		(17,722	)		(18,431	)
	Loss before income taxes		(34,789	)		(35,498	)
	Benefit for income taxes		(13,860	)		(13,982	)
	Net loss		(20,929	)		(21,516	)
	Supplemental Condensed Consolidating Statement of Cash Flows for the period January 1, 2006 to February 13, 2006
	Deferred income taxes		(7,817	)		(6,029	)
	Increase in accrued expenses and other liabilities		15,618			25,490
	Net cash used in operating activities		(57,553	)		(45,893	)
	Intercompany cash movements		25,655			49,564
	Net cash provided by financing activities		26,239			50,238
	Net decrease in cash and cash equivalents		(36,654	)		(1,085	)
	Cash and cash equivalents at beginning of period		44,287			8,718
	Supplemental Condensed Consolidating Statement of Cash Flows for the period February 14, 2006 to April 1, 2006
	Increase in prepaid expenses and other current assets		(12,199	)		(3,850	)
	Net loss		(20,929	)		(21,516	)
	Share-based compensation		—			709
	Decrease in accrued expenses and other liabilities		(17,254	)		(25,725	)
Non-Guarantors
	Supplemental Condensed Consolidating Balance Sheet at April 1, 2006
	Prepaid expenses and other current assets		2,292			3,321
	Total current assets		62,094			63,123
	Total assets		145,412			146,441
	Accrued expenses and other current liabilities		5,933			6,962
	Total current liabilities		26,427			27,456
	Total liabilities		91,317			92,346
	Total shareholders' equity		145,412			146,441
	Supplemental Condensed Consolidating Balance Sheet at December 31, 2005
	Accrued expenses and other current liabilities		10,343			10,360
	Total current liabilities		28,542			28,559
	Intercompany payable		9,000			8,945
	Total liabilities		102,887			102,850
	Shareholders' equity		26,477			26,514

F-71

	Supplemental Condensed Consolidating Statement of Operations for the 13-Week Period Ended April 2, 2005
	Cost of sales, including buying and distribution costs	$	15,287		$	15,570
	Gross profit		13,166			12,883
	Selling, general and administrative expenses		13,719			13,436
	Supplemental Condensed Consolidating Statement of Operations for the Period January 1, 2006 to February 13, 2006
	Cost of sales, including buying and distribution costs		9,826			9,999
	Gross profit		7,635			7,462
	Selling, general and administrative expenses		8,681			8,508
	Supplemental Condensed Consolidating Statement of Operations for the Period February 14, 2006 to April 1, 2006
	Cost of sales, including buying and distribution costs		8,967			9,155
	Gross profit		10,062			9,874
	Selling, general and administrative expenses		10,854			10,666
	Supplemental Condensed Consolidating Statement of Cash Flows for the period January 1, 2006 to February 13, 2006
	Decrease in accrued expenses and other liabilities		(4,143	)		(4,160	)
	Net cash used in operating activities		(5,926	)		(5,943	)
	Intercompany cash movements		2,577			2,594
	Net cash provided by financing activities		2,577			2,594
	Supplemental Condensed Consolidating Statement of Cash Flows for the period February 14, 2006 to April 1, 2006
	Increase in prepaid expenses and other current assets		(1,017	)		(2,046	)
	Increase in accrued expenses and other liabilities		381			1,410
Eliminations
	Supplemental Condensed Consolidating Balance Sheet at December 31, 2005
	Intercompany receivable		(823,410	)		(856,999	)
	Investment in subsidiaries		(481,216	)		(490,933	)
	Total assets		(2,424,922	)		(2,468,229	)
	Intercompany payable		(823,410	)		(856,999	)
	Total liabilities		(1,934,707	)		(1,977,296	)
	Total shareholders' equity		(481,215	)		(490,933	)
	Total liabilities and shareholders' equity		(2,424,922	)		(2,468,229	)
	Supplemental Condensed Consolidating Balance Sheet at April 1, 2006
	Investment in subsidiaries		(1,537,631	)		(1,537,754	)
	Total assets		(3,379,978	)		(3,380,101	)
	Total shareholders' equity		(1,537,631	)		(1,537,754	)
	Total liabilities and shareholders' equity		(3,379,978	)		(3,380,101	)

F-72

PART II

ITEM 20. Indemnification of Directors and Officers

        Linens Holding Co., Linens 'n Things, Inc., LNT Services, Inc. and LNT West, Inc. are organized under the laws of the State of Delaware. Under Delaware law, directors, officers, employees and other individuals may be indemnified against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard of conduct is applicable in the case of a derivative action, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with defense or settlement of such an action and Delaware law requires court approval before there can be any indemnification of expenses where the person seeking indemnification has been found liable to the corporation.

        Vendor Finance, LLC, LNT Leasing II, LLC, LNT Merchandising Company LLC, LNT Leasing III, LLC and Citadel LNT, LLC are organized under the laws of the State of Delaware. Under Section 18.108 of the Delaware Limited Liability Company Act, a limited liability company has the power to indemnify and hold harmless any member or manager or other person from and against all claims and demands whatsoever, subject to any restrictions set forth in its limited liability company agreement.

        Linens 'n Things Center, Inc. is organized under the laws of the State of California. Section 317 of the California Corporations Code permits indemnification of directors, officers, employees and other agents of corporations, provided such person acted in good faith and in a manner they reasonably believed to be in the corporation's best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that their conduct was illegal. Determination of whether this standard of conduct has been met is subject to specific procedures set forth in the statute, except that when the agent has been successful on the merits, indemnification for actual and reasonable expenses is mandatory. However, where the person has been adjudged to be liable to the corporation, or with respect to amounts paid in settling a pending action without court approval, indemnification is generally not permitted. Section 204(a)(10) of the California Corporations Code also permits a corporation to provide, in its articles of incorporation, that directors shall not have liability to the corporation or its shareholders for monetary damages for breach of fiduciary duty, subject to certain prescribed exceptions.

        LNT Virginia LLC is organized under the laws of the Commonwealth of Virginia. Under Section 13.1-1009 of the Limited Liability Company Act, a limited liability company has the power to indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever, subject to such standards and restrictions, if any, as are set forth in its articles of organization or an operating agreement.

        LNT, Inc. is organized under the laws of the State of New Jersey. Section 14A:3-5 of the New Jersey Business Corporation Act provides, in substance, that New Jersey corporations shall have the power, under specified circumstances, to indemnify their directors, officers and employees and agents in connection with actions, suits or proceedings brought against them or in the right of the corporation, by reason of the fact that they were or are such directors, officers, employees or agents, against expenses incurred in any such action, suit or proceeding.

        Bloomington, MN., L.T., Inc. is organized under the laws of the State of Minnesota. Section 302A.521, subd. 2, of the Minnesota Statutes requires a Company to indemnify a person made or threatened to be made a party to a proceeding by reason of the former or present official capacity of the person with respect to the Company, against judgments, penalties, fines, including, without

II-1

limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys' fees and disbursements, incurred by the person in connection with the proceeding with respect to the same acts or omissions if such person (1) has not been indemnified by another organization or employee benefit plan for the same judgments, penalties or fines; (2) acted in good faith; (3) received no improper personal benefit, and statutory procedure has been followed in the case of any conflict of interest by a director; (4) in the case of a criminal proceeding, had no reasonable cause to believe the conduct was unlawful; and (5) in the case of acts or omissions occurring in the person's performance in the official capacity of director or, for a person not a director, in the official capacity of officer, board committee member or employee, reasonably believed that the conduct was in the best interests of the Company, or, in the case of performance by a director, officer or employee of the Company involving service as a director, officer, partner, trustee, employee or agent of another organization or employee benefit plan, reasonably believed that the conduct was not opposed to the best interests of the Company. In addition, Section 302A.521, subd. 3, requires payment by a Company, upon written request, of reasonable expenses in advance of final disposition of the proceeding in certain instances. A decision as to required indemnification is made by a disinterested majority of the Board of Directors present at a meeting at which a disinterested quorum is present, or by a designated committee of the Board, by special legal counsel, by the shareholders, or by a court.

        Pursuant to certain indemnification agreements, certain officers of the Company are entitled to be indemnified, to the fullest extent permitted by law for certain liabilities that may be incurred by them in the performance of their duties.

ITEM 21. EXHIBITS

(a)

Exhibits

Exhibit Number	Description of Exhibits
3.1	Certificate of Merger merging Linens Merger Sub Co. with and into Linens 'n Things, Inc.
3.2	Amended and Restated Certificate of Incorporation of Linens 'n Things, Inc.
3.3	Amended and Restated By-laws of Linens 'n Things, Inc.
3.4	Articles of Incorporation of Linens 'n Things Center, Inc.
3.5	By-laws of Linens 'n Things Center, Inc.
3.6	Amended and Restated Certificate of Incorporation of Linens Holding Co.
3.7	Amended and Restated By-laws of Linens Holding Co.
3.8	Articles of Incorporation of Bloomington, MN., L.T., Inc.
3.9	By-laws of Bloomington, MN., L.T., Inc.
3.10	Certificate of Formation of Vendor Finance, LLC
3.11	Amended and Restated Operating Agreement of Vendor Finance, LLC
3.12	Certificate of Incorporation of E W Kalkin, Inc. (n/k/a) LNT, Inc.
3.13	Certificate of Amendment to the Certificate of Incorporation of E W Kalkin, Inc. (changing name to Linens 'n Things, Inc.)
3.14	Certificate of Amendment to the Certificate of Incorporation of Linens 'n Things, Inc. (changing name to LNT, Inc.)
3.15	By-laws of LNT, Inc.
3.16	Certificate of Incorporation of LNT Services, Inc.
3.17	By-laws of LNT Services, Inc.
3.18	Certificate of Formation of LNT Leasing II, LLC
3.19	Amended and Restated Operating Agreement of LNT Leasing II, LLC
3.20	Certificate of Incorporation of LNT West, Inc.
3.21	By-laws of LNT West, Inc.

II-2

3.22	Certificate of Organization of LNT Virginia LLC
3.23	Amended and Restated Operating Agreement of LNT Virginia LLC
3.24	Certificate of Formation of LNT Merchandising Company LLC
3.25	Amended and Restated Operating Agreement of LNT Merchandising Company LLC
3.26	Certificate of Formation of LNT Leasing III, LLC
3.27	Amended and Restated Operating Agreement of LNT Leasing III, LLC
3.28	Certificate of Formation of Citadel LNT, LLC
3.29	Amended and Restated Operating Agreement of Citadel LNT, LLC
4.1*	Indenture, dated as of February 14, 2006, among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors (as defined therein) and The Bank of New York, as Trustee, with respect to the Senior Secured Floating Rate Notes due 2014
4.2*	Form of Senior Secured Floating Rate Notes due 2014 (included as "Exhibit A" to Exhibit 4.1)
4.3*	Registration Rights Agreement, dated February 14, 2006, by and among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors listed on Schedule I thereto and Bear, Stearns & Co. Inc. and UBS Securities LLC
5.1	Opinion of Gardere Wynne Sewell LLP
5.2	Opinion of Morrison & Foerster, LLP
5.3	Opinion of Morrison & Foerster, LLP
5.4	Opinion of Wolff & Samson, P.C.
5.5	Opinion of Dorsey & Whitney LLP
10.1*	Credit Agreement, (the "Credit Agreement") dated as of February 14, 2006, among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Subsidiary Guarantors (as defined therein), the parties named therein from time to time as lenders, whether by execution of the Credit Agreement or an Assignment and Acceptance, UBS Securities LLC, as Arranger and Bookmanager, UBS AG, Stamford Branch, as Issuing Bank, US Administrative Agent and US Co-Collateral Agent, UBS AG, Canada Branch, as Canadian Co-Collateral Agent, Wachovia Bank, National Association, as US Co-Collateral Agent, Co-Documentation Agent and an Issuing Bank, Wachovia Capital Finance Corporation (Canada), as Canadian Administrative Agent, Canadian Co-Collateral Agent and Canadian Swingline Lender, UBS Loan Finance LLC, as US Swingline Lender, UBS Securities LLC and Bear, Stearns & Co. Inc., as Joint Book Runners, Bear, Stearns & Co. Inc., as Co-Syndication Agent, Wells Fargo, as Co-Documentation Agent and The CIT Group/Business Credit, Inc., as Co-Syndication Agent
10.2	Stockholders' Agreement, dated as of February 14, 2006, between Linens Holding Co. and its Stockholders
10.3	Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors party thereto and The Bank of New York
10.4	Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors party thereto, UBS AG, Stamford Branch and Wachovia Bank, National Association
10.5	Management Services Agreement, dated as of February 14, 2006, among Linens 'n Things, Inc., Linens Holding Co., Apollo Management V, L.P., NRDC Linens B LLC and Silver Point Capital Fund Investments LLC
10.6	Intercreditor Agreement, dated as of February 14, 2006, by and among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp., the Subsidiary Guarantors (as defined therein), UBS AG, Stamford Branch, Wachovia Bank, National Association, UBS AG Canada Branch, Wachovia Capital Finance Corporation and The Bank of New York

II-3

10.7*	Employment Agreement with Robert J. DiNicola
10.8*	Option Grant Letter with Robert J. DiNicola
10.9*	Employment Agreement with F. David Coder
10.10*	Amended and Restated Employment Agreement with F. David Coder
10.11*	Option Grant Letter with F. David Coder
10.12*	Employment Agreement with Robert Homler
10.13*	Amended and Restated Employment Agreement with Robert Homler
10.14	Separation Agreement and General Release, by and between Jack E. Moore and Linens 'n Things, Inc.
10.15*	Separation Agreement and General Release, dated April 10, 2006, by and between Jane Gilmartin and Linens 'n Things, Inc.
10.16*	Linens Holding Co. Stock Option Plan
10.17*	Standard Form of Option Grant Letter
10.18*	Director Compensation Policy
10.19*	Standard Form of Director Option Grant Letter
10.20	Trademark Security Agreement, dated as of February 14, 2006, by Bloomington, MN., L.T., Inc. in favor of The Bank of New York
10.21	Trademark Security Agreement, dated as of February 14, 2006, by LNT Merchandising Company LLC in favor of The Bank of New York
10.22	Trademark Security Agreement, dated as of February 14, 2006, by LNT Services, Inc. in favor of The Bank of New York
10.23	Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc. in favor of The Bank of New York
10.24	Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things Center, Inc. in favor of The Bank of New York
12.1*	Statement Regarding the Computation of Ratio of Earnings to Fixed Charges for Linens Holding Co.
14.1	Code of Ethics for the Chief Executive Officer and Senior Financial Officers of Linens 'n Things, Inc. and Linens Holding Co.
21.1*	Subsidiaries of Linens Holding Co.
23.1	Consent of Independent Registered Public Accounting Firm
23.3	Consent of Gardere Wynne Sewell LLP (included in Exhibit 5.1)
23.4	Consent of Morrison & Foerster, LLP (included in Exhibit 5.2)
23.5	Consent of Morrison & Foerster, LLP (included in Exhibit 5.3)
23.6	Consent of Wolff & Samson, P.C. (included in Exhibit 5.4)
23.7	Consent of Dorsey & Whitney LLP (included in Exhibit 5.5)
24.1	Powers of Attorney (included in the signature pages to the Registration Statement)
25.1	Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as trustee under the Indenture for Linens 'n Things, Inc.'s and Linens 'n Things Center, Inc.'s Senior Secured Floating Rate Notes due 2014
99.1	Form of Letter of Transmittal
99.2	Form of Notice for Guaranteed Delivery
99.3	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees

*

Filed previously as an exhibit to the Registration Statement on Form S-4 (File No. 333-135646) filed by the Registrants on July 7, 2006.

II-4

ITEM 22. UNDERTAKINGS

        The undersigned registrants hereby undertake:

        (a)   To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i)    to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

        (ii)   to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

        (iii)  to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

        (b)   That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (c)   To remove from the registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (d)   That, for purposes of determining liability under the Securities Act to any purchaser:

        (i)    Each prospectus filed pursuant to Rule 424(b) as part of the registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

        (e)   That, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of securities: The undersigned registrants undertake that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

        (i)    Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424;

II-5

        (ii)   Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrants;

        (iii)  The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or its securities provided by or on behalf of the undersigned registrants; and

        (iv)  Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser.

        (f)    Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described in Item 20, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        (g)   To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), or 11 or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the date of the registration statement through the date of responding to the request.

        (h)   To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-6

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LINENS 'N THINGS, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer)	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	August 10, 2006
* Dr. Joyce F. Brown	Director	August 10, 2006
* Peter P. Copses	Director	August 10, 2006
* Andrew S. Jhawar	Director	August 10, 2006
* Lee S. Neibart	Director	August 10, 2006
* Richard Baker	Director	August 10, 2006

II-7

* Michael A. Gatto	Director	August 10, 2006
* George G. Golleher	Director	August 10, 2006
* Damian J. Giangiacomo	Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-8

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LINENS 'N THINGS CENTER, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-9

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LINENS HOLDING CO.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer)	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	August 10, 2006
* Dr. Joyce F. Brown	Director	August 10, 2006
* Peter P. Copses	Director	August 10, 2006
* Andrew S. Jhawar	Director	August 10, 2006
* Lee S. Neibart	Director	August 10, 2006
* Richard Baker	Director	August 10, 2006

II-10

* Michael A. Gatto	Director	August 10, 2006
* George G. Golleher	Director	August 10, 2006
* Damian J. Giangiacomo	Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-11

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

BLOOMINGTON, MN., L.T., INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-12

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

VENDOR FINANCE, LLC
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-13

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-14

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT SERVICES, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-15

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT LEASING II, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-16

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT WEST, INC.
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-17

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT VIRGINIA LLC
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-18

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT MERCHANDISING COMPANY LLC
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-19

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

LNT LEASING III, LLC
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-20

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrants have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the city of Clifton, state of New Jersey, on August 10, 2006.

CITADEL LNT, LLC
By:	/s/  FRANCIS M. ROWAN Francis M. Rowan Chief Financial Officer

        Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Robert J. DiNicola	Chairman and Chief Executive Officer (Principal Executive Officer) and Director	August 10, 2006
/s/  FRANCIS M. ROWAN Francis M. Rowan	Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) and Director	August 10, 2006

* Pursuant to a Power of Attorney contained in the signature page to the Registration Statement on Form S-4 filed July 7, 2006
	/s/  FRANCIS M. ROWAN Francis M. Rowan

II-21

EXHIBIT INDEX

Exhibit Number	Description of Exhibits
3.1	Certificate of Merger merging Linens Merger Sub Co. with and into Linens 'n Things, Inc.
3.2	Amended and Restated Certificate of Incorporation of Linens 'n Things, Inc.
3.3	Amended and Restated By-laws of Linens 'n Things, Inc.
3.4	Articles of Incorporation of Linens 'n Things Center, Inc.
3.5	By-laws of Linens 'n Things Center, Inc.
3.6	Amended and Restated Certificate of Incorporation of Linens Holding Co.
3.7	Amended and Restated By-laws of Linens Holding Co.
3.8	Articles of Incorporation of Bloomington, MN., L.T., Inc.
3.9	By-laws of Bloomington, MN., L.T., Inc.
3.10	Certificate of Formation of Vendor Finance, LLC
3.11	Amended and Restated Operating Agreement of Vendor Finance, LLC
3.12	Certificate of Incorporation of E W Kalkin, Inc. (n/k/a) LNT, Inc.
3.13	Certificate of Amendment to the Certificate of Incorporation of E W Kalkin, Inc. (changing name to Linens 'n Things, Inc.)
3.14	Certificate of Amendment to the Certificate of Incorporation of Linens 'n Things, Inc. (changing name to LNT, Inc.)
3.15	By-laws of LNT, Inc.
3.16	Certificate of Incorporation of LNT Services, Inc.
3.17	By-laws of LNT Services, Inc.
3.18	Certificate of Formation of LNT Leasing II, LLC
3.19	Amended and Restated Operating Agreement of LNT Leasing II, LLC
3.20	Certificate of Incorporation of LNT West, Inc.
3.21	By-laws of LNT West, Inc.
3.22	Certificate of Organization of LNT Virginia LLC
3.23	Amended and Restated Operating Agreement of LNT Virginia LLC
3.24	Certificate of Formation of LNT Merchandising Company LLC
3.25	Amended and Restated Operating Agreement of LNT Merchandising Company LLC
3.26	Certificate of Formation of LNT Leasing III, LLC
3.27	Amended and Restated Operating Agreement of LNT Leasing III, LLC
3.28	Certificate of Formation of Citadel LNT, LLC
3.29	Amended and Restated Operating Agreement of Citadel LNT, LLC
4.1*	Indenture, dated as of February 14, 2006, among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors (as defined therein) and The Bank of New York, as Trustee, with respect to the Senior Secured Floating Rate Notes due 2014
4.2*	Form of Senior Secured Floating Rate Notes due 2014 (included as "Exhibit A" to Exhibit 4.1)
4.3*	Registration Rights Agreement, dated February 14, 2006, by and among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors listed on Schedule I thereto and Bear, Stearns & Co. Inc. and UBS Securities LLC
5.1	Opinion of Gardere Wynne Sewell LLP
5.2	Opinion of Morrison & Foerster, LLP
5.3	Opinion of Morrison & Foerster, LLP
5.4	Opinion of Wolff & Samson, P.C.
5.5	Opinion of Dorsey & Whitney LLP

II-22

10.1*	Credit Agreement, (the "Credit Agreement") dated as of February 14, 2006, among Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Subsidiary Guarantors (as defined therein), the parties named therein from time to time as lenders, whether by execution of the Credit Agreement or an Assignment and Acceptance, UBS Securities LLC, as Arranger and Bookmanager, UBS AG, Stamford Branch, as Issuing Bank, US Administrative Agent and US Co-Collateral Agent, UBS AG, Canada Branch, as Canadian Co-Collateral Agent, Wachovia Bank, National Association, as US Co-Collateral Agent, Co-Documentation Agent and an Issuing Bank, Wachovia Capital Finance Corporation (Canada), as Canadian Administrative Agent, Canadian Co-Collateral Agent and Canadian Swingline Lender, UBS Loan Finance LLC, as US Swingline Lender, UBS Securities LLC and Bear, Stearns & Co. Inc., as Joint Book Runners, Bear, Stearns & Co. Inc., as Co-Syndication Agent, Wells Fargo, as Co-Documentation Agent and The CIT Group/Business Credit, Inc., as Co-Syndication Agent
10.2	Stockholders' Agreement, dated as of February 14, 2006, between Linens Holding Co. and its Stockholders
10.3	Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors party thereto and The Bank of New York
10.4	Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc., Linens 'n Things Center, Inc., the Guarantors party thereto, UBS AG, Stamford Branch and Wachovia Bank, National Association
10.5	Management Services Agreement, dated as of February 14, 2006, among Linens 'n Things, Inc., Linens Holding Co., Apollo Management V, L.P., NRDC Linens B LLC and Silver Point Capital Fund Investments LLC
10.6	Intercreditor Agreement, dated as of February 14, 2006, by and among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp., the Subsidiary Guarantors (as defined therein), UBS AG, Stamford Branch, Wachovia Bank, National Association, UBS AG Canada Branch, Wachovia Capital Finance Corporation and The Bank of New York
10.7*	Employment Agreement with Robert J. DiNicola
10.8*	Option Grant Letter with Robert J. DiNicola
10.9*	Employment Agreement with F. David Coder
10.10*	Amended and Restated Employment Agreement with F. David Coder
10.11*	Option Grant Letter with F. David Coder
10.12*	Employment Agreement with Robert Homler
10.13*	Amended and Restated Employment Agreement with Robert Homler
10.14	Separation Agreement and General Release, by and between Jack E. Moore and Linens 'n Things, Inc.
10.15*	Separation Agreement and General Release, dated April 10, 2006, by and between Jane Gilmartin and Linens 'n Things, Inc.
10.16*	Linens Holding Co. Stock Option Plan
10.17*	Standard Form of Option Grant Letter
10.18*	Director Compensation Policy
10.19*	Standard Form of Director Option Grant Letter
10.20	Trademark Security Agreement, dated as of February 14, 2006, by Bloomington, MN., L.T., Inc. in favor of The Bank of New York
10.21	Trademark Security Agreement, dated as of February 14, 2006, by LNT Merchandising Company LLC in favor of The Bank of New York
10.22	Trademark Security Agreement, dated as of February 14, 2006, by LNT Services, Inc. in favor of The Bank of New York

II-23

10.23	Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc. in favor of The Bank of New York
10.24	Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things Center, Inc. in favor of The Bank of New York
12.1*	Statement Regarding the Computation of Ratio of Earnings to Fixed Charges for Linens Holding Co.
14.1	Code of Ethics for the Chief Executive Officer and Senior Financial Officers of Linens 'n Things, Inc. and Linens Holding Co.
21.1*	Subsidiaries of Linens Holding Co.
23.1	Consent of Independent Registered Public Accounting Firm
23.3	Consent of Gardere Wynne Sewell LLP (included in Exhibit 5.1)
23.4	Consent of Morrison & Foerster, LLP (included in Exhibit 5.2)
23.5	Consent of Morrison & Foerster, LLP (included in Exhibit 5.3)
23.6	Consent of Wolff & Samson, P.C. (included in Exhibit 5.4)
23.7	Consent of Dorsey & Whitney LLP (included in Exhibit 5.5)
24.1	Powers of Attorney (included in the signature pages to the Registration Statement)
25.1	Statement of Eligibility and Qualification on Form T-1 of The Bank of New York, as trustee under the Indenture for Linens 'n Things, Inc.'s and Linens 'n Things Center, Inc.'s Senior Secured Floating Rate Notes due 2014
99.1	Form of Letter of Transmittal
99.2	Form of Notice for Guaranteed Delivery
99.3	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees

*

Filed previously as an exhibit to the Registration Statement on Form S-4 (File No. 333-135646) filed by the Registrants on July 7, 2006.

II-24

EX-3.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.1

CERTIFICATE OF MERGER
MERGING

LINENS MERGER SUB CO.,
A DELAWARE CORPORATION

WITH AND INTO

LINENS 'N THINGS, INC.,
A DELAWARE CORPORATION

Pursuant to Section 251 of the General Corporation Law of the State of Delaware

Linens 'n Things, Inc., a Delaware corporation ("Linens 'n Things"), hereby certifies as follows:

        FIRST:    Each of the constituent corporations, Linens 'n Things and Linens Merger Sub Co. ("Merger Sub"), is a corporation duly organized and existing under the laws of the State of Delaware.

        SECOND:    An Agreement and Plan of Merger (the "Merger Agreement"), dated as of November 8, 2005, by and among Linens Holding Co., Merger Sub and Linens 'n Things, setting forth the terms and conditions of the merger of Merger Sub with and into Linens 'n Things (the Merger"), has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with Section 251 (and, with respect to Linens Merger Sub Co., Section 228) of the Delaware General Corporation Law.

        THIRD:    The surviving corporation in the Merger (the "Surviving Corporation") shall be Linens 'n Things.

        FOURTH:    The Certificate of Incorporation of the Surviving Corporation is amended in its entirety to read as set forth in Exhibit A hereto, and the name of the Surviving Corporation shall be "Linens 'n Things, Inc."

        FIFTH:    An executed copy of the Merger Agreement is on file at the principal place of business of the Surviving Corporation at the following address:

Linens 'n Things, Inc.
6 Brighton Road
Clifton, New Jersey 07015

        SIXTH:    A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of either constituent corporation.

        SEVENTH:    The Merger shall become effective upon the tiling of this Certificate of Merger with the Secretary of State of the State of Delaware.

        IN WITNESS WHEREOF, Linens 'n Things, Inc. has caused this Certificate of Merger to be executed in its Corporate name as of the 14th day of February, 2006.

LINENS 'N THINGS, INC.
By: /s/ William T Giles
Name:	William T Giles
Title:	Executive Vice President, Chief Financial Officer

EXHIBIT A

Amended and Restated Certificate of Incorporation

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

LINENS 'N THINGS, INC.

        FIRST:    The name of the corporation is LINENS 'N THINGS, INC. (hereinafter the "Corporation").

        SECOND:    The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

        THIRD:    The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

        FOURTH:    The total number of shares of capital stock which the Corporation shall have authority to issue is 1,000 shares of Common Stock, par value $0.01 per share (the "Common Stock").

        FIFTH:    The Corporation shall be entitled to treat the person in whose name any shares of its capital stock are registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such shares on the part of any other person, whether or not the Corporation shall have notice thereof, except as required by applicable law.

        SIXTH:    In furtherance and not in limitation of the powers conferred by statute, the Hoard of Directors is expressly authorized to adopt, alter, amend and repeal the By-Laws of the Corporation.

        SEVENTH:    The Corporation expressly elects not to be governed by Section 203 of the DGCL.

        EIGHTH:    To the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL. as so amended from time to time. No repeal or modification of this Article EIGHTH by the stockholders shall adversely affect any right or protection of a director of the Corporation existing by virtue of this Article EIGHTH at the time of such repeal or modification.

        NINTH:    Except as set forth herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

QuickLinks

CERTIFICATE OF MERGER MERGING LINENS MERGER SUB CO., A DELAWARE CORPORATION WITH AND INTO LINENS 'N THINGS, INC., A DELAWARE CORPORATION
EXHIBIT A Amended and Restated Certificate of Incorporation
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF LINENS 'N THINGS, INC.

EX-3.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.2

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

LINENS 'N THINGS, INC.

        FIRST:    The name of the corporation is LINENS 'N THINGS, INC. (hereinafter the "Corporation").

        SECOND:    The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

        THIRD:    The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL.

        FOURTH:    The total number of shares of capital stock which the Corporation shall have authority to issue is 1,000 shares of Common Stock, par value $0.01 per share (the "Common Stock").

        FIFTH:    The Corporation shall be entitled to treat the person in whose name any shares of its capital stock are registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such shares on the part of any other person, whether or not the Corporation shall have notice thereof, except as required by applicable law.

        SIXTH:    In furtherance and not in limitation of the powers conferred by statute, the Hoard of Directors is expressly authorized to adopt, alter, amend and repeal the By-Laws of the Corporation.

        SEVENTH:    The Corporation expressly elects not to be governed by Section 203 of the DGCL.

        EIGHTH:    To the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL. as so amended from time to time. No repeal or modification of this Article EIGHTH by the stockholders shall adversely affect any right or protection of a director of the Corporation existing by virtue of this Article EIGHTH at the time of such repeal or modification.

        NINTH:    Except as set forth herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

QuickLinks

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF LINENS 'N THINGS, INC.

EX-3.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.3

AMENDED AND RESTATED

BY-LAWS

OF

LINENS 'N THINGS, INC.

ARTICLE I.

Stockholders

        SECTION 1.    Annual Meeting.    The annual meeting of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be properly brought before the meeting.

        SECTION 2.    Special Meetings.    Except as otherwise provided in the Certificate of Incorporation, a special meeting of the stockholders of the Corporation may be called at any time by the Board of Directors or the Chairman thereof. Any special meeting of the stockholders shall be held on such date, at such time and at such place within or without the State of Delaware as the Board of Directors or the officer calling the meeting may designate. At a special meeting of the stockholders, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting unless all of the stockholders are present in person or by proxy, in which case any and all business may be transacted at the meeting even though the meeting is held without notice.

        SECTION 3.    Notice of Meetings.    Except as otherwise provided in these By-Laws or by law, a written notice of each meeting of the stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of the Corporation entitled to vote at such meeting at his or her address as it appears on the records of the Corporation. The notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

        SECTION 4.    Ouorum.    At any meeting of the stockholders, the holders of a majority in number of the total outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum of the stockholders for all purposes, unless the representation of a larger number of shares shall be required by law, by the Certificate of Incorporation or by these By-Laws, in which case the representation of the number of shares so required shall constitute a quorum; provided that at any meeting of the stockholders at which the holders of any class of stock of the Corporation shall be entitled to vote separately as a class, the holders of a majority in number of the total outstanding shares of such class, present in person or represented by proxy, shall constitute a quorum for purposes of such class vote unless the representation of a larger number of shares of such class shall be required by law, by the Certificate of Incorporation or by these By-Laws.

        SECTION 5.    Adjourned Meetings.    Whether or not a quorum shall be present in person or represented at any meeting of the stockholders, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting may adjourn from time to time; provided, however, that if the holders of any class of stock of the Corporation are entitled to vote separately as a class upon any matter at such meeting, any adjournment of the meeting in respect of action by such class upon such matter shall be determined by the holders of a majority of the shares of such class present in person or represented by proxy and entitled to vote at such meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holder of any class

of stock entitled to vote separately as a class, as the case may be, may transact any business which might have been transacted by them at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting.

        SECTION 6.    Organization.    The Chairman of the Board shall call all meetings of the stockholders to order and shall act as Chairman of such meetings. In the absence of the Chairman of the Board, the President shall, and in the absence of both the Chairman and the President, a Vice President shall, call the meeting of the stockholders to order and act as Chairman of such meeting. In the absence of the Chairman, the President and all of the Vice Presidents, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting shall elect a Chairman.

        The Secretary of the Corporation shall act as Secretary of all meetings of the stockholders; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting. It shall be the duty of the Secretary to prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held, for the ten days next preceding the meeting, to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, and shall be produced and kept at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present.

        SECTION 7.    Voting.    Except as otherwise provided in the Certificate of Incorporation or by law, each stockholder shall be entitled to one vote for each share of the capital stock of the Corporation registered in the name of such stockholder upon the books of the Corporation. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. When directed by the presiding officer or upon the demand of any stockholder, the vote upon any matter before a meeting of stockholders shall be by ballot. Except as otherwise provided by law or by the Certificate of Incorporation, Directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the stockholders entitled to vote in the election and, whenever any corporate action, other than the election of Directors is to be taken, it shall be authorized by a majority of the votes cast at a meeting of stockholders by the stockholders entitled to vote thereon.

        Shares of the capital stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes.

        SECTION 8.    Inspectors.    When required by law or directed by the presiding officer or upon the demand of any stockholder entitled to vote, but not otherwise, the polls shall be opened and closed, the proxies and ballots shall be received and taken in charge, and all questions touching the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided at any meeting of the stockholders by two or more Inspectors who may be appointed by the Board of Directors before the meeting, or if not so appointed, shall be appointed by the presiding officer at the meeting. If any person so appointed fails to appear or act, the vacancy may be filled by appointment in like manner.

2

        SECTION 9.    Consent of Stockholders in Lieu of Meeting.    Unless otherwise provided in the Certificate of Incorporation, any action required to be taken or which may be taken at any annual or special meeting of the stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of any such corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II.

Board of Directors

        SECTION 1.    Number and Term of Office.    The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors, none of whom need be stockholders of the Corporation. The number of Directors constituting the Board of Directors shall be fixed from time to time by resolution passed by a majority of the Board of Directors. The Directors shall, except as hereinafter otherwise provided for filling vacancies, be elected at the annual meeting of stockholders, and shall hold office until their respective successors are elected and qualified or until their earlier resignation or removal.

        SECTION 2.    Removal, Vacancies and Additional Directors.    The stockholders may, at any special meeting the notice of which shall state that it is called for that purpose, remove, with or without cause, any Director and fill the vacancy; provided that whenever any Director shall have been elected by the holders of any class of stock of the Corporation voting separately as a class under the provisions of the Certificate of Incorporation, such Director may be removed and the vacancy filled only by the holders of that class of stock voting separately as a class. Vacancies caused by any such removal and not filled by the stockholders at the meeting at which such removal shall have been made, or any vacancy caused by the death or resignation of any Director or for any other reason, and any newly created directorship resulting from any increase in the authorized number of Directors, may be filled by the affirmative vote of a majority of the Directors then in office, although less than a quorum, and any Director so elected to fill any such vacancy or newly created directorship shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

        When one or more Directors shall resign effective at a future date, a majority of the Directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office as herein provided in connection with the filling of other vacancies.

        SECTION 3.    Place of Meeting.    The Board of Directors may hold its meetings in such place or places in the State of Delaware or outside the State of Delaware as the Board from time to time shall determine.

        SECTION 4.    Regular Meetings.    Regular meetings of the Board of Directors shall be held at such times and places as the Board from time to time by resolution shall determine. No notice shall be required for any regular meeting of the Board of Directors; but a copy of every resolution fixing or changing the time or place of regular meetings shall be mailed to every Director at least five days before the first meeting held in pursuance thereof.

        SECTION 5.    Special Meetings.    Special meetings of the Board of Directors shall be held whenever called by direction of any three of the Directors then in office. Notice of the day, hour and place of holding of each special meeting shall be given by mailing the same at least two days before the meeting or by causing the same to be transmitted by facsimile, telegram or telephone at least one day

3

before the meeting to each Director. Unless otherwise indicated in the notice thereof, any and all business other than an amendment of these By-Laws may be transacted at any special meeting, and an amendment of these By-Laws may be acted upon if the notice of the meeting shall have stated that the amendment of these By-Laws is one of the purposes of the meeting. At any meeting at which every Director shall be present, even though without any notice, any business may be transacted, including the amendment of these By-Laws.

        SECTION 6.    Quorum.    Subject to the provisions of Section 2 of this Article II, a majority of the members of the Board of Directors in office (but in no case less than one-third of the total number of Directors nor less than two Directors) shall constitute a quorum for the transaction of business and the vote of the majority of the Directors present at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors. If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time.

        SECTION 7.    Organization.    A Chairman of the Board of Directors shall be elected from the Directors present and shall preside at such meeting. The Secretary of the Corporation shall act as Secretary of all meetings of the Directors; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting.

        SECTION 8.    Committees.    The Board of Directors may designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and the affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to approving or adopting, or recommending to the stockholders, any action or matter expressly required by law to be submitted to stockholders for approval, or adopting, amending or repealing these By-Laws.

        SECTION 9.    Conference Telephone Meetings.    Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, the members of the Board of Directors or any committee designated by the Board, may participate in a meeting of the Board or such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

        SECTION 10.    Consent of Directors or Committee in Lieu of Meeting.    Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee, as the case may be.

ARTICLE III.

Officers

        SECTION 1.    Officers.    The officers of the Corporation shall be a President, one or more Vice Presidents, a Secretary and a Treasurer, and such additional officers, if any, as shall be elected by the

4

Board of Directors pursuant to the provisions of Section 6 of this Article III. The President, one or more Vice Presidents, the Secretary and the Treasurer shall be elected by the Board of Directors at its first meeting after each annual meeting of the stockholders. The failure to hold such election shall not of itself terminate the term of office of any officer.

        All officers shall hold office at the pleasure of the Board of Directors. Any officer may resign at any time upon written notice to the Corporation. Officers may, but need not, be Directors. Any number of offices may be held by the same person. All officers, agents and employees shall be subject to removal, with or without cause, at any time by the Board of Directors. The removal of an officer without cause shall be without prejudice to his or her contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. All agents and employees other than officers elected by the Board of Directors shall also be subject to removal, with or without cause, at any time by the officers appointing them.

        Any vacancy caused by the death, resignation or removal of any officer, or otherwise, may be filled by the Board of Directors, and any officer so elected shall hold office at the pleasure of the Board of Directors.

        In addition to the powers and duties of the officers of the Corporation as set forth in these By-Laws, the officers shall have such authority and shall perform such duties as from time to time may be determined by the Board of Directors.

        SECTION 2.    Powers and Duties of the President.    The President shall be the chief executive officer of the Corporation and, subject to the control of the Board of Directors, shall have general charge and control of all its business and affairs and shall have all powers and shall perform all duties incident to the office of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors and shall have such other powers and perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors.

        SECTION 3.    Powers and Duties of the Vice Presidents.    Each Vice President shall have all powers and shall perform all duties incident to the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 4.    Powers and Duties of the Secretary.    The Secretary shall keep the minutes of all meetings of the Board of Directors and the minutes of all meetings of the stockholders in books provided for that purpose. The Secretary shall attend to the giving or serving of all notices of the Corporation; shall have custody of the corporate seal of the Corporation and shall affix the same to such documents and other papers as the Board of Directors or the President shall authorize and direct; shall have charge of the stock certificate books, transfer books and stock ledgers and such other books and papers as the Board of Directors or the President shall direct, all of which shall at all reasonable times be open to the examination of any Director, upon application, at the office of the Corporation during business hours. The Secretary shall have all powers and shall perform all duties incident to the office of Secretary and shall also have such other powers and shall perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 5.    Powers and Duties of the Treasurer.    The Treasurer shall have custody of, and when proper shall pay out, disburse or otherwise dispose of, all funds and securities of the Corporation. The Treasurer may endorse on behalf of the Corporation for collection checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositary or depositaries as the Board of Directors may designate; shall sign all receipts and vouchers for payments made to the Corporation; shall enter or cause to be entered regularly in the books of the Corporation kept for the purpose full and accurate accounts of all moneys received or paid or otherwise disposed of and whenever required by the Board of Directors or the President shall render statements of such

5

accounts. The Treasurer shall, at all reasonable times, exhibit the books and accounts to any Director of the Corporation upon application at the office of the Corporation during business hours; and shall have all powers and shall perform all duties incident of the office of Treasurer and shall also have such other powers and shall perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 6.    Additional Officers.    The Board of Directors may from time to time elect such other officers (who may but need not be Directors), including a Controller, Assistant Treasurers, Assistant Secretaries and Assistant Controllers, as the Board may deem advisable and such officers shall have such authority and shall perform such duties as may from time to time be assigned by the Board of Directors or the President.

        The Board of Directors may from time to time by resolution delegate to any Assistant Treasurer or Assistant Treasurers any of the powers or duties herein assigned to the Treasurer; and may similarly delegate to any Assistant Secretary or Assistant Secretaries any of the powers or duties herein assigned to the Secretary.

        SECTION 7.    Giving of Bond by Officers.    All officers of the Corporation, if required to do so by the Board of Directors, shall furnish bonds to the Corporation for the faithful performance of their duties, in such penalties and with such conditions and security as the Board shall require.

        SECTION 8.    Voting Upon Stocks.    Unless otherwise ordered by the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or in the name of the Corporation to execute proxies to vote, at any meeting of stockholders of any corporation in which the Corporation may hold stock, and at any such meeting shall possess and may exercise, in person or by proxy, any and all rights, powers and privileges incident to the ownership of such stock. The Board of Directors may from time to time, by resolution, confer like powers upon any other person or persons.

        SECTION 9.    Compensation of Officers.    The officers of the Corporation shall be entitled to receive such compensation for their services as shall from time to time be determined by the Board of Directors.

ARTICLE IV.

Stock; Seal; Fiscal Year

        SECTION 1.    Certificates For Shares of Stock.    The certificates for shares of stock of the Corporation shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be approved by the Board of Directors. All certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall not be valid unless so signed.

        In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates had not ceased to be such officer or officers of the Corporation.

        All certificates for shares of stock shall be consecutively numbered as the same are issued. The name of the person owning the shares represented thereby with the number of such shares and the date of issue thereof shall be entered on the books of the Corporation.

        Except as hereinafter provided, all certificates surrendered to the Corporation for transfer shall be cancelled, and no new certificates shall be issued until former certificates for the same number of shares have been surrendered and cancelled.

6

        SECTION 2.    Lost, Stolen or Destroyed Certificates.    Whenever a person owning a certificate for shares of stock of the Corporation alleges that it has been lost, stolen or destroyed, he or she shall file in the office of the Corporation an affidavit setting forth, to the best of his or her knowledge and belief, the time, place and circumstances of the loss, theft or destruction, and, if required by the Board of Directors, a bond of indemnity or other indemnification sufficient in the opinion of the Board of Directors to indemnify the Corporation and its agents against any claim that may be made against it or them on account of the alleged loss, theft or destruction of any such certificate or the issuance of a new certificate in replacement therefor. Thereupon the Corporation may cause to be issued to such person a new certificate in replacement for the certificate alleged to have been lost, stolen or destroyed. Upon the stub of every new certificate so issued shall be noted the fact of such issue and the number, date and the name of the registered owner of the lost, stolen or destroyed certificate in lieu of which the new certificate is issued.

        SECTION 3.    Transfer of Shares.    Shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof, in person or by his or her attorney duly authorized in writing, upon surrender and cancellation of certificates for the number of shares of stock to be transferred, except as provided in Section 2 of this Article IV. SECTION 4. Regulations. The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

        SECTION 5.    Record Date.    In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, as the case may be, the Board of Directors may fix, in advance, a record date, which shall not be (i) more than sixty (60) nor less than ten (10) days before the date of such meeting, or (ii) in the case of corporate action to be taken by consent in writing without a meeting, prior to, or more than ten (10) days after, the date upon which the resolution fixing the record date is adopted by the Board of Directors, or (iii) more than sixty (60) days prior to any other action.

        If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is delivered to the Corporation; and the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        SECTION 6.    Dividends.    Subject to the provisions of the Certificate of Incorporation, the Board of Directors shall have power to declare and pay dividends upon shares of stock of the Corporation, but only out of funds available for the payment of dividends as provided by law.

        Subject to the provisions of the Certificate of Incorporation, any dividends declared upon the stock of the Corporation shall be payable on such date or dates as the Board of Directors shall determine. If the date fixed for the payment of any dividend shall in any year fall upon a legal holiday, then the dividend payable on such date shall be paid on the next day not a legal holiday.

        SECTION 7.    Corporate Seal.    The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be kept in the custody of the Secretary. A duplicate of

7

the seal may be kept and be used by any officer of the Corporation designated by the Board of Directors or the President.

        SECTION 8.    Fiscal Year.    The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

ARTICLE V.

        SECTION 1.    Actions Other Than by or in the Right of the Corporation.    The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (collectively in this Article V, a "Proceeding") other than a Proceeding by or in the right of the Corporation, by reason of the fact that he is or was a director or officer of the Corporation, or while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including an employee benefit plan or trust (each such person in this Article V, a "Corporate Functionary"), against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such Proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, or conviction, or upon a plea of nob contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that he had reasonable cause to believe that his conduct was unlawful.

        SECTION 2.    Actions by or in the Right of the Corporation.    The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or involved in any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Corporate Functionary against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such Proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        SECTION 3.    Determination of Right to Indemnification.    Any indemnification under Section 1 or Section 2 of this Article V (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the Corporate Functionary is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article V. Such determination shall be made (i) by the Board of Directors by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by independent outside legal counsel in a written opinion, or (iii) by the stockholders.

        SECTION 4.    Right to Indemnification.    Notwithstanding the other provisions of this Article V, to the extent that a Corporate Functionary has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 1 or Section 2 of this Article V (including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without admission of liability), or in

8

defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith.

        SECTION 5.    Prepaid Expenses.    Expenses incurred by a Corporate Functionary in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding, upon receipt of an undertaking by or on behalf of the Corporate Functionary to repay such amount if it shall ultimately be determined he is not entitled to be indemnified by the Corporation as authorized in this Article V.

        SECTION 6.    Right to Indemnification upon Application; Procedure upon Application.    Any indemnification of a Corporate Functionary under Section 2, Section 4 or any advance under Section 5, of this Article V shall be made promptly upon, and in any event within 60 days after, the written request of the Corporate Functionary, unless with respect to applications under Section 2 or Section 5 of this Article V, a determination is reasonably and promptly made by the Board of Directors by majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, that such Corporate Functionary acted in a manner set forth in such Sections as to justify the Corporation in not indemnifying or making an advance of expenses to the Corporate Functionary. If there are no directors who are not parties to such Proceeding, the Board of Directors shall promptly direct that independent outside legal counsel shall decide whether the Corporate Functionary acted in a manner set forth in such Sections as to justify the Corporation's not indemnifying or making an advance of expenses to the Corporate Functionary. The right to indemnification or advance of expenses granted by this Article V shall be enforceable by the Corporate Functionary in any court of competent jurisdiction if the Board of Directors or independent legal counsel denies his claim, in whole or in part, or if no disposition of such claim is made within 60 days. The expenses of the Corporate Functionary incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation.

        SECTION 7.    Other Rights and Remedies.    The indemnification and advancement of expenses provided by or granted pursuant to this Article V shall not be deemed exclusive of any other rights to which any person seeking indemnification and for advancement of expenses or may be entitled under the By-laws, or any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such position or office, and shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Corporate Functionary and shall inure to the benefit of the heirs, executors, and administrators of such a person. Any repeal or modification of these By-laws or relevant provisions of the Delaware General Corporation Law and other applicable law, if any, shall not affect any then existing rights of a Corporate Functionary to indemnification or advancement of expenses.

        SECTION 8.    Insurance.    Upon resolution passed by the Board of Directors, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including an employee benefit plan or trust) against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article V or the Delaware General Corporation Law.

        SECTION 9.    Mergers.    For purposes of this Article V, references to "the Corporation" shall include, in addition to the resulting or surviving corporation, constituent corporations (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers/directors, officers, employees, or agents, so that any person who is or was a director or officer/director, officer, employee, or agent of such constituent corporation or is or was serving at the request of such constituent

9

corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including an employee benefit plan or trust) shall stand in the same position under the provisions of this Article V with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

        SECTION 10.    Savings Provision.    If this Article V or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Corporation shall nevertheless indemnify each Corporate Functionary as to expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any Proceeding, including a grand jury proceeding or action or suit brought by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article V that shall not have been invalidated.

ARTICLE VI.

Miscellaneous Provisions

        SECTION 1.    Checks, Notes, Etc.    All checks, drafts, bills of exchange, acceptances, notes or other obligations or orders for the payment of money shall be signed and, if so required by the Board of Directors, countersigned by such officers of the Corporation and/or other persons as the Board of Directors from time to time shall designate.

        Checks, drafts, bills of exchange, acceptances, notes, obligations and orders for the payment of money made payable to the Corporation may be endorsed for deposit to the credit of the Corporation with a duly authorized depository by the Treasurer and/or such other officers or persons as the Board of Directors from time to time may designate.

        SECTION 2.    Loans.    No loans and no renewals of any loans shall be contracted on behalf of the Corporation except as authorized by the Board of Directors. When authorized to do so, any officer or agent of the Corporation may effect loans and advances for the Corporation from any bank, trust company or other institution or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other evidences of indebtedness of the Corporation. When authorized so to do, any officer or agent of the Corporation may pledge, hypothecate or transfer, as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, any and all stocks, securities and other personal property at any time held by the Corporation, and to that end may endorse, assign and deliver the same. Such authority may be general or confined to specific instances.

        SECTION 3.    Contracts.    Except as otherwise provided in these By-Laws or by law or as otherwise directed by the Board of Directors, the President or any Vice President shall be authorized to execute and deliver, in the name and on behalf of the Corporation, all agreements, bonds, contracts, deeds, mortgages, and other instruments, either for the Corporation's own account or in a fiduciary or other capacity, and the seal of the Corporation, if appropriate, shall be affixed thereto by any of such officers or the Secretary or an Assistant Secretary. The Board of Directors, the President or any Vice President designated by the Board of Directors may authorize any other officer, employee or agent to execute and deliver, in the name and on behalf of the Corporation, agreements, bonds, contracts, deeds, mortgages, and other instruments, either for the Corporation's own account or in a fiduciary or other capacity, and, if appropriate, to affix the seal of the Corporation thereto. The grant of such authority by the Board or any such officer may be general or confined to specific instances.

        SECTION 4.    Waivers of Notice.    Whenever any notice whatever is required to be given by law, by the Certificate of Incorporation or by these By-Laws to any person or persons, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

10

        SECTION 5.    Offices Outside of Delaware.    Except as otherwise required by the laws of the State of Delaware, the Corporation may have an office or offices and keep its books, documents and papers outside of the State of Delaware at such place or places as from time to time may be determined by the Board of Directors.

ARTICLE VII.

Amendments

        These By-Laws and any amendment thereof may be altered, amended or repealed, or new By-Laws may be adopted, by the Board of Directors at any regular or special meeting by the affirmative vote of a majority of all of the members of the Board, provided in the case of any special meeting at which all of the members of the Board are not present, that the notice of such meeting shall have stated that the amendment of these By-Laws was one of the purposes of the meeting; but these By-Laws and any amendment thereof may be altered, amended or repealed or new By-Laws may be adopted by the holders of a majority of the total outstanding stock of the Corporation entitled to vote at any annual meeting or at any special meeting, provided, in the case of any special meeting, that notice of such proposed alteration, amendment, repeal or adoption is included in the notice of the meeting.

11

QuickLinks

AMENDED AND RESTATED BY-LAWS OF LINENS 'N THINGS, INC.
ARTICLE I. Stockholders
ARTICLE II. Board of Directors
ARTICLE III. Officers
ARTICLE IV. Stock; Seal; Fiscal Year
ARTICLE V.
ARTICLE VI. Miscellaneous Provisions
ARTICLE VII. Amendments

EX-3.4

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.4

ARTICLES OF INCORPORATION

OF

LINENS 'N THINGS CENTER, INC.

        The undersigned, being a natural person of full age and acting as the incorporator for the purpose of forming the business corporation hereinafter named pursuant to the provisions of the Corporations Code of the State of California, does hereby adopt the following articles of incorporation.

        FIRST:    The name of the corporation (hereinafter referred to as the "corporation") is LINENS 'N THINGS CENTER, INC.

        SECOND:    The existence of the corporation is perpetual.

        THIRD:    The purpose of the corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California, other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

        FOURTH:    The name of the corporation's initial agent for service of process within the State of California in accordance with the provisions of subdivision (b) of Section 1502 of the Corporations Code of the State of California is United States Corporation Company.

        FIFTH:    The total number of shares which the corporation is authorized to issue is one hundred, all of which are of one class and are Common shares. The Board of Directors of the corporation may issue any or all of the aforesaid authorized shares of the corporation from time to time for such consideration as it shall determine and may determine from time to time the amount of such consideration, if any, to be credited to paid in surplus.

        SIXTH:    In the interim between meetings of shareholders held for the election of directors or for the removal of one or more directors and the election of the replacement or replacements thereat, any vacancy which results by reason of the removal of a director or directors by the shareholders entitled to vote in an election of directors, and which has not been filled by said shareholders, may be filled by a majority of the directors then in office, whether or not less than a quorum. or by the sole remaining director, as the case may be.

        SEVENTH:    The liability of the directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California law.

        EIGHTH:    The corporation is authorized to provide indemnification of agents (as defined in Section 317 of the Corporations Code) for breach of duty to the corporation and its stockholders through bylaw provisions or through agreements with the agents, or both, in excess of the indemnification otherwise permitted by Section 317 of the Corporations Code, subject to the limits on such excess indemnification set forth in Section 204 of the Corporations Code.

        Signed on January 10, 1996.

/s/  JANET BUDHU Janet Budhu, Incorporator

QuickLinks

ARTICLES OF INCORPORATION OF LINENS 'N THINGS CENTER, INC.

EX-3.5

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.5

BYLAWS

OF

LINENS 'N THINGS CENTER, INC.

ARTICLE I
ANNUAL MEETING

        The annual meeting of the stockholders shall be held in the State of New York at such time and place as the Board of Directors shall determine.

ARTICLE II
SPECIAL MEETING

        Special meeting of the stockholders may be called by the President or a Vice President, by two members of the Board of Directors, or by holders of 25% or more of the capital stock.

ARTICLE III
NOTICE OF MEETINGS

        Notice of every meeting, whether annual or special, shall be in writing signed by an officer of the corporation. Such notice shall state the time when and place where the meeting is to be held, and a copy shall be served, either personally or by mail, upon each stockholder of record entitled to vote at such meeting, not less than ten days before the meeting, unless different notice is required by statue. Except as otherwise required by statute, published or written notice in any case may be waived in writing by the stockholders. In the case of special meetings, written notice of the purposes for which the meeting is called must be given to each stockholder.

ARTICLE IV
QUORUM

        At all stockholders' meetings a quorum shall (save as otherwise provided by statute) consist of a majority of the stock outstanding and entitled to vote in person or by proxy.

ARTICLE V
ELECTION OF DIRECTORS

        The number of directors shall be no less than 1 but no more than six. Directors shall be elected at each annual meeting and shall hold office for one year and thereafter until their successors are elected and qualify. Vacancies, however occurring during the year may be filled by a majority of the remaining directors. Directors need not be stockholders.

ARTICLE VI
MEETING OF DIRECTORS

        The board shall meet whenever and wherever called together by the President or a Vice President upon notice to each director, which need not exceed two days, and may be held at the office of the corporation, or such other places as the board may from time to time determine. If any member be where he cannot conveniently be notified, except where otherwise required by statute, a meeting held without notice to such member shall be valid, provide h shall thereafter assent in writing to any proceedings of the meeting. On the written request of any director, the Secretary shall call a special meeting of the board. A majority of directors shall constitute a quorum. Whenever the board is authorized to take any action after notice, such notice may be waived, in writing, before or after the holding of the meeting by the directors entitled to such notice.

ARTICLE VII
ELECTION OF OFFICERS

        After the election of the directors, the board shall elect a President, one or more Vice Presidents, a Secretary, and a Treasurer, and the directors may from time to time appoint such other officers as they deem necessary to serve at the pleasure of the board. The President and one Vice President shall be elected from their own number. Except as otherwise provided by statute, any two officers may be held by the same person.

ARTICLE VIII
POWERS AND DUTIES OF OFFICERS

        The President shall preside at all meetings of the Board of Directors, and shall act as temporary chairman and call to order all meetings of the stockholders. The term of office of all officers shall be until the next election of directors and until their respective successors are chosen and qualified, buy any officer may be removed from office at any time with or without cause by the Board of Directors. Vacancies in the offices shall be filled by the Board of Directors. The officers of the corporation shall have such powers and duties except as modified by the Board of Directors as generally pertain to their offices respectively, as well as such powers and duties as from time to time shall be conferred by the Board of Directors. The Board of Directors are authorized to select such depositories as they shall deem proper for the funds of the corporation, and all checks and drafts against such deposited funds shall be signed by officers or persons to be specified by the Board of Directors.

ARTICLE IX
CERTIFICATES OF STOCK

        Certificates of stock shall be numbered and signed in the order in which they are issued and shall be signed by the President or a Vice President and by the Secretary of an Assistant Secretary, and the seal of the company shall be affixed thereto.

ARTICLE X
TRANSFER OF SHAPES

        Transfers of shares shall be made only upon the books of the company and only in pursuance of the request of the holder in person, or by the holder of power of attorney duly executed and filed with the Secretary, and this only on the surrender to the Secretary of the certificate or certificates of stock.

ARTICLE XI
POWERS OF DIRECTORS

        The Board of Directors shall exercise all of the powers of the corporation, subject to the restrictions imposed by law or by these By-Laws, and they shall have general management and control of the affairs of the corporation. They shall set aside from the earnings such sum or sums as in their discretion may deem advisable for improvements or reserves; they shall declare and pay dividends out of the surplus profits of the corporation at such times as they deem proper, and they shall have power to borrow money, to make and issued notes, bonds and other negotiable and transferable instruments, deeds of trust and trust agreements. Any of the powers of the board in relation to the ordinary business of the company may be delegated to any committee, officer or agent upon such terms as they think fit. All of such powers shall be subject to any statutory requirement of limitation.

2

ARTICLE XII
INDEMNIFICATION OF DIRECTORS AND OFFICERS

        The corporation shall indemnify and save harmless all or any of the officers and directors of the corporation from and against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which any such director or officer by virtue of his office may be made a party, except if such officer or directors is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties he shall not be so indemnified and held harmless.

ARTICLE XIII
CORPORATE SEAL

        The corporate seal of the corporation shall be in such form as the Board of Directors shall prescribe.

ARTICLE XIV FISCAL YEAR

        The fiscal year of the corporation shall be the calendar year.

ARTICLE XV
AMENDMENTS

        The directors may make and alter any By-Laws, including any increase or decrease in the number of directors, provided that the Board of Directors shall not make or alter any By-Laws fixing their qualification, classifications or term of office.

3

QuickLinks

BYLAWS OF LINENS 'N THINGS CENTER, INC.
ARTICLE I ANNUAL MEETING
ARTICLE II SPECIAL MEETING
ARTICLE III NOTICE OF MEETINGS
ARTICLE IV QUORUM
ARTICLE V ELECTION OF DIRECTORS
ARTICLE VI MEETING OF DIRECTORS
ARTICLE VII ELECTION OF OFFICERS
ARTICLE VIII POWERS AND DUTIES OF OFFICERS
ARTICLE IX CERTIFICATES OF STOCK
ARTICLE X TRANSFER OF SHAPES
ARTICLE XI POWERS OF DIRECTORS
ARTICLE XII INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE XIII CORPORATE SEAL
ARTICLE XIV FISCAL YEAR
ARTICLE XV AMENDMENTS

EX-3.6

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.6

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

LINENS HOLDING CO.

February 14, 2006

        Linens Holding Co., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "DGCL"), hereby certifies as follows:

        1.     The name of this corporation is Linens Holding Co. (the "corporation"). The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on November 7, 2005 under the name "Laundry Holding Co."

        2.     This Amended and Restated Certificate of Incorporation (a) has been adopted in accordance with the provisions of Sections 242 and 245 of the DGCL and (b) amends and restates the Certificate of Incorporation of this Corporation.

        3.     The Certificate of Incorporation of this Corporation is hereby amended and restated to read in its entirety as follows:

        FIRST:    The name of the corporation is Linens Holding Co. (hereinafter the "Corporation").

        SECOND:    The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company.

        THIRD:    The purpose of the Corporation is to engage in any Lawful act or activity for which corporations may be organized under the DGCL.

        FOURTH:    The total number of shares of capital stock which the Corporation shall have authority to issue is 15,000,000 shares of Common Stock, par value $0.01 per share (the "Common Stock").

        FIFTH:    The Corporation shall be entitled to treat the person in whose name any shares of its capital stock are registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such shares on the part of any other person, whether or not the Corporation shall have notice thereof, except as required by applicable law.

        SIXTH:    In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, alter, amend and repeal the By-Laws of the Corporation.

        SEVENTH:    The Corporation expressly elects not to be governed by Section 203 of the DGCL.

        EIGHTH:    To the fullest extent permitted by the DGCL as the same exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL is amended after the date of filing of this Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended from time to time. No repeal or modification of this Article EIGHTH by the stockholders shall adversely affect any right or protection of a director of the Corporation existing by virtue of this Article EIGHTH at the time of such repeal or modification.

        NINTH:    Except as set forth herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.

        IN WITNESS WHEREOF, the undersigned has duly executed this Amended and Restated Certificate of Incorporation as of the date first written above.

By: /s/ Andrew Jhawar
Name:	Andrew Jhawar
Title:	Vice President

Signature Page to Amended and Restated Certificate of Incorporation

QuickLinks

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF LINENS HOLDING CO. February 14, 2006

EX-3.7

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.7

AMENDED AND RESTATED

BY-LAWS

OF

LINENS HOLDING CO.

ARTICLE I.

Stockholders

        SECTION 1.    Annual Meeting.    The annual meeting of the stockholders of the Corporation shall be held on such date, at such time and at such place within or without the State of Delaware as may be designated by the Board of Directors, for the purpose of electing Directors and for the transaction of such other business as may be properly brought before the meeting.

        SECTION 2.    Special Meetings.    Except as otherwise provided in the Certificate of Incorporation, a special meeting of the stockholders of the Corporation may be called at any time by the Board of Directors or the Chairman thereof. Any special meeting of the stockholders shall be held on such date, at such time and at such place within or without the State of Delaware as the Board of Directors or the officer calling the meeting may designate. At a special meeting of the stockholders, no business shall be transacted and no corporate action shall be taken other than that stated in the notice of the meeting unless all of the stockholders are present in person or by proxy, in which case any and all business may be transacted at the meeting even though the meeting is held without notice.

        SECTION 3.    Notice of Meetings.    Except as otherwise provided in these By-Laws or by law, a written notice of each meeting of the stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of the Corporation entitled to vote at such meeting at his or her address as it appears on the records of the Corporation. The notice shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called.

        SECTION 4.    Quorum.    At any meeting of the stockholders, the holders of a majority in number of the total outstanding shares of stock of the Corporation entitled to vote at such meeting, present in person or represented by proxy, shall constitute a quorum of the stockholders for all purposes, unless the representation of a larger number of shares shall be required by law, by the Certificate of Incorporation or by these By-Laws, in which case the representation of the number of shares so required shall constitute a quorum; provided that at any meeting of the stockholders at which the holders of any class of stock of the Corporation shall be entitled to vote separately as a class, the holders of a majority in number of the total outstanding shares of such class, present in person or represented by proxy, shall constitute a quorum for purposes of such class vote unless the representation of a larger number of shares of such class shall be required by law, by the Certificate of Incorporation or by these By-Laws.

        SECTION 5.    Adjourned Meetings.    Whether or not a quorum shall be present in person or represented at any meeting of the stockholders, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting may adjourn from time to time; provided, however, that if the holders of any class of stock of the Corporation are entitled to vote separately as a class upon any matter at such meeting, any adjournment of the meeting in respect of action by such class upon such matter shall be determined by the holders of a majority of the shares of such class present in person or represented by proxy and entitled to vote at such meeting. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the stockholders, or the holder of any class

of stock entitled to vote separately as a class, as the case may be, may transact any business which might have been transacted by them at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting.

        SECTION 6.    Organization.    The Chairman of the Board shall call all meetings of the stockholders to order and shall act as Chairman of such meetings. In the absence of the Chairman of the Board, the President shall, and in the absence of both the Chairman and the President, a Vice President shall, call the meeting of the stockholders to order and act as Chairman of such meeting. In the absence of the Chairman, the President and all of the Vice Presidents, the holders of a majority in number of the shares of stock of the Corporation present in person or represented by proxy and entitled to vote at such meeting shall elect a Chairman.

        The Secretary of the Corporation shall act as Secretary of all meetings of the stockholders; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting. It shall be the duty of the Secretary to prepare and make, at least ten days before every meeting of stockholders, a complete list of stockholders entitled to vote at such meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting or, if not so specified, at the place where the meeting is to be held, for the ten days next preceding the meeting, to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, and shall be produced and kept at the time and place of the meeting during the whole time thereof and subject to the inspection of any stockholder who may be present.

        SECTION 7.    Voting.    Except as otherwise provided in the Certificate of Incorporation or by law, each stockholder shall be entitled to one vote for each share of the capital stock of the Corporation registered in the name of such stockholder upon the books of the Corporation. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him or her by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. When directed by the presiding officer or upon the demand of any stockholder, the vote upon any matter before a meeting of stockholders shall be by ballot. Except as otherwise provided by law or by the Certificate of Incorporation, Directors shall be elected by a plurality of the votes cast at a meeting of stockholders by the stockholders entitled to vote in the election and, whenever any corporate action, other than the election of Directors is to be taken, it shall be authorized by a majority of the votes cast at a meeting of stockholders by the stockholders entitled to vote thereon.

        Shares of the capital stock of the Corporation belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes.

        SECTION 8.    Inspectors.    When required by law or directed by the presiding officer or upon the demand of any stockholder entitled to vote, but not otherwise, the polls shall be opened and closed, the proxies and ballots shall be received and taken in charge, and all questions touching the qualification of voters, the validity of proxies and the acceptance or rejection of votes shall be decided at any meeting of the stockholders by two or more Inspectors who may be appointed by the Board of Directors before the meeting, or if not so appointed, shall be appointed by the presiding officer at the meeting. If any person so appointed fails to appear or act, the vacancy may be filled by appointment in like manner.

2

        SECTION 9.    Consent of Stockholders in Lieu of Meeting.    Unless otherwise provided in the Certificate of Incorporation, any action required to be taken or which may be taken at any annual or special meeting of the stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of any such corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE II.

Board of Directors

        SECTION 1.    Number and Term of Office.    The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors, none of whom need be stockholders of the Corporation. The number of Directors constituting the Board of Directors shall be fixed at nine (9) unless another number shall be fixed by the Board of Directors; provided that the number of Directors constituting the Board of Directors shall not be decreased to fewer than nine (9) Directors without the unanimous written consent of the Board of Directors. The Directors shall, except as hereinafter otherwise provided for filling vacancies, be elected at the annual meeting of stockholders, and shall hold office until their respective successors are elected and qualified or until their earlier resignation or removal.

        SECTION 2.    Removal, Vacancies and Additional Directors.    The stockholders may, at any special meeting the notice of which shall state that it is called for that purpose, remove, with or without cause, any Director and fill the vacancy; provided that whenever any Director shall have been elected by the holders of any class of stock of the Corporation voting separately as a class under the provisions of the Certificate of Incorporation, such Director may be removed and the vacancy filled only by the holders of that class of stock voting separately as a class. Vacancies caused by any such removal and not filled by the stockholders at the meeting at which such removal shall have been made, or any vacancy caused by the death or resignation of any Director or for any other reason, and any newly created directorship resulting from any increase in the authorized number of Directors, may be filled by the affirmative vote of a majority of the Directors then in office, although less than a quorum, and any Director so elected to fill any such vacancy or newly created directorship shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

        When one or more Directors shall resign effective at a future date, a majority of the Directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office as herein provided in connection with the filling of other vacancies.

        SECTION 3.    Place of Meeting.    The Board of Directors may hold its meetings in such place or places in the State of Delaware or outside the State of Delaware as the Board from time to time shall determine.

        SECTION 4.    Regular Meetings.    Regular meetings of the Board of Directors shall be held at such times and places as the Board from time to time by resolution shall determine. No notice shall be required for any regular meeting of the Board of Directors; but a copy of every resolution fixing or changing the time or place of regular meetings shall be mailed to every Director at least five days before the first meeting held in pursuance thereof.

        SECTION 5.    Special Meetings.    Special meetings of the Board of Directors shall be held whenever called by direction of any three of the Directors then in office.

3

        Notice of the day, hour and place of holding of each special meeting shall be given by mailing the same at least two days before the meeting or by causing the same to be transmitted by facsimile, telegram or telephone at least one day before the meeting to each Director. Unless otherwise indicated in the notice thereof, any and all business other than an amendment of these By-Laws may be transacted at any special meeting, and an amendment of these By-Laws may be acted upon if the notice of the meeting shall have stated that the amendment of these By-Laws is one of the purposes of the meeting. At any meeting at which every Director shall be present, even though without any notice, any business may be transacted, including the amendment of these By-Laws.

        SECTION 6.    Quorum.    Subject to the provisions of Section 2 of this Article II, a majority of the members of the Board of Directors in office (but in no case less than one-third of the total number of Directors nor less than two Directors) shall constitute a quorum for the transaction of business and the vote of the majority of the Directors present at any meeting of the Board of Directors at which a quorum is present shall be the act of the Board of Directors. If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time.

        SECTION 7.    Organization.    A Chairman of the Board of Directors shall be elected from the Directors present and shall preside at such meeting. The Secretary of the Corporation shall act as Secretary of all meetings of the Directors; but in the absence of the Secretary, the Chairman may appoint any person to act as Secretary of the meeting.

        SECTION 8.    Committees.    The Board of Directors may designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and the affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to approving or adopting, or recommending to the stockholders, any action or matter expressly required by law to be submitted to stockholders for approval, or adopting, amending or repealing these By-Laws.

        SECTION 9.    Conference Telephone Meetings.    Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, the members of the Board of Directors or any committee designated by the Board, may participate in a meeting of the Board or such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting.

        SECTION 10.    Consent of Directors or Committee in Lieu of Meeting.    Unless otherwise restricted by the Certificate of Incorporation or by these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee, as the case may be.

4

ARTICLE III.

Officers

        SECTION 1.    Officers.    The officers of the Corporation shall be a President, one or more Vice Presidents, a Secretary and a Treasurer, and such additional officers, if any, as shall be elected by the Board of Directors pursuant to the provisions of Section 6 of this Article III. The President, one or more Vice Presidents, the Secretary and the Treasurer shall be elected by the Board of Directors at its first meeting after each annual meeting of the stockholders. The failure to hold such election shall not of itself terminate the term of office of any officer. All officers shall hold office at the pleasure of the Board of Directors. Any officer may resign at any time upon written notice to the Corporation. Officers may, but need not, be Directors. Any number of offices may be held by the same person.

        All officers, agents and employees shall be subject to removal, with or without cause, at any time by the Board of Directors. The removal of an officer without cause shall be without prejudice to his or her contract rights, if any. The election or appointment of an officer shall not of itself create contract rights. All agents and employees other than officers elected by the Board of Directors shall also be subject to removal, with or without cause, at any time by the officers appointing them.

        Any vacancy caused by the death, resignation or removal of any officer, or otherwise, may be filled by the Board of Directors, and any officer so elected shall hold office at the pleasure of the Board of Directors.

        In addition to the powers and duties of the officers of the Corporation as set forth in these By-Laws, the officers shall have such authority and shall perform such duties as from time to time may be determined by the Board of Directors.

        SECTION 2.    Powers and Duties of the President.    The President shall be the chief executive officer of the Corporation and, subject to the control of the Board of Directors, shall have general charge and control of all its business and affairs and shall have all powers and shall perform all duties incident to the office of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors and shall have such other powers and perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors.

        SECTION 3.    Powers and Duties of the Vice Presidents.    Each Vice President shall have all powers and shall perform all duties incident to the office of Vice President and shall have such other powers and perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 4.    Powers and Duties of the Secretary.    The Secretary shall keep the minutes of all meetings of the Board of Directors and the minutes of all meetings of the stockholders in books provided for that purpose. The Secretary shall attend to the giving or serving of all notices of the Corporation; shall have custody of the corporate seal of the Corporation and shall affix the same to such documents and other papers as the Board of Directors or the President shall authorize and direct; shall have charge of the stock certificate books, transfer books and stock ledgers and such other books and papers as the Board of Directors or the President shall direct, all of which shall at all reasonable times be open to the examination of any Director, upon application, at the office of the Corporation during business hours. The Secretary shall have all powers and shall perform all duties incident to the office of Secretary and shall also have such other powers and shall perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 5.    Powers and Duties of the Treasurer.    The Treasurer shall have custody of, and when proper shall pay out, disburse or otherwise dispose of, all funds and securities of the Corporation. The Treasurer may endorse on behalf of the Corporation for collection checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositary or

5

depositaries as the Board of Directors may designate; shall sign all receipts and vouchers for payments made to the Corporation; shall enter or cause to be entered regularly in the books of the Corporation kept for the purpose full and accurate accounts of all moneys received or paid or otherwise disposed of and whenever required by the Board of Directors or the President shall render statements of such accounts. The Treasurer shall, at all reasonable times, exhibit the books and accounts to any Director of the Corporation upon application at the office of the Corporation during business hours; and shall have all powers and shall perform all duties incident of the office of Treasurer and shall also have such other powers and shall perform such other duties as may from time to time be assigned by these By-Laws or by the Board of Directors or the President.

        SECTION 6.    Additional Officers.    The Board of Directors may from time to time elect such other officers (who may but need not be Directors), including a Controller, Assistant Treasurers, Assistant Secretaries and Assistant Controllers, as the Board may deem advisable and such officers shall have such authority and shall perform such duties as may from time to time be assigned by the Board of Directors or the President.

        The Board of Directors may from time to time by resolution delegate to any Assistant Treasurer or Assistant Treasurers any of the powers or duties herein assigned to the Treasurer; and may similarly delegate to any Assistant Secretary or Assistant Secretaries any of the powers or duties herein assigned to the Secretary.

        SECTION 7.    Giving of Bond by Officers.    All officers of the Corporation, if required to do so by the Board of Directors, shall furnish bonds to the Corporation for the faithful performance of their duties, in such penalties and with such conditions and security as the Board shall require.

        SECTION 8.    Voting Upon Stocks.    Unless otherwise ordered by the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or in the name of the Corporation to execute proxies to vote, at any meeting of stockholders of any corporation in which the Corporation may hold stock, and at any such meeting shall possess and may exercise, in person or by proxy, any and all rights, powers and privileges incident to the ownership of such stock. The Board of Directors may from time to time, by resolution, confer like powers upon any other person or persons.

        SECTION 9.    Compensation of Officers.    The officers of the Corporation shall be entitled to receive such compensation for their services as shall from time to time be determined by the Board of Directors.

ARTICLE IV.

Stock; Seal; Fiscal Year

        SECTION 1.    Certificates For Shares of Stock.    The certificates for shares of stock of the Corporation shall be in such form, not inconsistent with the Certificate of Incorporation, as shall be approved by the Board of Directors. All certificates shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and shall not be valid unless so signed.

        In case any officer or officers who shall have signed any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates had not ceased to be such officer or officers of the Corporation.

6

        All certificates for shares of stock shall be consecutively numbered as the same are issued. The name of the person owning the shares represented thereby with the number of such shares and the date of issue thereof shall be entered on the books of the Corporation.

        Except as hereinafter provided, all certificates surrendered to the Corporation for transfer shall be cancelled, and no new certificates shall be issued until former certificates for the same number of shares have been surrendered and cancelled.

        SECTION 2.    Lost, Stolen or Destroyed Certificates.    Whenever a person owning a certificate for shares of stock of the Corporation alleges that it has been lost, stolen or destroyed, he or she shall file in the office of the Corporation an affidavit setting forth, to the best of his or her knowledge and belief, the time, place and circumstances of the loss, theft or destruction, and, if required by the Board of Directors, a bond of indemnity or other indemnification sufficient in the opinion of the Board of Directors to indemnify the Corporation and its agents against any claim that may be made against it or them on account of the alleged loss, theft or destruction of any such certificate or the issuance of a new certificate in replacement therefor. Thereupon the Corporation may cause to be issued to such person a new certificate in replacement for the certificate alleged to have been lost, stolen or destroyed. Upon the stub of every new certificate so issued shall be noted the fact of such issue and the number, date and the name of the registered owner of the lost, stolen or destroyed certificate in lieu of which the new certificate is issued.

        SECTION 3.    Transfer of Shares.    Shares of stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof, in person or by his or her attorney duly authorized in writing, upon surrender and cancellation of certificates for the number of shares of stock to be transferred, except as provided in Section 2 of this Article IV.

        SECTION 4.    Regulations.    The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of stock of the Corporation.

        SECTION 5.    Record Date.    In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, as the case may be, the Board of Directors may fix, in advance, a record date, which shall not be (i) more than sixty (60) nor less than ten (10) days before the date of such meeting, or (ii) in the case of corporate action to be taken by consent in writing without a meeting, prior to, or more than ten (10) days after, the date upon which the resolution fixing the record date is adopted by the Board of Directors, or (iii) more than sixty (60) days prior to any other action.

        If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is delivered to the Corporation; and the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

7

        SECTION 6.    Dividends.    Subject to the provisions of the Certificate of Incorporation, the Board of Directors shall have power to declare and pay dividends upon shares of stock of the Corporation, but only out of funds available for the payment of dividends as provided by law.

        Subject to the provisions of the Certificate of Incorporation, any dividends declared upon the stock of the Corporation shall be payable on such date or dates as the Board of Directors shall determine. If the date fixed for the payment of any dividend shall in any year fall upon a legal holiday, then the dividend payable on such date shall be paid on the next day not a legal holiday.

        SECTION 7.    Corporate Seal.    The Board of Directors shall provide a suitable seal, containing the name of the Corporation, which seal shall be kept in the custody of the Secretary. A duplicate of the seal may be kept and be used by any officer of the Corporation designated by the Board of Directors or the President.

        SECTION 8.    Fiscal Year.    The fiscal year of the Corporation shall be such fiscal year as the Board of Directors from time to time by resolution shall determine.

ARTICLE V.

Indemnification

        SECTION 1.    Actions Other Than by or in the Right of the Corporation.    The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (collectively in this Article V. a "Proceeding") other than a Proceeding by or in the right of the Corporation, by reason of the fact that he is or was a director or officer of the Corporation, or while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, including an employee benefit plan or trust (each such person in this Article V, a "Corporate Functionary"), against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such Proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, or conviction, or upon a plea of contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation or, with respect to any criminal Proceeding, that he had reasonable cause to believe that his conduct was unlawful.

        SECTION 2.    Actions by or in the Right of the Corporation.    The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to or involved in any Proceeding by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a Corporate Functionary against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such Proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or the court in which such Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        SECTION 3.    Determination of Right to Indemnification.    Any indemnification under Section 1 or Section 2 of this Article V (unless ordered by a court) shall be made by the Corporation only as

8

authorized in the specific case upon a determination that indemnification of the Corporate Functionary is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article V. Such determination shall be made (i) by the Board of Directors by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by independent outside legal counsel in a written opinion, or (iii) by the stockholders.

        SECTION 4.    Right to Indemnification.    Notwithstanding the other provisions of this Article V, to the extent that a Corporate Functionary has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 1 or Section 2 of this Article V (including the dismissal of a Proceeding without prejudice or the settlement of a Proceeding without admission of liability), or in defense of any claim, issue, or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. SECTION 5. Prepaid Expenses. Expenses incurred by a Corporate Functionary in defending a Proceeding shall be paid by the Corporation in advance of the final disposition of such Proceeding, upon receipt of an undertaking by or on behalf of the Corporate Functionary to repay such amount if it shall ultimately be determined he is not entitled to be indemnified by the Corporation as authorized in this Article V.

        SECTION 6.    Right to Indemnification upon Application; Procedure upon Application.    Any indemnification of a Corporate Functionary under Section 2, Section 4 or any advance under Section 5, of this Article V shall be made promptly upon, and in any event within 60 days after, the written request of the Corporate Functionary, unless with respect to applications under Section 2 or Section 5 of this Article V, a determination is reasonably and promptly made by the Board of Directors by majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, that such Corporate Functionary acted in a manner set forth in such Sections as to justify the Corporation in not indemnifying or making an advance of expenses to the Corporate Functionary. If there are no directors who are not parties to such Proceeding, the Board of Directors shall promptly direct that independent outside legal counsel shall decide whether the Corporate Functionary acted in a manner set forth in such Sections as to justify the Corporation's not indemnifying or making an advance of expenses to the Corporate Functionary. The right to indemnification or advance of expenses granted by this Article V shall be enforceable by the Corporate Functionary in any court of competent jurisdiction if the Board of Directors or independent legal counsel denies his claim, in whole or in part, or if no disposition of such claim is made within 60 days. The expenses of the Corporate Functionary incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation.

        SECTION 7.    Other Rights and Remedies.    The indemnification and advancement of expenses provided by or granted pursuant to this Article V shall not be deemed exclusive of any other rights to which any person seeking indemnification and for advancement of expenses or may be entitled under the By-laws, or any agreement, vote of stockholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such position or office, and shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a Corporate Functionary and shall inure to the benefit of the heirs, executors, and administrators of such a person. Any repeal or modification of these By-laws or relevant provisions of the Delaware General Corporation Law and other applicable law, if any, shall not affect any then existing rights of a Corporate Functionary to indemnification or advancement of expenses.

        SECTION 8.    Insurance.    Upon resolution passed by the Board of Directors, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including an employee benefit plan or trust) against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the

9

Corporation would have the power to indemnify him against such liability under the provisions of this Article V or the Delaware General Corporation Law.

        SECTION 9.    Mergers.    For purposes of this Article V, references to "the Corporation" shall include, in addition to the resulting or surviving corporation, constituent corporations (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers/directors, officers, employees, or agents, so that any person who is or was a director or officer/director, officer, employee, or agent of such constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise (including an employee benefit plan or trust) shall stand in the same position under the provisions of this Article V with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

        SECTION 10.    Savings Provision.    If this Article V or any portion hereof shall be invalidated on any ground by a court of competent jurisdiction, the Corporation shall nevertheless indemnify each Corporate Functionary as to expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement with respect to any Proceeding, including a grand jury proceeding or action or suit brought by or in the right of the Corporation, to the full extent permitted by any applicable portion of this Article V that shall not have been invalidated.

ARTICLE VI.

Miscellaneous Provisions

        SECTION 1.    Checks, Notes, Etc.    All checks, drafts, bills of exchange, acceptances, notes or other obligations or orders for the payment of money shall be signed and, if so required by the Board of Directors, countersigned by such officers of the Corporation and/or other persons as the Board of Directors from time to time shall designate.

        Checks, drafts, bills of exchange, acceptances, notes, obligations and orders for the payment of money made payable to the Corporation may be endorsed for deposit to the credit of the Corporation with a duly authorized depository by the Treasurer and/or such other officers or persons as the Board of Directors from time to time may designate.

        SECTION 2.    Loans.    No loans and no renewals of any loans shall be contracted on behalf of the Corporation except as authorized by the Board of Directors. When authorized to do so, any officer or agent of the Corporation may effect loans and advances for the Corporation from any bank, trust company or other institution or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other evidences of indebtedness of the Corporation. When authorized so to do, any officer or agent of the Corporation may pledge, hypothecate or transfer, as security for the payment of any and all loans, advances, indebtedness and liabilities of the Corporation, any and all stocks, securities and other personal property at any time held by the Corporation, and to that end may endorse, assign and deliver the same. Such authority may be general or confined to specific instances.

        SECTION 3.    Contracts.    Except as otherwise provided in these By-Laws or by law or as otherwise directed by the Board of Directors, the President or any Vice President shall be authorized to execute and deliver, in the name and on behalf of the Corporation, all agreements, bonds, contracts, deeds, mortgages, and other instruments, either for the Corporation's own account or in a fiduciary or other capacity, and the seal of the Corporation, if appropriate, shall be affixed thereto by any of such officers or the Secretary or an Assistant Secretary. The Board of Directors, the President or any Vice President designated by the Board of Directors may authorize any other officer, employee or agent to execute and deliver, in the name and on behalf of the Corporation, agreements, bonds, contracts,

10

deeds, mortgages, and other instruments, either for the Corporation's own account or in a fiduciary or other capacity, and, if appropriate, to affix the seal of the Corporation thereto. The grant of such authority by the Board or any such officer may be general or confined to specific instances.

        SECTION 4.    Waivers of Notice.    Whenever any notice whatever is required to be given by law, by the Certificate of Incorporation or by these By-Laws to any person or persons, a waiver thereof in writing, signed by the person or persons entitled to the notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

        SECTION 5.    Offices Outside of Delaware.    Except as otherwise required by the laws of the State of Delaware, the Corporation may have an office or offices and keep its books, documents and papers outside of the State of Delaware at such place or places as from time to time may be determined by the Board of Directors.

ARTICLE VII.

Amendments

        These By-Laws and any amendment thereof may be altered, amended or repealed, or new By-Laws may be adopted, by the Board of Directors at any regular or special meeting by the affirmative vote of a majority of all of the members of the Board, provided in the case of any special meeting at which all of the members of the Board are not present, that the notice of such meeting shall have stated that the amendment of these By-Laws was one of the purposes of the meeting; but these By-Laws and any amendment thereof may be altered, amended or repealed or new By-Laws may be adopted by the holders of a majority of the total outstanding stock of the Corporation entitled to vote at any annual meeting or at any special meeting, provided, in the case of any special meeting, that notice of such proposed alteration, amendment, repeal or adoption is included in the notice of the meeting.

11

QuickLinks

AMENDED AND RESTATED BY-LAWS OF LINENS HOLDING CO.
ARTICLE I. Stockholders
ARTICLE II. Board of Directors
ARTICLE III. Officers
ARTICLE IV. Stock; Seal; Fiscal Year
ARTICLE V. Indemnification
ARTICLE VI. Miscellaneous Provisions
ARTICLE VII. Amendments

EX-3.8

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.8

ARTICLES OF INCORPORATION

OF

BLOOMINGTON, MN., L.T., INC.

        We, the undersigned, of full age, for the purpose of forming a corporation under and pursuant to the provisions of Chapter 302A of the Minnesota Statutes, and laws amendatory thereof and supplementary thereto, do hereby associate ourselves as a body corporate and adopt the following Articles of Incorporation:

ARTICLE I

        The name of the corporation is

        BLOOMINGTON, MN., L.T., INC.

ARTICLE II

        The nature of the business, or objects or purposes to be transacted, promoted or carried on are to do any and all of the things hereinafter set forth to the same extent as natural persons might or could do, in any part of the world, namely:

        To buy, sell and generally deal in and with (at wholesale, retail or both) all linens, domestics, draperies, home furnishings and other accessories thereto related.

        To purchase, lease or otherwise acquire, hold, improve, sell lease, mortgage and generally deal in lands and buildings and interest therein, necessary or incidental to the business.

        To buy, hold, own, mortgage, exchange, lease, rent, sell, convey and otherwise acquire, dispose of and deal in, operate, manage, improve and develop real property, improved and unimproved, and any interest therein, and buildings, fixtures and other structures therein, and personal property appurtenant thereto or connected therewith; to erect, construct and operate buildings, structures and works of every kind and description; and to reconstruct, renovate, alter, rehabilitate and improve buildings and structure and their appurtenances.

        To make, manufacture, produce, purchase and otherwise acquire, hold, own, store, sell and otherwise dispose of, mortgage, pledge, export, import, receive on consignment or otherwise, all on behalf of itself or of others, and in any way deal in goods, wares, merchandise, commodities, and personal property of every kind, nature and description, and to act as manufacturers, importers, exporters, wholesalers, retailers, agents, sales agents, factors, brokers, commission merchants and commission brokers with respect thereto.

        To obtain or otherwise acquire from any person, firm, partnership, association, corporation or other legal entity, public or private, domestic or foreign, or from the government of any country, territory, state, municipality or of any political or administrative subdivision or department thereof, and to hold, own, use, exercise, exploit, dispose of and realize upon any and all powers, rights, privileges, immunities, franchises, guarantees, grants and concessions which the corporation may den desirable; and to undertake and prosecute any business dependent thereon.

        To apply for, obtain, register, purchase, lease or otherwise acquire, hold, use, exploit, operate, exercise, develop, manufacture under, introduce, sell, assign, lease, grant licenses in respect of or otherwise dispose of, pledge or otherwise give liens upon or against, invest, trade and deal in and with or otherwise turn to account and otherwise contract with reference to letters patent, copyrights, trade-marks and trade names, licenses with respect thereto, and any and all inventions improvements, apparatus, appliances, processes, formulae, design or rights

used in connection with or secured under letters patent or otherwise, whether of the United States of America or of any other government or Country; and to engage in, carry on, conduct, manage and transact any business which may be deemed, directly or indirectly, to aid, effectuate or develop the same or any of them.

        To make, enter into and perform contracts and arrangements of every kind and description for any lawful purpose with any person, firm, partnership, association, corporation or other legal entity, public or private, domestic or foreign, and with the government of any country, territory, state, municipality or of any political or administrative subdivision or department thereof.

        To borrow and raise money for its corporate purposes, and, without limit as to amount, to draw, make, accept, indorse, execute, issue and deliver promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments, obligations and evidences of indebtedness of any nature, and to make the payment thereof and the interest thereon by mortgage upon or pledge, deed, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds, debentures, notes or other obligations or evidences of indebtedness.

        To subscribe for, purchase, borrow or otherwise acquire, own, hold, sell, lend, exchange, pledge, hypothecate or otherwise dispose of, invest, trade and deal in and with or otherwise realize upon, alone or in syndicates or otherwise in conjunction with others, stocks, bonds, debentures, notes, acceptances, bills of exchange, warrants, or other securities made, created or issued by any person, firm, partnership, association, corporation, or other legal entity, public or private, domestic or foreign, or by the government or any country, territory, state, municipality or political or administrative subdivision or department thereof, and any and all trust, participation or other certificates of or for, or receipts evidencing interest in, any such securities, in whole or in part, its own shares of stock, bonds, debentures, notes, evidences of indebtedness or other securities or to make payment there- for by any other lawful means; and, while the owner or holder of any such securities or of any interest therein, to possess and exercise all the rights, powers and privileges of ownership, including the right to vote thereon for any and all purposes.

        To purchase, hold, sell, transfer, reissue or cancel the shares of its own stock of any of its securities or other obligations or an rights therein; provided that it shall not use its funds or property for the purchase of shares of its own capital stock when such would cause an impairment of its capital, except as otherwise permitted by law; and provided further, that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.

        To make, enter into and perform any lawful contracts or arrangements for sharing of profits, union of interests, reciprocal concessions or cooperation with any person, firm, partnership, association, corporation or other legal entity, public or private, foreign or domestic, carrying on or proposing to carry on any business or transaction which this corporation is authorized to carry on expressly or by implication, or with the government of any country, territory, state, municipality or political or administrative subdivision or department thereof carrying on or proposing to carry on any such business or transaction.

        To have and maintain one or more offices and to conduct and carry on any or all of its operations anywhere in the world.

        To organize or cause to be organized under the laws of any country, territory, state or political or administrative subdivision or department thereof, any corporation or corporations for the purpose of accomplishing any or all of the objects for which this corporation or

2

corporations or to cause the same to be dissolved, wound up, liquidated, merged or consolidated.

The foregoing clauses shall be construed both as objects and powers, and the natters expressed in each clause shall, except as otherwise expressly provided, be in no way limited by reference to or inference from the terms of any other clause, but shall be regarded as independent objects and powers and the enumeration herein of any specific powers shall not be construed to limit or restrict in any manner the exercise by the corporation of the general powers now or hereafter conferred upon corporations by the laws of the State of Minnesota, nor shall expression of one thing be deemed to exclude another of like nature but not expressed.

ARTICLE III

        Its duration is perpetual.

ARTICLE IV

        The location and post office address of its registered office in this State is 33 South Sixth Street, Minneapolis., Minnesota 55402, County of Hennepin.

ARTICLE V

        The amount of stated capital with which the corporation will begin business is one thousand dollars ($1,000.00).

ARTICLE VI

        The total authorized number of shares is one hundred (100), all of which are without par value.

ARTICLE VII

        The name and post office address of each of the incorporators are:

Name	Post Office Address
John S. Hoenigmann	70 Pine Street, New York, NY 10270
Leif A. Tonnessen	70 Pine Street, New York, NY 10270
Paul Allersmeyer	70 Pine Street, New York, NY 10270

ARTICLE VIII

        The name and post office address of each of the first directors are:

Name	Post Office Address
Robert Karin	7 Becker Farm Rd., Roseland, NJ 07068
James B. Duffy	7 Becker Farm Rd., Roseland, NJ 07068
Richard T. O'Connell, Jr.	3000 Westchester Ave., Harrison, NY 10528
Arthur V. Richards	3000 Westchester Ave., Harrison, NY 10528
William C. Kingsford	3000 Westchester Ave., Harrison, NY 10528

and the term of office of each shall be one (1) year and until his successor is elected and qualifies.

ARTICLE IX

        The Board of Directors shall have authority to make and alter the By-Laws of the corporation, subject to the powers of the shareholders to change or repeal any such By-Laws: provided, however, that the Board of Directors shall not make or alter any By-Laws fixing their number, qualifications, classifications or term of office.

3

        IN TESTIMONY WHEREOF, we have hereunto set our hands and seals this 28th day of May, 1986.

In presence of:

/s/ A. Patalano A. Patalano
	/s/ Leif A. Tonnessen Leif A. Tonnessen	(SEAL)
	/s/ John S. Hoenigmann John S. Hoenigmann	(SEAL)
	/s/ Paul Allersmeyer Paul Allersmeyer	(SEAL)

STATE OF NEW YORK	)
	)	SS.:
COUNTY OF NEW YORK	)

        On this 28th day of May, 1986 personally appeared before me, Leif A. Tonnessen, John S. Hoenigrnann and Paul Allersmeyer, to me known to be the persons named in and who executed the foregoing Articles of Incorporation, and each acknowledged this to be of their own free act and deed or the uses and purposes therein expressed.

4

QuickLinks

ARTICLES OF INCORPORATION OF BLOOMINGTON, MN., L.T., INC.
ARTICLE I
ARTICLE II
ARTICLE III
ARTICLE IV
ARTICLE V
ARTICLE VI
ARTICLE VII
ARTICLE VIII
ARTICLE IX

EX-3.9

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.9

BY-LAWS

OF

BLOOMINGTON, MN., L.T., INC.

ARTICLE I
ANNUAL MEETING

        The annual meeting of the stockholders shall be held in the State of New York at such time and place as the Board of Directors shall determine.

ARTICLE II
SPECIAL MEETING

        Special meeting of the stockholders may be called by the President or a Vice President, by two members of the Board of Directors, or by holders of 25% or more of the capital stock.

ARTICLE III
NOTICE OF MEETINGS

        Notice of every meeting, whether annual or special, shall be in writing signed by an officer of the corporation. Such notice shall state the time when and place where the meeting is to be held, and a copy shall be served, either personally or by mail, upon each stockholder of record entitled to vote at such meeting, not less than ten days before the meeting, unless different notice is required by statute. Except as otherwise required by statute, published or written notice in any case may be waived in writing by the stockholders. In the case of special meetings, written notice of the purposes for which the meeting is called must be given to each stockholder.

ARTICLE IV
QUORUM

        At all stockholders' meetings a quorum shall (save as otherwise provided by statute) consist of a majority of the stock outstanding and entitled to vote In person or by proxy.

ARTICLE V
ELECTION OF DIRECTORS

        The number of directors shall be five. Directors shall be elected at each annual meeting and shall hold office for one year and thereafter until their successors are elected and qualify. Vacancies, however occurring during the year may be filled by a majority of the remaining directors. Directors need not be stockholders.

ARTICLE VI
MEETING OF DIRECTORS

        The board shall meet whenever and wherever called together by the President or a Vice President upon notice to each director, which need not exceed two days, and -may be held at the office of the corporation, or such other places as the board may from time to time determine. If any member be where he cannot conveniently be notified, except where otherwise required by statute, a meeting held without notice to such member shall be valid, provided he shall thereafter assent in writing to any proceedings of the meeting. On the written request of any director, the Secretary shall call a special - meeting of the board. A majority of directors shall constitute a quorum. Whenever the board is authorized to take any action after notice, such notice may be waived, in writing, before or after the holding of the meeting by the directors entitled to such notice.

ARTICLE VII
ELECTION OF OFFICERS

        After the election of the directors, the board shall elect a President, one or more Vice Presidents, a Secretary, and a Treasurer, and the directors may from time to time appoint such other officers as they deem necessary to serve at the pleasure of the board. The President and one Vice President shall be elected from their own number. Except as otherwise provided by statute, any two offices may be held by the same person.

ARTICLE VIII
POWERS AND DUTIES OF OFFICERS

        The President shall preside at all meetings of the Board of Directors, and shall act as temporary chairman and call to order all meetings of the stockholders. The term of office of all officers shall be until the next election of directors and until their respective successors are chosen and qualified, but any officer may be removed from office at any time with or without cause by the Board of Directors. Vacancies in the offices shall be filled by the Board of Directors. The officers of the corporation shall have such powers and duties except as modified by the Board of Directors as generally pertain to their offices respectively, as well as such powers and duties as from time to time shall be conferred by the Board of Directors. The Board of Directors are authorized to select such depositories as they shall deem proper for the funds of the corporation, and all checks and drafts against such deposited funds shall be signed by officers or persons to be specified by the Board of Directors.

ARTICLE IX
CERTIFICATES OF STOCK

        Certificates of stock shall be numbered and signed in the order in which they are issued and shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary, and the seal of the company shall be affixed thereto.

ARTICLE X
TRANSFER OF SHARES

        Transfers of shares shall be made only upon the books of the company and only in pursuance of the request of the holder in person, or by the holder of power of attorney duly executed and filed with the Secretary, and this only on the surrender to the Secretary of the certificate or certificates of stock.

ARTICLE XI
POWERS OF DIRECTORS

        The Board of Directors shall exercise all of the powers of tile corporation, subject to the restrictions imposed by law or by these By-Laws, and they shall have general management and control of the affairs of the corporation. They shall set aside from the earnings such sum or sums as in their-discretion may deem advisable for Improvements or reserves; they shall declare and pay dividends out of the surplus profits of the corporation at such. times as they deem proper, and they shall have power to borrow money, to make and issue notes, bonds and other negotiable and transferable instruments, deeds of trust and trust agreements. Any of the powers of the board in relation to the ordinary business of the company may be delegated to any committee, officer or agent upon such terms as they think fit. All of such powers shall be subject to any statutory requirement or limitation.

2

ARTICLE XII
IDENTIFICATION OF DIRECTORS AND OFFICERS

        The corporation shall indemnify and save harmless all or any of the officers and directors of the corporation from and against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which any such director or officer by virtue of his office may be made a party, except if such officer or director is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties he shall not be so indemnified and held harmless.

ARTICLE XIII
CORPORATE SEAL

        The corporate seal of the corporation shall be in such form as the Board of Directors shall prescribe.

ARTICLE XIV
FISCAL YEAR

        The fiscal year of the corporation shall be the calendar year.

ARTICLE XV
AMENDMENTS

        The directors may make and alter any By-Laws, including any increase or decrease in the number of directors, provided that the Board of Directors shall not make or alter any By-Laws fixing their qualifications, classifications or term of office.

3

BLOOMINGTON, MN, L.T., INC.

AMENDMENT TO BY-LAWS

Adopted pursuant to Resolutions by the Written Consent of the Sole Shareholder as of April 17, 2006:

RESOLVED FURTHER, that the first sentence of Article V of the By-Laws of the Company be and hereby is amended in its entirety such that it shall read as follows:

The number of directors constituting the board of directors shall be fixed from time to time by resolution passed by a majority of the board of directors.

QuickLinks

BY-LAWS OF BLOOMINGTON, MN., L.T., INC.
ARTICLE I ANNUAL MEETING
ARTICLE II SPECIAL MEETING
ARTICLE III NOTICE OF MEETINGS
ARTICLE IV QUORUM
ARTICLE V ELECTION OF DIRECTORS
ARTICLE VI MEETING OF DIRECTORS
ARTICLE VII ELECTION OF OFFICERS
ARTICLE VIII POWERS AND DUTIES OF OFFICERS
ARTICLE IX CERTIFICATES OF STOCK
ARTICLE X TRANSFER OF SHARES
ARTICLE XI POWERS OF DIRECTORS
ARTICLE XII IDENTIFICATION OF DIRECTORS AND OFFICERS
ARTICLE XIII CORPORATE SEAL
ARTICLE XIV FISCAL YEAR
ARTICLE XV AMENDMENTS
BLOOMINGTON, MN, L.T., INC. AMENDMENT TO BY-LAWS

EX-3.10

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.10

CERTIFICATE OF FORMATION

OF

LIMITED LIABILITY COMPANY

        FIRST: The name of the limited liability company is VENDOR FINANCE, LLC.

        SECOND: The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The name of its Registered Agent at such address is Corporation Service Company.

        IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation of VENDOR FINANCE, LLC this 6th day of January, 2005.

By:
/s/  RITA J. LEPORE Rita J. LePore
Authorized Person(s)

QuickLinks

CERTIFICATE OF FORMATION OF LIMITED LIABILITY COMPANY

EX-3.11

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.11

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

VENDOR FINANCE, LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of Vendor Finance, LLC, a Delaware limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of March 23, 2005 of the Company.

        WHEREAS, the Member has formed a limited liability company under the Delaware Limited Liability Company Act (Del. Code tit. 6, § § 18-101 - 18-1109), as amended from time to time (the "Act"), pursuant to this Agreement and the Certificate of Formation which was filed with the Secretary of State of the State of Delaware in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1.    Formation.    The Company was formed under the provisions of the Act, by the filing of the Certificate of Formation of the Company on January 6, 2005 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2.    Name.    The name of the Company shall be Vendor Finance, LLC.

        Section 1.3.    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4.    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Corporation Service Company, and the registered office of the Company in the State of Delaware shall be do Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808; in each case until otherwise established by an Amendment of the Certificate of Formation filed with the Delaware Secretary of State in the manner provided by law. The Company may have such other office or offices within or without the State of Delaware as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5.    Term.    The term of the Company commenced as of January 6, 2005 which is the date of the filing of the aforementioned Certificate of Formation with the Delaware Secretary of State, and shall continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6.    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1.    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2.    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3.    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Certificate of Formation of the Company or by this Agreement.

        Section 3.4.    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5.    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6.    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7.    Meetings of the Board.

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the

2

State of Delaware as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8.    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9.    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10.    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11.    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12.    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or operations of the Company and shall promptly reimburse the Member or such other person, upon written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

3

ARTICLE IV

OFFICERS

        Section 4.1.    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, a treasurer and such other officers as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2.    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3.    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4.    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5.    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1.    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2.    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1.    Distributions.    Except as otherwise provided in Article VIII hereof and subject to Section 18-607 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1.    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or

4

accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2.    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3.    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4.    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1.    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following:

        (a)   the written consent of the Member;

        (b)   the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

        (c)   at any time when there is no Member.

        Section 8.2.    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1.    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.3.    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the

5

State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        Section 9.4.    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.5.    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.6.    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.7.    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.8.    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.9.    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.10.    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.11.    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.12.    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows.]

6

        IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Agreement as of the date first above written.

LINENS 'N THINGS CENTER, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

7

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
Linens 'n Things Center, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF VENDOR FINANCE, LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-3.12

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.12

CERTIFICATE OF INCORPORATION

OF

E W KALKIN, INC.

To: The Secretary of State
State of New Jersey

        Pursuant to the provisions of the New Jersey Business Corporation Act, the undersigned, being a natural person of at least 21 years of age and acting as the incorporator of the corporation hereby being organized thereunder, certifies that:

FIRST:    The name of the corporation (hereinafter called the "corporation") is

E W KALKIN, INC.

SECOND:    The corporation is organized to engage in any activity within the purposes for which corporations may be organized under the New Jersey Business Corporation Act, and, in addition, and without limiting the generality of the foregoing, for the following purpose or purposes:

        To engage in the department store business and in therewith to sell, distribute, buy, import and export, manufacture and warehouse any and all kinds of goods and commodities. To engage in the purchase, sale, import, export, manufacture and warehousing of any and all linens, domestics, draperies, home furnishing and more specifically but not limited to the following items:

        Bedspreads of all description, draperies, blankets of all descriptions, qualities and types including electric blankets, comforts of all descriptions, qualities and types including electric comforts, dust ruffles, bed pillows of all descriptions, sheets and pillow cases, terry towels—all sizes, terry bath cloths, terry bath mats with or without additional products attached, terry bath sheets, terry beach sheets, dish towels, hand towels, dish cloths and scrub cloths, comforter and blanket covers, pillow tickings, ironing board covers and sets, laundry bags, mattress pads, mattress covers, kitchen and bathroom sponges, shower curtains and sets, shower curtain hooks, storage bags for closet use, dress bags, suit bags, blanket bags, shoe bags, toaster and other accessory covers, thermo bags, rugs of all types and sizes, bath mat sets, hassocks (including storage hassocks), table cloths—fabric, table cloth sets—fabric, table cloths—plastic, place mats and sets, cloth napkins, fancy guest towels, scarves for home use, doilies, sheet sets and pillow case sets, bridge sets, table pads, lace table cloths, towel sets, gift sets such as apron Sets, mat sets, bar-b-que sets, etc., aprons to match linen items, tailored curtains, ruffled curtains, cafe and tier curtains, valances and canopies, cottage curtains, draperies, throw pillows, slipcovers for indoor furniture, slipcovers for outdoor furniture, pads for outdoor furniture and pads for beach use.

        To carry on a general mercantile, industrial, investing, and trading business in all its branches; to devise, invent, manufacture, fabricate, assemble, install, service, maintain, alter, buy, sell, import, export, license as licensor or licensee, lease as lessor or lessee, distribute, job, enter into, negotiate, execute, acquire, and assign contracts in respect of, acquire, receive, grant, and assign licensing arrangements, options, franchises, and other rights in respect of, and generally deal in and with, at wholesale and retail, as principal, and as sales, business, special, or general agent, representative, broker, factor, merchant, distributor, jobber, advisor, and in any other lawful capacity, goods, wares, merchandise, commodities, and unimproved, improved, finished, processed, and other real, personal, and mixed property of any and all kinds, together with the components, resultants, and by-products thereof; to acquire by purchase or otherwise own, hold, lease, mortgage, sell, or otherwise dispose of, erect, construct, make, alter, enlarge, improve, and to aid or subscribe toward the construction, acquisition or improvement of any factories, shops, storehouses, buildings, and commercial and retail establishments of every character, including all equipment, fixtures, machinery, implements and supplies necessary, or

incidental to, or connected with, any of the purposes or business of the corporation; and generally to perform any and all acts connected therewith or arising therefrom or incidental thereto, and all acts proper or necessary for the purpose of the business.

        To engage generally in the real estate business as principal, agent, broker, and in any lawful capacity, and generally to take, lease, purchase, or otherwise acquire, and to own, use, hold, sell, convey, exchange, lease, mortgage, work, clear, improve, develop, divide, and otherwise handle, manage, operate, deal in and dispose of real estate, real property, lands, multiple-dwelling structures, houses, buildings arid other works and any interest or right therein; to take, lease, purchase or otherwise acquire, and to own, use, hold, sell, convey, exchange, hire, lease, pledge, mortgage, and otherwise handle, and deal in and dispose of, as principal, agent, broker, and in any lawful capacity, such personal property, chattels, chattels real, rights, easements, privileges, choses in action, notes, bonds, mortgages, and securities as may lawfully be acquired, held, or disposed of; and to acquire, purchase, sell assign, transfer dispose of, and generally deal in and with, as principal, agent, broker, and in any lawful capacity, mortgages and other interests in real, personal, and mixed properties; to carry on a general construction, contracting, building, and realty management business as principal, agent, representative, contractor, subcontractor, and in any other lawful capacity.

        To apply for, register, obtain, purchase, lease, take. licenses in respect of or otherwise acquire, and to hold, own, use, operate, develop, enjoy, turn to account, grant licenses and immunities in respect of, manufacture under arid to introduce, sell, assign, mortgage, pledge or otherwise dispose of, and, in any manner deal with and contract with reference to:

                (a)    inventions, devices, formulae, processes and any improvements and modifications thereof;

                (b)    letters patent, patent rights, patented processes, copyrights, designs, and similar rights, trademarks, trade symbols and other indications of origin and ownership granted by or recognized under the laws of the United States of America or of any state or subdivision thereof, or of any foreign country or subdivision thereof, and all rights connected therewith or appertaining thereunto;

                (c)    franchises, licenses, grants and concessions.

        To have all of the powers conferred upon corporations organized under the New Jersey Business Corporation Act.

THIRD:    The aggregate number of shares which the corporation shall have authority to issue is 100 shares, all of which are without par value, and all of which are of the same class.

FOURTH:    The address of the initial registered office of the corporation within the State of New Jersey is Bergen Mall Shopping Center, Route Number 4, Paramus, New Jersey; and the name of the initial registered agent at such address is Eugene W. Kalkin.

FIFTH:    The number of directors constituting the first Board of Directors of the corporation is two; and the name and the address of the persons who are to serve as the first director

NAME	ADDRESS
Eugene W. Kalkin	Bergen Mall Shopping Center Route Number 4 Paramus, New Jersey
Stanley C. Lesser	c/o Helfand & Lesser 2 West 45th Street New York, New York 10022

2

SIXTH:    The name and the address of the incorporator is as follows:

NAME	ADDRESS
Michael H. Jahrmarkt	c/o Helfand & Lesser 2 West 45th Street New York, New York 10022

SEVENTH:    For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation and regulation of the powers of the corporation and of its directors and of its shareholders or any class thereof, as the case may be, it is further provided:

        1.    The management of the business and conduct of the affairs of the corporation, including the election of the Chairman of the Board of Directors, if any, the President, the Treasurer, the Secretary, and other principal officers of the corporation, shall be vested in its Board of Directors.

        2.    A majority of the entire Board of Directors of the corporation shall constitute a quorum for the transaction of business except that the By-Laws may prescribe a lesser proportion, consistent with the provisions of the New Jersey Business Corporation Act, in the event of a vacancy or vacancies in the entire Board.

        3.    One or more or all the directors of the corporation may be removed for cause by the shareholders by the affirmative vote of the majority of the votes cast by the holders of shares entitled to vote for the election of directors; and one or more or all of the directors may be removed without cause by like vote of said shareholders. The Board of Directors shall have the power to remove directors for cause and to suspend directors pending a final determination that cause exists for removal.

        4.    In the interim between annual meetings of shareholders or of special meetings of shareholders called for the election of directors, newly created directorships may be filled by the Board of Directors.

        5.    The corporation is hereby authorized to lend money to, or guarantee any obligation of, or otherwise assist, any officer or other employee of the corporation or of any subsidiary, whether or not such officer or employee is a director thereof, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected tom benefit the corporation.

        6.    The corporation shall have the power, to the full extent permitted by the New Jersey Business Corporation Act, to indemnify each corporate agent as the term "corporate agent" is defined by said Act.

        7.    Except as otherwise provided by the New Jersey Business Corporation Act, any action required or permitted to be taken at a meeting of shareholders by the New Jersey Business Corporation Act, the certificate of incorporation, or the by-laws of the corporation may be taken without a meeting upon the written consent of less than all the shareholders entitled to cast at least the minimum number of votes which would be required to take such action at a meeting at which all shareholders entitled to vote thereon were present. In the event of such written action, prompt notice of such action shall be given to all shareholders who would have been entitled to vote upon the action if such meeting were held, and the written consents of the shareholders consenting thereto shall be filed within the minutes of proceedings of shareholders.

EIGHTH:    No holder of any of the shares of any class of the corporation shall be entitled as of right to subscribe for, purchase, or otherwise acquire any shares of any class of the corporation which the corporation proposes to issue or any rights or options which the corporation proposes to grant for the purchase of shares of any class of the corporation or for the purchase of any shares, bonds,

3

securities, or obligations of the corporation which are convertible into or exchangeable for, or which carry any rights, to subscribe for, purchase, or otherwise acquire shares of any class of the corporation; and any and all of such shares, bonds., securities or obligations of the corporation, whether now or hereafter authorized or created, may be issued, or may be reissued or transferred if the same have been reacquired and have treasury status, and any and all of such rights and options may be granted by the Board of Directors to such persons, firms, corporations and associations, and for such lawful consideration, and on such terms, as the Board of Directors in its discretion may determine, without first offering the same, or any thereof, to any said holder.

NINTH:    The duration of the corporation is to be perpetual.

        Signed on August 11, 1975.

/s/  MICHAEL H. JAHRMARKT Michael H. Jahrmarkt, Incorporator

4

QuickLinks

CERTIFICATE OF INCORPORATION OF E W KALKIN, INC.

EX-3.13

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.13

CERTIFICATE OF AMENDMENT

OF

CERTIFICATE OF INCORPORATION

OF

E. W. KALKIN, INC.

        The undersigned corporation, for the purpose of amending its Certificate of Incorporation and pursuant to the provisions of Section 14A: 9-4(3) of the New Jersey Business Corporation Act, hereby executes the following Certificate of Amendment:

        FIRST: The name of the corporation is E. W. KALKIN, INC.

        SECOND: The following amendment was adopted by the shareholders on June 16, 1983 in the manner prescribed by the New Jersey Business Corporation Act:

        ARTICLE FIRST of the Certificate of Incorporation be changed to read in full as follows:

                FIRST: The name of the corporation (hereinafter called the "Corporation") is:

LINENS 'N THINGS, INC."

        THIRD: The number of shares of the corporation outstanding and entitled to vote at the time of the adoption of said amendment was 50 shares, all of which are without par value.

        FOURTH: The number of shares voted for said amendment was 50 shares of common stock, all of which are without par value; and the number of shares voted against said amendment was none.

        IN WITNESS WHEREOF, E. W. KALKIN, INC. has caused this Certificate to be executed on its behalf

by a Vice President.

Dated: June 17, 1983	E. W. KALKIN, INC.
	/s/  ARTHUR V. RICHARDS Arthur V. Richards Vice President

QuickLinks

CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF E. W. KALKIN, INC.

EX-3.14

Exhibit 3.14

[SEAL]
New Jersey Department of State
Division of Commercial Recording
Certificate of Amendment to the
Certificate of Incorporation
(For Use by Domestic Profit Corporation)


[DATE STAMP]

"Federal Employer Identification No."

Pursuant to the provisions of Section 14A:9-2 (4) and Section 14A:9-3 (3), Corporations, General, of the New Jersey Statutes, the undersigned corporation executes the following Certificate of Amendment to its Certificate of Incorporation:

1.

The name of the corporation is:         LINENS 'N THINGS, INC.                                .

2.

The following amendment to the Certificate of Incorporation was approved by the directors and thereafter duly adopted by the shareholders of the corporation on the         18th         day of         July         , 1996:

Resolved, that Article         First         of the Certificates of Incorporation be amended to read as follows:

First: The name of the Corporation is:

LNT, INC.

3.

The number of shares outstanding at the time of the adoption of the amendment was         100        .
The total number of shares entitled to vote thereon was         100        .

If the shares of any class or series of shares are entitled to vote thereon as a class, set forth below the designation and number if outstanding shares entitled to vote thereon of each such class or series. (Omit if not applicable).

4.

The number of shares voting for and against such amendment is as follows: (If the shares of any class or series are entitled to vote as a class, set forth the number of shares of each such class and series voting for and against the amendment, respectively).

Number of Shares Voting for Amendment	Number of Shares Voting Against Amendment
100	–0–

5.

If the amendment provides for an exchange, reclassification or cancellation of issued shares, set forth a statement of the manner in which the same shall be effected. (Omit if not applicable).

6.

Other provisions: (Omit if not applicable).

	LINENS 'N THINGS, INC. (Corporate Name)
	By: /s/  [SIGNATURE] (Signature)
Dated this     3rd     day of     October     , 19    96    .	Zenon P. Lankowsky, Vice President (Type Name and Title)

May be executed by the Chairman of the Board, or the President, or a Vice President of the Corporation.

The purpose of this form is to simplify the filing requirements of the Secretary of State and does not replace the need for competent legal advice.

EX-3.15

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.15

Revised By-Laws
Adopted April 25, 1983

BY-LAWS

OF

E. W. KALKIN, INC.

OFFICES

        1.    The corporation may have offices at such places within or without the state of New Jersey as the Board of Directors may from time to time determine or the business of the corporation may require.

MEETINGS OF STOCKHOLDERS

        2.    All meetings of the stockholders shall be held at the principal office of the corporation, or at such other place within or without the state of New Jersey stated in the notice of the meeting as the Board of Directors may determine.

        3.    The annual meeting of the stockholders of the corporation shall be held on the second Wednesday of December in each year if not a legal holiday and, if a legal holiday, then on the next secular day following, when they shall elect a Board of Directors and transact such other business as may properly come before the meeting. In the event that the annual meeting is not held, a special meeting may be called and held in lieu thereof and for the purposes of such annual meeting.

        4.    Special meetings of the stockholders for any purpose or purposes, unless otherwise expressly provided by law, may be called by resolution of the Board of Directors or by the President or by the holder or holders of record of not less than one-tenth part in interest of the stock entitled to vote on any proposal to be submitted at such meeting.

        5.    Written notice of every meeting of stockholders, stating the purpose or purposes for which the meeting is called, the time when and the place where it is to be held, shall be served, either personally or by mail, upon each stockholder entitled to vote at such meeting at least ten days before the meeting, unless a different notice is required by statute. If mailed, such notice shall be directed to a stockholder at his address as it shall appear on the books of the corporation.

        6.    The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise expressly provided. If a quorum shall not be present or represented, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified.

        7.    When a quorum is present or represented at any meeting, the vote of the holders of a majority of the stock having voting power, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which, by express provision of the statutes or of the Certificate or Articles of Incorporation, or of these By-Laws, a different vote is required, in which case such express provision shall govern and control the decision of such question.

        8.    Unless the statute otherwise expressly provides, each stockholder of record having the right to vote shall be entitled at every meeting of the stockholders of the corporation to one vote for each

share of stock having voting power standing in the name of such stockholder on the books of the corporation, and such votes may be cast either in person or by proxy.

        9.    Meetings of stockholders shall be presided over by the President, or, if he is not present, by a chairman to be elected at the meeting. The Secretary of the corporation, or, in his absence, a secretary appointed at the meeting, shall act as Secretary of such meetings.

DIRECTORS

        10.    The Board of Directors shall consist of three directors, who shall have such qualifications as the statute may require. They shall be elected at the annual meeting of the stockholders and each director shall be elected to serve for one year and until his successor shall be elected and shall qualify.

        11.    If the office of any director becomes vacant for any reason, the directors in office, although less than a quorum, may choose a successor or successors, who shall hold office for the unexpired term in respect to which such vacancy occurred or until the next election of directors, or any vacancy may be filled by the stockholders at any meeting thereof.

        12.    The business of this corporation shall be managed by its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not otherwise required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD

        13.    The directors may hold their meetings at the principal office of Melville Corporation, the sole shareholder, 3000 Westchester Avenue, Harrison, New York, or at such other places as they may from time to time determine.

        14.    Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by resolution of the Board.

        15.    Special meetings of the Board may be called by the President on one day's notice to each director either personally or by mail or by wire; special meetings shall be called by the President or Secretary in a like manner on the written request of two directors.

        16.    At all meetings of the Board the presence of a majority of the entire number of directors shall be necessary to constitute a quorum and sufficient for the transaction of business and any act of a majority present at a meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided. If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present.

COMPENSATION OF DIRECTORS

        17.    Directors, as such, shall not receive any stated salary for their services but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity and receiving compensation there for.

        18.    Any one or more or all of the directors may be removed, either with or without case, at any time, by the vote of the stockholders holding a majority of the stock of the corporation, at any meeting called for the purpose, and thereupon the term of each director or directors, who shall have been so removed, shall forthwith terminate, and there shall be a vacancy or vacancies in the Board of Directors, to be filled as provided in these By-Laws.

WAIVER OF NOTICE

2

        19.    Whenever the stockholders or the Board of Directors are authorized to take any action after notice, such notice may be waived, in writing, before or after the holding of the meeting, by the person or persons entitled to such notice.

OFFICERS

        20.    TITLES: The corporate officers to be elected by the Board of Directors shall be a President who shall be a Director, and one or more Vice Presidents, a Secretary, a Treasurer, a Controller, one or more Assistant Secretaries, and one or more Assistant Treasurers who need not be Directors. The Board of Directors may appoint such other non-corporate officers having such titles (including without being limited to Vice President) as from time to time it may determine; provided, that any such non-corporate officers so appointed shall report either to another such non-corporate officer or to a corporate officer. One person may hold any two offices except the office of President and Vice President, and the office of President and Secretary.

        21.    Any officer elected or appointed by the Board of Directors may be removed at any time with or without cause, by the affirmative vote of a majority of the directors. If the office of any officer becomes vacant for any reason, the vacancy shall be filled by the Board of Directors.

        22.    PRESIDENT: The President shall have general manage men and control of the business and affairs of the corporation and shall generally do and perform all acts incident to the office of President or which are authorized by the Board of Directors or required by law.

        23.    CORPORATE VICE PRESIDENT: Each corporate Vice President shall have such designations and such powers and shall perform such duties as may be assigned to him by the Board of Directors.

        24.    SECRETARY: The Secretary shall attend all sessions of the Board of Directors and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose. He shall give or cause to be given notice of all meetings of stockholders and special meetings of the Board of Directors and shall perform such other duties as may be prescribed by the Board of Directors. He shall keep in safe custody the seal of the corporation and affix it to any instrument when authorized by the Board of Directors. He may sign, in the name of the corporation, all authorized contracts, documents, bonds or other obligations.

        25.    TREASURER: The Treasurer shall give such bond for the faithful discharge of his duties as the directors may require. He shall, subject to the control of the directors, keep the accounts of the corporation, and shall perform such additional duties as the directors may designate.

        26.    Each officer of the corporation shall have authority to sign tax returns on behalf of the corporation.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

        27.    The corporation shall indemnify and save harmless all or any of the officers and directors of the corporation from and against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which any such director or officer by virtue of his office may be made a party, except if such officer or director is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties he shall not be so indemnified and held harmless.

CERTIFICATE OF STOCK

        28.    Certificates of stock shall be in the form approved by the directors, shall be signed by the President or a Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary of the corporation, and shall be sealed with its seal.

3

        29.    The shares of stock of this corporation shall not be subject to any liability or assessments other than that imposed by the statute under which this corporation is organized.

        30.    The Board of Directors may cause a new stock certificate to be issued in lieu of a stock certificate lost or destroyed to the person entitled thereto upon satisfactory proof of such loss or destruction and the Board of Directors may require such indemnity by the person claiming such certificates as it may deem necessary or proper.

TRANSFERS OF STOCK

        31.    Shares of stock shall be transferable only on the books of the corporation upon the surrender of the certificate therefor duly endorsed for transfer. The corporation may require proof of the genuineness of the signature and of the capacity of the party executing the transfer.

        32.    The corporation shall not be required to recognize any partial or equitable interest in its shares but may treat the registered holder thereof as the absolute owner.

        33.    The Board of Directors may close the stock books for transfer for such time prior to the day fixed for the payment of any dividend or to the day fixed for the annual meeting or any special meeting of the stockholders as may appear to it to be reasonable.

SEAL

        34.    The seal of the corporation shall be circular in form and contain the name of the corporation, the year of its organization and the words "Corporate Seal" and the name of the state of incorporation.

CHECKS

        35.    All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

FISCAL YEAR

        36.    The fiscal year shall end on December 31st.

AMENDMENTS

        37.    These By-Laws, or any of them, may be replaced, altered, or amended by the affirmative vote of a majority of the shares present, either in person or by proxy, at any meeting duly called for that purpose.

4

QuickLinks

BY-LAWS OF E. W. KALKIN, INC.

EX-3.16

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.16

CERTIFICATE OF INCORPORATION

        FIRST: The name of this corporation shall be

LNT SERVICES, INC.

        SECOND: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle and its registered agent at such address is CORPORATION SERVICE COMPANY.

        THIRD: The purpose or purposes of the corporation shall be:

To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

        FOURTH: The total number of shares of stock which this corporation is authorized to issue is One Hundred (100) shares of common stock without par value.

        FIFTH: The name and address of the incorporator is as follows:

Jill E. Cilmi
2711 Centerville Road
Suite 400
Wilmington, Delaware 19808

        SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the by-laws

        SEVENTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.

        IN WITNESS WHEREOF, the undersigned, being the incorporator herein before named, has executed signed and acknowledged this certificate of incorporation this 14th day of November, A.D. 2003.

/s/  JILL E. CILMI Jill E. Cilmi
Incorporator

QuickLinks

CERTIFICATE OF INCORPORATION

EX-3.17

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.17

BY-LAWS

OF

LNT SERVICES, INC.

ARTICLE I

ANNUAL MEETING

        The annual meeting of the stockholders shall be held in the State of New Jersey at such time and place as the Board of Directors shall determine.

ARTICLE II

SPECIAL MEETING

        Special meetings of the stockholders may be called by the President or a Vice President, by two members of the Board of Directors, or by holders of 25% or more of the capital stock.

ARTICLE III

NOTICE OF MEETING

        Notice of every meeting, whether annual or special, shall be in writing and signed by an officer of the corporation. Such notice shall state the time when and place where the meeting is to be held and a copy shall be served either personally or by mail, upon each stockholder of record entitled to vote at such meeting not less than ten days before he meeting, unless different notice is required by statute. Except as otherwise required by statute, published or written notice in any case may be waived in writing by each stockholders. In the case of special meetings, written notice of the purposes for which the meeting is called must be given to each stockholder.

ARTICLE IV

QUORUM

        At all stockholders' meetings a quorum shall consist of a majority of the stock outstanding and entitled to vote either in person or by proxy.

ARTICLE V

ELECTION OF DIRECTORS

        The number of directors shall be no less than one but no more than six. Directors shall be elected at each annual meeting and shall hold office for one year and thereafter until their successors are elected and qualify. Vacancies, however occurring during the year may be filled by a majority of the remaining directors. Directors need not be stockholders.

ARTICLE VI

MEETING OF DIRECTORS

        The Board of Directors whenever and wherever called together by the President or a Vice President upon notice to each director, which may not exceed two days, and may be held at the office of the corporation, or such other place as the Board of Directors may from time to time determine. If any member cannot be conveniently notified, except where otherwise required by statute, a meeting

held without notice to such member shall be valid, provide he shall thereafter assent in writing to any proceedings of the meeting. On the written request of any director, the Secretary shall call a special meeting of the Board of Directors. A majority of directors shall constitute a quorum. Whenever the Board of Directors is authorized to take any action after notice, such notice may be waived in writing before or after the holding of the meeting by the directors entitled to such notice.

ARTICLE VII

ELECTION OF OFFICERS

        After the election of the directors, the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, and a Treasurer, and the directors may from time to time appoint such other officers as they deem necessary to serve at the pleasure of the Board of Directors. The President and one Vice shall be elected from their own number. Except as otherwise President provided by statute, any two offices may be held by the same person.

ARTICLE VIII

POWERS AND DUTIES OF OFFICERS

        The President shall preside at all meetings of the Board of Directors, and shall act as temporary chairman and call to order all meetings of the stockholders. The term of office of all officers shall be until the next election of directors and until their respective successors are chosen and qualified, but any officer may be removed from office at any time with or without cause by the Board of Directors. Vacancies in the offices shall be filled by the Board of Directors. The officers of the corporation shall have such powers and duties except as modified by the Board of Directors as generally pertain to their offices respectively, as well as powers and duties as from time to time shall be conferred by the Board of Directors. The Board of Directors is authorized to select such depositories as they shall deem proper for the funds of the corporation, and all checks and drafts against such deposited funds shall be signed by officers or persons to be specified by the Board of Directors.

ARTICLE IX

CERTIFICATES OF STOCK

        Certificates of stock shall be numbered and signed in the order in which they are issued and shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary and the seal of the company shall be affixed thereto.

ARTICLE X

TRANSFER OF SHARES

        Transfers of shares shall be made only upon the books of the corporation and only in pursuance of the request of the holder in person, or by the holder of power of attorney duly executed and filed with the Secretary, and this only on the surrender to the Secretary of the certificate or certificates of stock.

ARTICLE XI

POWERS OF DIRECTORS

        The Board of Directors shall exercise all of the powers of the corporation, subject to the restrictions imposed by law or by these By-Laws, and they shall have general management and control of the affairs of the corporation. They shall set aside from the earnings such sum or sums as in their discretion may deem advisable for improvements or reserves; they shall declare and pay dividends out of the surplus profits of the corporation at such times as they deem proper, and they shall have power

2

to borrow money, to make and issue notes, bonds and other negotiable and transferable instruments, deeds of trust and trust agreements. Any of the powers of the board in relation to the ordinary business of the corporation may be delegated to any committee, officer or agent upon such terms as they deem fit. All of such powers shall be subject to any statutory requirement of limitation.

ARTICLE XII

INDEMNIFICATION OF DIRECTORS AND OFFICERS

        The corporation shall indemnify and hold harmless all or any of the officers and directors of the corporation from and against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which any such director or officer by virtue of his office may be made a party, except if such officer or director is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties he shall not be so indemnified and held harmless.

ARTICLE XIII

CORPORATE SEAL

        The corporate seal of the corporation shall be in generic form.

ARTICLE XIV

FISCAL YEAR

        The fiscal year of the corporation shall be the calendar year.

ARTICLE XV

AMENDMENTS

        The directors may make and alter any By-Laws, including any increase or decrease in the number of directors, provided that the Board of Directors shall not make or alter any By-Laws fixing their qualification, classifications or term of office.

3

QuickLinks

BY-LAWS OF LNT SERVICES, INC.
ARTICLE I ANNUAL MEETING
ARTICLE II SPECIAL MEETING
ARTICLE III NOTICE OF MEETING
ARTICLE IV QUORUM
ARTICLE V ELECTION OF DIRECTORS
ARTICLE VI MEETING OF DIRECTORS
ARTICLE VII ELECTION OF OFFICERS
ARTICLE VIII POWERS AND DUTIES OF OFFICERS
ARTICLE IX CERTIFICATES OF STOCK
ARTICLE X TRANSFER OF SHARES
ARTICLE XI POWERS OF DIRECTORS
ARTICLE XII INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE XIII CORPORATE SEAL
ARTICLE XIV FISCAL YEAR
ARTICLE XV AMENDMENTS

EX-3.18

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.18

CERTIFICATE OF FORMATION

OF

LNT LEASING II, LLC

A LIMITED LIABILITY COMPANY

FIRST: The name of the limited liability company is:

LNT LEASING II, LLC

SECOND: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400 in the City of Wilmington, County of New Castle 19808, and its registered agent at such address is CORPORATION SERVICE COMPANY.

IN WITNESS WHEREOF, the undersigned, being the individual forming the Company, has executed, signed and acknowledged this Certificate of Formation this fourth day of December, A.D. 2001.

/s/  BRANDON LARAMORE Authorized Person
BRANDON LARAMORE

QuickLinks

CERTIFICATE OF FORMATION OF LNT LEASING II, LLC A LIMITED LIABILITY COMPANY

EX-3.19

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.19

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

LNT LEASING II, LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of LNT Leasing II, LLC, a Delaware limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of March 27, 2002 of the Company.

        WHEREAS, the Member has formed a limited liability company under the Delaware Limited Liability Company Act (Del. Code tit. 6, §§ 8-101 - 18-1 109), as amended from time to time (the "Act"), pursuant to this Agreement and the Certificate of Formation which was filed with the Secretary of State of the State of Delaware in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1.    Formation.    The Company was formed under the provisions of the Act, by the filing of the Certificate of Formation of the Company on December 4, 2001 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2.    Name.    The name of the Company shall be LNT Leasing II, LLC.

        Section 1.3.    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4.    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Corporation Service Company, and the registered office of the Company in the State of Delaware shall be do Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808; in each case until otherwise established by an Amendment of the Certificate of Formation filed with the Delaware Secretary of State in the manner provided by law. The Company may have such other office or offices within or without the State of Delaware as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5.    Term.    The term of the Company commenced as of December 4, 2001, which is the date of the filing of the aforementioned Certificate of Formation with the Delaware Secretary of State, and shall continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6.    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1.    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2.    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3.    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Certificate of Formation of the Company or by this Agreement.

        Section 3.4.    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5.    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6.    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7.    Meetings of the Board.    

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the

2

State of Delaware as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8.    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9.    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10.    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11.    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12.    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or operations of the Company and shall promptly reimburse the Member or such other person, upon written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

3

ARTICLE IV

OFFICERS

        Section 4.1.    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, a treasurer and such other officers as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2.    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3.    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4.    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5.    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1.    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2.    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1.    Distributions.    Except as otherwise provided in Article VIII hereof arid subject to Section 18-607 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1.    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or

4

accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2.    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3.    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4.    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1.    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following:

        (a)   the written consent of the Member;

        (b)   the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

        (c)   at any time when there is no Member.

        Section 8.2.    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1.    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.3.    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the

5

State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        Section 9.4.    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.5.    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.6.    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.7.    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.8.    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.9.    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.10.    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.11.    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.12.    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows]

6

        IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Agreement as of the date first above written.

LNT, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

7

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
LNT, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF LNT LEASING II, LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-3.20

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.20

CERTIFICATE OF INCORPORATION

        FIRST: The name of this corporation shall be

LNT WEST, INC.

        SECOND: Its registered office in the State of Delaware is to be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle and its registered agent at such address is CORPORATION SERVICE COMPANY.

        THIRD: The purpose or purposes of the corporation shall be:

To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

        FOURTH: The total number of shares of stock which this corporation is authorized to issue is One Hundred (100) shares of common stock without par value.

        FIFTH: The name and address of the incorporator is as follows:

Jill E. Cilmi
27 H Centerville Road
Suite 400
Wilmington, Delaware 19808

        SIXTH: The Board of Directors shall have the power to adopt, amend or repeal the by-laws.

        SEVENTH: No director shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty by such director as a director. Notwithstanding the foregoing sentence, a director shall be liable to the extent provided by applicable law, (i) for breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware General Corporation Law or (iv) for any transaction from which the director derived an improper personal benefit. No amendment to or repeal of this Article Seventh shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment.

        IN WITNESS WHEREOF, the undersigned. being the incorporator herein before named, has executed signed and acknowledged this certificate of incorporation this 14th day of November, A.D. 2003.

/s/  JILL E. CILMI Incorporator

QuickLinks

CERTIFICATE OF INCORPORATION

EX-3.21

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.21

BY-LAWS

OF

LNT WEST, INC.

ARTICLE I

ANNUAL MEETING

        The annual meeting of the stockholders shall be held in the State of New Jersey at such time and place as the Board of Directors shall determine.

ARTICLE II

SPECIAL MEETING

        Special meetings of the stockholders may be called by the President or a Vice President, by two members of the Board of Directors, or by holders of 25% or more of the capital stock.

ARTICLE III

NOTICE OF MEETING

        Notice of every meeting, whether annual or special, shall be in writing and signed by an officer of the corporation. Such notice shall state the time when and place where the meeting is to be held and a copy shall be served either personally or by mail, upon each stockholder of record entitled to vote at such meeting not less than ten days before the meeting, unless different notice is required by statute. Except as otherwise required by statute, published or written notice in any case may be waived in writing by each stockholders. In the case of special meetings, written notice of the purposes for which the meeting is called must be given to each stockholder.

ARTICLE IV

QUORUM

        At all stockholders' meetings a quorum shall consist of a majority of the stock outstanding and entitled to vote either in person or by proxy.

ARTICLE V

ELECTION OF DIRECTORS

        The number of directors shall be no less than one but no more than six. Directors shall be elected at each annual meeting and shall hold office for one year and thereafter until their successors are elected and qualify. Vacancies, however occurring during the year may be filled by a majority of the remaining directors. Directors need not be stockholders.

ARTICLE VI

MEETING OF DIRECTORS

        The Board of Directors whenever and wherever called together by the President or a Vice President upon notice to each director, which may not exceed two days, and may be held at the office of the corporation, or such other place as the Board of Directors may from time to time determine. If any member cannot be conveniently notified, except where otherwise required by statute, a meeting

held without notice to such member shall be valid, provide he shall thereafter assent in writing to any proceedings of the meeting. On the written request of any director, the Secretary shall call a special meeting of the Board of Directors. A majority of directors shall constitute a quorum. Whenever the Board of Directors is authorized to take any action after notice, such notice may be waived in writing before or after the holding of the meeting by the directors entitled to such notice.

ARTICLE VII

ELECTION OF OFFICERS

        After the election of the directors, the Board of Directors shall elect a President, one or more Vice Presidents, a Secretary, and a Treasurer, and the directors may from time to time appoint such other officers as they deem necessary to serve at the pleasure of the Board of Directors. The President and one Vice shall be elected from their own number. Except as otherwise President provided by statute, any two offices may be held by the same person.

ARTICLE VIII

POWERS AND DUTIES OF OFFICERS

        The President shall preside at all meetings of the Board of Directors, and shall act as temporary chairman and call to order all meetings of the stockholders. The term of office of all officers shall be until the next election of directors and until their respective successors are chosen and qualified, but any officer may be removed from office at any time with or without cause by the Board of Directors. Vacancies in the offices shall be filled by the Board of Directors. The officers of the corporation shall have such powers and duties except as modified by the Board of Directors as generally pertain to their offices respectively, as well as powers and duties as from time to time shall be conferred by the Board of Directors. The Board of Directors is authorized to select such depositories as they shall deem proper for the funds of the corporation, and all checks and drafts against such deposited funds shall be signed by officers or persons to be specified by the Board of Directors.

ARTICLE IX

CERTIFICATES OF STOCK

        Certificates of stock shall be numbered and signed in the order in which they are issued and shall be signed by the President or a Vice President and by the Secretary or an Assistant Secretary and the seal of the company shall be affixed thereto.

ARTICLE X

TRANSFER OF SHARES

        Transfers of shares shall be made only upon the books of the corporation and only in pursuance of the request of the holder in person, or by the holder of power of attorney duly executed and filed with the Secretary, and this only on the surrender to the Secretary of the certificate or certificates of stock.

ARTICLE XI

POWERS OF DIRECTORS

        The Board of Directors shall exercise all of the powers of the corporation, subject to the restrictions imposed by law or by these By-Laws, and they shall have general management and control of the affairs of the corporation. They shall set aside from the earnings such sum or sums as in their discretion may deem advisable for improvements or reserves; they shall declare and pay dividends out of the surplus profits of the corporation at such times as they deem proper, and they shall have power

2

to borrow money, to make and issue notes, bonds and other negotiable and transferable instruments, deeds of trust and trust agreements. Any of the powers of the board in relation to the ordinary business of the corporation may be delegated to any committee, officer or agent upon such terms as they deem fit. All of such powers shall be subject to any statutory requirement of limitation.

ARTICLE XII

INDEMNIFICATION OF DIRECTORS AND OFFICERS

        The corporation shall indemnify and hold harmless all or any of the officers and directors of the corporation from and against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which any such director or officer by virtue of his office may be made a party, except if such officer or director is finally adjudged in such action, suit or proceeding to be liable for negligence or misconduct in the performance of his duties he shall not be so indemnified and held harmless.

ARTICLE XIII

CORPORATE SEAL

        The corporate seal of the corporation shall be in generic form.

ARTICLE XIV

FISCAL YEAR

        The fiscal year of the corporation shall be the calendar year.

ARTICLE XV

AMENDMENTS

        The directors may make and alter any By-Laws, including any increase or decrease in the number of directors, provided that the Board of Directors shall not make or alter any By-Laws fixing their qualification, classifications or term of office.

3

QuickLinks

BY-LAWS OF LNT WEST, INC.
ARTICLE I ANNUAL MEETING
ARTICLE II SPECIAL MEETING
ARTICLE III NOTICE OF MEETING
ARTICLE IV QUORUM
ARTICLE V ELECTION OF DIRECTORS
ARTICLE VI MEETING OF DIRECTORS
ARTICLE VII ELECTION OF OFFICERS
ARTICLE VIII POWERS AND DUTIES OF OFFICERS
ARTICLE IX CERTIFICATES OF STOCK
ARTICLE X TRANSFER OF SHARES
ARTICLE XI POWERS OF DIRECTORS
ARTICLE XII INDEMNIFICATION OF DIRECTORS AND OFFICERS
ARTICLE XIII CORPORATE SEAL
ARTICLE XIV FISCAL YEAR
ARTICLE XV AMENDMENTS

EX-3.22

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.22

COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION

October 14, 2003

The State Corporation Commission has found the accompanying articles submitted on behalf of

LNT Virginia LLC

to comply with the requirements of law, and confirms payment of all required fees

Therefore, it is ORDERED that this

CERTIFICATE OF ORGANIZATION

be issued and admitted to record with the articles of organization in the Office of the Clerk of the Commission October 14, 2003

STATE CORPORATION COMMISSION
By	/s/  T. V. MORRISON Commissioner

COMMONWEALTH OF VIRGINIA
STATE CORPORATION COMMISSION

ARTICLES OF ORGANIZATION OF A
DOMESTIC LIMITED LIABILITY COMPANY

Pursuant to Chapter 12 of Title 13.1 the Code of Virginia the undersigned states as follows:

1.	The name of the limited liability company is
	LNT Virgina LLC
	(The name must contain the words "limited company" or "limited liability company" or their abbreviations "L.C.," "LC," "L.L.C." or "LLC")
2.	A.	The name of the limited liability company's initial registered agent Is
	Corporation Service Company
	B.	The registered agent is (mark appropriate box):
		(1)	an INDIVIDUAL who is a resident of Virginia and
			o	a member or manager of the limited liability company.
			o	an officer or director of a corporation that is a member or manager of the limited liability company.
			o	a general partner of a general or limited partnership that is a member or manager of the limited liability company.
			o	a trustee of a trust that is a member or manager of the limited liability company.
			o	a member of the Virginia State Bar.
OR
		(2)	ý	a domestic or foreign stock or nonstock corporation, limited liability company or registered limited liability partnership authorized to transact business in Virginia.
3.	The limited liability company's initial registered office address, which is identical to the business office of the initial registered agent, is:
	11 South 12th Street, P. O. Box 1463                        (number/street) Richmond                                                                                                                                    VA 23714                                                 (city or town)                                                                                                                                                               (zip) which is located in the ý city or o county of Richmond
4.	The limited liability company's principal office is located at 6 Brighton Road                        (number/street) Clifton. NJ 07015                                                 (city or town)                                                                                       (state)                                                              (zip)
5.	Signature:

/s/ Michelle Disbrow                                    (organizer)	October 13, 2003                                    (date)
Michelle Disbrow                              (printed name)	(telephone number ________)

QuickLinks

COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION October 14, 2003

EX-3.23

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.23

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

LNT VIRGINIA LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of LNT Virginia LLC, a Virginia limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of December 22, 2003 of LNT Virginia LLC.

        WHEREAS, the Member has formed a limited liability company under the Virginia Limited Liability Company Act (Va. Code § 13.1-1000 - 13.1-1073), as amended from time to time (the "Act"), pursuant to this Agreement and the Articles of Organization which were filed with the State Corporation Commission of the Commonwealth of Virginia (the "Commission") in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1.    Formation.    The Company was formed under the provisions of the Act, by the filing of the Articles of Organization of the Company on October 14, 2003 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2.    Name.    The name of the Company shall be LNT Virginia LLC.

        Section 1.3.    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4.    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Beverley L. Crump, Esq., and the registered office of the Company in the Commonwealth of Virginia shall be do Beverley L. Crump, Esq., 11 South 12th Street, Richmond, Virginia 23219; in each case until otherwise established by an Amendment of the Articles of Organization filed with the Commission in the manner provided by law. The Company may have such other office or offices within or without the State of Virginia as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5.    Term.    The term of the Company commenced as of October 14,2003 which is the date of the filing of the aforementioned Articles of Organization with the Commission, and shall

continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6.    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1.    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2.    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3.    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Articles of Organization of the Company or by this Agreement.

        Section 3.4.    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5.    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6.    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7.    Meetings of the Board.

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the Commonwealth of Virginia as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

2

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the Commonwealth of Virginia as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8.    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9.    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Articles of Organization or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10.    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11.    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12.    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or

3

operations of the Company and shall promptly reimburse the Member or such other person, upon written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

ARTICLE IV

OFFICERS

        Section 4.1.    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, a treasurer and such other officers as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2.    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3.    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Virginia law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4.    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1.    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1.    Distributions.    Except as otherwise provided in Article VIII hereof and subject to Section 13.1-1035 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

4

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1.    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2.    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3.    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4.    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1.    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following:

        (a)   the written consent of the Member;

        (b)   the entry of a decree of judicial dissolution under Section 13.1-1047 of the Act; or

        (c)   at any time when there is no Member.

        Section 8.2.    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

5

        Section 9.3.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its sole membership interest as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.4.    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the Commonwealth of Virginia without giving effect to any choice of law or conflict of law provision or rule (whether of the Commonwealth of Virginia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Virginia.

        Section 9.5.    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.6.    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.7.    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.8.    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.9.    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.10.    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.11.    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.12.    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.13.    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows.]

6

        IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Agreement as of the date first above written.

LNT, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

7

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
Linens 'n Things Center, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF LNT VIRGINIA LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-3.24

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.24

CERTIFICATE OF FORMATION

OF

LIMITED LIABILITY COMPANY

        FIRST:    The name of the limited liability company is LNT MERCHANDISING COMPANY LLC.

        SECOND:    The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington. The name of its Registered Agent at such address is CORPORATION SERVICE COMPANY.

        IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation of LNT MERCHANDISING COMPANY LLC this 18th day of November 2003.

NAME:
/s/  ANGELA NORTON Angela Norton
Authorized Person

QuickLinks

CERTIFICATE OF FORMATION OF LIMITED LIABILITY COMPANY

EX-3.25

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.25

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

LNT MERCHANDISING COMPANY LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of LNT Merchandising Company LLC, a Delaware limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of December 22, 2003 of the Company.

        WHEREAS, the Member has formed a limited liability company under the Delaware Limited Liability Company Act (Del. Code tit. 6, §§ 18-101 - 18-1109), as amended from time to time (the "Act"), pursuant to this Agreement and the Certificate of Formation which was filed with the Secretary of State of the State of Delaware in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1.    Formation.    The Company was formed under the provisions of the Act, by the filing of the Certificate of Formation of the Company on November 18, 2003 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2.    Name.    The name of the Company shall be LNT Merchandising Company LLC.

        Section 1.3.    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4.    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Corporation Service Company, and the registered office of the Company in the State of Delaware shall be do Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808; in each case until otherwise established by an Amendment of the Certificate of Formation filed with the Delaware Secretary of State in the manner provided by law. The Company may have such other office or offices within or without the State of Delaware as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5.    Term.    The term of the Company commenced as of November 18, 2003, which is the date of the filing of the aforementioned Certificate of Formation with the Delaware Secretary of State,

and shall continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6.    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1.    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2.    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3.    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Certificate of Formation of the Company or by this Agreement.

        Section 3.4.    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5.    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6.    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7.    Meetings of the Board.    

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

2

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the State of Delaware as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8.    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9.    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10.    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11.    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12.    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or operations of the Company and shall promptly reimburse the Member or such other person, upon

3

written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

ARTICLE IV

OFFICERS

        Section 4.1.    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, a treasurer and such other officers as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2.    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3.    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4.    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5.    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1.    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2.    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1.    Distributions.    Except as otherwise provided in Article VIII hereof and subject to Section 18-607 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

4

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1.    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2.    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3.    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4.    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1.    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following:

        (a)   the written consent of the Member;

        (b)   the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

        (c)   at any time when there is no Member.

        Section 8.2.    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1.    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit

5

such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.3.    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        Section 9.4.    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.5.    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.6.    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.7.    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.8.    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.9.    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.10.    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.11.    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.12.    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows.]

6

        IN WITNESS WHEREOF the undersigned has duly executed arid delivered this Agreement as of the date first above written.

LNT WEST, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

Signature Page to LNT Merchandising Company LLC Amended and Restated Operating Agreement

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
LNT West, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF LNT MERCHANDISING COMPANY LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-3.26

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.26

CERTIFICATE OF FORMATION

OF

LIMITED LIABILITY COMPANY

        FIRST. The name of the limited liability company is

LNT LEASING III, LLC

        SECOND. The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400 in the City of Wilmington. The name of its Registered Agent at such address is CORPORATION SERVICE COMPANY.

IN WITNESS WHEREOF, the undersigned have executed this Certificate of Formation of LNT LEASING III, LLC this 2nd day of April, 2004.

BY:
/s/  JILL E. CILMI Jill E. Cilmi
Authorized Person

QuickLinks

CERTIFICATE OF FORMATION OF LIMITED LIABILITY COMPANY

EX-3.27

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.27

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

LNT LEASING III, LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of LNT Leasing III, LLC, a Delaware limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of July 6, 2004 of the Company.

        WHEREAS, the Member has formed a limited liability company under the Delaware Limited Liability Company Act (Del. Code tit. 6, §§ 18-101 - 18-1109), as amended from time to time (the "Act"), pursuant to this Agreement and the Certificate of Formation which was filed with the Secretary of State of the State of Delaware in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1    Formation.    The Company was formed under the provisions of the Act, by the filing of the Certificate of Formation of the Company on April 2, 2004 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2    Name.    The name of the Company shall be LNT Leasing III, LLC.

        Section 1.3    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Corporation Service Company, and the registered office of the Company in the State of Delaware shall be c/o Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808; in each case until otherwise established by an Amendment of the Certificate of Formation filed with the Delaware Secretary of State in the manner provided by law. The Company may have such other office or offices within or without the State of Delaware as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5    Term.    The term of the Company commenced as of April 2, 2004, which is the date of the filing of the aforementioned Certificate of Formation with the Delaware Secretary of State, and shall continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Certificate of Formation of the Company or by this Agreement.

        Section 3.4    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7    Meetings of the Board.    

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the State of Delaware as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by

leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or operations of the Company and shall promptly reimburse the Member or such other person, upon written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

ARTICLE IV

OFFICERS

        Section 4.1    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, a treasurer and such other officers

as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1    Distributions.    Except as otherwise provided in Article VIII hereof and subject to Section 18-607 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following:

        (a)   the written consent of the Member;

        (b)   the entry of a decree of judicial dissolution under Section 18-802 of the Act; or

        (c)   at any time when there is no Member.

        Section 8.2    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.3    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        Section 9.4    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.5    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.6    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.7    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.8    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.9    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.10    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.11    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.12    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows.]

        IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Agreement as of the date first above written.

LNT WEST, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
LNT West, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF LNT LEASING III, LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-3.28

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.28

STATE of DELAWARE
LIMITED LIABILITY COMPANY
CERTIFICATE of FORMATION

•	First: The name of the limited liability company is CITADEL LNT, LLC.
•	Second: The address of its registered office in the State of Delaware is 2711 Centerville Road Suite 400 in the City of Wilmington, DE 19808.
	The name of its Registered agent at such address is Corporation Service Company.
•	Third: (Use this paragraph only f the company is to have a specific effective date of dissolution.)
	"The latest date on which the limited liability company is to dissolve is                                        ."
•	Fourth: (Insert any other matters the members determine to include herein.)
	In Witness Whereof, the undersigned have executed this Certificate of Formation of CITADEL LNT, LLC this 16th day of April, 2004.

BY:	/s/ Catherine C. Kelleher Authorized Person(s)
NAME:	Catherine C. Kelleher
	Type or Print

QuickLinks

STATE of DELAWARE LIMITED LIABILITY COMPANY CERTIFICATE of FORMATION

EX-3.29

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 3.29

AMENDED AND RESTATED

OPERATING AGREEMENT

OF

CITADEL LNT, LLC

        This AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of Citadel LNT, LLC, a Delaware limited liability company (the "Company"), dated as of March 28, 2006, is effective as of February 14, 2006 and is entered into by the member listed on the signature page attached hereto (the "Member"). This Agreement amends and restates in its entirety that certain Operating Agreement (the "Operating Agreement") dated as of July 6, 2004 of the Company.

        WHEREAS, the Member has formed a limited liability company under the Delaware Limited Liability Company Act (Del. Code tit. 6, §§ 18-101 - 18-1109), as amended from time to time (the "Act"), pursuant to this Agreement and the Certificate of Formation which was filed with the Secretary of State of the State of Delaware in connection with the execution of the Operating Agreement;

        WHEREAS, the Member now desires to amend and restate the Operating Agreement in its entirety, as set forth herein.

        NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

THE COMPANY

        Section 1.1.    Formation.    The Company was formed under the provisions of the Act, by the filing of the Certificate of Formation of the Company on April 16, 2004 as required by the Act. The Company and the rights and obligations of the Member in its capacity as such shall be governed by the Act, except in each case as specifically set forth in this Agreement. The Company shall file such documents as may be required by law for the operation of the Company in all jurisdictions where the Company does business.

        Section 1.2.    Name.    The name of the Company shall be Citadel LNT, LLC.

        Section 1.3.    Purpose.    The purpose of the Company shall be to engage in any lawful act or activity for which a limited liability company may be organized under the Act. The Company shall possess and may exercise all the powers and privileges granted by the Act or by any other law, together with any powers incidental thereto, so far as such powers and privileges are reasonably necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

        Section 1.4.    Registered Agent and Registered Office and Other Offices.    The registered agent for service of process is Corporation Service Company, and the registered office of the Company in the State of Delaware shall be do Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, Delaware 19808; in each case until otherwise established by an Amendment of the Certificate of Formation filed with the Delaware Secretary of State in the manner provided by law. The Company may have such other office or offices within or without the State of Delaware as the Board (as defined in Section 3.2) may from time to time appoint or the business of the Company may require. The address of the principal place of business of the Company shall be 6 Brighton Road, Clifton, New Jersey 07015.

        Section 1.5.    Term.    The term of the Company commenced as of April 16, 2004, which is the date of the filing of the aforementioned Certificate of Formation with the Delaware Secretary of State, and shall continue until the date on which the Company is terminated pursuant to the provisions of this Agreement or as otherwise required by law.

        Section 1.6.    Organizational Matters.    From time to time as required, the Member shall execute all such certificates and other documents, make such filings and recordings and perform such other acts conforming hereto, as shall be required to comply with the Act and any other statutes, rules and regulations that affect the Company.

ARTICLE II

TITLE TO THE PROPERTY OF THE COMPANY

        Title to any and all property, real, personal or mixed, owned by, or leased to, the Company shall be held in the name of the Company, or in the name of any nominee that the Company designates.

ARTICLE III

MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION

        Section 3.1.    Management.    From time to time, the Member may appoint one or more managers (each a "Manager" and collectively, the "Managers"), to administer the affairs of the Company. Any Manager may be removed by the Member at any time in the Member's sole discretion.

        Section 3.2.    Board of Managers.    Unless and until otherwise determined by the Member, the affairs of the Company shall be under the direction and control of a board of Managers, which may also be called the board of directors (the "Board"), which shall be initially composed of two (2) Managers who shall be designated by the Member and shall hold office until their successors are duly chosen and qualified. The number of Managers may be increased or decreased from time to time by the Member. A Manager shall hold office until removed by the Member, subject to prior death, resignation, retirement, disqualification or removal from office. The Member hereby designates William T. Giles and David J. Dick as the initial Managers of the Company.

        Section 3.3.    Function of Board.    The business and affairs of the Company shall be managed under the direction of the Board. All the powers of the Company are vested in and shall be exercised by or under the authority of the Board except as otherwise prescribed by statute, by the Certificate of Formation of the Company or by this Agreement.

        Section 3.4.    Vacancies.    Any vacancy occurring on the Board shall be filled by a person designated by the Member.

        Section 3.5.    Resignations.    Any Manager may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of receipt by the Member. Acceptance of a resignation shall not be necessary to make it effective.

        Section 3.6.    Removal.    The Member may remove any Manager from office with cause, and may elect a successor or successors to fill any resulting vacancy for the unexpired term of any removed Manager.

        Section 3.7.    Meetings of the Board.    

        (a)   Meetings of the Board, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine or as shall be specified in the notice of such meeting. Members of the Board may participate in a meeting by means of a telephone conference or similar communications if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by such means shall constitute presence in person at such meeting.

        (b)   Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Special meetings of the Board may be called at any time by a majority of the Managers and may be held at such place or places in or out of the

2

State of Delaware as may be designated in such notice. Notice of the place and time of every special meeting of the Board shall be delivered by the Secretary or other officer of the Company to each Manager either personally or by telephone, telegraph, overnight courier or facsimile, or by leaving the same at his or her residence or usual place of business at least twenty-four (24) hours before the time at which such meeting is to be held or, if by first-class mail, at least seventy-two (72) hours before the time of such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the Manager at his or her post office address as it appears on the records of the Company, with postage thereon paid. Unless a resolution of the Board provides otherwise, the notice need not state the business to be transacted at, or the purpose of, any special meeting of the Board. No notice of any special meeting of the Board need be give to any Manager who attends (except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the special meeting is not lawfully called or convened), or to any Manager who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.

        (c)   Any meeting of the Board, regular or special, may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting.

        Section 3.8.    Action by Written Consent.    Unless otherwise provided by law, any action required to be taken at a meeting of the Managers or any other action which may be taken at a meeting of the Managers may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the Managers.

        Section 3.9.    Quorum and Voting.    At all meetings of the Board, a majority of the entire Board shall constitute a quorum for the transaction of business, and the action of a majority of the Managers present at any meeting at which a quorum is present shall be the action of the Board unless the concurrence of a greater proportion is required for such action by law, the Company's Certificate of Formation or this Agreement. If a quorum shall not be present at any meeting of Managers, the Managers present thereat may, by a majority vote, adjourn the meeting from time to time without notice, until a quorum shall be present.

        Section 3.10.    Outside Interests.    The Member, each of the Managers and each of the Member's and the Managers' officers, partners, employees, agents, successors and assigns may engage, invest and participate in, and otherwise enter into, other business ventures of any kind, nature or description, individually or with others, whether or not any such business venture competes with the business of the Company, and the Company shall not have any right in or to any such activities, or the income or profits derived therefrom.

        Section 3.11.    Liability for Debts of the Company.    Except as prohibited by the Law, neither the Member, any of the Managers nor any of the Member's or Mangers' officers, partners, employees, agents, successors or assigns, shall be liable, responsible or accountable to the Company, in damages or otherwise, for breach of any duty or obligation to the Company in the Member's or such other person's capacity as a manager of the Company.

        Section 3.12.    Indemnification.    Except to the extent expressly prohibited by the Act, the Company shall indemnify, defend and hold harmless the Member, each of the Managers and any of the Member's or Managers' officers, partners, employees, agents, successors or assigns against all claims, actions, proceedings, demands, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys' fees) to the extent that the same arise, directly or indirectly, from the business or operations of the Company and shall promptly reimburse the Member or such other person, upon written request, for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred by the Member or such other person in connection therewith.

3

ARTICLE IV

OFFICERS

        Section 4.1.    Officers.    The Board may, but shall have no obligation to, elect one or more of the following officers (the "Officers") to supervise operations of the Company on a day-to-day basis: a chief executive officer, president, one or more vice presidents, a secretary, treasurer and such other officers as the Board may determine. Except as limited herein or under the Act, the Board shall determine the powers and duties of the Officers and any other terms or conditions regarding the positions held by them. All officers, agents and employees of the Company shall be subject to removal, with or without cause, at any time by the Board.

        Section 4.2.    Powers and Authority.    The Officers shall have such power and authority to manage the day to day operations of the Company as are delegated to them by the Board. Any Officer's exercise of such delegated powers and authority shall, with the exception of actions taken by such Officer in the ordinary course of business, require the consent of the Board.

        Section 4.3.    Indemnity of the Officers.    Each Officer, to the extent that he is acting for or in the interests of the Company, shall be indemnified by the Company to the fullest extent permitted by Delaware law. Notwithstanding the foregoing, no Officer shall be indemnified for claims and expenses arising out of said Officer's illegal acts, gross negligence or willful misconduct.

        Section 4.4.    Resignation.    An Officer of the Company may resign at any time by giving written notice to the Board. The resignation of any Officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. In the event of a resignation, the Member may nominate and elect such Officer's successor.

        Section 4.5.    Removal of Officers.    Any Officer may be removed with or without cause at any meeting of the Board by an affirmative vote of a majority of the Board.

ARTICLE V

CAPITAL

        Section 5.1.    Capital Contributions.    The Member shall have the right, but not the obligation, to make capital contributions in such amounts as the Member shall from time to time desire.

        Section 5.2.    Record of Contributions.    The amounts of the Member's capital contributions and the dates on which they were made will be set forth in the Company's books and records.

ARTICLE VI

DISTRIBUTIONS

        Section 6.1.    Distributions.    Except as otherwise provided in Article VIII hereof and subject to Section 18-607 of the Act, all distributions of cash or other property from the Company to the Member shall be made at such times, and in such amounts, as the Member deems appropriate, and subject to any reserve which the Member, in its sole discretion, may cause the Company to retain.

ARTICLE VII

BOOKS AND RECORDS

        Section 7.1.    Records and Books of Account.    Complete and accurate books shall be kept and maintained for the Company at the Company's principal place of business or at such other place as the Board may select. Such books and accounts shall be kept for fiscal and tax purposes on the cash or

4

accrual basis, as the Board shall determine. The Member or the Member's duly authorized representative, at the Member's own expense and upon delivering advance written notice to the Company, shall at all reasonable times have access to, and may inspect and make copies of, such books and accounts and any other records of the Company.

        Section 7.2.    Fiscal and Taxable Year.    The fiscal and taxable year of the Company shall commence on January 1 and end on December 31, unless the Board, in its sole and absolute discretion, designates a different fiscal or taxable year.

        Section 7.3.    Bank Accounts.    All funds received by the Company shall be deposited in the name of the Company in such bank account or accounts as the Board may designate from time to time, and withdrawals therefrom shall be made upon the signature of an officer or upon such other signature or signatures on behalf of the Company as the Board may designate from time to time.

        Section 7.4.    Tax Matters.    The Company shall not elect under Section 301.7701-3 of the Treasury regulations to be taxed as a corporation for U.S. federal income tax purposes.

ARTICLE VIII

DISSOLUTION

        Section 8.1.    Events of Dissolution.    The Company shall be dissolved upon the earliest to occur of the following: (a) the written consent of the Member; (b) the entry of a decree of judicial dissolution under Section 18-802 of the Act; or (c) at any time when there is no Member.

        Section 8.2.    Application of Proceeds.    Upon dissolution of the Company, the Board shall wind up the business of the Company and the assets of the Company shall be liquidated, and the cash proceeds applied, first to the satisfaction of creditors and then to the Member.

ARTICLE IX

MISCELLANEOUS

        Section 9.1.    Nature of Company Interests.    The Member represents and warrants to the Company that it is acquiring its membership interests in the Company for its own account as an investment and without any intent to distribute the interest. The Member acknowledges that its interest in the Company has not been registered under the Securities Act of 1933 or any state securities laws, and may not be resold or transferred by the Member without appropriate registration or the availability of an exemption from such requirements.

        Section 9.2.    No Restrictions on Transfers.    Notwithstanding any other provision in this Agreement, no consent of the Member shall be required to permit (i) the Member to pledge its membership interest hereunder as security for a loan to such Member or any affiliate of such Member, or (ii) a pledgee of the Member's membership interest in the Company to transfer such membership interest in connection with such pledgee's exercise of its rights and remedies with respect thereto, or to permit such pledgee or its assignee to be substituted for the Member under this Agreement in connection with such pledgee's exercise of such rights and remedies.

        Section 9.3.    Governing Law.    This Agreement, and all matters relating to the Member and the Company, shall be governed and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

        Section 9.4.    Notices.    All notices, demands, solicitations of consent or approval, consents and other communications permitted or required to be given hereunder shall be in writing and shall be

5

deemed to have been duly given only if mailed (registered or certified mail, return receipt requested, postage prepaid), delivered by a reputable international overnight courier or sent by facsimile transmission addressed as follows: If intended for: (a) the Company, to its principal place of business; or (b) the Member, to the address of the Member set forth in Schedule A attached hereto or otherwise as designated by notice by the Member in the manner provided above.

        Section 9.5.    Entire Agreement and Amendments.    This Agreement represents the entire agreement between the parties with respect to the subject matter of this Agreement, and may not be changed, modified or terminated except by an instrument in writing signed by the Member.

        Section 9.6.    Headings; Pronouns.    The headings in this Agreement are for convenience only and shall not affect the meaning, construction or effect of this Agreement.

        Section 9.7.    Further Assurances.    The Member shall sign such further and other documents, and perform or cause to be performed such other acts and things, in each case as may be necessary or desirable in order to give full effect to this Agreement.

        Section 9.8.    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties to this Agreement hereby waive any provision of law which renders any provision hereof prohibited or unenforceable in any respect.

        Section 9.9.    No Waiver.    No failure by the Member to insist upon the strict performance of any provision of this Agreement or to exercise any right or remedy upon a breach thereof shall constitute a waiver of any such breach or of a breach of any other provision hereof.

        Section 9.10.    Binding Effect.    This Agreement shall inure to the benefit of and be binding upon the Member and its respective successors and permitted assigns.

        Section 9.11.    No Third Party Beneficiaries.    Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any person other than the Member and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities.

        Section 9.12.    Counterparts.    This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.

[Signature page follows.]

6

        IN WITNESS WHEREOF, the undersigned has duly executed and delivered this Agreement as of the date first above written.

LNT WEST, INC.

/s/  WILLIAM T. GILES By: William T. Giles
Title:

Signature Page to Citadel LNT, LLC Operating Agreement

Schedule A

Name, Address and Number of Units of Membership
Interests of the Member

Name and Address of Member	Membership Interests
LNT West, Inc.	100	%
6 Brighton Road Clifton, New Jersey 07015

QuickLinks

AMENDED AND RESTATED OPERATING AGREEMENT OF CITADEL LNT, LLC
ARTICLE I THE COMPANY
ARTICLE II TITLE TO THE PROPERTY OF THE COMPANY
ARTICLE III MANAGEMENT; BOARD OF MANAGERS; INDEMNIFICATION
ARTICLE IV OFFICERS
ARTICLE V CAPITAL
ARTICLE VI DISTRIBUTIONS
ARTICLE VII BOOKS AND RECORDS
ARTICLE VIII DISSOLUTION
ARTICLE IX MISCELLANEOUS
Schedule A

EX-5.1

Exhibit 5.1

Direct: 214-999-4645
Direct Fax: 214-999-3645
dearhart@gardere.com

August 10, 2006

Linens Holding Co.
Linens 'n Things, Inc.
6 Brighton Road
Clifton, New Jersey 07015

Ladies and Gentlemen:

        We have acted as counsel to Linens 'n Things, Inc., a Delaware corporation (the "Company"), Linens Holding Co., a Delaware corporation ("Linens Holding"), and each of the entities listed on Schedule A attached hereto, each of which is a direct or indirect subsidiary of the Company (collectively the "Subsidiary Guarantors"), in connection with (i) the offer to exchange (the "Exchange Offer") up to $650,000,000 aggregate principal amount of the Company's and Linens 'n Things Center, Inc.'s, a California corporation (the "Co-Issuer" and together with the Company, the "Co-Issuers"), Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes"), for the Co-Issuers' $650,000,000 aggregate principal amount of Senior Secured Floating Rate Notes due 2014 (the "Old Notes") that are currently outstanding, and (ii) the preparation of the registration statement on Form S-4 (the "Registration Statement") filed with the Securities and Exchange Commission by the Co-Issuers, Linens Holding, the Subsidiary Guarantors, and certain other direct or indirect subsidiaries of the Company, for the purpose of registering the issuance of the Exchange Notes and certain guarantees under the Securities Act of 1933, as amended (the "Act"). The Old Notes were issued, and the Exchange Notes will be issued, under an indenture, dated as of February 14, 2006 (the "Indenture"), among the Co-Issuers, Linens Holding, The Bank of New York, as trustee, the Subsidiary Guarantors and certain other wholly owned subsidiaries of the Company.

        In the course of our representation as such counsel, we have examined records of the Company, Linens Holding, and the Subsidiary Guarantors and such other documents, certificates of public officials, certificates of officers or other representatives of the companies and other documents, certificates, and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

        In our examination, we have assumed the genuineness of all signatures (including, without limitation, endorsements), the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such copies. As to various facts material to this opinion letter, we have relied upon statements and representations of the Company, Linens Holding, the Subsidiary Guarantors and their respective officers, managers, and other representatives and of public officials, set forth in the Indenture and related documents and in certificates delivered to us, without independently verifying the accuracy of the information contained therein.

        Based upon the foregoing, and subject to the exceptions, limitations, and qualifications set forth below, we are of the following opinions:

        A. When the Exchange Notes have been duly executed by the Company and duly delivered in exchange for the Old Notes in accordance with the Exchange Offer, the Exchange Notes will be valid and binding obligations of the Company as provided in the Indenture.

        B. When the Exchange Notes have been duly executed by the Company and duly delivered in exchange for the Old Notes in accordance with the Exchange Offer, the guaranties of Linens Holding

and each of the Subsidiary Guarantors will be valid and binding obligations of Linens Holding and the Subsidiary Guarantors, respectively.

        The opinions expressed herein are limited to the federal laws of the United States of America and the laws of the State of Delaware, and we assume no responsibility as to the applicability or the effect of any other laws. No opinion is expressed herein with respect to any law, statute, ordinance, rule or regulation of any county, city, locality, or other similar political subdivision.

        The opinions expressed herein are qualified to the extent that the validity or enforceability of the obligations referred to herein may be subject to or affected by: (i) judicial discretion that may limit or affect the availability or granting of certain equitable remedies (such as specific performance) in certain instances; (ii) bankruptcy, insolvency, fraudulent conveyance or transfer, reorganization, moratorium, or similar laws now or hereafter in effect relating to or affecting creditors' rights or remedies generally; (iii) general principles of equity (regardless of whether considered in a proceeding in equity or at law); and (iv) federal and state securities laws, and public policy embodied in or underlying those laws, affecting rights to indemnification or contribution.

        This opinion letter is as of the date hereof, and we undertake no obligation, and expressly disclaim any obligation, to advise any person or entity of any change in the matters set forth herein. This opinion letter is limited to the matters expressly stated, and no opinion other than upon the matters so expressly stated is implied or may be inferred.

        We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus constituting a part of the Registration Statement

Respectfully submitted,
GARDERE WYNNE SEWELL LLP
By:	/s/ David R. Earhart David R. Earhart, Partner

2

SCHEDULE A

Vendor Finance, LLC, a Delaware limited liability company
LNT Services, Inc., a Delaware corporation
LNT Leasing II, LLC, a Delaware limited liability company
LNT West, Inc., a Delaware corporation
LNT Merchandising Company, LLC, a Delaware limited liability company
LNT Leasing III, LLC, a Delaware limited liability company
Citadel LNT, LLC, a Delaware limited liability company

3

EX-5.2

Exhibit 5.2

[MORRISON FOERSTER LETTERHEAD]

August 10, 2006

Linens 'N Things Center, Inc.
6 Brighton Road
Clifton, New Jersey 07015

Re:

$650,000,000 Senior Secured Floating Rate Notes due 2014; Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as special counsel for Linens 'n Things Center, Inc., a California corporation (the "Company"), in connection with a registration statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission by Linens 'n Things, Inc., a Delaware corporation (the "Co-Issuer," and together with the Company, the "Co-Issuers"), Linens Holding Co., a Delaware corporation, and certain subsidiaries of the Co-Issuer for the registration of up to an aggregate of $650,000,000 principal amount of Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes"), by the Co-Issuers in connection with the exchange offer (the "Exchange Offer") of $650,000,000 aggregate principal amount of previously issued and currently outstanding Senior Secured Floating Rate Notes due 2014 (the "Old Notes") for the Exchange Notes. The Exchange Notes will be issued under an indenture, dated as of February 14, 2006 (the "Indenture"), by and among the Co-Issuers, The Bank of New York, as trustee (the "Trustee"), and the Guarantors (as defined in the Indenture). The Exchange Notes and the Indenture are collectively referred to hereinafter as the "Documents."

In connection with this opinion, we have examined such corporate records, documents, instruments, certificates of public officials and of the Company, made such inquiries of officials of the Company, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

In connection with this opinion, we have assumed the genuineness of all signatures, the authenticity of all items submitted to us as originals, and the conformity with originals of all items submitted to us as copies. We have also assumed that each party to the Documents, other than the Company, has the power and authority to execute and deliver, and to perform and observe the provisions of, the Documents, and has duly authorized, executed and delivered the Documents, that the Indenture constitutes the legal, valid and binding obligations of the Trustee, the Co-Issuer and the Guarantors, and that the Indenture has been duly authenticated by the Trustee and will be duly qualified under the Trust Indenture Act of 1939, as amended. We have also assumed compliance with all applicable state securities and "Blue Sky" laws.

The opinions hereinafter expressed are subject to the following qualifications and exceptions:

        (i)    The effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally, including, without limitation, laws relating to fraudulent transfers or conveyances, preferences and equitable subordination;

        (ii)   Limitations imposed by general principles of equity upon the availability of equitable remedies or the enforcement of provisions of the Documents; and the effect of judicial decisions which have held that certain provisions are unenforceable where their enforcement would violate the implied covenants of good faith and fair dealing, or would be commercially unreasonable, or where their breach is not material;

        (iii)  Except to the extent encompassed by an opinion set forth below with respect to the Company, we express no opinion as to the effect on the opinions expressed herein of (a) the compliance or non-compliance of any party to the Documents with any laws or regulations applicable to it, or (b) the legal or regulatory status or the nature of the business of any such party;

        (iv)  The effect of judicial decisions which may permit the introduction of extrinsic evidence to supplement the terms of the Documents or to aid in the interpretation of the Documents;

        (v)   We express no opinion as to the enforceability of provisions of the Documents imposing, or which are construed as effectively imposing, penalties or forfeitures;

        (vi)  We express no opinion as to the enforceability of provisions of the Documents that purport to establish evidentiary standards or make determinations conclusive;

        (vii) We express no opinion as to the enforceability of any indemnification or contribution provisions in the Documents which may be limited or prohibited by federal or state securities laws or by public policy; and

        (viii) We express no opinion as to the enforceability of any choice of law provisions contained in the Documents or the enforceability of any provisions which purport to establish a particular court as the forum for adjudication of any controversy relating to the Documents or which purport to cause any party to waive or alter any right to a trial by jury or which waive objection to jurisdiction.

Our opinion is based upon current statutes, rules, regulations, cases and official interpretive opinions, and it covers certain items that are not directly or definitively addressed by such authorities.

Based upon and subject to the limitations and qualifications set forth herein, we are of the opinion that upon (i) the execution and authentication of the Exchange Notes in accordance with the provisions of the Indenture, (ii) the valid tender of the Old Notes to The Bank of New York as exchange agent for the Exchange Offer and (iii) the issuance of the Exchange Notes in exchange for such tendered Old Notes in accordance with the terms of the Registration Statement and the Indenture, the Exchange Notes will be valid and binding obligations of the Company.

We express no opinion as to matters governed by laws of any jurisdiction other than the following as in effect on the date hereof: the substantive laws of the State of California (excluding its applicable choice of law rules), and the federal laws of the United States of America.

We hereby consent to the inclusion of this opinion as an exhibit to the Registration Statement and any amendments thereto and to the reference to our firm under the caption "Legal Matters" in the prospectus included therein.

Very truly yours,

/s/ Morrison & Foerster LLP

MORRISON & FOERSTER LLP

2

EX-5.3

Exhibit 5.3

[MORRISON & FOERSTER LLP LETTERHEAD]

August 10,2006

LNT Virginia LLC
6 Brighton Road
Clifton, New Jersey 07015

Re:

$650,000,000 Senior Secured Floating Rate Notes due 2014; Registration Statement on Form S-4

Ladies and Gentlemen:

We have acted as special counsel for LNT Virginia LLC, a Virginia limited liability company (the "Company"), in connection with a registration statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission by Linens 'n Things, Inc., a Delaware corporation and Linens 'n Things Center, Inc., a California corporation (the "Co-Issuers"), Linens Holding Co., a Delaware Corporation, the Company and certain other subsidiaries of Linens 'n Things, Inc. for the registration of up to an aggregate of $650,000,000 principal amount of Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes"), by the Co-Issuers in connection with the exchange offer (the "Exchange Offer") of $650,000,000 aggregate principal amount of previously issued and currently outstanding Senior Secured Floating Rate Notes due 2014 (the "Old Notes") for the Exchange Notes. The Exchange Notes will be issued under an indenture, dated as of February 14, 2006 (the "Indenture"), by and among the Co-Issuers, The Bank of New York, as trustee (the "Trustee"), the Company and the other Guarantors (as defined in the Indenture). The Exchange Notes and the Indenture are collectively referred to hereinafter as the "Documents."

In connection with this opinion, we have examined such corporate records, documents, instruments, certificates of public officials and of the Company, made such inquiries of officials of the Company, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

In connection with this opinion, we have assumed the genuineness of all signatures, the authenticity of all items submitted to us as originals, and the conformity with originals of all items submitted to us as copies. We have also assumed that each party to the Documents, other than the Company, has the power and authority to execute and deliver, and to perform and observe the provisions of, the Documents, and has duly authorized, executed and delivered the Documents, that the Indenture constitutes the legal, valid and binding obligations of the Trustee, the Co-Issuer and the Guarantors other than the Company, and that the Indenture has been duly authenticated by the Trustee and will be duly qualified under the Trust Indenture Act of 1939, as amended. We have also assumed compliance with all applicable state securities and "Blue Sky" laws.

The opinions hereinafter expressed are subject to the following qualifications and exceptions:

        (i)    The effect of bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws relating to or affecting the rights of creditors generally, including, without limitation, laws relating to fraudulent transfers or conveyances, preferences and equitable subordination;

        (ii)   Limitations imposed by general principles of equity upon the availability of equitable remedies or the enforcement of provisions of the Documents; and the effect of judicial decisions which have held that certain provisions are unenforceable where their enforcement would violate the implied covenants of good faith and fair dealing, or would be commercially unreasonable, or where their breach is not material;

        (iii)  Except to the extent encompassed by an opinion set forth below with respect to the Company, we express no opinion as to the effect on the opinions expressed herein of (a) the compliance or

non-compliance of any party to the Documents with any laws or regulations applicable to it, or (b) the legal or regulatory status or the nature of the business of any such party;

        (iv)  The effect of judicial decisions which may permit the introduction of extrinsic evidence to supplement the terms of the Documents or to aid in the interpretation of the Documents;

        (v)   We express no opinion as to the enforceability of provisions of the Documents imposing, or which are construed as effectively imposing, penalties or forfeitures;

        (vi)  We express no opinion as to the enforceability of provisions of the Documents that purport to establish evidentiary standards or make determinations conclusive;

        (vii) We express no opinion as to the enforceability of any indemnification or contribution provisions in the Documents which may be limited or prohibited by federal or state securities laws or by public policy; and

        (viii) We express no opinion as to the enforceability of any choice of law provisions contained in the Documents or the enforceability of any provisions which purport to establish a particular court as the forum for adjudication of any controversy relating to the Documents or which purport to cause any party to waive or alter any right to a trial by jury or which waive objection to jurisdiction.

        Our opinion is based upon current statutes, rules, regulations, cases and official interpretive opinions, and it covers certain items that are not directly or definitively addressed by such authorities.

        Based upon and subject to the limitations and qualifications set forth herein, we are of the opinion that upon (i) the execution and authentication of the Exchange Notes in accordance with the provisions of the Indenture, (ii) the valid tender of the Old Notes to The Bank of New York as exchange agent for the Exchange Offer and (iii) the issuance of the Exchange Notes in exchange for such tendered Old Notes in accordance with the terms of the Registration Statement and the Indenture, the guarantee of the Company pursuant to the provisions of the Indenture will be a valid and binding obligation of the Company.

        We express no opinion as to matters governed by laws of any jurisdiction other than the following as in effect on the date hereof: the substantive laws of the Commonwealth of Virginia (excluding its applicable choice of law rules), and the federal laws of the United States of America.

        We hereby consent to the inclusion of this opinion as an exhibit to the Registration Statement and any amendments thereto and to the reference to our firm under the caption "Legal Matters" in the prospectus included therein.

Very truly yours,

/s/ Morrison & Foerster LLP

Morrison & Foerster LLP

2

EX-5.4

Exhibit 5.4

[WOLFF & SAMSON PC LETTERHEAD]

August 10, 2006

Linens 'n Things, Inc.
6 Brighton Road
Clifton, New Jersey 07015

Re:

LNT, Inc., a New Jersey Corporation—Credit Agreement and Indenture

Ladies and Gentlemen:

        We are acting as special local counsel to LNT, Inc., a New Jersey corporation (the "Corporation"), a wholly-owned subsidiary of Linens 'n Things, Inc., a Delaware corporation (the "Company") for the sole purpose of delivering this opinion with respect to (i) that certain Credit Agreement dated as of February 14, 2006 by and among the Company, the Corporation and certain other parties (the "Credit Agreement") and (ii) that certain Indenture, dated as of February 14, 2006 by and among the Company, the Corporation and certain other parties (the "Indenture", and together with the Credit Agreement, the "Guaranty Documents").

        In rendering the opinions set forth below, we have examined the following documents: (a) a Secretary's Certificate of the Secretary of the Corporation certifying (i) the Certificate of Incorporation of the Corporation and the amendments thereto; (ii) the Bylaws of the Corporation; (iii) the Unanimous Written Consents of the Board of Directors of the Corporation dated February 14, 2006 and June 20, 2006; and (iv) a certificate of good standing dated August 9, 2006 issued by the Department of Treasury of the State of New Jersey; and (b) a copy of the Credit Agreement and the Indenture (collectively, the "Documents").

        In our examination of the foregoing, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as certified, photostatic or conformed copies thereof and the authenticity of the originals of all such documents. As to certain matters of fact material to the opinions expressed herein, we have relied solely and exclusively upon the representations and warranties contained in the Documents, and certificates of state authorities and public officials. We have conducted no independent inquiry or investigation into or with respect to any of the factual matters contained therein and have assumed the accuracy thereof without undertaking to verify the same.

        In rendering these opinions, we have assumed, with your permission, that (i) each of the parties to the Guaranty Documents other than the Corporation (the "Other Guaranty Parties") is an entity duly formed, validly existing and in good standing under the laws of the State of its organization, (ii) each of the Other Guaranty Parties has full power and authority to execute and deliver the Guaranty Documents to which it is a party and to perform its obligations thereunder, (iii) the execution and delivery by the Other Guaranty Parties of the Guaranty Documents and the performance by the Other Guaranty Parties of their respective obligations thereunder have been duly authorized by all requisite corporate, limited liability company and/or partnership action, (iv) the Guaranty Documents have been duly executed and delivered by the parties thereto, (v) no consent, approval, authorization, declaration, registration or filing by or with any governmental agency, authority, commission, board or bureau or other person or entity is required for the execution and delivery of the Guaranty Documents by the parties thereto or in connection with the consummation by such parties of the transactions contemplated by the Guaranty Documents and (vi) the execution and delivery of the Guaranty Documents by the parties thereto, and the performance of their respective obligations thereunder, do not (a) conflict with or violate any provision of the certificate of limited partnership, certificate of formation, partnership agreement, operating agreement or other charter or organizational documents of any of the Other Guaranty Parties, (b) conflict with or violate any order, decree or judgment applicable to or binding upon any of the parties thereto, (c) violate, conflict with, result in a breach of or

constitute a default under any agreement, mortgage, indenture or contract to which any of the parties thereto is a party or by which any of their properties or assets are bound or (e) result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of any of the parties thereto other than as contemplated by the Guaranty Documents.

        We are authorized to practice law in the State of New Jersey, and we do not purport to be experts on, or to express any opinion hereunder concerning, any law other than the laws of the State of New Jersey. Our opinions herein are based upon existing laws which are subject to change.

        Based upon and subject to the foregoing, and in reliance thereon, and subject to the limitations, qualifications and exceptions set forth below, we are of the opinion that as of the date hereof:

        The execution and delivery of the Guaranty Documents by the Corporation has been duly authorized under New Jersey law, and constitute the legal, valid and binding obligation of the Corporation, in accordance with the terms and conditions set forth therein.

        The foregoing opinion is based upon the following further assumptions and are subject to the following further exceptions, qualifications and limitations:

        Our opinion regarding the validity, binding effect and enforceability of the Guaranty Documents means that (i) each Guaranty Document constitutes an effective contract under New Jersey law, (ii) each of the Guaranty Documents is not invalid in its entirety because of a specific statutory prohibition or public policy and is not subject in its entirety to a contractual defense, and (iii) subject to the last sentence of this paragraph, some remedy is available if a party is in material default under the Guaranty Documents. This opinion does not mean that (i) any particular remedy is available upon a material default or (ii) every provision of the Guaranty Documents will be upheld or enforced in any or each circumstance by a court. Furthermore, the foregoing opinion regarding the enforceability of the Guaranty Documents is subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance and other similar laws (and court decisions with respect thereto) now or hereafter in effect and affecting the rights and remedies of creditors generally or providing for the relief of debtors, (ii) the refusal of a particular court to grant (a) equitable remedies, including, without limitation, the remedy of specific performance or injunctive relief, or (b) a particular remedy sought by a party under any of the Guaranty Documents as opposed to another remedy provided for therein or another remedy available at law or in equity, and (iii) general principles of equity (regardless of whether such remedies are sought in a proceeding in equity or at law).

        Without limiting the foregoing, we express no opinion as to (i) any limitations which may be contrary to statute or public policy limiting a person's right to waive the benefit of statutory provisions or common-law rights, (ii) any limitations on the right of a party to exercise rights or remedies in respect of defaults under the Guaranty Documents if (a) it is determined that such defaults are not material, (b) such damages bear no reasonable relation to the damages suffered by such party as a result of such delinquencies or defaults, or it can not be determined that the enforcement of such provisions is reasonably necessary for the protection of such party, or (c) such party's enforcement of such provisions would violate such party's implied covenant of good faith and fair dealing, (iv) any provision of applicable law which permits a court to refuse to enforce, or limit application of, provisions of a contract which the court finds to have been unconscionable at the time the contract was made or an unfair portion of an adhesion contract, (v) any provisions relating to indemnification to the extent prohibited by public policy, (vi) the enforceability of (a) any self-help remedies provided for in the Guaranty Documents, (b) provisions which purport to restrict access to legal or equitable remedies or waive any rights or which purport to establish evidentiary standards, or (c) provisions relating to subrogation rights, suretyship, delay or omission of enforcement of rights or remedies, agreements to agree on future matters, waivers or ratification of future acts, unreasonable prohibitions against the transfer, alienation or hypothecation of property, consent judgments or marshalling of assets and

2

(vii) the enforceability of any provision in the Guaranty Documents relating to the submission by any party to the jurisdiction of any particular court or courts.

        This opinion is issued as of the date hereof and we undertake no obligation to advise you of any changes in any matter set forth in this opinion. This opinion is rendered solely for the benefit of the Company and Gardere Wynne Sewell LLP in connection with the Credit Agreement and the Indenture and may not, without our prior written consent, be relied upon in any manner by any person other than the Corporation and its successors and assigns.

        Notwithstanding the foregoing, we hereby consent to the filing of this opinion letter as an Exhibit to the Registration Statement on Form S-4 filed by the Company and the other parties thereto in connection with that certain Exchange Offer as are fully described therein.

Very truly yours,
Wolff & Samson, P.C.

SEL:kac

3

EX-5.5

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 5.5

August 10, 2006

Linens 'n Things, Inc.
Bloomington, MN, L.T., Inc.
6 Brighton Road
Clifton, New Jersey 07015

Gardere Wynne Sewell
LLP 1601 Elm Street, Suite 3000
Dallas, Texas 75201

Re:

Registration Statement on Form S-4 Relating to $650,000,000 Registered Senior Secured Floating Rate Notes due 2014

Ladies and Gentlemen:

        In connection with the registration of $650,000,000 Registered Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes") by Linens 'n Things, Inc., a Delaware corporation (the "Company"), and each of the co-registrants, the guarantees of the Exchange Notes (the "Guarantees") by each of the entities listed on Schedule A hereto (the "Guarantors"), and specifically that certain guarantee of the Exchange Notes (the "Covered Guarantee") by Bloomington, MN., L.T., Inc., a Minnesota corporation (the "Covered Guarantor"), under the Securities Act of 1933, as amended (the "Act"), on Form S-4 filed with the Securities and Exchange Commission (the "Commission") on July 6, 2006 as amended by Amendment No. 1 dated August    , 2006 (the "Registration Statement"), you have requested our opinion with respect to the matters set forth below. The Exchange Notes and Guarantees will be issued pursuant to an Indenture, dated as of February 14, 2006, among the Company, Linens 'n Things Center, Inc., the Guarantors (as defined therein), and The Bank of New York, as trustee (the "Trustee"). The Exchange Notes and the Guarantees will be issued in exchange for the Company's outstanding, unregistered, Senior Secured Floating Rate Notes due 2014 on the terms set forth in the prospectus contained in the Registration Statement. The Indenture, the Exchange Notes and the Guarantees are sometimes referred to herein collectively as the "Operative Documents."

        In our capacity as special counsel to the Covered Guarantor, in connection with such registration, we are familiar with the proceedings taken by the Covered Guarantor in connection with the authorization and issuance of the Indenture pursuant to which the Exchange Notes and the Covered Guarantee will be issued and have reviewed a signed copy of the Indenture bearing the signature of David J. Dick on behalf of the Covered Guarantor.

        In addition, we have examined originals and copies certified or otherwise identified to our satisfaction of the following documents:

(i)

the Articles of Incorporation of Bloomington, MN., L.T., Inc., dated as of May 30, 1986;



(ii)

the By-Laws of Bloomington, MN., L.T., Inc., as amended by an Amendment to By-Laws, dated as of April 17, 2006 (the "By-Laws");



(iii)

the Unanimous Written Consent of the Board of Directors of Bloomington, MN., L.T., Inc., the Covered Guarantor, dated February 14, 2006; and



(iv)

the Resolutions of the Board of Directors of Bloomington, MN., L.T., Inc., the Covered Guarantor, dated June 20, 2006.

        The documents described in (i), (ii), (iii), and (iv) above are collectively referred to herein as the "Corporate Documents." With respect to all factual matters, we have relied solely upon, and have assumed the accuracy, completeness, and genuineness of, the representations, warranties, and certificates contained in and made pursuant to, the Operative Documents and the Corporate Documents.

        We have not served as general counsel to any of the parties to the Operative Documents. We have represented the Covered Guarantor only with respect to the rendering of this opinion.

        In rendering the opinions set forth below, we have relied, with your permission, upon the following specific assumptions, the accuracy of which we have not independently verified:

(i)

Except for the Operative Documents, there are no other documents or agreements executed by or between any of the parties that would expand or otherwise modify the obligations of the Covered Guarantor under the Covered Guarantee or that would have any effect on the opinion rendered herein;



(ii)

We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to authentic original documents of all documents submitted to us as copies, and that the duly elected officers as identified and signed the Officer's Certificate are the only parties that executed documents on behalf of the Covered Guarantor; and



(iii)

The Articles of Incorporation and the By-Laws of the Covered Guarantor that have been provided to us are the current Articles of Incorporation and By-Laws of the Covered Guarantor, and there have been no amendments to such Articles of Incorporation or By-Laws that would have any effect on the opinion rendered herein.

        We are members of the bar of the State of Minnesota, and this opinion relates only to the laws of the State of Minnesota. We are not opining on the laws of any other jurisdiction or federal law, including federal securities laws, or any state securities law, including Minnesota securities laws, and we express no opinion with respect to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction, including the federal laws of the United States, or as to any matters of municipal law or the laws of any local agencies within any state.

        Subject to the foregoing and the other matters set forth herein, it is our opinion that as of the date hereof:

(1)

The Indenture has been duly authorized by all necessary corporate action of the Covered Guarantor and has been duly executed and delivered by the Covered Guarantor.



(2)

The Covered Guaranty has been duly authorized by all necessary corporate action of the Covered Guarantor.

        To the extent that the obligations of the Company and each Guarantor under the Operative Documents may be dependent upon such matters, we assume for purposes of this opinion that the Trustee, the Company, Linens 'n Things Center, Inc., and each Guarantor other than the Covered Guarantor: (a) is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization; (b) has the requisite organizational and legal power and authority to perform its obligations under each of the Operative Documents to which it is a party; (c) is duly qualified to engage in the activities contemplated by each such Operative Document; and (d) has duly authorized, executed, and delivered each such Operative Document.

        This opinion is for the benefit of the addressees hereof and we consent to your filing this opinion as an exhibit to the Registration Statement. Except as set forth in the preceding sentence, this letter may not be quoted for any other purpose without our prior written consent.

Very truly yours,
Dorcey & Whitney LLP

RAK

SCHEDULE A

Subsidiary Guarantors

Name	Jurisdiction of Formation
Bloomington, MN., L.T., Inc.	Minnesota
Vendor Finance L.L.C.	Delaware
LNT, Inc.	New Jersey
LNT Services, Inc.	Delaware
LNT Leasing II, L.L.C	Delaware
LNT West, Inc.	Delaware
LNT Virginia L.L.C.	Virginia
LNT Merchandising Company L.L.C.	Delaware
LNT Leasing III, L.L.C.	Delaware
Citadel LNT L.L.C.	Delaware

QuickLinks

SCHEDULE A Subsidiary Guarantors

EX-10.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.2

STOCKHOLDERS' AGREEMENT

dated as of February 14, 2006

between

LINENS HOLDING CO.

and

ITS STOCKHOLDERS

STOCKHOLDERS' AGREEMENT

        This STOCKHOLDERS' AGREEMENT (this "Agreement") is dated as of February 14, 2006 among Linens Holding Co., a Delaware corporation (the "Company"), Linens Investors, LLC, a Delaware limited liability company ("Linens Investors"), and each of the other Stockholders of the Company signatory hereto from time to time. Linens Investors and any other person who shall become a party to or agree to be bound by the terms of this Agreement after the date hereof is referred to herein as a "Stockholder."

        WHEREAS, the Company and the Stockholders desire to enter into this Agreement setting forth the rights and obligations with respect to all shares of Common Stock of the Company, par value $0.01 per share (the "Common Stock"), owned and hereafter acquired by them.

        NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth in this Agreement, the parties hereto, intending to be legally bound, hereby agree as follows:

        1.    Certain Definitions.    As used in this Agreement, the following terms shall have the following respective meanings:

        "Affiliate" of a person means any person, controlling, controlled by, or under common control with such person.

        "Apollo" means Apollo Management V, L.P. and its affiliates (which, for these purposes, shall include, without limitation, Apollo Linens Investors, LLC, Apollo Linens Investors B. LLC, Apollo Investment Fund V, L.P., Apollo Overseas Partners V, L.P., Apollo Netherlands Partners V (A), L.P., Apollo Netherlands Partners V (B), L.P., Apollo German Partners V GmbH & Co. Kg and Apollo Investment Fund VI, L.P. and their respective limited partners).

        "Board" means the Board of Directors of the Company.

        "Commission" means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

        "Common Stock" has the meaning set forth in the recitals hereto.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

        "Governmental Authority" means any government, court, administrative agency or commission or other governmental agency, authority or instrumentality, domestic or foreign, of competent jurisdiction.

        "NRDC" means NRDC Real Estate Advisors I LLC, a Delaware limited liability company.

        "Permitted Transfer" has the meaning set forth in Section 3.4 hereof.

        "Permitted Transferee" means any stockholders, partners or members of Linens Investors and any Affiliate of Linens Investors.

        "person" means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, Governmental Authority or other entity, and shall include any successor (by merger or otherwise) of such entity.

        "Qualified IPO" means a sale by the Company of shares of Common Stock in an underwritten (firm commitment) public offering registered under the Securities Act, with gross proceeds to the Company of not less than $150 million, resulting in the listing of the Common Stock on a nationally recognized stock exchange, including without limitation the Nasdaq National Market System.

        "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

        "Silver Point" means Silver Point Capital Fund Investments LLC, a Delaware limited liability company.

        "Stockholders" means each person, other than the Company, who has executed this Agreement and each person who is required to become a party to this Agreement in the future in accordance with the terms hereof.

        "Transfer" means a sale, assignment, encumbrance, gift, pledge, hypothecation, distribution or other disposition of Common Stock or any interest therein.

        2.    Voting.    Each Stockholder hereby irrevocably appoints Linens Investors (with full power of substitution), upon the execution and delivery of this Agreement, as such Stockholder's proxy and attorney-in-fact (in such capacity, the "Proxy Holder") to vote and give or withhold consent, with respect to all shares of Common Stock held by such Stockholder at any time, for all matters subject to the vote of such Stockholder from time to time in such manner as the Proxy Holder shall determine in its sole and absolute discretion, whether at any meeting (whether annual or special and whether or not an adjourned meeting) of the Company or by written consent or otherwise, giving and granting to the Proxy Holder all powers such Stockholder would possess if personally present and hereby ratifying and confirming all that the Proxy Holder shall lawfully do or cause to be done by virtue hereof. The Proxy Holder shall not have any liability to any Stockholder as a result of any action taken or failure to take action pursuant to the foregoing proxy except for any action or failure to take action not taken or omitted in good faith or which involves intentional misconduct or a knowing violation of applicable law. Each Stockholder represents that any proxies given by such Stockholder prior to becoming a party to this Agreement are not irrevocable; any such proxies are hereby revoked. Each Stockholder hereby affirms that this irrevocable proxy is given in consideration for the mutual agreements contained in this Agreement and that this irrevocable proxy is coupled with an interest and may, under no circumstances, be revoked. The Company hereby acknowledges receipt of and the validity of the foregoing irrevocable proxy, and agrees to recognize the Proxy Holder as the sole attorney and proxy for each such Stockholder at all times prior to the termination date of such irrevocable proxy as hereinafter provided in this Section 2. Each such Stockholder intends that this irrevocable proxy is executed and intended to be irrevocable in accordance with the provisions of Section 212 of the Delaware General Corporation Law. The proxy provided by this Section 2 shall terminate and be deemed revoked: (a) on the date that the shares owned by a Stockholder are (i) Transferred pursuant to Rule 144 promulgated under the Securities Act, (ii) sold pursuant to a registration statement filed with the Commission or (iii) Transferred in accordance with Section 4 or 5 hereof; or (b) solely with respect to NRDC and Silver Point and their respective members as of the date hereof and persons who receive Common Stock from such persons in a Permitted Transfer (collectively with NRDC, Silver Point and Silver Point Fund Affiliates, the "Original Investors"), following a registration by the Company of shares of Common Stock pursuant to the Exchange Act (an "IPO") and the distribution of shares of Common Stock by Linens Investors pursuant to the terms of the Linens Investors Amended and Restated Limited Liability Company Agreement (the "Linens Investors LLC Agreement").

        3.    Transferability.    

        3.1    Restrictions on Transferability.    

        (a)   No Stockholder shall, directly or indirectly, Transfer any shares of Common Stock owned by such Stockholder, or any interest therein, unless such transfer or disposition is made upon compliance with the provisions of the Securities Act and in accordance with the applicable provisions of Sections 3, 4 and 5 hereof. Any attempted Transfer by a Stockholder other than in accordance with the terms hereof is void ab initio and transfers no right, title or interest in or to such shares to the purported transferee, buyer, donee, assignee or encumbrance holder.

        (b)   Each Stockholder agrees that it will not, directly or indirectly, Transfer any shares of Common Stock without Linens Investors' prior written consent (except for Transfers permitted

2

under Section 3.4 hereof), which consent shall be in Linens Investors' sole and absolute discretion.

        3.2    Restrictive Legend.    

        (a)   Each certificate representing any shares of Common Stock that is held by a party hereto shall be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws):

"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND MAY BE OFFERED, PLEDGED, SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT AND SUCH LAWS, OR IN COMPLIANCE WITH AN APPLICABLE EXEMPTION FROM REGISTRATION; PROVIDED THAT THE ISSUER MAY REQUIRE THE TRANSFEROR TO DELIVER AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER REGARDING THE AVAILABILITY OF SUCH AN EXEMPTION.

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE ALSO SUBJECT TO A STOCKHOLDERS' AGREEMENT, DATED AS OF FEBRUARY 14, 2006, AS IT MAY BE AMENDED FROM TIME TO TIME (THE "AGREEMENT"), WHICH CONTAINS PROVISIONS REGARDING (I) CERTAIN RESTRICTIONS ON THE SALE, ASSIGNMENT, ENCUMBRANCE, GIFT, PLEDGE, HYPOTHECATION, DISTRIBUTION OR OTHER DISTRIBUTION (EACH, A "TRANSFER") OF SUCH SECURITIES, (II) CERTAIN TAG-ALONG RIGHTS AND DRAG-ALONG RIGHTS APPLICABLE TO SUCH SECURITIES, (III) CERTAIN RESTRICTIONS ON VOTING AND THE GRANT OF AN IRREVOCABLE PROXY AND (IV) CERTAIN OTHER MATTERS. A COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY. ANY TRANSFER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE OR ANY INTEREST THEREIN IN VIOLATION OF THE AGREEMENT IS NULL AND VOID."

        (b)   The Company will instruct any transfer agent not to register the Transfer of any shares of Common Stock until the conditions specified in the foregoing legends and this Agreement are satisfied.

        (c)   The first paragraph of the legend required by Section 3.2(a) hereof shall cease and terminate as to any particular shares of Common Stock (i) when, in the written opinion of counsel reasonably acceptable to the Company, such legend is no longer required in order to assure compliance by the Company with the Securities Act, or (ii) when such shares have been effectively registered under the Securities Act or transferred pursuant to Rule 144 under the Securities Act. Whenever (x) such requirement shall cease and terminate as to any shares of Common Stock or (y) such shares shall be transferable under paragraph (k) of Rule 144 under the Securities Act, the holder thereof shall be entitled to receive from the Company, without expense, new certificates not bearing the first paragraph of the legend required by Section 3.2(a) hereof.

        (d)   Any person who holds shares of Common Stock that are not subject to all or part of the terms of this Agreement shall have the right to have the second paragraph of the legend required by Section 3.2(a) hereof (or the applicable portion thereof) removed from certificates representing such shares.

        3.3    Notice of Proposed Transfers; Securities Law Compliance.    Prior to any proposed Transfer of any shares of Common Stock by a Stockholder (other than Linens Investors) that has been

3

approved or permitted pursuant to Sections 3.1(a) or (b) hereof, as applicable, unless there is in effect a registration statement under the Securities Act covering the proposed Transfer, the Stockholder intending to Transfer such Common Stock (the "Transferor Stockholder") shall give written notice to the Company of such Transferor Stockholder's intention to effect such Transfer. Each such notice shall describe the manner and circumstances of the proposed Transfer in sufficient detail, and shall be accompanied, unless Linens Investors or the Board otherwise approves, by either (a) a written opinion of legal counsel, who shall be reasonably satisfactory to the Company, addressed to the Company, and reasonably satisfactory in form and substance to the Company's legal counsel, to the effect that the proposed Transfer may be effected without registration under the Securities Act, or (b) a "no action" letter from the staff of the Commission to the effect that the Transfer of such Common Stock without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, whereupon the holder of such Common Stock shall be entitled to Transfer such Common Stock in accordance with the terms of the notice delivered by the holder to the Company. Notwithstanding the foregoing, any proposed Transfer (other than Transfers pursuant to Rule 144 under the Securities Act or Transfers pursuant to a transaction subject to an effective registration statement) shall be null and void unless the proposed transferee becomes a party to this Agreement (in the same capacity as the transferor) by executing a signature page hereto and agrees to become legally bound hereby.

        3.4    Permitted Transfers.    Subject to compliance with the applicable provisions of the Securities Act and Section 3.3 hereof, the following Transfers may be made by Stockholders without complying with Sections 3.1(a) or (b) hereof, as applicable, subject to the transferee executing a signature page hereof and thereby becoming a party hereto (in the same capacity as the transferor) and agreeing to become legally bound hereby: (a) Transfers upon death or incompetence of an individual Stockholder to such Stockholder's heirs, executors, administrators, testamentary trustees, legatees or beneficiaries; (b) Transfers by a Stockholder to the Company; (c) Transfers contemplated by, and in conformity with, Sections 4 and 5 hereof; (d) Transfers by a Stockholder by gift to his or her spouse or to the siblings, lineal descendants (including adopted children), or ancestors of such individual or his or her spouse or to a trustee of any trust of which such person or persons or such Stockholder is or are beneficiaries or any partnership or corporation wholly owned by such persons; and (e) Transfers by a Stockholder to its wholly owned or commonly managed affiliates, if, in each case, the Transferor retains voting rights with respect to the portion of the shares of Common Stock being transferred or, if the Transferor does not retain voting rights, such Transfer is made with the prior written consent of Linens Investors, in its sole and absolute discretion (each of the immediately preceding clauses (a), (b), (c), (d) and (e) is individually referred to herein as a "Permitted Transfer" and, collectively, as "Permitted Transfers").

        3.5    Transfer Restrictions.    Prior to a Qualified IPO, each Stockholder shall sign customary lock-ups requested by the managing underwriter in the Qualified IPO (the "QIPO Lock-Up"). Following such Qualified IPO, the Stockholders shall not Transfer any shares of Common Stock (i) until the expiration or waiver by the managing underwriter in the Qualified IPO of the QIPO Lock-Up and (ii) until the first anniversary of such Qualified IPO (the "Transfer Restriction Period"), without the consent of Linens Investors, such consent not to be unreasonably withheld. Upon the Company's receipt of notice (a "Transfer Request Notice") from any Stockholder other than Silver Point or a Silver Point Fund Affiliate (an "Initiating Transfer Party") requesting the consent of Linens Investors for any Transfer during the Transfer Restriction Period, the Company shall promptly forward to all other Stockholders, other than Silver Point or a Silver Point Fund Affiliate, by facsimile a copy of such Transfer Request Notice (a "Notice of Receipt of Transfer Request"). If the Company receives a Transfer Request Notice from any Stockholder other than the Initiating Transfer Party and other than Silver Point or a Silver Point Fund Affiliate (an "Additional Transfer Party") during the five (5) business day period (the "Transfer Request Period") after the

4

date of delivery by the Company of the Notice of Receipt of Transfer Request (the number of Securities requested to be Transferred in all of such Transfer Request Notices, the "Transfer Requested Securities") and Linens Investors determines pursuant hereto to allow the Transfer of some, but not all, of the Transfer Requested Securities of the Initiating Transfer Party and all Additional Transfer Parties set forth in the Transfer Request Notice received during such Transfer Request Period (the "Permitted Transfer Requested Securities"), then each Initiating Transfer Party and Additional Transfer Party shall be permitted to sell its pro rata portion of the Permitted Transfer Requested Securities based on the aggregate amount of Securities requested to be transferred by each of the Initiating Transfer Party and the Additional Transfer Parties relative to the total amount of such Transfer Requested Securities.

        4.    Drag-Along Rights.    

        (a)   Generally.    If Linens Investors proposes a transaction involving the Transfer of Common Stock representing at least a majority of the outstanding Common Stock of the Company or a transaction involving the Transfer of a majority of the assets of the Company (whether through a stock sale, a merger, a recapitalization, a consolidation transaction, a transaction involving the transfer of the majority of the assets of the Company or otherwise) to any person (a "Prospective Purchaser"), other than a transfer to the public by means of a public offering, then Linens Investors shall have the right (the "Drag-Along Right") to compel the remaining Stockholders (the "Drag-Along Stockholders") to sell their shares of Common Stock to the Prospective Purchaser for a consideration per share and on terms and conditions no less favorable to the Drag-Along Stockholders than those Linens Investors obtains (and in the case of a transfer of such shares or a transfer of assets of the Company, or other transaction requiring the vote of the Drag-Along Stockholders, this Drag-Along Right requires the Drag-Along Stockholders to vote their shares in favor of the transaction and to tender their shares for the transaction consideration) for its Common Stock. The number of shares subject to the Drag-Along Right shall be, as to each Drag-Along Stockholder, (x) a number of shares of Common Stock that represents the same percentage of all shares of Common Stock owned by such Drag-Along Stockholder as the number of shares of Common Stock proposed to be transferred by Linens Investors represents as a percentage of all shares of Common Stock owned by Linens Investors (the "Pro Rata Portion") or (y) in the case of a Transfer of 80% or more of the outstanding Common Stock, such greater amount as designated by Linens Investors, in its sole and absolute discretion. Linens Investors shall exercise the Drag-Along Right by giving written notice (the "Drag-Along Notice"), not less than 15 days prior to consummation of the transfer to the Prospective Purchaser, to the Company and the Drag-Along Stockholders stating: (i) that they propose to effect such a transaction; (ii) the name and address of the Prospective Purchaser; (iii) the proposed purchase price per share of Common Stock or for such assets; (iv) the Pro Rata Portion or, in the case of a Transfer of 80% or more of the outstanding Common Stock, such greater amount as designated by Linens Investors; (v) that all the Drag-Along Stockholders shall be obligated to sell their shares upon terms and conditions no less favorable to the Drag-Along Stockholders than those Linens Investors is able to obtain for its shares, including entering into agreements with other persons on terms substantially identical to or more favorable to the Drag-Along Stockholders than those applicable to Linens Investors and obtaining any required consents; and (vi) in the case of a transfer, whether through a stock sale, a merger, a recapitalization, a consolidation transaction, a transaction involving the transfer of the majority of the assets of the Company or otherwise, of such shares or of such assets in a transaction requiring the vote of or tenders by the Drag-Along Stockholders, that all the Drag-Along Stockholders shall be obligated to vote in favor of such transaction and tender their shares for the transaction consideration. Each Drag-Along Stockholder affirms that its agreement to vote for the approval of the transaction with respect to the transfer of shares or assets to the Prospective Purchaser under

5

this Section 4 is given as a condition of this Agreement and as such is coupled with an interest and is irrevocable. This voting agreement shall remain in full force and effect throughout the time that this Section 4 is in effect. It is understood that this voting agreement relates solely to the transaction with a Prospective Purchaser as described in this Section 4 and does not constitute the agreement to vote or consent as to any other matters.

        (b)   Procedure.    Not later than 10 days following the date of receipt of the Drag-Along Notice, each of the Drag-Along Stockholders shall deliver to Linens Investors certificates representing the shares held by such Drag-Along Stockholder to be transferred, accompanied by duly executed stock powers. If any Drag-Along Stockholder fails to deliver such certificates to Linens Investors, the Company shall cause the books and records of the Company to show that the shares represented by such certificates of such Drag-Along Stockholder are bound by the provisions of this Section 4 and are transferable only to the Prospective Purchaser or an Affiliate of such Prospective Purchaser upon surrender for transfer by the holder thereof.

        5.    Tag-Along Rights.    

        (a)   Generally.    If Linens Investors (the "Transferring Stockholder") proposes, in a single transaction or a series of related transactions, to Transfer any or all of the shares of Common Stock it owns to a Prospective Purchaser, other than to a Permitted Transferee (a "Tag-Along Sale"), and the Drag-Along Right, if any, has not been exercised with respect to such Tag-Along Sale, then, prior to proceeding with such Tag-Along Sale, the Transferring Stockholder shall promptly deliver to each remaining Stockholder and the Company a written notice (the "Tag-Along Notice") stating that the Transferring Stockholder desires to enter into the Tag-Along Sale and setting forth the purchase price per share of Common Stock the number of shares desired to be sold by the Transferring Stockholder and the total number of shares of Common Stock then owned by the Transferring Stockholder and other material terms of the Tag-Along Sale, including whether the Prospective Purchaser will purchase all shares proffered. Each of the remaining Stockholders shall have the right (the "Tag-Along Right") to participate in any such sale of shares of Common Stock by the Transferring Stockholder in accordance with the procedures set forth in Section 5(b) below; provided, that such participation shall be on terms and conditions no less favorable to such remaining Stockholders than those on which the Transferring Stockholder proposes to transfer its shares.

        (b)   Procedure.    Within 10 days after receipt of the Tag-Along Notice (the "Tag-Along Option Period"), the remaining Stockholders may elect to exercise their Tag-Along Right and participate in the Tag-Along Sale. Any remaining Stockholder electing to participate in the Tag-Along Sale (a "Tag-Along Stockholder") shall give written notice thereof (the "Election Notice") to the Transferring Stockholder and the Company within the Tag-Along Option Period. If the Prospective Purchaser will purchase all shares proffered, then the Election Notice shall specify the number of shares that such Tag-Along Stockholder desires to sell to the Prospective Purchaser, which amount may be up to (or less than) the total number of shares owned by such Tag-Along Stockholder. If the Prospective Purchaser will not purchase all shares proffered, then the Election Notice shall specify the number of shares that such Tag-Along Stockholder desires to sell to the Prospective Purchaser, which amount may be up to (or less than) the total number of shares to be purchased by the Prospective Purchaser multiplied by a fraction, the numerator of which is the total number of shares being sold by the Transferring Stockholder and the denominator of which is the total number of shares owned by the Transferring Stockholder. If, at the end of the Tag-Along Option Period, any remaining Stockholders do not exercise their Tag-Along Right in full (or at all), then the Transferring Stockholder shall give notice to the Tag-Along Stockholders who fully exercised their Tag-Along Rights of the number of such unexercised shares (the "Reallotment Shares"), and these Tag-Along Stockholders shall have three business days to notify the Transferring

6

Stockholder of their election to sell all or a portion of the Reallotment Shares (and indicating the number of such shares desired to be sold). If the purchase of such unexercised shares is oversubscribed, the shares will be allocated to electing Stockholders on a pro rata basis in accordance with their relative ownership of Common Stock. Each Tag-Along Stockholder shall deliver to the Transferring Stockholder, at the same time as and enclosed with its Election Notice, certificates representing such Tag-Along Stockholder's shares that are specified in the Election Notice to be transferred, accompanied by duly executed stock powers (the "Tag-Along Certificates"). The failure of any remaining Stockholder to submit an Election Notice or deliver its Tag-Along Certificates within the Tag-Along Option Period shall constitute an election by such remaining Stockholder not to participate in such Tag-Along Sale; provided, however, that such Tag-Along Sale is consummated within 120 days of the expiration of the Tag-Along Option Period. By delivering an Election Notice and its Tag-Along Certificates to the Transferring Stockholder within the Tag-Along Option Period, a Tag-Along Stockholder shall have the right and obligation to sell to the Prospective Purchaser that number of shares specified in the Election Notice; provided, however, that, to the extent the Prospective Purchaser is unwilling or unable to purchase all of the shares proposed to be sold by the Transferring Stockholder and the Tag-Along Stockholders, the number of shares to be sold by the Transferring Stockholder shall be ratably reduced so that each Tag-Along Stockholder may sell its proportionate share of Common Stock calculated as provided above, and the number of shares to be sold by the Transferring Stockholder and each of the Tag-Along Stockholders equals the number of shares that the Prospective Purchaser is willing or able to purchase.

        (c)   The provisions of this Section 5 shall not pertain or apply to (i) any Transfer by Linens Investors to a Permitted Transferee, (ii) any Transfer pursuant to Rule 144 promulgated under the Securities Act or (iii) any Transfer pursuant to a registration statement filed with the Commission.

        6.    Board Of Directors.    

        6.1    Board Appointees.    

        (a)   Until the occurrence of a Qualified IPO, Linens Investors shall have the right to appoint all of the members of the Board (the "Directors"). The Company acknowledges that Apollo Investment Fund V, L.P. ("AIF V") has the power by itself to cause the Company to appoint at least one of the directors to the Board.

        (b)   Following a Qualified IPO, the Directors shall be nominated as follows:

(i)

For so long so long as Apollo owns at least 25% of the issued and outstanding Common Stock, Apollo shall have the right to nominate Directors constituting a majority of the Board, of which AIF V, by itself, shall have the power to appoint at least one Director (provided, however, that in the event that Apollo owns less than 25% of the issued and outstanding Common Stock, Apollo shall have the right to nominate a number of Directors equal to the product of (A) the total number of Directors multiplied by (B) the percentage of the issued and outstanding Common Stock owned by Apollo, rounded to the nearest whole number, of which AIF V, by itself, shall have the power to nominate at least one such Director;



(ii)

For so long as Silver Point and any of Ed Mulé, Bob O'Shea, Michael Gallo, Silver Point Capital, L.P., or any entity controlled directly or indirectly by one or more of them (the "Silver Point Fund Affiliates") own at least 5% of the issued and outstanding Common Stock, Silver Point shall have the right to nominate one Director (which shall be (A) Michael Gatto, (B) any other employee or partner of any Silver Point Fund Affiliate or (C) any other individual approved in writing in advance by Apollo in its sole and absolute discretion); and in the event that Silver Point and the Silver Point Fund Affiliates own less than 5% of the issued and outstanding Common Stock, Silver Point shall have no right to nominate any Directors.

7

        6.2    Election of Board Appointees.    The Stockholders shall vote all of the shares of Common Stock owned or held of record by them at all regular and special meetings of the stockholders of the Company called or held for the purpose of filling positions on the Board and in each written consent executed in lieu of such a meeting of stockholders, and each party hereto shall take all actions otherwise necessary to ensure (to the extent within the parties' collective control) the election to the Board of the persons appointed pursuant to Section 6.1 hereof.

        6.3    Vacancies.    

        (a)   Each person appointed or nominated to the Board pursuant to Section 6.1 hereof will hold his or her office as a director of the Company for such term as is provided in the Certificate of Incorporation and Bylaws of the Company (as may be amended from time to time, the "Charter Documents") or until his or her death, resignation or removal from the Board or until his or her successor has been duly elected and qualified in accordance with the provisions of this Agreement, the Charter Documents and applicable law. If any such person ceases to serve as a director of the Company for any reason during his or her term (a "Terminating Nominee"), a nominee for the vacancy resulting therefrom will be designated by the person who appointed or nominated such person pursuant to Section 6.1 hereof.

        (b)   If any person entitled to appoint or nominate any director pursuant to Section 6.1 hereof fails at any time to nominate the maximum number of persons for election to the Board that it is entitled to nominate pursuant to this Agreement, each directorship in respect of which it so failed to make a nomination will remain vacant unless such vacancy results in there being fewer than the minimum number of directors required by law or the Charter Documents, in which case such vacancy or vacancies will be filled by a person or persons selected by a majority of the directors of the Company then in office.

        6.4    Removal of Board Appointees.    

        (a)   The Stockholders shall use their respective best efforts to call, or cause the appropriate officers and directors of the Company to call, a special meeting of stockholders of the Company and to vote all of the shares of Common Stock owned or held of record by them for, or to take all actions by written consent in lieu of any such meeting necessary to cause, the removal (with or without cause) of any director, if any person entitled to appoint such director requests such director's removal in writing for any reason. The person requesting such removal shall have the right to appoint a new person to the Board in the event any director shall be so removed under this Section 6.4(a) or shall vacate his directorship for any other reason.

        (b)   Subject to the foregoing, no Stockholder shall vote or cause to be voted any securities that such Stockholder has the power to vote (or in respect of which such Stockholder has the power to direct the vote) for the removal of any Board member appointed pursuant to Section 6.1 hereof without the prior written consent of the person who appointed such person.

        6.5    Termination.    The obligations of Stockholders under Sections 6.2 and 6.4 hereof shall terminate, solely with respect to those Stockholders that are Original Investors, following an IPO and the distribution of shares of Common Stock by Linens Investors pursuant to the terms of the Linens Investors LLC Agreement.

        7.    Registration Rights.    

        7.1    Demand Registration.    

        (a)   Following a Qualified IPO, if the Company shall at any time and from time to time receive from Linens Investors a written request that the Company register all or a portion of

8

the Common Stock owned by Linens Investors then the Company shall use its best efforts to effect as soon as possible, and in any event within sixty (60) days following receipt of such request, the registration under the Securities Act of all Common Stock that Linens Investors requests to be registered.

        (b)   If the registration of which Linens Investors gives notice is for a registered public offering involving an underwriting, Linens Investors shall so advise the Company as a part of the written notice given pursuant to Section 7.1(a) hereof.

        7.2    Company Registration.    

        (a)   Following a Qualified IPO, but not in connection with any initial public offering, if the Company shall determine to register its Common Stock either for its own account or for the account of another Stockholder, other than a registration relating solely to employee benefit plans or a registration relating solely to a Rule 145 transaction or a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the sale of Common Stock, the Company will:

(i)

promptly give to each Stockholder written notice thereof; and



(ii)

include in such registration, and in any underwriting involved therein, all of the Common Stock specified in a written request or requests made by any Stockholder within ten (10) days after receipt of the written notice from the Company described in clause (i) above, except as set forth in Section 7.2(b) hereof. Such written request may specify all or a part of a Stockholder's Common Stock. Notwithstanding the foregoing, any Stockholder shall have the right to withdraw its request for inclusion of its Common Stock by giving written notice to the Company of its request to withdraw; provided, however, that such request must be made in writing prior to the execution of the underwriting agreement with respect to such registration, if applicable.

        (b)   If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Stockholders as a part of the written notice given pursuant to Section 7.2(a)(i) hereof. In such event the right of any Stockholder to registration pursuant to this Section 7 shall be conditioned upon such Stockholder's participation in such underwriting and the inclusion of such Stockholder's Common Stock in the underwriting to the extent provided herein. All Stockholders proposing to distribute their Common Stock through such underwriting shall (together with the Company) enter into an underwriting agreement in customary form with the underwriter selected for underwriting by the Company. Notwithstanding any other provision of this Section 7, if the underwriter determines that marketing factors require a limitation on the number of shares to be underwritten, the underwriter may (subject to the allocation priority set forth below) exclude from such registration and underwriting some or all of the Stockholder's Common Stock which would otherwise be underwritten pursuant hereto. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the following priority: first, pro rata among shares of Common Stock owned by Linens Investors, the Original Investors and each person who receives Common Stock in a Permitted Transfer; and second, pro rata among any other Stockholders requesting their shares to be included in such registration at the time of filing the registration statement; provided, however, that, notwithstanding the priority set forth in the foregoing clause, following the first anniversary of a Qualified IPO, the number of shares of securities that are entitled to be included shall be determined in accordance with the following priority: first, pro rata among shares of Common Stock held by Linens Investors and

9

each Original Investor that owns 3% or more of the issued and outstanding shares of Common Stock; second, pro rata among any Original Investors holding less than 3% of the issued and outstanding shares of Common Stock; and third, pro rata among any other Stockholders requesting their shares to be included in such registration at the time of filing the registration statement. Notwithstanding the foregoing, if the underwriter determines that marketing factors require the exclusion of members of management, the Company shall so advise such Stockholder(s) and such Stockholder's Common Stock shall be excluded from such registration. If any Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Common Stock or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

        7.3    Expenses of Registration.    All expenses incurred in connection with any registration, qualification or compliance pursuant to this Section 7 (collectively, "Registration Expenses") shall be borne by the Company, and all underwriting discounts and selling commissions applicable to the sale of Common Stock and the fees and expenses of counsel for the selling Stockholders shall be borne by the Stockholders so registered pro rata on the basis of the number of their shares so registered.

        7.4    Indemnification.    

        (a)   To the fullest extent permitted by law, the Company will indemnify and hold harmless each Stockholder, each of its officers, directors, partners and members and each person controlling such Stockholder, if Common Stock held by such Stockholder are included in the securities with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each person who controls any underwriter, against all claims, losses, damages and liabilities (or actions in respect thereof), whether joint or several, arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement) or in any free writing prospectus utilized in connection therewith or in any information conveyed to any purchaser at the time of the sale to such purchaser incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, or any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any applicable state securities law or any rule or regulation thereunder relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Stockholder, each of its officers, directors, partners and members and each person controlling such Stockholder, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement (or alleged untrue statement) or omission (or alleged omission) based upon written information furnished to the Company by such Stockholder or underwriter and stated to be specifically for use therein.

        (b)   To the fullest extent permitted by law, each Stockholder will, if Common Stock is included in the securities as to which such registration, qualification or compliance is being effected, indemnify and hold harmless the Company, each of its directors, officers and agents and each underwriter, if any, against all claims, losses, damages and liabilities (or actions in respect thereof), whether joint or several, arising out of or based on any untrue statement (or

10

alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document or in any free writing prospectus utilized in connection therewith or in any information conveyed to any purchaser at the time of the sale to such purchaser, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and will reimburse the Company and such directors, officers, agents, partners, members, persons, underwriters or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, as such expenses are incurred, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Stockholder and stated to be specifically for use therein. In no event shall the liability of a Stockholder for indemnification under this Section 7 exceed the proceeds received by such Stockholder in the offering.

        (c)   Each party entitled to indemnification under this Section 7 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party's expense; and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement except to the extent the Indemnifying Party is materially prejudiced thereby. Notwithstanding the foregoing, an Indemnified Party (together with all other Indemnified Parties) shall have the right to retain one separate counsel, with the reasonable fees and expenses of such counsel to be paid by the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate due to actual or potential differing interests between such Indemnified Party and any other party represented by such counsel in such proceeding. No Indemnifying Party in the defense of any such claim or litigation shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

        (d)   If the indemnification provided for in this Section 7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact

11

relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

        (e)   Notwithstanding the foregoing provisions of this Section 7, to the extent that any provision contained in the underwriting agreement entered into in connection with the underwritten public offering related to any such claim for indemnification or contribution are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

        (f)    The obligations of the Company and the Stockholders under this Section 7 shall survive the completion of any offering of Common Stock pursuant to this Agreement, and otherwise.

        7.5    Member as Agent.    Each Stockholder and each person to whom such Stockholder Transfers Common Stock in a manner that does not violate this Agreement that owns at least 1% of the issued and outstanding Common Stock (the "Minimum Threshold") shall continue to enjoy the benefit of the registration rights granted pursuant to this Section 7 notwithstanding any Transfer of Common Stock pursuant to the provisions of this Agreement; provided, however, that (a) Common Stock owned by wholly owned or commonly managed affiliates of a person shall be deemed to be owned by such person, and shares owned by Glenn Dubin shall be deemed to be owned by Highbridge Capital Management, LLC, for purposes of determining if the Minimum Threshold is satisfied, (b) if the Minimum Threshold is not satisfied with respect to an Original Investor solely as a result of any underwriter's cutback pursuant to Section 7.2(b) hereof, the Minimum Threshold shall be deemed satisfied with respect to such Original Investor and (c) each of Apollo, Silver Point and NRDC shall act as agent for any person who receives IPO Interests, directly or indirectly, from such Stockholder in the exercise and administration of such registration rights.

        7.6    Information by Stockholder.    Each Stockholder holding securities included in any registration shall furnish to the Company such information regarding such Stockholder as the Company may reasonably request and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement.

        8.    Miscellaneous.    

        8.1    Governing Law.    This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws.

        8.2    Certain Adjustments.    The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all shares of capital stock of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for, or in substitution for the shares of Common Stock, by combination, recapitalization, reclassification, merger, consolidation or otherwise and the term "Common Stock" shall include all such other securities; provided, however, that the provisions of Section 7 hereof shall only apply to common equity securities of the Company registered in a Qualified IPO. In the event of any change in the capitalization of the Company, as a result of any stock split, stock dividend or stock combination or otherwise, the provisions of this Agreement shall be appropriately adjusted.

        8.3    Additional Parties.    Upon any distribution by Linens Investors of the Common Stock pursuant to the terms of the Linens Investors LLC Agreement, each person holding Common Stock as a result, each Permitted Transferee and each person who receives Common Stock in a Permitted Transfer shall execute a signature page to this Agreement, become a party entitled to

12

the rights afforded such person herein to and agree to be bound by the provisions of this Agreement.

        8.4    Enforcement.    The parties expressly agree that the provisions of this Agreement may be specifically enforced against each of the parties hereto in any court of competent jurisdiction.

        8.5    Successors and Assigns.    Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. For the avoidance of doubt, Apollo shall, following a distribution described in Section 8.3 hereof or a dissolution of Linens Investors, be deemed for all purposes of this Agreement to be the successor to Linens Investors.

        8.6    Entire Agreement.    This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and supersedes all prior oral or written (and all contemporaneous oral) agreements or understandings with respect to the subject matter hereof.

        8.7    Notices.    All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if (a) delivered personally against written receipt, (b) sent by facsimile transmission, (c) mailed by registered or certified mail, postage prepaid, return receipt requested, or (d) mailed by reputable international overnight courier, fee prepaid, to the parties hereto at the following addresses or facsimile numbers:

If to Linens Investors, to:

Linens Investors, LLC
c/o Apollo Management V, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, CA 90067
Facsimile: 310-843-1950
Attention: Michael D. Weiner

with a copy to:

Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Facsimile: 212-309-6001
Attention: Robert G. Robison

If to the Company, to:

Linens Holding Co.
c/o Linens Investors, LLC
c/o Apollo Management V, L.P.
10250 Constellation Boulevard
Suite 2900
Los Angeles, CA 90067
Facsimile: 310-843-1950
Attention: Michael D. Weiner

        All such notices, requests and other communications will be deemed given, (w) if delivered personally as provided in this Section 8.7, upon delivery, (x) if delivered by facsimile transmission as provided in this Section 8.7, upon confirmed receipt, (y) if delivered by mail as provided in this Section 8.7, upon the earlier of the fifth business day following mailing and receipt, and (z) if

13

delivered by overnight courier as provided in this Section 8.7, upon the earlier of the second business day following the date sent by such overnight courier and receipt (in each case regardless of whether such notice, request or other communication is received by any other person to whom a copy of such notice is to be delivered pursuant to this Section 8.7). Any party hereto may change the address to which notices, requests and other communications hereunder are to be delivered by giving the other parties hereto notice in the manner set forth herein.

        8.8    Delays or Omissions.    No delay or omission to exercise any right, power or remedy accruing to any party hereto upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any party, shall be cumulative and not alternative.

        8.9    Counterparts.    This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the parties hereto, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

        8.10    Severability.    If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

        8.11    Amendments and Waivers.    

        (a)   The provisions of this Agreement may be amended at any time and from time to time with and only with an agreement or consent in writing signed by the Company and the Stockholders holding a majority of the outstanding shares of Common Stock.

        (b)   Notwithstanding anything to the contrary in this Agreement, any amendments or modifications to the provisions of this Agreement in a manner adverse to any Stockholder or Stockholders shall require the consent of a majority of the shares of Common Stock owned by such Stockholder or Stockholders, voting together as a single class.

        8.12    Jurisdiction.    The parties hereto irrevocably submit, in any legal action or proceeding relating to this Agreement, to the jurisdiction of the courts of the United States located in the State of Delaware or in any Delaware state court and consent that any such action or proceeding may be brought in such courts and waive any objection that they may now or hereafter have to the venue of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum.

        8.13    Further Assurances.    The parties agree to use their best efforts and act in good faith in carrying out their obligations under this Agreement. The parties also agree, without further consideration, to execute such further instruments and to take such further actions as may be necessary or desirable to carry out the purposes and intent of this Agreement.

        8.14    Termination.    This Agreement shall terminate upon the written agreement between the Company and the Stockholders holding a majority of the shares of Common Stock outstanding; provided, however, that the provisions of Sections 3.1(b), 3.3, 4 and 5 hereof shall terminate with respect to Linens Investors and any member of Linens Investors (and their members, as

14

applicable) to whom Common Stock has been distributed by Linens Investors pursuant to its Amended and Restated Limited Liability Agreement after the consummation of a Qualified IPO; and provided, further, that, notwithstanding anything else herein to the contrary, to the extent that Apollo continues to own an interest in the Company (either directly or indirectly through its ownership of Linens Investors or such other entity affiliated with AIF V), to the extent required by AIF V such that its investment in the Company remains an investment in an "operating company" as defined in Department of Labor Regulation Section 2510.3-101 in which it has direct contractual management rights, the Company agrees to enter into a management rights letter with Apollo which provides it substantially similar rights as set forth in Department of Labor Opinion No. 02-01A, dated March 26, 2002.

[Signature page follows.]

15

IN WITNESS WHEREOF, the parties hereto have duly executed this Stockholders' Agreement on the date first written above.

LINENS HOLDING CO.
By:	Name: Title:
LINENS INVESTORS, LLC
By:	Name: Title:

Signature Page to Stockholders' Agreement

QuickLinks

STOCKHOLDERS' AGREEMENT

EX-10.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.3

SECURITY AGREEMENT

by

LINENS 'N THINGS, INC.
and
LINENS 'N THINGS CENTER, INC.,
as Issuers

and

THE GUARANTORS PARTY HERETO

and

THE BANK OF NEW YORK,

as Collateral Agent

Dated as of February 14, 2006

TABLE OF CONTENTS

		Page
PREAMBLE		1
RECITALS		1
AGREEMENT		1
ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1.	DEFINITIONS	1
SECTION 1.2.	INTERPRETATION	7
SECTION 1.3.	RESOLUTION OF DRAFTING AMBIGUITIES	8
SECTION 1.4.	PERFECTION CERTIFICATE	8
ARTICLE II GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1.	GRANT OF SECURITY INTEREST	8
SECTION 2.2.	FILINGS	9
ARTICLE III PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
SECTION 3.1.	DELIVERY OF CERTIFICATED SECURITIES COLLATERAL	9
SECTION 3.2.	PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL	10
SECTION 3.3.	FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY INTEREST	10
SECTION 3.4.	OTHER ACTIONS	10
SECTION 3.5.	JOINDER OF ADDITIONAL GUARANTORS	14
SECTION 3.6.	SUPPLEMENTS; FURTHER ASSURANCES	14
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1.	TITLE	15
SECTION 4.2.	VALIDITY OF SECURITY INTEREST	15
SECTION 4.3.	DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL	15
SECTION 4.4.	OTHER FINANCING STATEMENTS	15
SECTION 4.5.	CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION OF ORGANIZATION	15
SECTION 4.6.	LOCATION OF INVENTORY AND EQUIPMENT	16
SECTION 4.7.	DUE AUTHORIZATION AND ISSUANCE	16
SECTION 4.8.	CONSENTS, ETC.	16
SECTION 4.9.	PLEDGED COLLATERAL	16
SECTION 4.10.	INSURANCE	16

i

ARTICLE V CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1.	PLEDGE OF ADDITIONAL SECURITIES COLLATERAL	16
SECTION 5.2.	VOTING RIGHTS; DISTRIBUTIONS; ETC.	17
SECTION 5.3.	DEFAULTS, ETC	17
SECTION 5.4.	CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS	18
ARTICLE VI CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
SECTION 6.1.	GRANT OF INTELLECTUAL PROPERTY LICENSE	18
SECTION 6.2.	PROTECTION OF COLLATERAL AGENT'S SECURITY	18
SECTION 6.3.	AFTER-ACQUIRED PROPERTY	19
SECTION 6.4.	LITIGATION	19
ARTICLE VII CERTAIN PROVISIONS CONCERNING RECEIVABLES
SECTION 7.1.	MAINTENANCE OF RECORDS	20
SECTION 7.2.	LEGEND	20
SECTION 7.3.	MODIFICATION OF TERMS, ETC	20
SECTION 7.4.	COLLECTION	20
ARTICLE VIII TRANSFERS
SECTION 8.1.	TRANSFERS OF PLEDGED COLLATERAL	21
ARTICLE IX REMEDIES
SECTION 9.1.	REMEDIES	21
SECTION 9.2.	NOTICE OF SALE	22
SECTION 9.3.	WAIVER OF NOTICE AND CLAIMS	23
SECTION 9.4.	CERTAIN SALES OF PLEDGED COLLATERAL	23
SECTION 9.5.	NO WAIVER; CUMULATIVE REMEDIES	24
SECTION 9.6.	CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY	25
SECTION 9.7.	ACCESS TO PREMISES	25
ARTICLE X PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS
SECTION 10.1.	APPLICATION OF PROCEEDS	25

ii

ARTICLE XI MISCELLANEOUS
SECTION 11.1.	CONCERNING COLLATERAL AGENT	25
SECTION 11.2.	COLLATERAL AGENT MAY PERFORM; COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT	27
SECTION 11.3.	CONTINUING SECURITY INTEREST; ASSIGNMENT	28
SECTION 11.4.	TERMINATION; RELEASE	29
SECTION 11.5.	MODIFICATION IN WRITING	29
SECTION 11.6.	NOTICES	29
SECTION 11.7.	GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL	29
SECTION 11.8.	SEVERABILITY OF PROVISIONS	30
SECTION 11.9.	EXECUTION IN COUNTERPARTS	30
SECTION 11.10.	BUSINESS DAYS	30
SECTION 11.11.	NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION	30
SECTION 11.12.	NO CLAIMS AGAINST COLLATERAL AGENT	30
SECTION 11.13.	NO RELEASE	31
SECTION 11.14.	OBLIGATIONS ABSOLUTE	31
SECTION 11.15.	INTERCREDITOR AGREEMENT	31
SIGNATURES		S-1
EXHIBIT 1	Form of Issuer's Acknowledgment
EXHIBIT 2	Form of Securities Pledge Amendment
EXHIBIT 3	Form of Joinder Agreement
EXHIBIT 4	Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5	Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6	Form of Copyright Security Agreement
EXHIBIT 7	Form of Patent Security Agreement
EXHIBIT 8	Form of Trademark Security Agreement
EXHIBIT 9	Form of Armored Car Control Agreement Letter
EXHIBIT 10	Form of Bailee's Letter

iii

SECURITY AGREEMENT

        This SECURITY AGREEMENT dated as of February 14, 2006 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this "Agreement") made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (collectively, the "Issuers" and each individually, a "Issuer"), and the Guarantors from time to time party hereto (the "Guarantors"), as pledgors, assignors and debtors (the Issuers, together with the Guarantors, in such capacities and together with any successors in such capacities, the "Pledgors," and each, a "Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as indenture trustee pursuant to the Indenture (as hereinafter defined), as pledgee, assignee and secured party (in such capacities and together with any successors in such capacity, the "Collateral Agent").

R E C I T A L S:

        A.    Pursuant to that certain Indenture, dated as of February     , 2006 (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Indenture"), among the Issuers, the Guarantors and The Bank of New York, as trustee (the "Trustee"), the Issuers have issued the Senior Secured Floating Rate Notes due 2014 (as the same may be amended, restated, replaced, supplemented, substituted or otherwise modified from time to time, collectively, the "Notes") to the holders of such Notes (the "Holders").

        B.    Pursuant to the Indenture, each Guarantor has guaranteed the obligations of the Issuers with respect to the Notes and the Indenture.

        C.    It is a condition precedent to (i) the purchase by the Holders of the Notes that each Pledgor execute and deliver this Agreement to the Collateral Agent for the ratable benefit of the Holders and the Trustee for the purpose of providing security for the Secured Obligations.

A G R E E M E N T:

        NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Pledgor agrees with the Collateral Agent, for the ratable benefit of the Holders and the Collateral Agent, as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

        SECTION 1.1.    Definitions.    

        (a)   Unless otherwise defined herein or in the Indenture, capitalized terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC; provided that in any event, the following terms shall have the meanings assigned to them in the UCC:

        "Accounts"; "Bank"; "Chattel Paper"; "Commercial Tort Claim"; "Commodity Account"; "Commodity Contract"; "Commodity Intermediary"; "Documents"; "Electronic Chattel Paper"; "Entitlement Order"; "Equipment"; "Financial Asset"; "Fixtures"; "Goods", "Inventory"; "Investment Property"; "Letter-of-Credit Rights"; "Letters of Credit"; "Money"; "Payment Intangibles"; "Proceeds"; "Records"; "Securities Account"; "Securities Intermediary"; "Supporting Obligations"; and "Tangible Chattel Paper."

        (b)   Terms used but not otherwise defined herein that are defined in the Indenture shall have the meanings given to them in the Indenture.

        (c)   The following terms shall have the following meanings:

        "Account Debtor" shall mean each person who is obligated on a Receivable or Supporting Obligation related thereto.

        "Agreement" shall have the meaning assigned to such term in the Preamble hereof.

        "Armored Car Control Agreement" shall mean an agreement in substantially the form attached hereto as Exhibit 9 or such other form as is reasonably satisfactory to the Revolving Credit Collateral Agent establishing the Collateral Agent's control with respect to the cash, checks or other items obtained by the armored car carrier from any Pledgor or otherwise under the armored car carrier's control, custody or possession pursuant to any agreement with any Pledgor.

        "Bailee Letter" shall be an agreement in form substantially similar to Exhibit 9 hereto.

        "Collateral Agent" shall have the meaning assigned to such term in the Preamble hereof.

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Pledged Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

        "Commodity Account Control Agreement" shall mean a control agreement in a form that is reasonably satisfactory to the Revolving Credit Collateral Agent establishing the Collateral Agent's Control with respect to any Commodity Account.

        "Contracts" shall mean, collectively, with respect to each Pledgor, the Acquisition Agreement, all sale, service, performance, equipment or property lease contracts, agreements and grants and all other contracts, agreements or grants (in each case, whether written or oral, or third party or intercompany), between such Pledgor and any third party, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof.

        "Control" shall mean (i) in the case of each Deposit Account, "control," as such term is defined in Section 9-104 of the UCC, (ii) in the case of any Security Entitlement, "control," as such term is defined in Section 8-106 of the UCC, and (iii) in the case of any Commodity Contract, "control," as such term is defined in Section 9-106 of the UCC.

        "Control Agreements" shall mean, collectively, the Armored Car Control Agreements, Commodity Account Control Agreements, Credit Card Processing Control Agreements, Deposit Account Control Agreements, and the Securities Account Control Agreements.

        "Copyright Licenses" shall mean any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Copyrights (whether the applicable Pledgor is licensee or licensor thereunder).

        "Copyrights" shall mean, collectively, with respect to each Pledgor, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished) and all copyright registrations and applications made by such Pledgor, in each case, whether now owned or hereafter created or acquired by or assigned to such Pledgor, and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof.

        "Copyright Security Agreement" shall mean an agreement substantially in the form of Exhibit 6 hereto.

        "Credit Card Processing Control Agreement" shall mean an agreement as is reasonably satisfactory to the Revolving Credit Collateral Agent establishing the Collateral Agent's control with respect to all

2

amounts payable by the credit card processor to any Pledgor pursuant to an arrangement between such credit card processor and any Pledgor.

        "Deposit Account Control Agreement" shall mean an agreement substantially in the form of Exhibit 5 hereto or such other form that is reasonably satisfactory to the Revolving Credit Collateral Agent establishing the Collateral Agent's Control with respect to any Deposit Account.

        "Deposit Accounts" shall mean, collectively, with respect to each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and in any event shall include the Net Available Cash Account and all accounts and sub-accounts relating to any of the foregoing accounts and (ii) all cash, funds, checks, notes and instruments from time to time on deposit in any of the accounts or sub-accounts described in clause (i) of this definition.

        "Distributions" shall mean, collectively, with respect to each Pledgor, all dividends, cash, options, warrants, rights, instruments, distributions, returns of capital or principal, income, interest, profits and other property, interests (debt or equity) or proceeds, including as a result of a split, revision, reclassification or other like change of the Pledged Securities, from time to time received, receivable or otherwise distributed to such Pledgor in respect of or in exchange for any or all of the Pledged Securities or Intercompany Notes.

        "Excluded Accounts" shall mean the accounts excluded under Section 9.02(f) of the Revolving Credit Agreement, it being understood that, in any event, the grant of the security interest in Section 2.01 shall extend to such accounts excluded under Section 9.02(f) of the Revolving Credit Agreement and any Pledgor's right to receive any excess funds remaining in any escrow accounts following the payment in full of the taxes, fees and charges payable from such escrow accounts.

        "Excluded Property" shall mean

        (a)   any permit or license issued by a Governmental Authority to any Pledgor or any agreement to which any Pledgor is a party, in each case, only to the extent and for so long as the terms of such permit, license or agreement or any Requirement of Law applicable thereto, (i) validly prohibit the creation by such Pledgor of a security interest in such permit, license or agreement in favor of the Collateral Agent (after giving effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any other applicable law (including the Bankruptcy Code) or principles of equity), (ii) would be abandoned, invalidated or unenforceable as a result of the creation of such security interest in favor of the Collateral Agent or (iii) would result in a breach or termination pursuant to the terms of, or a default under any such permit, license or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity);

        (b)   Equipment owned by any Pledgor on the date hereof or hereafter acquired that is subject to a Lien securing a purchase money obligation or Capital Lease Obligation permitted to be incurred pursuant to the provisions of the Indenture if the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money obligation or Capital Lease Obligation) validly prohibits the creation of any other Lien on such Equipment, and;

        (c)   any "intent to use" applications for trademark or service mark registration filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051(b), unless and until an Amendment to Allege Use or a Statement of Use under Section 1(c) and 1(d) of said Act has been properly filed and filing accepted by the Patent and Trademark Office, to the extent that any assignment of an "intent to use" application prior to such filing would violate the Lanham Act, whereupon such application shall be automatically subject to the security interst granted herein and deemed to be included in the Pledged Collateral;

3

provided, however, that Excluded Property shall not include any Proceeds, substitutions or replacements of any Excluded Property referred to in clause (a), (b) or (c) (unless such Proceeds, substitutions or replacements would constitute Excluded Property referred to in clause (a), (b) or (c)).

        "Foreign Subsidiary" shall mean any Subsidiary organized under the laws of any jurisdiction outside the United States of America.

        "Foreign Subsidiary Voting Stock" shall mean the Voting Stock in any Foreign Subsidiary.

        "General Intangibles" shall mean, collectively, with respect to each Pledgor, all "general intangibles," as such term is defined in Article 9 of the UCC, of such Pledgor and, in any event, shall include (i) all of such Pledgor's rights, title and interest in, to and under all Contracts and insurance policies (including all rights and remedies relating to monetary damages, including indemnification rights and remedies, and claims for damages or other relief pursuant to or in respect of any Contract), (ii) all know-how and warranties relating to any of the Pledged Collateral or the Mortgaged Property, (iii) any and all other rights, claims, choses-in-action and causes of action of such Pledgor against any other person and the benefits of any and all collateral or other security given by any other person in connection therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any of the Pledged Collateral or any of the Mortgaged Property, (v) all lists, books, records, correspondence, ledgers, printouts, files (whether in printed form or stored electronically), tapes and other papers or materials containing information relating to any of the Pledged Collateral or any of the Mortgaged Property, including all customer or tenant lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering reports, test reports, manuals, standards, processing standards, performance standards, catalogs, research data, computer and automatic machinery software and programs and the like, field repair data, accounting information pertaining to such Pledgor's operations or any of the Pledged Collateral or any of the Mortgaged Property and all media in which or on which any of the information or knowledge or data or records may be recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data, (vi) all licenses, consents, permits, variances, certifications, authorizations and approvals, however characterized, now or hereafter acquired or held by such Pledgor, including building permits, certificates of occupancy, environmental certificates, industrial permits or licenses and certificates of operation and (vii) all rights to reserves, deferred payments, deposits, refunds, indemnification of claims and claims for tax or other refunds against any Governmental Authority.

        "Guarantor Obligations" shall mean, with respect to any Guarantor, the collective reference to all obligations and liabilities of such Guarantor which may arise under or in connection with any Note Guarantee, this Agreement, any Mortgage, the Indenture or any other document related thereto to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise.

        "Guarantors" shall have the meaning assigned to such term in the Preamble hereof.

        "Holders" shall have the meaning assigned to such term in Recital A hereof.

        "Indenture" shall have the meaning assigned to such term in Recital A hereof.

        "Instruments" shall mean, collectively, with respect to each Pledgor, all "instruments," as such term is defined in Article 9, rather than Article 3, of the UCC, and shall include all promissory notes, drafts, bills of exchange or acceptances.

        "Intellectual Property" shall mean, collectively, the Patents, Patent Licenses, Trademarks, Trademark Licenses, Copyrights, and Copyright Licenses, trade secrets, confidential or proprietary technical or business information, know-how, show-how or other data or information.

4

        "Intercompany Notes" shall mean, with respect to each Pledgor, all intercompany notes described in Schedule 11 to the Perfection Certificate and intercompany notes hereafter acquired by such Pledgor and all certificates, instruments or agreements evidencing such intercompany notes, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof to the extent permitted pursuant to the terms hereof.

        "Intercreditor Agreement" shall have the meaning assigned to such term in Section 11.15 hereof.

        "Investment Property" shall mean a security, whether certificated or uncertificated, Security Entitlement, Securities Account, Commodity Contract or Commodity Account, excluding, however, the Securities Collateral and any property specifically excluded from the definition of Securities Collateral pursuant to one of the provisos thereof.

        "Issuer Obligations" shall mean the collective reference to the unpaid principal of and interest on the Notes and all other obligations and liabilities of the Issuers to the Collateral Agent or any Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, the Indenture, the Mortgages, the Intercreditor Agreement, or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expense or otherwise (including, without limitation, all fees and disbursements of counsel to the Collateral Agent or to the Secured Parties that are required to be paid by the Company pursuant to the terms of any of the foregoing agreements.

        "Issuers" shall have the meaning assigned to such term in the Preamble hereof.

        "Joinder Agreement" shall mean an agreement substantially in the form of Exhibit 3 hereto.

        "Material Intellectual Property" shall mean any Intellectual Property that is material (i) to the use and operation of the Pledged Collateral or Mortgaged Property or (ii) to the business, results of operations, prospects or condition, financial or otherwise, of any Pledgor.

        "Mortgaged Property" shall have the meaning assigned to such term in the Mortgages.

        "Net Available Cash Account" shall mean any account established and maintained in accordance with the provisions of Section 4.10 of the Indenture and all property from time to time on deposit in such Net Available Cash Account.

        "Patent Licenses" shall mean any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Patents (whether the applicable Pledgor is licensee or licensor thereunder).

        "Patents" shall mean, collectively, with respect to each Pledgor, all letters patent issued or assigned to, and all patent applications and registrations made by, such Pledgor (whether established or registered or recorded in the United States or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, and rights to obtain any of the foregoing (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future infringements thereof.

        "Patent Security Agreement" shall mean an agreement substantially in the form of Exhibit 7 hereto.

        "Perfection Certificate" shall mean that certain perfection certificate dated February 14 2006, executed and delivered by each Pledgor in favor of the Collateral Agent for the benefit of the Secured

5

Parties, and each other Perfection Certificate (which shall be in form and substance reasonably acceptable to the Revolving Credit Collateral Agent) executed and delivered by the applicable Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties contemporaneously with the execution and delivery of each Joinder Agreement executed in accordance with Section 3.5 hereof, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the Indenture or upon the request of the Collateral Agent.

        "Pledge Amendment" shall have the meaning assigned to such term in Section 5.1 hereof.

        "Pledged Collateral" shall have the meaning assigned to such term in Section 2.1 hereof.

        "Pledged Securities" shall mean, collectively, with respect to each Pledgor, (i) all issued and outstanding Equity Interests of each issuer set forth on Schedule 10(a) to the Perfection Certificate as being owned by such Pledgor and all options, warrants, rights, agreements and additional Equity Interests of whatever class of any such issuer acquired by such Pledgor (including by issuance), together with all rights, privileges, authority and powers of such Pledgor relating to such Equity Interests in each such issuer or under any organizational document of each such issuer, and the certificates, instruments and agreements representing such Equity Interests and any and all interest of such Pledgor in the entries on the books of any financial intermediary pertaining to such Equity Interests, (ii) all Equity Interests of any Subsidiary, which Equity Interests are hereafter acquired by such Pledgor (including by issuance) and all options, warrants, rights, agreements and additional Equity Interests of whatever class of any such Subsidiary acquired by such Pledgor (including by issuance), together with all rights, privileges, authority and powers of such Pledgor relating to such Equity Interests or under any organizational document of any such Subsidiary, and the certificates, instruments and agreements representing such Equity Interests and any and all interest of such Pledgor in the entries on the books of any financial intermediary pertaining to such Equity Interests, from time to time acquired by such Pledgor in any manner, and (iii) all Equity Interests issued in respect of the Equity Interests referred to in clause (i) or (ii) upon any consolidation or merger of any issuer of such Equity Interests; provided, however, that Pledged Securities shall not include any Equity Interests (x) which are part of the Capital Stock Collateral but not part of the Note Capital Stock Collateral and (y) of any issuer for which the Release Date shall have occurred; and provided further, however, that in no event shall more than 65% of the total outstanding Foreign Subsidiary Voting Stock of a Foreign Subsidiary be required to be pledged hereunder.

        "Pledgor" shall have the meaning assigned to such term in the Preamble hereof.

        "Receivables" shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv) General Intangibles, (v) Instruments and (vi) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under Article 9 of the UCC together with all of Pledgors' rights, if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto and all Records relating thereto.

        "Secured Obligations" shall mean, collectively, the Issuer Obligations and the Guarantor Obligations.

        "Secured Parties" shall mean, collectively, the Holders and the Trustee.

        "Securities Account Control Agreement" shall mean an agreement substantially in the form of Exhibit 4 hereto or such other form that is reasonably satisfactory to the Revolving Credit Collateral Agent establishing the Collateral Agent's Control with respect to any Securities Account.

6

        "Securities Collateral" shall mean, collectively, the Pledged Securities, the Intercompany Notes and the Distributions.

        "Trademark Licenses" shall mean any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Trademarks (whether the applicable Pledgor is licensee or licensor thereunder).

        "Trademarks" shall mean, collectively, with respect to each Pledgor, all trademarks, service marks, slogans, logos, certification marks, trade dress, uniform resource locations (URL's), domain names, corporate names, trade names, and other source or business identifiers, whether registered or unregistered, owned by or assigned to such Pledgor and all registrations and applications for the foregoing (whether statutory or common law and whether established or registered in the United States, any State thereof, or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof.

        "Trademark Security Agreement" shall mean an agreement substantially in the form of Exhibit 8 hereto.

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Collateral Agent's and the Secured Parties' security interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

        SECTION 1.2.    Interpretation.    The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC (except that terms used herein which are defined in the UCC as in effect in the State of New York on the Closing Date shall continue to have the same meaning notwithstanding any replacement or amendment to such statute). Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person's successors and assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time, (f) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (g) "on," when used with respect to the

7

Mortgaged Property or any property adjacent to the Mortgaged Property, means "on, in, under, above or about."

        SECTION 1.3.    Resolution of Drafting Ambiguities.    Each Pledgor acknowledges and agrees that it was represented by counsel in connection with the execution and delivery hereof, that it and its counsel reviewed and participated in the preparation and negotiation hereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof.

        SECTION 1.4.    Perfection Certificate.    The Collateral Agent, each Pledgor and each Secured Party agree that the Perfection Certificate and all descriptions of Pledged Collateral contained therein, schedules, amendments and supplements thereto are and shall at all times remain a part of this Agreement.

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

        SECTION 2.1.    Grant of Security Interest.    As collateral security for the payment and performance in full of all the Secured Obligations, each Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties, a lien on and security interest in all of the right, title and interest of such Pledgor in, to and under the following property, wherever located, and whether now existing or hereafter arising or acquired from time to time (collectively, the "Pledged Collateral"):

(i)

all Accounts, including, without limitation, Credit Card Receivables;



(ii)

all Equipment, Goods, Inventory and Fixtures;



(iii)

all Documents, Instruments and Chattel Paper;



(iv)

all Letters of Credit and Letter-of-Credit Rights;



(v)

all Securities Collateral;



(vi)

all Investment Property;



(vii)

all Intellectual Property;



(viii)

the Commercial Tort Claims described on Schedule 13 to the Perfection Certificate;



(ix)

all General Intangibles;



(x)

all Money and all Deposit Accounts (including the Net Available Cash Account);



(xi)

all Supporting Obligations;



(xii)

all books and records relating to the Pledged Collateral; and



(xiii)

to the extent not covered by clauses (i) through (xii) of this sentence, all other personal property of such Pledgor, whether tangible or intangible, and all Proceeds and products of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Pledgor from time to time with respect to any of the foregoing.

        Notwithstanding anything to the contrary contained in clauses (i) through (xiii) above, the security interest created by this Agreement shall not extend to, and the term "Pledged Collateral" shall not include, any Excluded Property and (i) the Pledgors shall from time to time at the request of the Collateral Agent, but in any event no more frequently than once a fiscal quarter prior to the occurrence and continuance of an Event of Default, give written notice to the Collateral Agent

8

identifying in reasonable detail the Excluded Property and shall provide to the Collateral Agent such other information regarding the Excluded Property as the Collateral Agent may reasonably request and (ii) from and after the Closing Date, no Pledgor shall permit to become effective in any document creating, governing or providing for any permit, lease or license, a provision that would prohibit the creation of a Lien on such permit, lease or license in favor of the Collateral Agent unless such Pledgor believes, in its reasonable judgment, that such prohibition is usual and customary in transactions of such type.

        SECTION 2.2.    Filings.    (a) Each Pledgor hereby irrevocably authorizes the Collateral Agent at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Pledged Collateral, including (i) whether such Pledgor is an organization, the type of organization and any organizational identification number issued to such Pledgor, (ii) any financing or continuation statements or other documents without the signature of such Pledgor where permitted by law, including the filing of a financing statement describing the Pledged Collateral as "all assets of Debtor whether now owned or hereafter arising or acquired, including all proceeds thereof" and (iii) in the case of a financing statement filed as a fixture filing or covering Pledged Collateral constituting minerals or the like to be extracted or timber to be cut, a sufficient description of the real property to which such Pledged Collateral relates. Each Pledgor agrees to provide all information described in the immediately preceding sentence to the Collateral Agent promptly upon request by the Collateral Agent.

        (b)   Each Pledgor hereby ratifies its authorization for the Collateral Agent to file in any relevant jurisdiction any financing statements or amendments thereto relating to the Pledged Collateral if filed prior to the date hereof.

        (c)   Each Pledgor hereby further authorizes the Collateral Agent to file filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country), as applicable, the Copyright Security Agreement, the Patent Security Agreement and the Trademark Security Agreement, or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by such Pledgor hereunder, without the signature of such Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as secured party.

        (d)   Notwithstanding the foregoing the Collateral Agent shall be under no obligation whatsoever to prepare or file any financing or continuation statements or record any documents or instruments in any public office at any time or times or otherwise to perfect or maintain the perfection of any security interest in the Pledged Collateral

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL

        SECTION 3.1.    Delivery of Certificated Securities Collateral.    Each Pledgor represents and warrants that all certificates, agreements or instruments representing or evidencing the Securities Collateral in existence on the date hereof have been delivered to the Collateral Agent in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank and that the Collateral Agent have a perfected first priority security interest therein subject to Section 11.15 hereof. Each Pledgor hereby agrees that all certificates, agreements or instruments representing or evidencing Securities Collateral acquired by such Pledgor after the date hereof shall promptly (but in any event within five Business Days after receipt thereof by such Pledgor) be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer by delivery or

9

accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent. The Collateral Agent shall have the right, at any time upon the occurrence and during the continuance of any Event of Default, to endorse, assign or otherwise transfer to or to register in the name of the Collateral Agent or any of its nominees or endorse for negotiation any or all of the Securities Collateral, without any indication that such Securities Collateral is subject to the security interest hereunder. In addition, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the right at any time to exchange certificates representing or evidencing Securities Collateral for certificates of smaller or larger denominations.

        SECTION 3.2.    Perfection of Uncertificated Securities Collateral.    Each Pledgor represents and warrants that the Collateral Agent have a perfected first priority security interest in all uncertificated Pledged Securities pledged by it hereunder that are in existence on the date thereof subject to Section 11.15 hereof. Each Pledgor hereby agrees that if any of the Pledged Securities are at any time not evidenced by certificates of ownership, then each applicable Pledgor shall, to the extent permitted by applicable law, (i) cause the issuer to execute and deliver to the Collateral Agent an acknowledgment of the pledge of such Pledged Securities substantially in the form of Exhibit 1 hereto, (ii) if necessary or desirable to perfect a security interest in such Pledged Securities, cause such pledge to be recorded on the equityholder register or the books of the issuer, execute any customary pledge forms or other documents necessary or appropriate to complete the pledge and give the Collateral Agent the right to transfer such Pledged Securities under the terms hereof, (iii) upon the reasonable request by the Revolving Credit Collateral Agent, provide to the Collateral Agent an opinion of counsel, in form and substance reasonably satisfactory to the Revolving Credit Collateral Agent, confirming the validity and enforceability of such pledge and perfection thereof, and (iv) after the occurrence and during the continuance of any Event of Default, upon request by the Revolving Credit Collateral Agent, (A) cause the Organizational Documents of such issuer to be amended to provide that such Pledged Securities shall be treated as "securities" for purposes of the UCC and (B) cause such Pledged Securities to become certificated and delivered to the Collateral Agent in accordance with the provisions of Section 3.1.

        SECTION 3.3.    Financing Statements and Other Filings; Maintenance of Perfected Security Interest.    Each Pledgor represents and warrants that all financing statements, agreements, instruments and other documents necessary to perfect the security interest granted by it to the Collateral Agent in respect of the Pledged Collateral have been delivered to the Collateral Agent in completed and, to the extent necessary or appropriate, duly executed form for filing in each governmental, municipal or other office specified in Schedule 7 to the Perfection Certificate (other than such Pledged Collateral in which a security interest cannot be perfected under the UCC as in effect on the Closing Date). Each Pledgor agrees that at the sole cost and expense of the Pledgors, such Pledgor will maintain the security interest created by this Agreement in the Pledged Collateral as a perfected first priority security interest subject only to Permitted Collateral Liens and Section 11.15 hereof.

        SECTION 3.4.    Other Actions.    In order to further ensure the attachment, perfection and priority of, and the ability of the Collateral Agent to enforce, the Collateral Agent's security interest in the Pledged Collateral subject to Section 11.15 hereof, each Pledgor represents and warrants (as to itself) as follows and agrees, in each case at such Pledgor's own expense, to take the following actions with respect to the following Pledged Collateral:

        (a)    Instruments and Tangible Chattel Paper.    As of the date hereof, no amounts payable under or in connection with any of the Pledged Collateral are evidenced by any Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel Paper listed in Schedule 11 to the Perfection Certificate. Each Instrument and each item of Tangible Chattel Paper listed in Schedule 11 to the Perfection Certificate has been properly endorsed, assigned and delivered to the Collateral Agent, accompanied by instruments of transfer or assignment duly

10

executed in blank. If any amount then payable under or in connection with any of the Pledged Collateral shall be evidenced by any Instrument or Tangible Chattel Paper, and such amount, together with all amounts payable evidenced by any Instrument or Tangible Chattel Paper not previously delivered to the Collateral Agent exceeds $1,000,000 in the aggregate for all Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall promptly (but in any event within five Business Days after receipt thereof) endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as necessary or as the Collateral Agent may from time to time specify.

        (b)    Deposit Accounts.    As of the date hereof, no Pledgor has any Deposit Accounts other than the accounts listed in Schedule 14 to the Perfection Certificate. The Collateral Agent has a first priority security interest in each such Deposit Account, which security interest, except for the Excluded Accounts, is perfected by Control, except to the extent that obtaining such Control may be completed after the Closing Date pursuant to the terms of Section 4.19 of the Indenture. No Pledgor shall hereafter establish and maintain any Deposit Account (other than Excluded Accounts) unless (1) it shall have given the Collateral Agent thirty (30) days' prior written notice of its intention to establish such new Deposit Account with a Bank, (2) such Bank shall be reasonably acceptable to the Revolving Credit Collateral Agent and (3) such Bank and such Pledgor shall have duly executed and delivered to the Collateral Agent a Deposit Account Control Agreement with respect to such Deposit Account; provided, that the Revolving Credit Collateral Agent shall have the right to waive (or extend) the requirement of a Deposit Account Control Agreement for any account in its reasonable discretion. The Collateral Agent agrees with each Pledgor that such Collateral Agent shall not give any instructions directing the disposition of funds from time to time credited to any Deposit Account or withhold any withdrawal rights from such Pledgor with respect to funds from time to time credited to any Deposit Account unless an Event of Default has occurred and is continuing. The provisions of this Section 3.4(b) shall not apply to the Net Available Cash Account or to any other Deposit Accounts for which the Revolving Credit Collateral Agent is the Bank. No Pledgor shall grant Control of any Deposit Account to any person other than the Collateral Agent.

        (c)    Investment Property.    (i) As of the date hereof, no Pledgor has any Securities Accounts or Commodity Accounts other than those listed in Schedule 14 to the Perfection Certificate. The Collateral Agent has a first priority security interest in each such Securities Account and Commodity Account, which security interest is perfected by Control, except to the extent that obtaining such Control may be completed after the Closing Date pursuant to the terms of Section 4.19 of the Indenture. No Pledgor shall hereafter establish and maintain any Securities Account or Commodity Account with any Securities Intermediary or Commodity Intermediary unless (1) it shall have given the Collateral Agent thirty (30) days' prior written notice of its intention to establish such new Securities Account or Commodity Account with such Securities Intermediary or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall be reasonably acceptable to the Collateral Agent and (3) such Securities Intermediary or Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and delivered a Control Agreement with respect to such Securities Account or Commodity Account, as the case may be; provided, that the Collateral Agent shall have the right to waive (or extend) the requirement of a Control Agreement for any account in its reasonable discretion. Each Pledgor shall accept any cash and Investment Property in trust for the benefit of the Collateral Agent and within three (3) Business Days of actual receipt thereof, deposit any and all cash and Investment Property (other than any Investment Property pledged pursuant to clauses (ii)(1), (iii)(1) or (iii)(3) below) received by it into a Deposit Account or Securities Account subject to the Collateral Agent's Control. The Collateral Agent agrees with each Pledgor that such Collateral Agent shall not give any Entitlement Orders or instructions or directions to any issuer of uncertificated securities, Securities Intermediary or Commodity Intermediary, and

11

shall not withhold its consent to the exercise of any withdrawal or dealing rights by such Pledgor, unless an Event of Default has occurred and is continuing or, after giving effect to any such investment and withdrawal rights, would occur. The provisions of this Section 3.4(c) shall not apply to any Financial Assets credited to a Securities Account for which the Revolving Credit Collateral Agent is the Securities Intermediary. No Pledgor shall grant Control over any Investment Property to any person other than the Collateral Agent.

        (ii)   If any Pledgor shall at any time hold or acquire any certificated securities constituting Investment Property, such Pledgor shall promptly (1) endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as are necessary to perfect the security interest in such securities or (2) deliver such securities into a Securities Account with respect to which a Securities Account Control Agreement is in effect in favor of the Collateral Agent.

        (iii)  If any Pledgor shall at any time own or acquire, directly or through a nominee, any uncertificated securities constituting Investment Property, such Pledgor shall promptly notify the Collateral Agent thereof and pursuant to an agreement in form and substance sufficient to perfect the security interest in such uncertificated securities, either (1) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Pledgor or such nominee, (2) cause a Security Entitlement with respect to such uncertificated security to be held in a Securities Account with respect to which the Collateral Agent has Control or (3) arrange for the Collateral Agent to become the registered owners of such securities.

        (iv)  As between the Collateral Agent and the Pledgors, the Pledgors shall bear the investment risk with respect to the Investment Property and Pledged Securities, and the risk of loss of, damage to, or the destruction of the Investment Property and Pledged Securities, whether in the possession of, or maintained as a Security Entitlement or deposit by, or subject to the Control of, the Collateral Agent, a Securities Intermediary, a Commodity Intermediary, any Pledgor or any other person.

        (d)    Electronic Chattel Paper and Transferable Records.    As of the date hereof, no amount under or in connection with any of the Pledged Collateral is evidenced by any Electronic Chattel Paper or any "transferable record" (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction) other than such Electronic Chattel Paper and transferable records listed in Schedule 11 to the Perfection Certificate. If any amount payable under or in connection with any of the Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any transferable record, the Pledgor acquiring such Electronic Chattel Paper or transferable record shall promptly notify the Collateral Agent thereof and shall take such action as necessary to vest in the Collateral Agent control of such Electronic Chattel Paper under Section 9-105 of the UCC or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The requirement in the preceding sentence shall not apply to the extent that such amount, together with all amounts payable evidenced by Electronic Chattel Paper or any transferable record in which the Collateral Agent has not been vested control within the meaning of the statutes described in the immediately preceding sentence, does not exceed $500,000 in the aggregate for all Pledgors. The Collateral Agent agrees with such Pledgor that, so long as such procedures will not result in the Collateral Agent's loss of control, the Pledgor may make alterations to the Electronic Chattel Paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing

12

or would occur after taking into account any action by such Pledgor with respect to such Electronic Chattel Paper or transferable record.

        (e)    Letter-of-Credit Rights.    If any Pledgor is at any time a beneficiary under a Letter of Credit now or hereafter issued, such Pledgor shall promptly notify the Collateral Agent thereof and such Pledgor shall, at the reasonable request of the Revolving Credit Collateral Agent, pursuant to an agreement in form and substance reasonably satisfactory to the Revolving Credit Collateral Agent, either (i) use reasonable commercial efforts to arrange for the issuer and any confirmer of such Letter of Credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the Letter of Credit or (ii) use reasonable commercial efforts to arrange for the Collateral Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the Letter of Credit are to be applied as provided in the Indenture. The actions in the preceding sentence shall not be required to the extent that the amount of any such Letter of Credit, together with the aggregate amount of all other Letters of Credit for which the actions described above in clause (i) and (ii) have not been taken, does not exceed $1,000,000 in the aggregate for all Pledgors.

        (f)    Commercial Tort Claims.    As of the date hereof, each Pledgor hereby represents and warrants that it holds no Commercial Tort Claims other than those listed in Schedule 13 to the Perfection Certificate. If any Pledgor shall at any time hold or acquire a Commercial Tort Claim, such Pledgor shall promptly notify the Collateral Agent in writing signed by such Pledgor of the brief details thereof and grant to the Collateral Agent in writing a security interest therein and in the Proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Revolving Credit Collateral Agent. The requirement in the preceding sentence shall not apply to the extent that the amount of such Commercial Tort Claim, together with the amount of all other Commercial Tort Claims held by any Pledgor in which the Collateral Agent do not have a security interest, does not exceed $5,000,000 in the aggregate for all Pledgors.

        (g)    Motor Vehicles.    Each Pledgor shall deliver to the Collateral Agent originals of the certificates of title or ownership for the motor vehicles (and any other Equipment covered by certificates of title or ownership) owned by it, with such Collateral Agent listed as lienholder therein. Such requirement shall not apply unless (i) the aggregate value of all motor vehicles (and such other Equipment) as to which any Pledgor has not delivered a certificate of title or ownership is at least $4,000,000. or (ii) the Revolving Credit Collateral Agent has requested delivery of such originals of the certificates of tile or ownership for the motor vehicles to it.

        (h)    Credit Card Receivables.    Pledgors will deliver to the Collateral Agent an executed Credit Card Processing Control Agreement with respect to all Credit Card Receivables. No Pledgor shall hereafter enter into any Credit Card Agreement unless (1) it shall have given the Collateral Agent thirty (30) days' prior written notice of its intention to enter into any new Credit Card Agreement and (2) such Pledgor and credit card issuer or credit card processor shall have duly executed and delivered to the Collateral Agent a Credit Card Processing Control Agreement with respect to such Credit Card Agreement. Notwithstanding the foregoing, the Revolving Credit Collateral Agent shall have the right to waive (or extend) the requirement of a Credit Card Processing Control Agreement with respect to any credit card issuer or credit card processor in its reasonable discretion.

13

        (i)    Armored Car Control Agreements.    As of the date hereof, no Pledgor has any agreement with any Person which provides armored car services other than the agreements listed in Schedule 17 to the Perfection Certificate. Pledgors will deliver to the Collateral Agent an executed Armored Car Control Agreement with respect to each arrangement between Pledgors and any Person which provides armored car services. No Pledgor shall hereafter enter into any arrangement with an armored car carrier unless (1) it shall have given the Collateral Agent thirty (30) days' prior written notice of its intention to enter into any new Credit Card Agreement and (2) such Pledgor and armored car carrier shall have duly executed and delivered to the Collateral Agent an Armored Car Control Agreement with respect to such arrangement. Notwithstanding the foregoing, the Revolving Credit Collateral Agent shall have the right to waive (or extend) the requirement of an Armored Car Control Agreement with respect to any arrangement with an armored car carrier

        SECTION 3.5.    Joinder of Additional Guarantors.    The Pledgors shall cause each Subsidiary of the Issuer which, from time to time, after the date hereof shall be required to pledge any assets to the Collateral Agent for the benefit of the Secured Parties pursuant to the provisions of the Indenture, to execute and deliver to the Collateral Agent (i) a Joinder Agreement substantially in the form of Exhibit 3 hereto within thirty (30) days of the date on which it was acquired or created and (ii) a Perfection Certificate, in each case, within thirty (30) days of the date on which it was acquired or created and, upon such execution and delivery, such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for all purposes hereunder with the same force and effect as if originally named as a Guarantor and Pledgor herein. The execution and delivery of such Joinder Agreement shall not require the consent of any Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor and Pledgor as a party to this Agreement.

        SECTION 3.6.    Supplements; Further Assurances.    Each Pledgor shall take such further actions, and execute and/or deliver to the Collateral Agent such additional financing statements, amendments, assignments, agreements, supplements, powers and instruments, as the Revolving Credit Collateral Agent may in its reasonable judgment deem necessary or appropriate in order to create, perfect, preserve and protect the security interest in the Pledged Collateral as provided herein and the rights and interests granted to the Collateral Agent hereunder, to carry into effect the purposes hereof or better to assure and confirm the validity, enforceability and priority of the Collateral Agent's security interest in the Pledged Collateral hereof or permit the Collateral Agent to exercise and enforce its rights, powers and remedies hereunder with respect to any Pledged Collateral, including the filing of financing statements, continuation statements and other documents (including this Agreement) under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interest created hereby and the execution and delivery of Control Agreements, all in form reasonably satisfactory to the Revolving Credit Collateral Agent and in such offices (including the United States Patent and Trademark Office and the United States Copyright Office) wherever required by law to perfect, continue and maintain the validity, enforceability and priority of the security interest in the Pledged Collateral as provided herein and to preserve the other rights and interests granted to the Collateral Agent hereunder, as against third parties, with respect to the Pledged Collateral all subject to Section 11.15 hereof. Without limiting the generality of the foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or refile and/or deliver to the Collateral Agent from time to time upon reasonable request by the Revolving Credit Collateral Agent, but in any event no more frequently than once a fiscal quarter prior to the occurrence and continuance of an Event of Default, such lists, schedules, descriptions and designations of the Pledged Collateral, copies of warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, supplements, additional security agreements, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments as the Collateral Agent shall reasonably request. If an Event of Default

14

has occurred and is continuing, the Collateral Agent may institute and maintain, in its own name or in the name of any Pledgor, such suits and proceedings as the Collateral Agent may be advised by counsel shall be necessary or expedient to prevent any impairment of the security interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at the sole cost and expense of the Pledgors.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

        Each Pledgor represents, warrants and covenants as follows:

        SECTION 4.1.    Title.    Except for the security interest granted to the Collateral Agent for the ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Liens, such Pledgor owns and has rights and, as to Pledged Collateral acquired by it from time to time after the date hereof, will own and have rights in each item of Pledged Collateral pledged by it hereunder, free and clear of any and all Liens or claims of others. In addition, no Liens or claims exist on the Securities Collateral, other than as permitted by Section 4.12 of the Indenture.

        SECTION 4.2.    Validity of Security Interest.    The security interest in and Lien on the Pledged Collateral granted to the Collateral Agent for the benefit of the Secured Parties hereunder constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the payment and performance of the Secured Obligations, and (b) subject to the filings and other actions described in Schedule 7 to the Perfection Certificate (to the extent required to be listed on the schedules to the Perfection Certificate as of the date this representation is made or deemed made), a perfected security interest in all the Pledged Collateral. The security interest and Lien granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement in and on the Pledged Collateral will at all times constitute a perfected, continuing security interest therein, prior to all other Liens on the Pledged Collateral except for Permitted Liens and subject to Section 11.15 hereof.

        SECTION 4.3.    Defense of Claims; Transferability of Pledged Collateral.    Each Pledgor shall, at its own cost and expense, defend title to the Pledged Collateral pledged by it hereunder and the security interest therein and Lien thereon granted to the Collateral Agent and the priority thereof against all material claims and demands of all persons, at its own cost and expense, at any time claiming any interest therein adverse to the Collateral Agent or any other Secured Party other than Permitted Liens. There is no agreement, order, judgment or decree, and no Pledgor shall enter into any agreement or take any other action, that would materially restrict the transferability of any of the Pledged Collateral or otherwise impair or conflict with such Pledgor's obligations or the rights of the Collateral Agent hereunder other than such permits, licenses or agreements in the ordinary course of business.

        SECTION 4.4.    Other Financing Statements.    It has not filed, nor authorized any third party to file (nor will there be), any valid or effective financing statement (or similar statement, instrument of registration or public notice under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Pledged Collateral, except such as have been filed in favor of the Collateral Agent pursuant to this Agreement or in favor of any holder of a Permitted Lien with respect to such Permitted Collateral Lien or financing statements or public notices relating to the termination statements listed on Schedule 9 to the Perfection Certificate. No Pledgor shall execute, authorize or permit to be filed in any public office any financing statement (or similar statement, instrument of registration or public notice under the law of any jurisdiction) relating to any Pledged Collateral, except financing statements and other statements and instruments filed or to be filed in respect of and covering the security interests granted by such Pledgor to the holder of the Permitted Liens.

        SECTION 4.5.    Chief Executive Office; Change of Name; Jurisdiction of Organization.    Such Pledgor will not, except after not less than 30 days' prior written notice to the Collateral Agent, (i) change its jurisdiction of organization or its organizational identification number, (ii) change the

15

location of its chief execution office, (iii) take any action to become a "registered organization" (as used in Section 9-307 of the UCC) in any different jurisdiction or (iv) change its name. The Collateral Agent shall not be liable or responsible to any party for any failure to maintain a perfected security interest in such Pledgor's property constituting Pledged Collateral.

        SECTION 4.6.    Location of Inventory and Equipment.    It shall not move any Equipment or Inventory to an ultimate location that is not listed in the relevant Schedules to the Perfection Certificate, unless it shall have given the Collateral Agent not less than 10 days' prior written notice of its intention so to do, clearly describing such new location and providing monthly rent expense, if applicable, and such other information in connection therewith as the Revolving Credit Collateral Agent may reasonably request; provided that in no event shall any Equipment or Inventory be moved to any location outside of the continental United States or Canada.

        SECTION 4.7.    Due Authorization and Issuance.    All of the Pledged Securities existing on the date hereof have been, and to the extent any Pledged Securities are hereafter issued, such Pledged Securities will be, upon such issuance, duly authorized, validly issued and fully paid and non-assessable. There is no amount or other obligation owing by any Pledgor to any issuer of the Pledged Securities in exchange for or in connection with the issuance of the Pledged Securities or any Pledgor's status as a partner or a member of any issuer of the Pledged Securities.

        SECTION 4.8.    Consents, etc.    In the event that the Collateral Agent desires to exercise any remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and determines it necessary to obtain any approvals or consents of any Governmental Authority or any other person therefor, then, upon the reasonable request of such Collateral Agent, such Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to obtain as soon as practicable any necessary approvals or consents for the exercise of any such remedies, rights and powers.

        SECTION 4.9.    Pledged Collateral.    All information set forth herein, including the schedules hereto, and all information contained in any documents, schedules and lists heretofore delivered to any Secured Party, including the Perfection Certificate and the schedules thereto, in connection with this Agreement, in each case, relating to the Pledged Collateral, is accurate and complete in all material respects. The Pledged Collateral described on the schedules to the Perfection Certificate constitutes all of the property of such type of Pledged Collateral owned or held by the Pledgors.

        SECTION 4.10.    Insurance.    In the event that the proceeds of any insurance claim are paid to any Pledgor after the Collateral Agent has exercised its right to foreclose after an Event of Default, such Net Cash Proceeds shall be held in trust for the benefit of the Collateral Agent and promptly after receipt thereof shall be paid to the Collateral Agent for application in accordance with the Indenture.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

        SECTION 5.1.    Pledge of Additional Securities Collateral.    Each Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of any person, accept the same in trust for the benefit of the Collateral Agent and promptly (but in any event within five Business Days after receipt thereof) deliver to the Collateral Agent a pledge amendment, duly executed by such Pledgor, in substantially the form of Exhibit 2 hereto (each, a "Pledge Amendment"), and deliver to the Collateral Agent the certificates and other documents required under Section 3.1 and Section 3.2 hereof in respect of the additional Pledged Securities or Intercompany Notes which are to be pledged pursuant to this Agreement, and confirming the attachment of the Lien hereby created on and in respect of such additional Pledged Securities or Intercompany Notes. Each Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment to this Agreement and agrees that all Pledged Securities or Intercompany Notes

16

listed on any Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder be considered Pledged Collateral.

        SECTION 5.2.    Voting Rights; Distributions; etc.

        (a)   So long as no Event of Default shall have occurred and be continuing:

          (i)  Each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Securities Collateral or any part thereof; provided, however, that no Pledgor shall in any event exercise such rights in any manner which could reasonably be expected to have a Material Adverse Effect.

         (ii)  Each Pledgor shall be entitled to receive and retain, and to utilize free and clear of the Lien hereof, any and all Distributions, but only if and to the extent made in accordance with the provisions of the Indenture; provided, however, that any and all such Distributions consisting of rights or interests in the form of securities shall be promptly delivered to the Collateral Agent to hold as Pledged Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Collateral Agent, be segregated from the other property or funds of such Pledgor and be promptly (but in any event within five Business Days after receipt thereof) delivered to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

        (b)   So long as no Event of Default shall have occurred and be continuing, the Collateral Agent shall be deemed without further action or formality to have granted to each Pledgor all necessary consents relating to voting rights and shall, if necessary, upon written request of any Pledgor and at the sole cost and expense of the Pledgors, from time to time execute and deliver (or cause to be executed and delivered) to such Pledgor all such instruments as such Pledgor may reasonably request in order to permit such Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to Section 5.2(a)(i) hereof and to receive the Distributions which it is authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof.

        (c)   Upon the occurrence and during the continuance of any Event of Default:

          (i)  All rights of each Pledgor to exercise the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i) hereof shall immediately cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to exercise such voting and other consensual rights.

         (ii)  All rights of each Pledgor to receive Distributions which it would otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof shall immediately cease and all such rights shall thereupon become vested in the Collateral Agent, which shall thereupon have the sole right to receive and hold as Pledged Collateral such Distributions.

        (d)   Each Pledgor shall, at its sole cost and expense, from time to time execute and deliver to the Collateral Agent appropriate instruments as the Revolving Credit Collateral Agent may reasonably request in order to permit the Collateral Agent to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 5.2(c)(i) hereof and to receive all Distributions which it may be entitled to receive under Section 5.2(c)(ii) hereof.

        (e)   All Distributions which are received by any Pledgor contrary to the provisions of Section 5.2(c)(ii) hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of such Pledgor and shall immediately be paid over to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

        SECTION 5.3.    Defaults, etc.    Such Pledgor is not in default in the payment of any material portion of any mandatory capital contribution, if any, required to be made under any agreement to

17

which such Pledgor is a party relating to the Pledged Securities pledged by it, and such Pledgor is not in violation of any other material provisions of any such agreement to which such Pledgor is a party, or otherwise in default or violation thereunder. No Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor by any person with respect thereto, and as of the date hereof, there are no certificates, instruments, documents or other writings (other than the Organizational Documents and certificates representing such Pledged Securities that have been delivered to the Collateral Agent) which evidence any Pledged Securities of such Pledgor.

        SECTION 5.4.    Certain Agreements of Pledgors As Issuers and Holders of Equity Interests.

        (a)   In the case of each Pledgor which is an issuer of Securities Collateral, such Pledgor agrees to be bound by the terms of this Agreement relating to the Securities Collateral issued by it and will comply with such terms insofar as such terms are applicable to it.

        (b)   In the case of each Pledgor which is a partner, shareholder or member, as the case may be, in a partnership, limited liability company or other entity, such Pledgor hereby consents to the extent required by the applicable Organizational Document to the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged Securities in such partnership, limited liability company or other entity and, upon the occurrence and during the continuance of an Event of Default, to the transfer of such Pledged Securities to the Collateral Agent or its nominee and to the substitution of the Collateral Agent or its nominee as a substituted partner, shareholder or member in such partnership, limited liability company or other entity with all the rights, powers and duties of a general partner, limited partner, shareholder or member, as the case may be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

        SECTION 6.1.    Grant of Intellectual Property License.    For the purpose of enabling the Collateral Agent, upon the occurrence and during the continuance of an Event of Default, to exercise rights and remedies under Article IX hereof at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Pledgor hereby grants to the Collateral Agent, to the extent assignable, an irrevocable, non-exclusive, royalty free, worldwide license or (for third party rights) sublicenses to use, assign, license or sublicense any of the Intellectual Property now owned, held or hereafter acquired by such Pledgor, wherever the same may be located. Such license or sublicense shall include access to all media in which any of the applicable items may be recorded or stored and to all computer programs used for the compilation or printout hereof. The Collateral Agent agrees to maintain, during the period such license or sublicense is in effect, the quality of all products and services marketed under the Trademarks at a level that the Collateral Agent in good faith believes is in all material respects equal to that maintained by each Pledgor immediately prior to the Event of Default.

        SECTION 6.2.    Protection of Collateral Agent's Security.    On a continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly notify the Collateral Agent if it knows or has reason to know that any application or registration for any Material Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination in any proceeding or the institution of any proceeding in any federal, state, foreign or local court or administrative body (including the United States Patent and Trademark Office or the United States Copyright Office or any foreign counterparts thereof) regarding any Material Intellectual Property, such Pledgor's right to register such Material Intellectual Property or its right to keep and maintain such registration in full force and effect, (ii) maintain all Material Intellectual Property as presently used and operated, except as shall be consistent with commercially reasonable business judgment, (iii) continue to use each

18

material Trademark so as to maintain it in full force in each class of goods, except as shall be consistent with commercially reasonable business judgment, (iv) maintain, consistent with commercially reasonable business judgment, the quality of products and services offered under such Trademark at or above the quality of products and services offered under such Trademarks as of the date hereof, (v) not adopt or use any mark which is confusingly similar to such Trademark unless the Collateral Agent shall obtain a perfected security interest in such mark pursuant to this Agreement, (vi) use all Intellectual Property with applicable notices and legends, (vii) not permit to lapse or become invalidated or abandoned any Material Intellectual Property, and not settle or compromise any pending or future litigation or administrative proceeding with respect to any such Material Intellectual Property, in either case except as shall be consistent with commercially reasonable business judgment, (viii) maintain, apply and prosecute each registration of the Material Intellectual Property, except as shall be consistent with commercially reasonable business judgment, (ix) upon such Pledgor obtaining knowledge thereof, promptly notify the Collateral Agent in writing of any event which may be reasonably expected to materially and adversely affect the value or utility of any Material Intellectual Property or the rights and remedies of the Collateral Agent in relation thereto including a levy or threat of levy or any legal process against any Material Intellectual Property (x) not license any Intellectual Property, other than licenses entered into by such Pledgor in, or incidental to, the ordinary course of business or consistent with commercially reasonable business judgment, or amend or permit the amendment of any of the licenses in a manner that materially and adversely affects the right to receive payments thereunder, or in any manner that would materially impair the value of any Intellectual Property or the Lien on and security interest in the Intellectual Property created therein hereby, (xi) diligently keep adequate records respecting all Intellectual Property and (xii) furnish within five (5) Business Days after the end of each fiscal quarter to the Collateral Agent therefor reasonably detailed statements and amended schedules further identifying and describing the Intellectual Property and such other materials evidencing or reports pertaining to any Intellectual Property as the Collateral Agent may from time to time reasonably request.

        SECTION 6.3.    After-Acquired Property.    If any Pledgor either by itself or through any agent, employee, licensee or designee, shall at any time after the date hereof (i) obtain any rights to any additional Intellectual Property or (ii) file or otherwise become entitled to the benefit of any additional Intellectual Property or any renewal, registration, application or extension thereof, including any reissue, division, continuation, or continuation-in-part of any Intellectual Property, or any improvement on any Intellectual Property, the provisions hereof shall automatically apply thereto and any such item enumerated in the preceding clause (i) or (ii) shall automatically constitute Intellectual Property as if such would have constituted Intellectual Property at the time of execution hereof and be subject to the Lien and security interest created by this Agreement without further action by any party. Each Pledgor shall within five (5) Business Days after the last day of any fiscal quarter in which such Pledgor has obtained or filed such rights described in clauses (i) and (ii) above provide to the Collateral Agent written notice of any of the foregoing and confirm the attachment of the Lien and security interest created by this Agreement to any rights described in clauses (i) and (ii) above by execution of an instrument in form substantially in the form of Exhibit 6, 7 or 8 hereof and the filing of any instruments or statements as shall be reasonably necessary to create, preserve, protect or perfect the Collateral Agent's security interest in such Intellectual Property. Further, each Pledgor authorizes the Collateral Agent to modify this Agreement by amending Schedules 12(a) and 12(b) to the Perfection Certificate to include any Intellectual Property of such Pledgor acquired or arising after the date hereof.

        SECTION 6.4.    Litigation.    Unless there shall occur and be continuing any Event of Default, each Pledgor shall take all reasonable and necessary steps to commence and prosecute in its own name, as the party in interest, for its own benefit and at the sole cost and expense of the Pledgors, such applications for protection of the Material Intellectual Property and suits, proceedings or other actions to prevent the material infringement, counterfeiting, unfair competition, dilution, diminution in value or

19

other damage as are necessary to protect the Intellectual Property. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent shall have the right but shall in no way be obligated to file applications for protection of the Intellectual Property and/or bring suit in the name of any Pledgor, the Collateral Agent or the Secured Parties to enforce the Intellectual Property and any license thereunder. In the event of such suit, each Pledgor shall do any and all lawful acts and execute any and all documents requested by the Collateral Agent in aid of such enforcement and the Pledgors shall promptly reimburse and indemnify the Collateral Agent for all costs and expenses incurred by the Collateral Agent in the exercise of its rights under this Section 6.4 in accordance with Sections 6.11 and 7.07 of the Indenture. In the event that the Collateral Agent shall elect not to bring suit to enforce the Intellectual Property, each Pledgor agrees to take all commercially reasonable actions necessary, whether by suit, proceeding or other action, to prevent the infringement, counterfeiting, unfair competition, dilution, diminution in value of or other damage to any of the Intellectual Property by any person.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

        SECTION 7.1.    Maintenance of Records.    Each Pledgor shall keep and maintain at its own cost and expense complete records of each Receivable, in a manner consistent with prudent business practice, including records of all payments received, all credits granted thereon, all merchandise returned and all other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole cost and expense, upon the Collateral Agent's demand made at any time after the occurrence and during the continuance of any Event of Default, deliver all tangible evidence of Receivables, including all documents evidencing Receivables and any books and records relating thereto to such Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Pledgor). Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent may transfer a full and complete copy of any Pledgor's books, records, credit information, reports, memoranda and all other writings relating to the Receivables to and for the use by any person that has acquired or is contemplating acquisition of an interest in the Receivables or the Collateral Agent's security interest therein without the consent of any Pledgor; provided, that such person and its representative shall be obligated to keep any information or knowledge obtained in connection with their review of such books, records, credit information, reports, memoranda or other writings related to the Receivables confidential.

        SECTION 7.2.    Legend.    Each Pledgor shall legend, at the reasonable request of the Revolving Credit Collateral Agent and in form and manner satisfactory to the Revolving Credit Collateral Agent, the Receivables and the other books, records and documents of such Pledgor evidencing or pertaining to the Receivables with an appropriate reference to the fact that the Receivables have been assigned to the Collateral Agent for the benefit of the Secured Parties and that the Collateral Agent have a security interest therein.

        SECTION 7.3.    Modification of Terms, etc.    No Pledgor shall rescind or cancel any obligations evidenced by any material Receivable or modify any term thereof or make any adjustment with respect thereto except in the ordinary course of business consistent with prudent business practice, or extend or renew any such material obligations except in the ordinary course of business consistent with prudent business practice or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto or sell any Receivable or interest therein except in the ordinary course of business consistent with prudent business practice without the prior written consent of the Revolving Credit Collateral Agent. Each Pledgor shall timely fulfill all obligations on its part to be fulfilled under or in connection with the Receivables.

        SECTION 7.4.    Collection.    Each Pledgor shall cause to be collected from the Account Debtor of each of the Receivables, as and when due in the ordinary course of business and consistent with

20

prudent business practice (including Receivables that are delinquent, such Receivables to be collected in accordance with generally accepted commercial collection procedures), any and all amounts owing under or on account of such Receivable, and apply promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable, except that any Pledgor may, with respect to a Receivable, allow in the ordinary course of business (i) a refund or credit due as a result of returned or damaged or defective merchandise and (ii) such extensions of time to pay amounts due in respect of Receivables and such other modifications of payment terms or settlements in respect of Receivables as shall be commercially reasonable in the circumstances, all in accordance with such Pledgor's ordinary course of business consistent with its collection practices as in effect from time to time. The costs and expenses (including attorneys' fees) of collection, in any case, whether incurred by any Pledgor, the Collateral Agent or any Secured Party, shall be paid by the Pledgors.

ARTICLE VIII

TRANSFERS

        SECTION 8.1.    Transfers of Pledged Collateral.    No Pledgor shall sell, convey, assign or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral pledged by it hereunder except as expressly permitted by the Indenture.

ARTICLE IX

REMEDIES

        SECTION 9.1.    Remedies.    Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent may from time to time exercise in respect of the Pledged Collateral, in addition to the other rights and remedies provided for herein or otherwise available to them, the following remedies:

          (i)  Personally, or by agents or attorneys, immediately take possession of the Pledged Collateral or any part thereof, from any Pledgor or any other person who then has possession of any part thereof with or without notice or process of law, and for that purpose and/or for the purposes of completing the manufacture and packaging of the Pledged Collateral or sale or other disposition of the Pledged Collateral may enter upon any Pledgor's premises where any of the Pledged Collateral is located, remove such Pledged Collateral, complete the manufacture and packaging of the Pledged Collateral and/or sell or otherwise dispose of the Pledged Collateral, remain present at such premises to receive copies of all communications and remittances relating to the Pledged Collateral and for other purposes set forth in this clause (i) and use in connection with such removal, possession, completion of manufacturing and packaging, sale or other disposition, any and all services, supplies, equipment, aids and other facilities of any Pledgor;

         (ii)  Demand, sue for, collect or receive any money or property at any time payable or receivable in respect of the Pledged Collateral including instructing the obligor or obligors on any agreement, instrument or other obligation constituting part of the Pledged Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent, and in connection with any of the foregoing, compromise, settle, extend the time for payment and make other modifications with respect thereto; provided, however, that in the event that any such payments are made directly to any Pledgor, prior to receipt by any such obligor of such instruction, such Pledgor shall segregate all amounts received pursuant thereto in trust for the benefit of the Collateral Agent and shall promptly (but in no event later than three (3) Business Days after receipt thereof) pay such amounts to the Collateral Agent;

        (iii)  Sell, assign, grant a license to use or otherwise liquidate, or direct any Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and all investments made in whole or in part with the Pledged Collateral or any part thereof, and take possession of the proceeds of any such sale, assignment, license or liquidation;

21

        (iv)  Take possession of the Pledged Collateral or any part thereof, by directing any Pledgor in writing to deliver the same to the Collateral Agent at any place or places so designated by the Collateral Agent, in which event such Pledgor shall at its own expense: (A) forthwith cause the same to be moved to the place or places designated by the Collateral Agent and therewith delivered to the Collateral Agent, (B) store and keep any Pledged Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent and (C) while the Pledged Collateral shall be so stored and kept, provide such security and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition. Each Pledgor's obligation to deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is of the essence hereof. Upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by any Pledgor of such obligation;

         (v)  Withdraw all moneys, instruments, securities and other property in any bank, financial securities, deposit or other account of any Pledgor constituting Pledged Collateral for application to the Secured Obligations as provided in Article X hereof;

        (vi)  Retain and apply the Distributions to the Secured Obligations as provided in Article X hereof;

       (vii)  Exercise any and all rights as beneficial and legal owner of the Pledged Collateral, including perfecting assignment of and exercising any and all voting, consensual and other rights and powers with respect to any Pledged Collateral; and

      (viii)  Exercise all the rights and remedies of a secured party on default under the UCC, and the Collateral Agent may also in its sole discretion, without notice except as specified in Section 9.2 hereof, sell, assign or grant a license to use the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Collateral Agent's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agent may deem commercially reasonable. The Collateral Agent or any other Secured Party or any of their respective Affiliates may be the purchaser, licensee, assignee or recipient of the Pledged Collateral or any part thereof at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations owed to such person as a credit on account of the purchase price of the Pledged Collateral or any part thereof payable by such person at such sale. Each purchaser, assignee, licensee or recipient at any such sale shall acquire the property sold, assigned or licensed absolutely free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent permitted by law, all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agent shall not be obligated to make any sale of the Pledged Collateral or any part thereof regardless of notice of sale having been given. The Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law, any claims against the Collateral Agent arising by reason of the fact that the price at which the Pledged Collateral or any part thereof may have been sold, assigned or licensed at such a private sale was less than the price which might have been obtained at a public sale, even if one of the Collateral Agent accept the first offer received and does not offer such Pledged Collateral to more than one offeree.

        SECTION 9.2.    Notice of Sale.    Each Pledgor acknowledges and agrees that, to the extent notice of sale or other disposition of the Pledged Collateral or any part thereof shall be required by law, ten

22

(10) days' prior notice to such Pledgor of the time and place of any public sale or of the time after which any private sale or other intended disposition is to take place shall be commercially reasonable notification of such matters. No notification need be given to any Pledgor if it has signed, after the occurrence of an Event of Default, a statement renouncing or modifying any right to notification of sale or other intended disposition.

        SECTION 9.3.    Waiver of Notice and Claims.    Each Pledgor hereby waives, to the fullest extent permitted by applicable law, notice or judicial hearing in connection with either of the Collateral Agent's taking possession or either of the Collateral Agent's disposition of the Pledged Collateral or any part thereof, including any and all prior notice and hearing for any prejudgment remedy or remedies and any such right which such Pledgor would otherwise have under law, and each Pledgor hereby further waives, to the fullest extent permitted by applicable law: (i) all damages occasioned by such taking of possession other than those caused by the gross negligence or willful misconduct of the Collateral Agent or its representatives as determined by a final, non-appealable order of a court of competent jurisdiction, (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent's rights hereunder and (iii) all rights of redemption, appraisal, valuation, stay, extension or moratorium now or hereafter in force under any applicable law. The Collateral Agent shall not be liable for any incorrect or improper payment made pursuant to this Article IX in the absence of gross negligence or willful misconduct on the part of the Collateral Agent as determined by a final, non-appealable order of a court of competent jurisdiction. Any sale of, or the grant of options to purchase, or any other realization upon, any Pledged Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the applicable Pledgor therein and thereto, and shall be a perpetual bar both at law and in equity against such Pledgor and against any and all persons claiming or attempting to claim the Pledged Collateral so sold, optioned or realized upon, or any part thereof, from, through or under such Pledgor.

        SECTION 9.4.    Certain Sales of Pledged Collateral.

        (a)   Each Pledgor recognizes that, by reason of certain prohibitions contained in law, rules, regulations or orders of any Governmental Authority, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who meet the requirements of such Governmental Authority. Each Pledgor acknowledges that any such sales may be at prices and on terms less favorable to the Collateral Agent than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such restricted sale shall be deemed to have been made in a commercially reasonable manner and that, except as may be required by applicable law, the Collateral Agent shall have no obligation to engage in public sales.

        (b)   Each Pledgor recognizes that, by reason of certain prohibitions contained in the Securities Act, and applicable state securities laws, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Securities Collateral and Investment Property, to limit purchasers to persons who will agree, among other things, to acquire such Securities Collateral or Investment Property for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor acknowledges that any such private sales may be at prices and on terms less favorable to the Collateral Agent than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act), and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Securities Collateral or Investment Property for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would agree to do so.

23

        (c)   Notwithstanding the foregoing, each Pledgor shall, upon the occurrence and during the continuance of any Event of Default, at the reasonable request of the Revolving Credit Collateral Agent, for the benefit of the Collateral Agent, cause any registration, qualification under or compliance with any Federal or state securities law or laws to be effected with respect to all or any part of the Securities Collateral as soon as practicable and at the sole cost and expense of the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause such registration to be effected (and be kept effective) and will use its commercially reasonable efforts to cause such qualification and compliance to be effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Securities Collateral including registration under the Securities Act (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with all other requirements of any Governmental Authority. Each Pledgor shall use its commercially reasonable efforts to cause the Collateral Agent to be kept advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, shall furnish to the Collateral Agent such number of prospectuses, offering circulars or other documents incident thereto as the Collateral Agent from time to time may reasonably request, and shall indemnify and shall cause the issuer of the Securities Collateral to indemnify the Collateral Agent and all others participating in the distribution of such Securities Collateral against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading other than any claims, losses, damages and liabilities arising from or by virtue of the gross negligence or willful misconduct or misrepresentation of the Collateral Agent or its representative as determined by a final, non-appealable order of a court of competent jurisdiction.

        (d)   If the Collateral Agent determines to exercise its right to sell any or all of the Securities Collateral or Investment Property, upon written request, the applicable Pledgor shall from time to time furnish to the Collateral Agent all such information as the Collateral Agent may request in order to determine the number of securities included in the Securities Collateral or Investment Property which may be sold by the Collateral Agent as exempt transactions under the Securities Act and the rules of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.

        (e)   Each Pledgor further agrees that a breach of any of the covenants contained in this Section 9.4 will cause irreparable injury to the Collateral Agent and the other Secured Parties, that the Collateral Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 9.4 shall be specifically enforceable against such Pledgor, and such Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing.

        SECTION 9.5.    No Waiver; Cumulative Remedies.

        (a)   No failure on the part of the Collateral Agent to exercise, no course of dealing with respect to, and no delay on the part of the Collateral Agent in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power, privilege or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy; nor shall the Collateral Agent be required to look first to, enforce or exhaust any other security, collateral or guaranties. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law or otherwise available.

24

        (b)   In the event that the Collateral Agent shall have instituted any proceeding to enforce any right, power, privilege or remedy under this Agreement or any other Loan Document by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case, the Pledgors, the Collateral Agent and each other Secured Party shall be restored to their respective former positions and rights hereunder with respect to the Pledged Collateral, and all rights, remedies, privileges and powers of the Collateral Agent and the other Secured Parties shall continue as if no such proceeding had been instituted.

        SECTION 9.6.    Certain Additional Actions Regarding Intellectual Property.    If any Event of Default shall have occurred and be continuing, upon the written demand of the Collateral Agent, each Pledgor shall execute and deliver to the Collateral Agent an assignment or assignments of the Intellectual Property and such other documents as are necessary or appropriate to carry out the intent and purposes hereof. Within five (5) Business Days of written notice thereafter from the Collateral Agent, each Pledgor shall make available to the Collateral Agent, to the extent within such Pledgor's power and authority, such personnel in such Pledgor's employ on the date of the Event of Default as the Collateral Agent may reasonably designate to permit such Pledgor to continue, directly or indirectly, to produce, advertise and sell the products and services sold by such Pledgor under the Intellectual Property, and such persons shall be available to perform their prior functions on the Collateral Agent's behalf.

        SECTION 9.7.    Access to Premises.    Each Pledgor will permit Collateral Agent or its designee to visit and inspect the financial records and the property of such Pledgor at reasonable times during regular business hours as often as reasonably requested and at any time upon the occurrence and during the continuance of any Event of Default, make extracts from and copies of such financial records, and to discuss the affairs, finances, accounts and condition of any Pledgor with the officers and employees thereof and advisors therefor (including independent accountants).

ARTICLE X

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS

        SECTION 10.1.    Application of Proceeds.    The proceeds received by the Collateral Agent in respect of any sale of, collection from or other realization upon all or any part of the Pledged Collateral pursuant to the exercise by the Collateral Agent of its remedies shall be applied, together with any other sums then held by the Collateral Agent pursuant to this Agreement, in accordance with the Indenture.

ARTICLE XI

MISCELLANEOUS

        SECTION 11.1.    Concerning Collateral Agent.

        (a)   The Collateral Agent has been appointed as Collateral Agent pursuant to the Indenture. The actions of the Collateral Agent hereunder are subject to the provisions of the Indenture. The Collateral Agent shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking action (including the release or substitution of the Pledged Collateral), in accordance with this Agreement and the Indenture. The Collateral Agent may employ in good faith agents and attorneys-in-fact in connection herewith and shall not be liable for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with due care. The Collateral Agent may resign and a successor Collateral Agent may be appointed in the manner provided in the Indenture. Upon the acceptance of any

25

appointment as Collateral Agent by successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent under this Agreement, and the retiring Collateral Agent shall thereupon be discharged from its duties and obligations under this Agreement. After any retiring Collateral Agent's resignation, the provisions hereof shall inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement while it was a Collateral Agent.

        (b)   The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equivalent to that which the Collateral Agent, in its individual capacity, accords its own property consisting of similar instruments or interests, it being understood that neither the Collateral Agent nor any of the Secured Parties shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Securities Collateral, whether or not the Collateral Agent or any other Secured Party has or is deemed to have knowledge of such matters or (ii) taking any necessary steps to preserve rights against any person with respect to any Pledged Collateral.

        (c)   The Collateral Agent shall be entitled to rely upon any written notice, statement, certificate, order or other document or any telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person, and, with respect to all matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by it.

        (d)   If any item of Pledged Collateral also constitutes collateral granted to the Collateral Agent under any other deed of trust, mortgage, security agreement, pledge or instrument of any type, in the event of any conflict between the provisions hereof and the provisions of such other deed of trust, mortgage, security agreement, pledge or instrument of any type in respect of such collateral, the terms of this Agreement shall control.

        (e)   In the case of any provision of this Agreement which contemplates the granting of consent or exercise of discretion by the Collateral Agent (other than the provisions of Article 9 hereunder) with respect to any category of Pledged Collateral which constitutes Revolving Credit Collateral, if pursuant to a comparable provision of the Revolving Credit Loan Documents the Revolving Credit Collateral Agent grants a consent or exercises its discretion, the Collateral Agent shall automatically be deemed to have granted the same consent or exercised its discretion in the same manner hereunder upon receipt by the Collateral Agent of written notice from the Pledgors that the Revolving Credit Collateral Agent has granted such consent or exercised such discretion.

26

        (f)    Anything herein contained to the contrary notwithstanding, the Pledgors shall remain liable under each of the agreements to which they are a party to perform all of their duties and obligations thereunder to the same extent as if this Agreement had not been executed, and the Collateral Agent shall have no obligation or liability under any such agreements to perform any of the obligations or duties of the Pledgors thereunder. Notwithstanding anything contained herein to the contrary, the right of the Collateral Agent to perform any discretionary act enumerated herein (including the right to consent to or approve of any action or document) shall not be construed as giving rise to any expressed or implied duty. Beyond the exercise of reasonable care in the custody thereof, the Collateral Agent shall have no duty as to any Pledged Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto. The Collateral Agent shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Pledged Collateral. The Collateral Agent shall not be responsible for the existence, genuineness or value of any of the Pledged Collateral or for the validity, perfection, priority or enforceability of the liens in any of the Pledged Collateral, whether impaired by operation of law or by reason of any of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes gross negligence, bad faith or willful misconduct on the part of the Collateral Agent. Nor shall the Collateral Agent be responsible for the validity or sufficiency of the Pledged Collateral, for the validity of the title of the Pledgors to the Pledged Collateral, for insuring the Pledged Collateral or for the payment of taxes, charges, assessments or Liens upon the Pledged Collateral or otherwise as to the maintenance of the Pledged Collateral. In acting under and by virtue of this Agreement, the Collateral Agent shall have all of the rights, protections and immunities granted to it under the Indenture, all of which are incorporated by reference herein, mutatis mutandis.

        SECTION 11.2.    Collateral Agent May Perform; Collateral Agent Appointed Attorney-in-Fact.

        (a)   If any Pledgor shall fail to perform any covenants contained in this Agreement (including such Pledgor's covenants to (i) pay the premiums in respect of all required insurance policies hereunder, (ii) pay and discharge any taxes, assessments and special assessments, levies, fees and governmental charges imposed upon or assessed against, and landlords', carriers', mechanics', workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's Liens and other claims arising by operation of law against, all or any portion of the Pledged Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any obligations of such Pledgor under any Pledged Collateral) or if any representation or warranty on the part of any Pledgor contained herein shall be breached, the Collateral Agent may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose; provided, however, that the Collateral Agent shall in no event be bound to inquire into the validity of any tax, Lien, imposition or other obligation which such Pledgor fails to pay or perform as and when required hereby and which such Pledgor does not contest in accordance with the provisions of the Credit Agreement. Any and all amounts so expended by the Collateral Agent shall be paid by the Pledgors in accordance with the provisions of Section 7.07 of the Indenture. Neither the provisions of this Section 11.2 nor any action taken by the Collateral Agent pursuant to the provisions of this Section 11.2 shall prevent any such failure to observe any covenant contained in this Agreement nor any breach of representation or warranty from constituting an Event of Default. Each Pledgor hereby appoints the Collateral Agent its attorneys-in-fact, with full power and authority in the place and stead of such Pledgor and in the name of such Pledgor, or otherwise, from time to time in the Collateral Agent's discretion to take any action and to execute any instrument consistent with the terms of the Indenture, this Agreement and the other Security Documents which such Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (but the Collateral Agent shall not be obligated to and shall have no liability to such Pledgor or any third

27

party for failure to so do or take action). The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof.

        (b)   Without limiting the foregoing, each Pledgor hereby irrevocably designates and appoints the Collateral Agent (and all persons designated by the Collateral Agent) as such Pledgor's true and lawful attorney-in-fact, and authorizes Collateral Agent, in such Pledgor's or Collateral Agent's name, to:(i) at any time an Event of Default exists or has occurred and is continuing (1) demand payment on Accounts or other Pledged Collateral, (2) enforce payment of Accounts by legal proceedings or otherwise, (3) exercise all of such Pledgor's rights and remedies to collect any Account or other Pledged Collateral, (4) sell or assign any Account upon such terms, for such amount and at such time or times as the Collateral Agent deems advisable, (5) settle, adjust, compromise, extend or renew an Account, (6) discharge and release any Account, (7) prepare, file and sign such Pledgor's name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any Accounts or other Pledged Collateral, (8) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of Accounts or other proceeds of Pledged Collateral to an address designated by Collateral Agent, and open and dispose of all mail addressed to such Pledgor and handle and store all mail relating to the Pledged Collateral; (9) do all acts and things which are necessary, in Collateral Agent's determination, to fulfill such Pledgor's obligations under this Agreement, the Indenture, the Intercreditor Agreement, the Mortgages or any other document made, delivered or given in connection with any of the foregoing, (10) endorse such Pledgor's name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Account or any goods pertaining thereto or any other Pledged Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, (11) clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Customs or foreign export control authorities in such Pledgor's, Collateral Agent's name or the name of Collateral Agent's designee, and to sign and deliver to customs officials powers of attorney in such Pledgor's name for such purpose, and to complete in such Pledgor's or Collateral Agent's name, any order, sale or transaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, and (12) sign such Pledgor's name on any verification of Accounts and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof and (ii) at any time after delivery of a Notice of Sole Control (as defined in the form Deposit Account Control Agreement attached hereto as Exhibit 5) or a similar notice to (1) take control in any manner of any item of payment in respect of Accounts or constituting Pledged Collateral or otherwise received in or for deposit in the Concentration Account or otherwise received by Collateral Agent, (2) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of Accounts or other proceeds of Pledged Collateral are sent or received, (3) endorse such Pledgor's name upon any items of payment in respect of Accounts or constituting Pledged Collateral or otherwise received by Collateral Agent and deposit the same in Collateral Agent's account for application to the Secured Obligations. Each Pledgor hereby releases Collateral Agent and its officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of Collateral Agent's own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

        SECTION 11.3.    Continuing Security Interest; Assignment.    This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) be binding upon the Pledgors, their respective successors and assigns and (ii) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and the other Secured Parties and each of their respective successors, transferees and assigns. No other persons (including any other creditor of

28

any Pledgor) shall have any interest herein or any right or benefit with respect hereto. Without limiting the generality of the foregoing clause (ii), any Secured Party may assign or otherwise transfer any indebtedness held by it secured by this Agreement to any other person, and such other person shall thereupon become vested with all the benefits in respect thereof granted to such Secured Party, herein or otherwise, subject however, to the provisions of the Indenture.

        SECTION 11.4.    Termination; Release.    (a) When all the Secured Obligations have been paid in full, this Agreement shall terminate. Upon termination of this Agreement the Pledged Collateral shall be released from the Lien of this Agreement. Upon such release or any release of Pledged Collateral or any part thereof in accordance with the provisions of the Indenture, the Collateral Agent shall, upon the request and at the sole cost and expense of the Pledgors, assign, transfer and deliver to Pledgor, against receipt and without recourse to or warranty by the Collateral Agent, such of the Pledged Collateral or any part thereof to be released (in the case of a release) as may be in possession of the Collateral Agent and as shall not have been sold or otherwise applied pursuant to the terms hereof, and, with respect to any other Pledged Collateral, any proper documents and instruments (including UCC-3 termination financing statements or releases) acknowledging the termination hereof or the release of such Pledged Collateral, as the case may be, which the Pledgors may reasonably request.

        (b)   The Collateral Agent will release the liens on any part of the Collateral to the extent required by Section 5.1 of the Intercreditor Agreement.

        SECTION 11.5.    Modification in Writing.    No amendment, modification, supplement, termination or waiver of or to any provision hereof, nor consent to any departure by any Pledgor therefrom, shall be effective unless the same shall be made in accordance with the terms of the Indenture and unless in writing and signed by the Collateral Agent. Any amendment, modification or supplement of or to any provision hereof, any waiver of any provision hereof and any consent to any departure by any Pledgor from the terms of any provision hereof in each case shall be effective only in the specific instance and for the specific purpose for which made or given. In signing any such amendment or modification to this Agreement, the Collateral Agent shall be entitled to rely upon an opinion of counsel that such amendment or modification is authorized or permitted by this Agreement, the Intercreditor Agreement and the Indenture. Except where notice is specifically required by this Agreement or any other document evidencing the Secured Obligations, no notice to or demand on any Pledgor in any case shall entitle any Pledgor to any other or further notice or demand in similar or other circumstances.

        SECTION 11.6.    Notices.    Unless otherwise provided herein or in the Indenture, any notice or other communication herein required or permitted to be given shall be given in the manner and become effective as set forth in the Indenture, as to any Pledgor, addressed to it at the address of the Issuer set forth in the Indenture and as to the Collateral Agent, addressed to it at the address set forth in the Indenture, or in each case at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 11.6.

        SECTION 11.7.    Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.

        (a)    Governing Law.    This Agreement shall be construed in accordance with and governed by the law of the State of New York, without regard to conflicts of law principles that would require the application of the laws of another jurisdiction.

        (b)    Submission to Jurisdiction.    Each Pledgor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent

29

permitted by applicable law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that the Collateral Agent, the Trustee or any Holder may otherwise have to bring any action or proceeding relating to this Agreement or any other document against any Pledgor or its properties in the courts of any jurisdiction.

        (c)    Waiver of Venue.    Each Pledgor hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Requirements of Law, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in Section 11.7(b). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Requirements of Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

        (d)    Service of Process.    Each party hereto irrevocably consents to service of process in any action or proceeding arising out of or relating to this Agreement, in the manner provided for notices (other than telecopier) in Section 11.6. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable Requirements of Law.

        (e)    Trial by Jury.    Each Pledgor hereby waives, to the fullest extent permitted by applicable Requirements of Law, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement, any other Loan Document or the transactions contemplated hereby (whether based on contract, tort or any other theory). Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section.

        SECTION 11.8.    Severability of Provisions.    Any provision hereof which is invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating the remaining provisions hereof or affecting the validity, legality or enforceability of such provision in any other jurisdiction.

        SECTION 11.9.    Execution in Counterparts.    This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        SECTION 11.10.    Business Days.    In the event any time period or any date provided in this Agreement ends or falls on a day other than a Business Day, then such time period shall be deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and performance herein may be made on such Business Day, with the same force and effect as if made on such other day.

        SECTION 11.11.    No Credit for Payment of Taxes or Imposition.    Such Pledgor shall not be entitled to any credit against the principal, premium, if any, or interest payable under the Indenture, and such Pledgor shall not be entitled to any credit against any other sums which may become payable under the terms thereof or hereof, by reason of the payment of any Tax on the Pledged Collateral or any part thereof.

        SECTION 11.12.    No Claims Against Collateral Agent.    Nothing contained in this Agreement shall constitute any consent or request by the Collateral Agent, express or implied, for the performance of any labor or services or the furnishing of any materials or other property in respect of the Pledged Collateral or any part thereof, nor as giving any Pledgor any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in

30

such fashion as would permit the making of any claim against either of the Collateral Agent in respect thereof or any claim that any Lien based on the performance of such labor or services or the furnishing of any such materials or other property is prior to the Lien hereof.

        SECTION 11.13.    No Release.    Nothing set forth in this Agreement or any other document, nor the exercise by the Collateral Agent of any of the rights or remedies hereunder, shall relieve any Pledgor from the performance of any term, covenant, condition or agreement on such Pledgor's part to be performed or observed under or in respect of any of the Pledged Collateral or from any liability to any person under or in respect of any of the Pledged Collateral or shall impose any obligation on either of the Collateral Agent or any other Secured Party to perform or observe any such term, covenant, condition or agreement on such Pledgor's part to be so performed or observed or shall impose any liability on either of the Collateral Agent or any other Secured Party for any act or omission on the part of such Pledgor relating thereto or for any breach of any representation or warranty on the part of such Pledgor contained in this Agreement, the Indenture or any other documents, or under or in respect of the Pledged Collateral or made in connection herewith or therewith. Anything herein to the contrary notwithstanding, neither the Collateral Agent nor any other Secured Party shall have any obligation or liability under any contracts, agreements and other documents included in the Pledged Collateral by reason of this Agreement, nor shall the Collateral Agent or any other Secured Party be obligated to perform any of the obligations or duties of any Pledgor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Pledged Collateral hereunder. The obligations of each Pledgor contained in this Section 11.13 shall survive the termination hereof and the discharge of such Pledgor's other obligations under this Agreement, the Indenture and the other Loan Documents.

        SECTION 11.14.    Obligations Absolute.    All obligations of each Pledgor hereunder shall be absolute and unconditional irrespective of:

          (i)  any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of any other Pledgor;

         (ii)  any lack of validity or enforceability of the Indenture, or any other agreement or instrument relating thereto;

        (iii)  any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture or any other agreement or instrument relating thereto;

        (iv)  any pledge, exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Secured Obligations;

         (v)  any exercise, non-exercise or waiver of any right, remedy, power or privilege under or in respect hereof, the Indenture or any other document except as specifically set forth in a waiver granted pursuant to the provisions of Section 11.5 hereof; or

        (vi)  any other circumstances which might otherwise constitute a defense available to, or a discharge of, any Pledgor.

        SECTION 11.15.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National

31

Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York, serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control. As long as the Intercreditor Agreement shall remain in effect, any provisions of this Agreement requiring or contemplating delivery to the Collateral Agent shall be satisfied by delivery to the Revolving Credit Collateral Agent as contemplated by Section 5.4 of the Intercreditor Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

32

        IN WITNESS WHEREOF, each Pledgor and the Collateral Agent have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first above written.

LINENS HOLDING CO., as Pledgor
By:	Name: Title:
LINENS 'N THINGS, INC. as Pledgor
By:	Name: Title:
LINENS 'N THINGS CENTER, INC. as Pledgor
By:	Name: Title:
BLOOMINGTON MN, L.T., INC. as Pledgor
By:	Name: Title:
VENDOR FINANCE, LLC as Pledgor
By:	Name: Title:
LNT, INC. as Pledgor
By:	Name: Title:
LNT SERVICES, INC. as Pledgor
By:	Name: Title:

LNT LEASING II, LLC as Pledgor
By:	Name: Title:
LNT WEST, INC. as Pledgor
By:	Name: Title:
LNT VIRGINIA, LLC as Pledgor
By:	Name: Title:
LNT MERCHANDISING COMPANY, LLC as Pledgor
By:	Name: Title:
LNT LEASING III, LLC as Pledgor
By:	Name: Title:
CITADEL LNT, LLC as Pledgor
By:	Name: Title:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

EXHIBIT 1

[Form of]

ISSUER'S ACKNOWLEDGMENT

        The undersigned hereby (i) acknowledges receipt of the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (the "Issuers"), the Guarantors party thereto and THE BANK OF NEW YORK, as Collateral Agent (in such capacity and together with any successors in such capacity, the "Collateral Agent"), (ii) agrees promptly to note on its books the security interests granted to the Collateral Agent and confirmed under the Security Agreement, (iii) agrees that it will comply with instructions of the Collateral Agent with respect to the applicable Securities Collateral without further consent by the applicable Pledgor, (iv) agrees to notify the Collateral Agent upon obtaining knowledge of any interest in favor of any person in the applicable Securities Collateral that is adverse to the interest of the Collateral Agent therein and (v) waives any right or requirement at any time hereafter to receive a copy of the Security Agreement in connection with the registration of any Securities Collateral thereunder in the name of the Collateral Agent or its nominee or the exercise of voting rights by the Collateral Agent or its nominee.

[                                ]
By:	Name: Title:

EXHIBIT 2

[Form of]

SECURITIES PLEDGE AMENDMENT

        This Securities Pledge Amendment, dated as of [                        ], is delivered pursuant to Section 5.1 of the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (the "Issuers"), the Guarantors party thereto and THE BANK OF NEW YORK, as Collateral Agent (in such capacity and together with any successors in such capacity, the "Collateral Agent"). The undersigned hereby agrees that this Securities Pledge Amendment may be attached to the Security Agreement and that the Pledged Securities and/or Intercompany Notes listed on this Securities Pledge Amendment shall be deemed to be and shall become part of the Pledged Collateral and shall secure all Secured Obligations. In acting under and by virtue of this Securities Pledge Amendment, the Collateral Agent shall have all of the rights, protections and immunities granted to it under the Security Agreement, all of which are incorporated by reference herein, mutatis mutandis.

PLEDGED SECURITIES

ISSUER
CLASS
OF STOCK
OR
INTERESTS PAR
VALUE CERTIFICATE
NO(S). NUMBER OF
SHARES
OR
INTERESTS PERCENTAGE OF
ALL ISSUED CAPITAL
OR OTHER EQUITY
INTERESTS OF ISSUER

INTERCOMPANY NOTES

ISSUER
PRINCIPAL
AMOUNT DATE OF
ISSUANCE INTEREST
RATE MATURITY
DATE

[                                    ], as Pledgor
By:	Name: Title:

AGREED TO AND ACCEPTED:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

EXHIBIT 3

[Form of]

JOINDER AGREEMENT

	[Name of New Pledgor] [Address of New Pledgor]
[Date]

Ladies and Gentlemen:

        Reference is made to the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER,  INC., a California corporation (the "Issuers"), the Guarantors party thereto and THE BANK OF NEW YORK, as Collateral Agent (in such capacity and together with any successors in such capacity, the "Collateral Agent").

        This Joinder Agreement supplements the Security Agreement and is delivered by the undersigned, [                        ] (the "New Pledgor"), pursuant to Section 3.5 of the Security Agreement. The New Pledgor hereby agrees to be bound as a Guarantor and as a Pledgor party to the Security Agreement by all of the terms, covenants and conditions set forth in the Security Agreement to the same extent that it would have been bound if it had been a signatory to the Security Agreement on the date of the Security Agreement. The New Pledgor also hereby agrees to be bound as a party by all of the terms, covenants and conditions applicable to it set forth in the Indenture to the same extent that it would have been bound if it had been a signatory to the Indenture on the execution date of the Indenture. Without limiting the generality of the foregoing, the New Pledgor hereby grants and pledges to the Collateral Agent, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, a Lien on and security interest in, all of its right, title and interest in, to and under the Pledged Collateral and expressly assumes all obligations and liabilities of a Guarantor and Pledgor thereunder. The New Pledgor hereby makes each of the representations and warranties and agrees to each of the covenants applicable to the Pledgors contained in the Security Agreement and the Indenture.

        Concurrent with the execution of this Agreement, the New Pledgor shall deliver to the Collateral Agent a Perfection Certificate. Such Perfection Certificate shall supplement the disclosures contained in the Security Agreement and shall be deemed to be part of the Security Agreement or the Indenture, as applicable.

        This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York, serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control. In acting under and by virtue of this Agreement, the Collateral Agent shall have all of the rights, protections and immunities granted to it under the Security Agreement, all of which are incorporated by reference herein, mutatis mutandis.

        IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement to be executed and delivered by its duly authorized officer as of the date first above written.

		[NEW PLEDGOR]
		By:	Name: Title:
AGREED TO AND ACCEPTED:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

[Schedules to be attached]

EXHIBIT 4

[Form of]

CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS

        This Control Agreement Concerning Securities Accounts (this "Control Agreement"), dated as of [                        ], by and among [                        ] (the "Pledgor"), UBS AG, Stamford Branch as Collateral Agent ("UBS"), and [            ] (the "Securities Intermediary"), is delivered pursuant to Section 3.4(c) of that certain security agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement"), dated as of [                        ], made by the Pledgor and each of the Guarantors listed on the signature pages thereto in favor of UBS AG, Stamford Branch and Wachovia Bank, National Association as Collateral Agents (collectively, the "Collateral Agents"), as pledgees, assignees and secured parties and that certain [Indenture], dated as of [                        ], made by Pledgor and each of the Guarantors referred to therein in favor of The Bank of New York, as Collateral Agent and Indenture Trustee (the "Indenture Trustee") and a secured party. This Control Agreement is for the purpose of perfecting the security interests of the Collateral Agents and the Indenture Trustee granted by the Pledgor in the Designated Accounts described below. All references herein to the "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Security Agreement.

        Section 1.    Confirmation of Establishment and Maintenance of Designated Accounts.    The Securities Intermediary hereby confirms and agrees that (i) the Securities Intermediary has established for the Pledgor and maintains the account(s) listed in Schedule I annexed hereto (such account(s), together with each such other securities account maintained by the Pledgor with the Securities Intermediary collectively, the "Designated Accounts" and each a "Designated Account"), (ii) each Designated Account will be maintained in the manner set forth herein until termination of this Control Agreement, (iii) this Control Agreement is the valid and legally binding obligation of the Securities Intermediary, (iv) the Securities Intermediary is a "securities intermediary" as defined in Article 8-102(a)(14) of the UCC, (v) each of the Designated Accounts is a "securities account" as such term is defined in Section 8-501(a) of the UCC and (vi) all securities or other property underlying any financial assets which are credited to any Designated Account shall be registered in the name of the Securities Intermediary, endorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to any Designated Account be registered in the name of the Pledgor, payable to the order of the Pledgor or specially endorsed to the Pledgor, except to the extent the foregoing have been specially endorsed to the Securities Intermediary or in blank.

        Section 2.    Controlling Party.    As used herein, "Controlling Party" means UBS or its designee until such time as UBS or its designee has provided Bank with a written notice substantially in the form of Exhibit A hereto that Collateral Agents have ceased to be the Controlling Party hereunder (such notice being the "Controlling Party Notice"), "Controlling Party" means the Indenture Trustee. It is understood and agreed hereby that Bank shall rely exclusively on a Controlling Party Notice as to the determination of whether the Collateral Agents or the Indenture Trustee is the Controlling Party hereunder and shall be under no obligation to make any independent investigation thereof.

        Section 3.    "Financial Assets" Election.    All parties hereto agree that each item of Investment Property and all other property held in or credited to any Designated Account (the "Account Property") shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC.

        Section 4.    Entitlement Order.    Upon receipt of a Notice of Sole Control delivered pursuant to Section 10(i) hereof together with an "entitlement order" (within the meaning of Section 8-102(a)(8) of the UCC) issued by the Controlling Party and relating to any financial asset maintained in one or more of the Designated Accounts, the Securities Intermediary shall comply with such entitlement order without further consent by the Pledgor or any other person. Prior to receipt of such Notice of Sole Control and "entitlement order", the Securities Intermediary shall comply with instructions directing

the Securities Intermediary with respect to the sale, exchange or transfer of any Account Property held in each Designated Account originated by a Pledgor, or any representative of, or investment manager appointed by, a Pledgor. The Securities Intermediary shall comply with, and is fully entitled to rely upon, any entitlement order from the Controlling Party, even if such entitlement order is contrary to any entitlement order that the Pledgor may give or may have given to the Securities Intermediary.

        Section 5.    Subordination of Lien; Waiver of Set-Off.    The Securities Intermediary hereby agrees that any security interest in, lien on, encumbrance, claim or (except as provided in the next sentence) right of setoff against, any Designated Account or any Account Property it now has or subsequently obtains shall be subordinate to the security interest of the Controlling Party in the Designated Accounts and the Account Property therein or credited thereto. The Securities Intermediary agrees not to exercise any present or future right of recoupment or set-off against any of the Designated Accounts or to assert against any of the Designated Accounts any present or future security interest, banker's lien or any other lien or claim (including claim for penalties) that the Securities Intermediary may at any time have against or in any of the Designated Accounts or any Account Property therein or credited thereto; provided, however, that the Securities Intermediary may set off all amounts due to the Securities Intermediary in respect of its customary fees and expenses for the routine maintenance and operation of the Designated Accounts, including overdraft fees and amounts advanced to settle authorized transactions.

        Section 6.    Choice of Law.    Both this Control Agreement and the Designated Accounts shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary's jurisdiction and the Designated Accounts (as well as the security entitlements related thereto) shall be governed by the laws of the State of New York.

        Section 7.    Conflict with Other Agreements; Amendments.    As of the date hereof, there are no other agreements entered into between the Securities Intermediary and the Pledgor with respect to any Designated Account or any security entitlements or other financial assets credited thereto (other than standard and customary documentation with respect to the establishment and maintenance of such Designated Accounts). The Securities Intermediary and the Pledgor will not enter into any other agreement with respect to any Designated Account unless the Controlling Party shall have received prior written notice thereof. The Securities Intermediary and the Pledgor have not and will not enter into any other agreement with respect to (i) creation or perfection of any security interest in or (ii) control of security entitlements maintained in any of the Designated Accounts or purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders with respect to any Account Property held in or credited to any Designated Account as set forth in Section 4 hereof without the prior written consent of the Controlling Party acting in their sole discretion. In the event of any conflict with respect to control over any Designated Account between this Control Agreement (or any portion hereof) and any other agreement now existing or hereafter entered into, the terms of this Control Agreement shall prevail. No amendment or modification of this Control Agreement or waiver of any rights hereunder shall be binding on any party hereto unless it is in writing and is signed by all the parties hereto.

        Section 8.    Certain Agreements.

          (i)  As of the date hereof, the Securities Intermediary has furnished to the Controlling Party the most recent account statement issued by the Securities Intermediary with respect to each of the Designated Accounts and the financial assets and cash balances held therein, identifying the financial assets held therein in a manner acceptable to the Controlling Party. Each such statement accurately reflects the assets held in such Designated Account as of the date thereof.

         (ii)  The Securities Intermediary will, upon its receipt of each supplement to the Security Agreement signed by the Pledgor and identifying one or more financial assets as "Pledged Collateral," enter into its records, including computer records, with respect to each Designated Account a notation with respect to any such financial asset so that such records and reports generated with respect thereto identify such financial asset as "Pledged."

        Section 9.    Notice of Adverse Claims.    Except for the claims and interest of the Collateral Agent, the Indenture Trustee and of the Pledgor in the Account Property held in or credited to the Designated Accounts, the Securities Intermediary on the date hereof does not know of any claim to, security interest in, lien on, or encumbrance against, any Designated Account or Account Property held in or credited thereto and does not know of any claim that any person or entity other than the Controlling Party has been given "control" (within the meaning of Section 8-106 of the UCC) of any Designated Account or any such Account Property. If the Securities Intermediary becomes aware that any person or entity is asserting any lien, encumbrance, security interest or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process or any claim of control) against any of the Account Property held in or credited to any Designated Account, the Securities Intermediary shall promptly notify the Controlling Party and the Pledgor thereof.

        Section 10.    Maintenance of Designated Accounts.    In addition to the obligations of the Securities Intermediary in Section 4 hereof, the Securities Intermediary agrees to maintain the Designated Accounts as follows:

        (i)    Notice of Sole Control.    If at any time the Controlling Party deliver to the Securities Intermediary a notice substantially in the form of Exhibit B hereto instructing the Securities Intermediary to terminate Pledgor's access to any Designated Account (the "Notice of Sole Control"), the Securities Intermediary agrees that, after receipt of such notice, it will take all instructions with respect to such Designated Account solely from the Controlling Party, terminate all instructions and orders originated by the Pledgor with respect to the Designated Accounts or any Account Property therein, and cease taking instructions from Pledgor, including, without limitation, instructions for investment, distribution or transfer of any financial asset maintained in any Designated Account. Permitting settlement of trades pending at the time of receipt of such notice shall not constitute a violation of the immediately preceding sentence.

        (ii)    Voting Rights.    Until such time as the Securities Intermediary receives a Notice of Sole Control, the Pledgor, or an investment manager on behalf of the Pledgor, shall direct the Securities Intermediary with respect to the voting of any financial assets credited to any Designated Account.

        (iii)    Statements and Confirmations.    The Securities Intermediary will send copies of all statements and other correspondence (excluding routine confirmations) concerning any Designated Account or any financial assets credited thereto simultaneously to each of the Pledgor and the Controlling Party at the address set forth in Section 12 hereof. The Securities Intermediary will provide to the Controlling Party, upon the Controlling Party' request therefor from time to time and, in any event, as of the last business day of each calendar month, a statement of the market value of each financial asset maintained in each Designated Account. The Securities Intermediary shall not change the name or account number of any Designated Account without the prior written consent of the Controlling Party.

        (iv)    Perfection in Certificated Securities.    The Securities Intermediary acknowledges that, in the event that it should come into possession of any certificate representing any security or other Account Property held in or credited to any of the Designated Accounts, the Securities Intermediary shall retain possession of the same on behalf and for the benefit of the Controlling Party and such act shall cause the Securities Intermediary to be deemed holding such certificate for the Controlling Party, if necessary to perfect the Controlling Party' security interest in such securities or assets. The Securities Intermediary hereby acknowledges its receipt of a copy of the Security Agreement, which shall also serve as notice to the Securities Intermediary of a security interest in collateral held on behalf and for the benefit of the Controlling Party.

        Section 11.    Successors; Assignment.    The terms of this Control Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors and permitted assignees.

        Section 12.    Notices.    Any notice, request or other communication required or permitted to be given under this Control Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below.

If to Pledgor:		[                        ] [Address] Attention: Telecopy: Telephone:
	with copy to:
		[                        ] [Address] Attention: Telecopy: Telephone:
If to Securities Intermediary:		[                        ] [                        ] [                        ] Attention: Telecopy: Telephone:
If to any of the Collateral Agents:		UBS AG, Stamford Branch 677 Washington Boulevard Stamford, Connecticut 06901 Attention: Telecopy: Telephone:
	with a copy to:
		Latham & Watkins LLP 233 South Wacker Drive Sears Tower, Suite 5800 Chicago, IL 60606
		Attention:	Donald Schwartz
		Telecopy:	(312) 993-9767
		Telephone:	(312) 876-7631
If to Indenture Trustee:		The Bank of New York [address] Attention: Telecopy: Telephone:
	with a copy to:
		[                        ] [address]
		Attention:	[                        ]
		Telecopy:	[                        ]
		Telephone:	[                        ]

        Any party may change its address for notices in the manner set forth above.

        Section 13.    Termination.

          (i)  Except as otherwise provided in this Section 13, the obligations of the Securities Intermediary hereunder and this Control Agreement shall continue in effect until the security interests of both the Collateral Agents and the Indenture Trustee in the Designated Accounts and any and all Account Property held therein or credited thereto have been terminated pursuant to the terms of the Security Agreement and the Indenture and the Controlling Party has notified the Securities Intermediary of such termination in writing. The Controlling Party agrees promptly to provide a Notice of Termination substantially in the form of Exhibit C hereto to the Securities Intermediary upon the request of the Pledgor on or after the termination of the Collateral Agents' or Indenture Trustee's security interest, as applicable, pursuant to the terms of the Security Agreement or Indenture, as applicable. The termination of this Agreement shall not terminate the Designated Accounts or alter the obligations of the Securities Intermediary to the Pledgor pursuant to any other agreement with respect to the Designated Accounts.

         (ii)  The Securities Intermediary, acting alone, may terminate this Control Agreement at any time and for any reason by written notice delivered to the Controlling Party and the Pledgor not less than thirty (30) days prior to the effective termination date.

        (iii)  Prior to any termination of this Control Agreement pursuant to this Section 13, the Securities Intermediary hereby agrees that it shall promptly take, at Pledgor's sole cost and expense, all reasonable actions necessary to facilitate the transfer of any Account Property in or credited to the Designated Accounts as follows: (i) in the case of a termination of this Control Agreement under Section 13(i), to the institution designated in writing by Pledgor; and (ii) in all other cases, to the institution designated in writing by the Controlling Party.

        Section 13.    Fees and Expenses.    The Securities Intermediary agrees to look solely to the Pledgor for payment of any and all fees, costs, charges and expenses incurred or otherwise relating to the Designated Accounts and services provided by the Securities Intermediary hereunder (collectively, the "Account Expenses"), and the Pledgor agrees to pay such Account Expenses to the Securities Intermediary on demand therefor. The Pledgor acknowledges and agrees that it shall be, and at all times remains, solely liable to the Securities Intermediary for all Account Expenses.

        Section 14.    Severability.    If any term or provision set forth in this Control Agreement shall be invalid or unenforceable, the remainder of this Control Agreement, other than those provisions held invalid or unenforceable, shall be construed in all respects as if such invalid or unenforceable term or provision were omitted.

        Section 15.    Counterparts.    This Control Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Control Agreement by signing and delivering one or more counterparts.

[signature page follows]

[                        ], as Pledgor
By:
	Name: Title:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:
	Name: Title:
By:
	Name: Title:
[                        ], as Securities Intermediary
By:
	Name: Title:

SCHEDULE I

Designated Account(s)

Exhibit A

CONTROLLING PARTY NOTICE

[Letterhead of UBS or its designee]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concerning Securities Account Concentration Account Agreement dated as of                            , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts. We hereby give you notice that the rights of the Collateral Agents under the Control Agreement have terminated.

Very truly yours,

UBS AG, STAMFORD BRANCH,
Collateral Agent

By

Name:

Title:

Exhibit B

NOTICE OF SOLE CONTROL

[Letterhead of applicable Controlling Party]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concentration Securities Accounts dated as of                        , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts.

        This is to notify [                        ] (the "Securities Intermediary") that the Designated Accounts are now under the exclusive control of the undersigned. The Securities Intermediary is hereby instructed to cease complying with instructions given by or on behalf of Pledgor relating to the Designated Accounts, to cease distributing interest earned on property in the Designated Accounts to Pledgor and to refuse to accept any other instructions from Pledgor intended to exercise any authority with respect to the Designated Accounts unless instructed by the undersigned as Controlling Party.

        All future instructions on the Designated Accounts shall be given solely on behalf of the undersigned until the undersigned has notified the Bank in writing that the Agreement, or the undersigned's security interest in the Designated Accounts, is terminated.

UBS AG, STAMFORD BRANCH,
as Collateral Agent(1)

By

Name:

Title:

By

Name:

Title:

THE BANK OF NEW YORK,
as Indenture Trustee(2)

By

Name:

Title:

cc:                Pledgors

(1)

Included only if prior to delivery of the Controlling Party Notice.

(2)

Included only if after delivery of the Controlling Party Notice.

Exhibit C

NOTICE OF TERMINATION

[Letterhead of applicable Controlling Party]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concentration Securities Accounts dated as of                        , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts.

        The undersigned hereby give you notice that the Control Agreement is terminated and that you have no further obligations to the Controlling Party pursuant to such Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to the Designated Accounts from the Pledgor. This notice terminates any obligations you may have to the undersigned with respect to such accounts, however nothing contained in this notice shall alter any obligations which you may otherwise owe to the Pledgor pursuant to any other agreement.

UBS AG, STAMFORD BRANCH,
as Collateral Agent(3)

By

Name:

Title:

By

Name:

Title:

THE BANK OF NEW YORK,
as Indenture Trustee(4)

By

Name:

Title:

        cc:                Pledgors

(3)

Included only if prior to delivery of the Controlling Party Notice.

(4)

Included only if after delivery of the Controlling Party Notice.

EXHIBIT 5

Form of Deposit Account Control Agreement

[Provided under separate cover]

EXHIBIT 6

[Form of]

Copyright Security Agreement

Copyright Security Agreement, dated as of [                        ], by Linens 'n Things, Inc. (the "Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Copyright Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Copyright Collateral.    The Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Copyright Collateral"):

        (a)   The Copyright of such Pledgor listed on Schedule I attached hereto; and

        (b)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Copyright made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Copyright Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Copyright under this Copyright Security Agreement.

        SECTION 6.    Counterparts.    This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor

Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Capital Finance, Inc., as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance, Inc., as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, the Pledgor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		Linens 'n Things, Inc.
		By:	Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of [Pledgor], a [state] [form of entity]; who, being duly sworn, did depose and say that she/he is the                        in such [form of entity], the [form of entity] described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of [form of entity]; and that she/he acknowledged said instrument to be the free act and deed of said [form of entity].

Notary Public

(PLACE STAMP AND SEAL ABOVE)

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a [state] [form of entity]; who, being duly sworn, did depose and say that she/he is the                        in such [form of entity], the [form of entity] described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such [form of entity]; and that she/he acknowledged said instrument to be the free act and deed of said [form of entity].

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

OWNER	REGISTRATION NUMBER	TITLE
Linens 'n Things, Inc.	VA-1-056-560	Moon and Stars

Copyright Applications:

OWNER
TITLE

EXHIBIT 7

[Form of]

Patent Security Agreement

Patent Security Agreement, dated as of [                        ], by [            ] and [                        ] (individually, a "Pledgor", and, collectively, the "Pledgors"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W I T N E S S E T H:

        WHEREAS, the Pledgors are party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgors are required to execute and deliver this Patent Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgors hereby agree with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Patent Collateral.    Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgors' right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Patent Collateral"):

        (a)   Patents of such Pledgor listed on Schedule I attached hereto; and

        (b)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgors hereby acknowledge and affirm that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Patent Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgors an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Patents under this Patent Security Agreement.

        SECTION 6.    Counterparts.    This Patent Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Patent Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor

Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Capital Finance, Inc., as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance, Inc., as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, each Pledgor has caused this Patent Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		[PLEDGORS](5)
		By:	Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

(5)

This document needs only to be executed by the Issuer and/or any Guarantor which owns a pledged Patent.

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of [Pledgor], a [state] [form of entity]; who, being duly sworn, did depose and say that she/he is the                        in such [form of entity], the [form of entity] described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of [form of entity]; and that she/he acknowledged said instrument to be the free act and deed of said [form of entity].

Notary Public

(PLACE STAMP AND SEAL ABOVE)

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a [state] [form of entity]; who, being duly sworn, did depose and say that she/he is the                        in such [form of entity], the [form of entity] described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such [form of entity]; and that she/he acknowledged said instrument to be the free act and deed of said [form of entity].

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

SCHEDULE I
to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS(6)

Patent Registrations:

OWNER
REGISTRATION
NUMBER NAME

Patent Applications:

OWNER
APPLICATION
NUMBER NAME

(6)

Note to attorney: These schedules include the minimum information required to perfect in the PTO. A conformed version of perfection certificate would be adequate, provided it contains this information.

EXHIBIT 8

[Form of]

Trademark Security Agreement(7)

(7)

Separate Agreements will be executed for each Pledgor with trademarks, as well as a separate agreement for the trademark license

Trademark Security Agreement, dated as of [                        ], by LNT Merchandising Company, LLC, a Delaware limited liability company ("Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W i t n e s s e t h:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Trademark Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Trademark Collateral.    Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Trademark Collateral"):

        (a)   Trademarks of such Pledgor listed on Schedule I attached hereto;

        (b)   Trademark Licenses of such Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Trademarks and Trademark Licenses made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Trademark Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Trademarks and Trademark Licenses under this Trademark Security Agreement.

        SECTION 6.    Counterparts.    This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Capital Finance, Inc., as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance, Inc., as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, the Pledgor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		LNT Merchandising Company, LLC
		By:	Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of [LNT Merchandising, LLC, a Delaware limited liability company]; who, being duly sworn, did depose and say that she/he is the                        in such limited liability company, the limited liability company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such limited liability company; and that she/he acknowledged said instrument to be the free act and deed of said limited liability company.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a [state] [form of entity]; who, being duly sworn, did depose and say that she/he is the                        in such [form of entity], the [form of entity] described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such [form of entity]; and that she/he acknowledged said instrument to be the free act and deed of said [form of entity].

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS, APPLICATIONS AND LICENSES

Registered U.S. Trademarks

Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
LINENS 'N THINGS	LNT Merchandising Company, LLC	Registered, USA, 42 Int.	72/370206 0934171	09-Sep-1970 16-May-1972
LNT	LNT Merchandising Company, LLC	Registered, USA, Int. 20,24,27 and 35	75/546927 2337611	01-Sep-1998 04-Apr-2000
DREAM BIG, PAY LITTLE	LNT Merchandising Company, LLC	Registered, USA 35	78/497112 3035124	08-Oct-2004

Pending U.S. Applications

Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
ATTITUDE	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427854	01-Jun-2004
ATTITUDES	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427863	01-Jun-2004
HOTEL LIVING	LNT Merchandising Company, LLC	Pending, USA 24 Int., 25 Int., 27 Int.	78/438409	21-Jun-2004
LINENS-N-THINGS and DESIGN	LNT Merchandising Company, LLC	Pending, USA 35	78/425295	26-May-2004
MAKE YOUR HOME HAPPY	Bloomington, M.N., L.T. Inc.	Pending, USA 35	78/257756	03-Jun-2003
SPA-TEX	LNT Merchandising Company, LLC	Published, USA 24 Int., 25 Int., 27 Int.	78/389104	23-Mar-2004

        License Agreement dated as of July 30, 2004, as amended, by and between Nate Berkus Entertainment, Inc. (NBE) as Licensor and LNT Services, Inc. (LNT) as Licensee granting Licensee an exclusive license to use the following trademarks in connection with the manufacture, distribution, sale, advertising and promotion of certain categories of products, including bedding, bath textiles and accessories, kitchen textiles, dinnerware and flatware:

NATE BERKUS	USA Registration No.
NATE BERKUS	USA Registration No.
NATE BERKUS	USA Registration No.
NATE BERKUS	USA Registration No.
NATE BERKUS	USA Registration No.
NATE BERKUS	USA Registration No.

EXHIBIT 9

FORM OF ARMORED CAR CONTROL AGREEMENTS

[PROVIDED UNDER SEPARATE COVER]

EXHIBIT 10

FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY

CERTIFIED MAIL—RETURN RECEIPT REQUESTED

        [                        ], 200 [    ]

TO:

[Bailee's Name]
[Bailee's Address]

Re:

Linens 'n Things, Inc. and Linens 'n Things Center, Inc.

Ladies and Gentlemen:

        In connection with that certain Security Agreement, dated as of February     , 2006 (the "Security Agreement"), made by Linens 'n Things, Inc., a Delaware corporation and Linens 'n Things Center, Inc., a California corporation, the Guarantors party thereto, UBS AG, Stamford Branch as Collateral Agent ("UBS") and Wachovia Bank, National Association as Collateral Agent (together with UBS, the "Collateral Agents"), we have granted to the Collateral Agents a security interest in substantially all of our personal property, including our inventory. In connection that certain Security Agreement, dated as of February     , 2006, made by Linens 'n Things Center, Inc., a California corporation, the Guarantors party thereto, and The Bank of New York as Collateral Agent and Indenture Trustee (the "Indenture Trustee"), we have granted to the Indenture Trustee a security interest in substantially all of our personal property, including our inventory.

        As used herein, "Controlling Party" means UBS or its designee until such time as UBS or its designee has provided you with a written notice that Collateral Agents have ceased to be the Controlling Party hereunder (such notice being the "Controlling Party Notice"), "Controlling Party" means the Indenture Trustee. It is understood and agreed hereby that you shall rely exclusively on a Controlling Party Notice as to the determination of whether the Collateral Agents or the Indenture Trustee is the Controlling Party hereunder and shall be under no obligation to make any independent investigation thereof.

        This letter constitutes notice to you, and your signature below will constitute your acknowledgment, of the Controlling Party's continuing first priority security interest in all goods with respect to which you are acting as bailee. Until you are notified in writing to the contrary by Controlling Party, however, you may continue to accept instructions from us regarding the delivery of goods stored by you.

        Your acknowledgment also constitutes a waiver and release, for the Collateral Agents' and Indenture Trustee's benefit, of any and all claims, liens, including bailee's liens, and demands of every kind which you have or may later have against such goods (including any right to include such goods in any secured financing to which you may become party).

        In order to complete our records, kindly have a duplicate of this letter signed by an officer of your company and return same to us at your earliest convenience.

Receipt acknowledged, confirmed and approved:		Very truly yours,
[BAILEE]		[APPLICABLE PLEDGOR]
By:	Name: Title:	By:	Name: Title:

cc:

Collateral Agents
Indenture Trustee

QuickLinks

SECURITY AGREEMENT

EX-10.4

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.4

EXECUTION VERSION

SECURITY AGREEMENT

by

LINENS 'N THINGS, INC.
and
LINENS 'N THINGS CENTER, INC.,
as Borrowers

and

THE GUARANTORS PARTY HERETO

and

UBS AG, STAMFORD BRANCH,
and
WACHOVIA BANK, NATIONAL ASSOCIATION,

as Collateral Agents

Dated as of February 14, 2006

TABLE OF CONTENTS

		Page
PREAMBLE		1
RECITALS		1
AGREEMENT		2
ARTICLE I DEFINITIONS AND INTERPRETATION
SECTION 1.1.	DEFINITIONS	2
SECTION 1.2.	INTERPRETATION	8
SECTION 1.3.	RESOLUTION OF DRAFTING AMBIGUITIES	8
SECTION 1.4.	PERFECTION CERTIFICATE	8
ARTICLE II GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1.	GRANT OF SECURITY INTEREST	8
SECTION 2.2.	FILINGS	9
ARTICLE III PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
SECTION 3.1.	DELIVERY OF CERTIFICATED SECURITIES COLLATERAL	10
SECTION 3.2.	PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL	10
SECTION 3.3.	FINANCING STATEMENTS AND OTHER FILINGS; MAINTENANCE OF PERFECTED SECURITY INTEREST	10
SECTION 3.4.	OTHER ACTIONS	11
SECTION 3.5.	JOINDER OF ADDITIONAL GUARANTORS	14
SECTION 3.6.	SUPPLEMENTS; FURTHER ASSURANCES	14
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1.	TITLE	15
SECTION 4.2.	VALIDITY OF SECURITY INTEREST	15
SECTION 4.3.	DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED COLLATERAL	15
SECTION 4.4.	OTHER FINANCING STATEMENTS	16
SECTION 4.5.	CHIEF EXECUTIVE OFFICE; CHANGE OF NAME; JURISDICTION OF ORGANIZATION	16
SECTION 4.6.	LOCATION OF INVENTORY AND EQUIPMENT.	16
SECTION 4.7.	DUE AUTHORIZATION AND ISSUANCE	16
SECTION 4.8.	CONSENTS, ETC.	16
SECTION 4.9.	PLEDGED COLLATERAL	17
SECTION 4.10.	INSURANCE	17
ARTICLE V CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1.	PLEDGE OF ADDITIONAL SECURITIES COLLATERAL	17
SECTION 5.2.	VOTING RIGHTS; DISTRIBUTIONS; ETC.	17
SECTION 5.3.	DEFAULTS, ETC	18
SECTION 5.4.	CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND HOLDERS OF EQUITY INTERESTS	18

i

ARTICLE VI CERTAIN PROVISIONS CONCERNING INTELLECTUAL PROPERTY COLLATERAL
SECTION 6.1.	GRANT OF INTELLECTUAL PROPERTY LICENSE	19
SECTION 6.2.	PROTECTION OF COLLATERAL AGENTS' SECURITY	19
SECTION 6.3.	AFTER-ACQUIRED PROPERTY	20
SECTION 6.4.	LITIGATION	20
ARTICLE VII CERTAIN PROVISIONS CONCERNING RECEIVABLES
SECTION 7.1.	MAINTENANCE OF RECORDS	20
SECTION 7.2.	LEGEND	21
SECTION 7.3.	MODIFICATION OF TERMS, ETC	21
SECTION 7.4.	COLLECTION	21
ARTICLE VIII TRANSFERS
SECTION 8.1.	TRANSFERS OF PLEDGED COLLATERAL	21
ARTICLE IX REMEDIES
SECTION 9.1.	REMEDIES	22
SECTION 9.2.	NOTICE OF SALE	23
SECTION 9.3.	WAIVER OF NOTICE AND CLAIMS	23
SECTION 9.4.	CERTAIN SALES OF PLEDGED COLLATERAL	24
SECTION 9.5.	NO WAIVER; CUMULATIVE REMEDIES	25
SECTION 9.6.	CERTAIN ADDITIONAL ACTIONS REGARDING INTELLECTUAL PROPERTY	25
ARTICLE X PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS; APPLICATION OF PROCEEDS
SECTION 10.1.	APPLICATION OF PROCEEDS	26
ARTICLE XI MISCELLANEOUS
SECTION 11.1.	CONCERNING COLLATERAL AGENTS	26
SECTION 11.2.	COLLATERAL AGENTS MAY PERFORM; COLLATERAL AGENTS APPOINTED ATTORNEY-IN-FACT	27
SECTION 11.3.	CONTINUING SECURITY INTEREST; ASSIGNMENT	28
SECTION 11.4.	TERMINATION; RELEASE	28
SECTION 11.5.	MODIFICATION IN WRITING	29
SECTION 11.6.	NOTICES	30
SECTION 11.7.	GOVERNING LAW, CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL	30
SECTION 11.8.	SEVERABILITY OF PROVISIONS	30
SECTION 11.9.	EXECUTION IN COUNTERPARTS	30
SECTION 11.10.	BUSINESS DAYS	30
SECTION 11.11.	NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION	30
SECTION 11.12.	NO CLAIMS AGAINST COLLATERAL AGENTS	30
SECTION 11.13.	NO RELEASE	30
SECTION 11.14.	OBLIGATIONS ABSOLUTE	31

ii

SIGNATURES
EXHIBIT 1	Form of Issuer's Acknowledgment
EXHIBIT 2	Form of Securities Pledge Amendment
EXHIBIT 3	Form of Joinder Agreement
EXHIBIT 4	Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5	Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6	Form of Copyright Security Agreement
EXHIBIT 7	Form of Patent Security Agreement
EXHIBIT 8	Form of Trademark Security Agreement
EXHIBIT 9	Form of Armored Car Control Agreement
EXHIBIT 10	Form of Bailee's Letter

iii

SECURITY AGREEMENT

        This SECURITY AGREEMENT dated as of February 14, 2006 (as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this "Agreement") made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (collectively, the "Borrowers" and each individually, a "Borrower"), and the Guarantors from to time to time party hereto (the "Guarantors"), as pledgors, assignors and debtors (the Borrowers, together with the Guarantors, in such capacities and together with any successors in such capacities, the "Pledgors," and each, a "Pledgor"), in favor of UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION in their capacities as US Collateral Agents pursuant to the Credit Agreement (as hereinafter defined), as pledgees, assignees and secured parties (in such capacities and together with any successors in such capacities, the "Collateral Agents").

R E C I T A L S:

        A.    The Borrowers, the Guarantors, the Collateral Agents, the other Loan Parties party thereto, the other agents listed therein and the lending institutions listed therein (the "Lenders") have, in connection with the execution and delivery of this Agreement, entered into that certain credit agreement, dated as of February 14, 2006 (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Credit Agreement"; which term shall also include and refer to any increase in the amount of indebtedness under the Credit Agreement and any refinancing or replacement of the Credit Agreement (whether under a bank facility, securities offering or otherwise) or one or more successor or replacement facilities whether or not with a different group of agents or lenders (whether under a bank facility, securities offering or otherwise) and whether or not with different obligors upon the Administrative Agent's acknowledgment of the termination of the predecessor Credit Agreement).

        B.    The Borrowers and each Guarantor has, pursuant to the Credit Agreement, unconditionally guaranteed the Secured Obligations.

        C.    The Borrowers and each Guarantor will receive substantial benefits from the execution, delivery and performance of the obligations under the Credit Agreement and the other Loan Documents and each is, therefore, willing to enter into this Agreement.

        D.    This Agreement is given by each Pledgor in favor of the Collateral Agents for the benefit of the Secured Parties (as hereinafter defined) to secure the payment and performance of all of the Secured Obligations.

        F.     It is a condition to (i) the obligations of the Lenders to make the Loans under the Credit Agreement, (ii) the obligations of the Issuing Bank to issue Letters of Credit and (iii) the performance of the obligations of the Secured Parties under Hedging Agreements that constitute Secured Obligations that each Pledgor execute and deliver the applicable Loan Documents, including this Agreement.

A G R E E M E N T:

        NOW THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Pledgor and the Collateral Agents hereby agree as follows:

ARTICLE I

DEFINITIONS AND INTERPRETATION

        SECTION 1.1.    Definitions.

        (a)   Unless otherwise defined herein or in the Credit Agreement, capitalized terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC; provided that in any event, the following terms shall have the meanings assigned to them in the UCC:

        "Accounts"; "Bank"; "Chattel Paper"; "Commercial Tort Claim"; "Commodity Account"; "Commodity Contract"; "Commodity Intermediary"; "Documents"; "Electronic Chattel Paper"; "Entitlement Order"; "Equipment"; "Financial Asset"; "Fixtures"; "Goods", "Inventory"; "Investment Property"; "Letter-of-Credit Rights"; "Letters of Credit"; "Money"; "Payment Intangibles"; "Proceeds"; "Records"; "Securities Account"; "Securities Intermediary"; "Supporting Obligations"; and "Tangible Chattel Paper."

        (b)   Terms used but not otherwise defined herein that are defined in the Credit Agreement shall have the meanings given to them in the Credit Agreement. Sections 1.03 and 1.05 of the Credit Agreement shall apply herein mutatis mutandis.

        (c)   The following terms shall have the following meanings:

        "Account Debtor" shall mean each person who is obligated on a Receivable or Supporting Obligation related thereto.

        "Agreement" shall have the meaning assigned to such term in the Preamble hereof.

        "Armored Car Control Agreement" shall mean an agreement in substantially the form attached hereto as Exhibit 9 or such other form as is reasonably satisfactory to Collateral Agents establishing the applicable Collateral Agent's control with respect to the cash, checks or other items obtained by the armored car carrier from any Pledgor or otherwise under the armored car carrier's control, custody or possession pursuant to any agreement with any Pledgor.

        "Bailee Letter" shall be an agreement in form substantially similar to Exhibit 10 hereto.

        "Bankruptcy Code" shall mean Title 11 of the United States Code entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.

        "Borrowers" shall have the meaning assigned to such term in the Preamble hereof.

        "Collateral Agents" shall have the meaning assigned to such term in the Preamble hereof.

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Pledged Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

        "Commodity Account Control Agreement" shall mean a control agreement in a form that is reasonably satisfactory to the Administrative Agent establishing the applicable Collateral Agent's Control with respect to any Commodity Account.

2

        "Contracts" shall mean, collectively, with respect to each Pledgor, the Acquisition Documents, all sale, service, performance, equipment or property lease contracts, agreements and grants and all other contracts, agreements or grants (in each case, whether written or oral, or third party or intercompany), between such Pledgor and any third party, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof.

        "Control" shall mean (i) in the case of each Deposit Account, "control," as such term is defined in Section 9-104 of the UCC, (ii) in the case of any Security Entitlement, "control," as such term is defined in Section 8-106 of the UCC, and (iii) in the case of any Commodity Contract, "control," as such term is defined in Section 9-106 of the UCC.

        "Control Agreements" shall mean, collectively, the Armored Car Control Agreements, Commodity Account Control Agreements, Credit Card Processing Control Agreements, Deposit Account Control Agreements, and the Securities Account Control Agreements.

        "Copyright Licenses" shall mean any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Copyrights (whether the applicable Pledgor is licensee or licensor thereunder).

        "Copyrights" shall mean, collectively, with respect to each Pledgor, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished) and all copyright registrations and applications made by such Pledgor, in each case, whether now owned or hereafter created or acquired by or assigned to such Pledgor, and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof.

        "Copyright Security Agreement" shall mean an agreement substantially in the form of Exhibit 6 hereto.

        "Credit Agreement" shall have the meaning assigned to such term in Recital A hereof.

        "Credit Card Processing Control Agreement" shall mean an agreement as is reasonably satisfactory to Collateral Agents establishing the applicable Collateral Agent's control with respect to all amounts payable by the credit card processor to any Pledgor pursuant to an arrangement between such credit card processor and any Pledgor.

        "Deposit Account Control Agreement" shall mean an agreement substantially in the form of Exhibit 5 hereto or such other form that is reasonably satisfactory to the Collateral Agents establishing UBS AG, Stamford Branch's Control with respect to any Deposit Account.

        "Deposit Accounts" shall mean, collectively, with respect to each Pledgor, (i) all "deposit accounts" as such term is defined in Article 9 of the UCC and in any event shall include the LC Account and all accounts and sub-accounts relating to any of the foregoing accounts and (ii) all cash, funds, checks, notes and instruments from time to time on deposit in any of the accounts or sub-accounts described in clause (i) of this definition.

        "Distributions" shall mean, collectively, with respect to each Pledgor, all dividends, cash, options, warrants, rights, instruments, distributions, returns of capital or principal, income, interest, profits and other property, interests (debt or equity) or proceeds, including as a result

3

of a split, revision, reclassification or other like change of the Pledged Securities, from time to time received, receivable or otherwise distributed to such Pledgor in respect of or in exchange for any or all of the Pledged Securities or Intercompany Notes.

        "Excluded Accounts" shall mean the accounts excluded under 9.02(f) of the Credit Agreement, it being understood that, in any event, the grant of the security interest in Section 2.01 shall extend to such accounts excluded under 9.02(f) of the Credit Agreement and any Pledgor's right to receive any excess funds remaining in any escrow accounts following the payment in full of the taxes, fees and charges payable from such escrow accounts.

        "Excluded Property" shall mean

        (a)   any permit or license issued by a Governmental Authority to any Pledgor or any agreement to which any Pledgor is a party, in each case, only to the extent and for so long as the terms of such permit, license or agreement or any Requirement of Law applicable thereto, (i) validly prohibit the creation by such Pledgor of a security interest in such permit, license or agreement in favor of the Collateral Agents (after giving effect to Sections 9-406(d), 9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or provisions) or any other applicable law (including the Bankruptcy Code) or principles of equity), (ii) would be abandoned, invalidated or unenforceable as a result of the creation of such security interest in favor of the Collateral Agents or (iii) would result in a breach or termination pursuant to the terms of, or a default under any such permit, license or agreement (other than to the extent that any such term would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity);

        (b)   Equipment owned by any Pledgor on the date hereof or hereafter acquired that is subject to a Lien securing a Purchase Money Obligation or Capital Lease Obligation permitted to be incurred pursuant to the provisions of the Credit Agreement if the contract or other agreement in which such Lien is granted (or the documentation providing for such Purchase Money Obligation or Capital Lease Obligation) validly prohibits the creation of any other Lien on such Equipment; and

        (c)   any "intent to use" applications for trademark or service mark registration filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051(b), unless and until an Amendment to Allege Use or a Statement of Use under Section 1(c) and 1(d) of said Act has been properly filed and filing accepted by the Patent and Trademark Office, to the extent that any assignment of an "intent to use" application prior to such filing would violate the Lanham Act, whereupon such application shall be automatically subject to the security interest granted herein and deemed to be included in the Pledged Collateral;

provided, however, that Excluded Property shall not include any Proceeds, substitutions or replacements of any Excluded Property referred to in clause (a), (b) or (c) (unless such Proceeds, substitutions or replacements would constitute Excluded Property referred to in clause (a), (b) or (c)).

        "General Intangibles" shall mean, collectively, with respect to each Pledgor, all "general intangibles," as such term is defined in Article 9 of the UCC, of such Pledgor and, in any event, shall include (i) all of such Pledgor's rights, title and interest in, to and under all Contracts and insurance policies (including all rights and remedies relating to monetary damages, including indemnification rights and remedies, and claims for damages or other relief pursuant to or in respect of any Contract), (ii) all know-how and warranties relating to any of the Pledged Collateral or the Mortgaged Property, (iii) any and all other rights, claims,

4

choses-in-action and causes of action of such Pledgor against any other person and the benefits of any and all collateral or other security given by any other person in connection therewith, (iv) all guarantees, endorsements and indemnifications on, or of, any of the Pledged Collateral or any of the Mortgaged Property, (v) all lists, books, records, correspondence, ledgers, printouts, files (whether in printed form or stored electronically), tapes and other papers or materials containing information relating to any of the Pledged Collateral or any of the Mortgaged Property, including all customer or tenant lists, identification of suppliers, data, plans, blueprints, specifications, designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering reports, test reports, manuals, standards, processing standards, performance standards, catalogs, research data, computer and automatic machinery software and programs and the like, field repair data, accounting information pertaining to such Pledgor's operations or any of the Pledged Collateral or any of the Mortgaged Property and all media in which or on which any of the information or knowledge or data or records may be recorded or stored and all computer programs used for the compilation or printout of such information, knowledge, records or data, (vi) all licenses, consents, permits, variances, certifications, authorizations and approvals, however characterized, now or hereafter acquired or held by such Pledgor, including building permits, certificates of occupancy, environmental certificates, industrial permits or licenses and certificates of operation and (vii) all rights to reserves, deferred payments, deposits, refunds, indemnification of claims and claims for tax or other refunds against any Governmental Authority.

        "Guarantors" shall have the meaning assigned to such term in the Preamble hereof.

        "Instruments" shall mean, collectively, with respect to each Pledgor, all "instruments," as such term is defined in Article 9, rather than Article 3, of the UCC, and shall include all promissory notes, drafts, bills of exchange or acceptances.

        "Intellectual Property" shall mean, collectively, the Copyright Licenses, Copyrights, Patent Licenses, Patents, Trademark Licenses and Trademarks.

        "Intercompany Notes" shall mean, with respect to each Pledgor, all intercompany notes described in Schedule 11 to the Perfection Certificate and intercompany notes hereafter acquired by such Pledgor and all certificates, instruments or agreements evidencing such intercompany notes, and all assignments, amendments, restatements, supplements, extensions, renewals, replacements or modifications thereof to the extent permitted pursuant to the terms hereof.

        "Intercreditor Agreement" shall have the meaning assigned to such term in Section 11.15 hereof.

        "Investment Property" shall mean a security, whether certificated or uncertificated, Security Entitlement, Securities Account, Commodity Contract or Commodity Account, excluding, however, the Securities Collateral.

        "Joinder Agreement" shall mean an agreement substantially in the form of Exhibit 3 hereto.

        "LC Account" shall mean any account established and maintained in accordance with the provisions of Section 2.18(i) of the Credit Agreement and all property from time to time on deposit in such LC Account.

        "Lenders" shall have the meaning assigned to such term in Recital A hereof.

        "Material Intellectual Property" shall mean any Intellectual Property that is material (i) to the use and operation of the Pledged Collateral or Mortgaged Property or (ii) to the business, results of operations, prospects or condition, financial or otherwise, of any Pledgor.

5

        "Mortgaged Property" shall have the meaning assigned to such term in the Mortgages.

        "Patent Licenses" shall mean all present and future agreements providing for the granting of any right in or to Patents (whether the applicable Grantor is licensee or licensor thereunder).

        "Patents" shall mean, collectively, with respect to each Pledgor, all letters patent issued or assigned to, and all patent applications and registrations made by, such Pledgor (whether established or registered or recorded in the United States or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, and rights to obtain any of the foregoing, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future infringements thereof.

        "Patent Security Agreement" shall mean an agreement substantially in the form of Exhibit 7 hereto.

        "Perfection Certificate" shall mean that certain perfection certificate dated February 14, 2006, executed and delivered by each Pledgor in favor of the Collateral Agents for the benefit of the Secured Parties, and each other Perfection Certificate (which shall be in form and substance reasonably acceptable to the Collateral Agents) executed and delivered by the applicable Guarantor in favor of the Collateral Agents for the benefit of the Secured Parties contemporaneously with the execution and delivery of each Joinder Agreement executed in accordance with Section 3.5 hereof, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the Credit Agreement or upon the reasonable request of the Collateral Agents, but in any event no more frequently than once a fiscal quarter prior to the occurrence and continuance of an Event of Default.

        "Pledge Amendment" shall have the meaning assigned to such term in Section 5.1 hereof.

        "Pledged Collateral" shall have the meaning assigned to such term in Section 2.1 hereof.

        "Pledged Securities" shall mean, collectively, with respect to each Pledgor, (i) all issued and outstanding Equity Interests of each issuer set forth on Schedule 10(a) to the Perfection Certificate as being owned by such Pledgor and all options, warrants, rights, agreements and additional Equity Interests of whatever class of any such issuer acquired by such Pledgor (including by issuance), together with all rights, privileges, authority and powers of such Pledgor relating to such Equity Interests in each such issuer or under any Organizational Document of each such issuer, and the certificates, instruments and agreements representing such Equity Interests and any and all interest of such Pledgor in the entries on the books of any financial intermediary pertaining to such Equity Interests, (ii) all Equity Interests of any Subsidiary, which Equity Interests are hereafter acquired by such Pledgor (including by issuance) and all options, warrants, rights, agreements and additional Equity Interests of whatever class of any such Subsidiary acquired by such Pledgor (including by issuance), together with all rights, privileges, authority and powers of such Pledgor relating to such Equity Interests or under any Organizational Document of any such Subsidiary, and the certificates, instruments and agreements representing such Equity Interests and any and all interest of such Pledgor in the entries on the books of any financial intermediary pertaining to

6

such Equity Interests, from time to time acquired by such Pledgor in any manner, and (iii) all Equity Interests issued in respect of the Equity Interests referred to in clause (i) or (ii) upon any consolidation or merger of any issuer of such Equity Interests; provided, however, that Pledged Securities shall not include (x) any Equity Interests which are not required to be pledged pursuant to Section 5.11(b) of the Credit Agreement, (y) more than 65% of the Equity Interests in Linens "n Things Investment Canada I Company and (z) more than 65% of the Equity Interests in Linens "n Things Investment Canada II Company.

        "Pledgor" shall have the meaning assigned to such term in the Preamble hereof.

        "Receivables" shall mean all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv) General Intangibles, (v) Instruments and (vi) to the extent not otherwise covered above, all other rights to payment, whether or not earned by performance, for goods or other property sold, leased, licensed, assigned or otherwise disposed of, or services rendered or to be rendered, regardless of how classified under Article 9 of the UCC together with all of Grantors' rights, if any, in any goods or other property giving rise to such right to payment and all Collateral Support and Supporting Obligations related thereto and all Records relating thereto.

        "Secured Parties" shall mean, collectively, the Administrative Agents, the Collateral Agents, each other Agent, the Issuing Banks, the Lenders and each party to a Hedging Agreement if at the date of entering into such Hedging Agreement such person was a Lender or an Affiliate of a Lender and such person executes and delivers to the Administrative Agent a letter agreement in form and substance acceptable to the Administrative Agent pursuant to which such person (i) appoints the Collateral Agents as its agent under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Sections 9.03, 10.03 and 10.09 of the Credit Agreement.

        "Securities Account Control Agreement" shall mean an agreement substantially in the form of Exhibit 4 hereto or such other form that is reasonably satisfactory to the Collateral Agents establishing UBS AG, Stamford Branch's Control with respect to any Securities Account.

        "Securities Collateral" shall mean, collectively, the Pledged Securities, the Intercompany Notes and the Distributions.

        "Trademark Licenses" shall mean any and all present and future agreements providing for the granting of any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder).

        "Trademarks" shall mean, collectively, with respect to each Pledgor, all trademarks, service marks, slogans, logos, certification marks, trade dress, uniform resource locations (URL's), domain names, corporate names, trade names and other source or business identifiers, whether registered or unregistered, owned by or assigned to such Pledgor and all registrations and applications for the foregoing (whether statutory or common law and whether established or registered in the United States, any State thereof, or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Pledgor's use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof.

7

        "Trademark Security Agreement" shall mean an agreement substantially in the form of Exhibit 8 hereto.

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that, at any time, if by reason of mandatory provisions of law, any or all of the perfection or priority of the Collateral Agents' and the Secured Parties' security interest in any item or portion of the Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect, at such time, in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions relating to such provisions.

        SECTION 1.2.    Interpretation.    The rules of interpretation specified in the Credit Agreement (including Section 1.03 thereof) shall be applicable to this Agreement. All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC (except that terms used herein which are defined in the UCC as in effect in the State of New York on the Closing Date shall continue to have the same meaning notwithstanding any replacement or amendment to such statute except as Collateral Agents may determine).

        SECTION 1.3.    Resolution of Drafting Ambiguities.    Each Pledgor acknowledges and agrees that it was represented by counsel in connection with the execution and delivery hereof, that it and its counsel reviewed and participated in the preparation and negotiation hereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party (i.e., the Collateral Agents) shall not be employed in the interpretation hereof.

        SECTION 1.4.    Perfection Certificate    The Collateral Agents, each Pledgor and each Secured Party agree that the Perfection Certificate and all descriptions of Pledged Collateral contained therein, schedules, amendments and supplements thereto are and shall at all times remain a part of this Agreement.

ARTICLE II

GRANT OF SECURITY AND SECURED OBLIGATIONS

        SECTION 2.1.    Grant of Security Interest.    As collateral security for the payment and performance in full of all the Secured Obligations, each Pledgor hereby pledges and grants to the Collateral Agents for the benefit of the Secured Parties, a lien on and security interest in all of the right, title and interest of such Pledgor in, to and under the following property, wherever located, and whether now existing or hereafter arising or acquired from time to time (collectively, the "Pledged Collateral"):

(i)

all Accounts, including, without limitation, Credit Card Receivables;



(ii)

all Equipment, Goods, Inventory and Fixtures;



(iii)

all Documents, Instruments and Chattel Paper;



(iv)

all Letters of Credit and Letter-of-Credit Rights;



(v)

all Securities Collateral;



(vi)

all Investment Property;



(vii)

all Intellectual Property;



(viii)

the Commercial Tort Claims described on Schedule 13 to the Perfection Certificate;



(ix)

all General Intangibles;

8

(x)

all Money and all Deposit Accounts;



(xi)

all Supporting Obligations;



(xii)

all books and records relating to the Pledged Collateral; and



(xiii)

to the extent not covered by clauses (i) through (xii) of this sentence, all other personal property of such Pledgor, whether tangible or intangible, and all Proceeds and products of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to such Pledgor from time to time with respect to any of the foregoing.

        Notwithstanding anything to the contrary contained in clauses (i) through (xiii) above, the security interest created by this Agreement shall not extend to, and the term "Pledged Collateral" shall not include, any Excluded Property and (i) the Pledgors shall from time to time at the request of the Collateral Agents, but in any event no more frequently than once a fiscal quarter prior to the occurrence and continuance of an Event of Default, give written notice to the Collateral Agents identifying in reasonable detail the Excluded Property and shall provide to the Collateral Agents such other information regarding the Excluded Property as the Collateral Agents may reasonably request and (ii) from and after the Closing Date, no Pledgor shall permit to become effective in any document creating, governing or providing for any permit, lease or license, a provision that would prohibit the creation of a Lien on such permit, lease or license in favor of the Collateral Agents unless such Pledgor believes, in its reasonable judgment, that such prohibition is usual and customary in transactions of such type.

        SECTION 2.2.    Filings.    (a) Each Pledgor hereby irrevocably authorizes the Collateral Agents at any time and from time to time to file in any relevant jurisdiction any financing statements (including fixture filings) and amendments thereto that contain the information required by Article 9 of the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Pledged Collateral, including (i) whether such Pledgor is an organization, the type of organization and any organizational identification number issued to such Pledgor, (ii) any financing or continuation statements or other documents without the signature of such Pledgor where permitted by law, including the filing of a financing statement describing the Pledged Collateral as "all assets of Pledgor whether now owned or hereafter arising or acquired, including all proceeds thereof" and (iii) in the case of a financing statement filed as a fixture filing or covering Pledged Collateral constituting minerals or the like to be extracted or timber to be cut, a sufficient description of the real property to which such Pledged Collateral relates. Each Pledgor agrees to provide all information described in the immediately preceding sentence to the Collateral Agents promptly upon request by the Collateral Agents.

        (b)   Each Pledgor hereby ratifies its authorization for the Collateral Agents to file in any relevant jurisdiction any financing statements or amendments thereto relating to the Pledged Collateral if filed prior to the date hereof.

        (c)   Each Pledgor hereby further authorizes the Collateral Agents to file filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country), as applicable, the Copyright Security Agreement, the Patent Security Agreement and the Trademark Security Agreement, or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by such Pledgor hereunder, without the signature of such Pledgor, and naming such Pledgor, as debtor, and the Collateral Agents, as secured party.

9

ARTICLE III

PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL

        SECTION 3.1.    Delivery of Certificated Securities Collateral.    Each Pledgor represents and warrants that all certificates, agreements or instruments representing or evidencing the Securities Collateral in existence on the date hereof have been delivered to the applicable Collateral Agent in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank and that the Collateral Agents have a perfected first priority security interest therein subject to Section 11.15 hereof. Each Pledgor hereby agrees that all certificates, agreements or instruments representing or evidencing Securities Collateral acquired by such Pledgor after the date hereof shall promptly (but in any event within five Business Days after receipt thereof by such Pledgor) be delivered to and held by or on behalf of the applicable Collateral Agent pursuant hereto in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agents. The applicable Collateral Agent shall have the right, at any time upon the occurrence and during the continuance of any Event of Default, to endorse, assign or otherwise transfer to or to register in the name of the Collateral Agents or any of its nominees or endorse for negotiation any or all of the Securities Collateral, without any indication that such Securities Collateral is subject to the security interest hereunder. In addition, upon the occurrence and during the continuance of an Event of Default, the applicable Collateral Agent shall have the right at any time to exchange certificates representing or evidencing Securities Collateral for certificates of smaller or larger denominations.

        SECTION 3.2.    Perfection of Uncertificated Securities Collateral.    Each Pledgor represents and warrants that the Collateral Agents have a perfected first priority security interest in all uncertificated Pledged Securities pledged by it hereunder that are in existence on the date hereof subject to Section 11.15 hereof. Each Pledgor hereby agrees that if any of the Pledged Securities are at any time not evidenced by certificates of ownership, then each applicable Pledgor shall, to the extent permitted by applicable law, (i) cause the issuer to execute and deliver to the applicable Collateral Agent an acknowledgment of the pledge of such Pledged Securities substantially in the form of Exhibit 1 hereto, (ii) if necessary or desirable to perfect a security interest in such Pledged Securities, cause such pledge to be recorded on the equityholder register or the books of the issuer, execute any customary pledge forms or other documents necessary or appropriate to complete the pledge and give the applicable Collateral Agent the right to transfer such Pledged Securities under the terms hereof, (iii) upon the reasonable request by the Collateral Agents, provide to the Collateral Agents an opinion of counsel, in form and substance reasonably satisfactory to the Collateral Agents, confirming the validity and enforceability of such pledge and perfection thereof, and (iv) after the occurrence and during the continuance of any Event of Default, upon request by the applicable Collateral Agent, (A) cause the Organizational Documents of such issuer to be amended to provide that such Pledged Securities shall be treated as "securities" for purposes of the UCC and (B) cause such Pledged Securities to become certificated and delivered to the applicable Collateral Agent in accordance with the provisions of Section 3.1.

        SECTION 3.3.    Financing Statements and Other Filings; Maintenance of Perfected Security Interest.    Each Pledgor represents and warrants that all financing statements, agreements, instruments and other documents necessary to perfect the security interest granted by it to the Collateral Agents in respect of the Pledged Collateral have been delivered to the applicable Collateral Agent in completed and, to the extent necessary or appropriate, duly executed form for filing in each governmental, municipal or other office specified in Schedule 7 to the Perfection Certificate (other than such Pledged Collateral in which a security interest cannot be perfected under the UCC as in effect on the Closing Date). Each Pledgor agrees that at the sole cost and expense of the Pledgors, such Pledgor will maintain the security interest

10

created by this Agreement in the Pledged Collateral as a perfected first priority security interest subject only to Permitted Liens and Section 11.15 hereof.

        SECTION 3.4.    Other Actions.    In order to further ensure the attachment, perfection and priority of, and the ability of the applicable Collateral Agent to enforce, the Collateral Agents' security interest in the Pledged Collateral subject to Section 11.15 hereof, each Pledgor represents and warrants (as to itself) as follows and agrees, in each case at such Pledgor's own expense, to take the following actions with respect to the following Pledged Collateral:

        (a)    Instruments and Tangible Chattel Paper.    As of the date hereof, no amounts payable under or in connection with any of the Pledged Collateral are evidenced by any Instrument or Tangible Chattel Paper other than such Instruments and Tangible Chattel Paper listed in Schedule 11 to the Perfection Certificate. Each Instrument and each item of Tangible Chattel Paper listed in Schedule 11 to the Perfection Certificate has been properly endorsed, assigned and delivered to the applicable Collateral Agent, accompanied by instruments of transfer or assignment duly executed in blank. If any amount then payable under or in connection with any of the Pledged Collateral shall be evidenced by any Instrument or Tangible Chattel Paper, and such amount, together with all amounts payable evidenced by any Instrument or Tangible Chattel Paper not previously delivered to the Collateral Agents exceeds $1,000,000 in the aggregate for all Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel Paper shall promptly (but in any event within five Business Days after receipt thereof) endorse, assign and deliver the same to the applicable Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the applicable Collateral Agent may from time to time specify.

        (b)    Deposit Accounts.    As of the date hereof, no Pledgor has any Deposit Accounts other than the accounts listed in Schedule 14 to the Perfection Certificate. The applicable Collateral Agent has a first priority security interest in each such Deposit Account, which security interest, except for the Excluded Accounts, is perfected by Control, except to the extent that obtaining such Control may be completed after the Closing Date pursuant to the terms of Schedule 5.14 to the Credit Agreement. No Pledgor shall hereafter establish and maintain any Deposit Account (other than Excluded Accounts) unless (1) it shall have given the applicable Collateral Agent thirty (30) days' prior written notice of its intention to establish such new Deposit Account with a Bank, (2) such Bank shall be reasonably acceptable to the applicable Collateral Agent and (3) such Bank and such Pledgor shall have duly executed and delivered to the applicable Collateral Agent a Deposit Account Control Agreement with respect to such Deposit Account; provided, that the Collateral Agents shall have the right to waive (or extend) the requirement of a Deposit Account Control Agreement for any account in their reasonable discretion. The applicable Collateral Agent agrees with each Pledgor that such Collateral Agent shall not give any instructions directing the disposition of funds from time to time credited to any Deposit Account or withhold any withdrawal rights from such Pledgor with respect to funds from time to time credited to any Deposit Account unless an Event of Default has occurred and is continuing. The provisions of this Section 3.4(b) shall not apply to the LC Account or to any other Deposit Accounts for which UBS AG, Stamford Branch is the Bank. No Pledgor shall grant Control of any Deposit Account to any person other than the applicable Collateral Agent.

        (c)    Investment Property.    (i) As of the date hereof, no Pledgor has any Securities Accounts or Commodity Accounts other than those listed in Schedule 14 to the Perfection Certificate. The applicable Collateral Agent has a first priority security interest in each such Securities Account and Commodity Account, which security interest is perfected by Control, except to the extent that obtaining such Control may be completed after the Closing Date pursuant to the terms of Schedule 5.14 to the Credit Agreement. No Pledgor shall hereafter establish and maintain any Securities Account or Commodity Account with any Securities Intermediary or Commodity Intermediary unless (1) it shall have given the applicable Collateral Agent thirty (30) days' prior

11

written notice of its intention to establish such new Securities Account or Commodity Account with such Securities Intermediary or Commodity Intermediary, (2) such Securities Intermediary or Commodity Intermediary shall be reasonably acceptable to the applicable Collateral Agent and (3) such Securities Intermediary or Commodity Intermediary, as the case may be, and such Pledgor shall have duly executed and delivered a Control Agreement with respect to such Securities Account or Commodity Account, as the case may be; provided, that the Collateral Agents shall have the right to waive (or extend) the requirement of a Control Agreement for any account in their reasonable discretion. Each Pledgor shall accept any cash and Investment Property in trust for the benefit of the applicable Collateral Agent and within three (3) Business Days of actual receipt thereof, deposit any and all cash and Investment Property (other than any Investment Property pledged pursuant to clauses (ii)(1), (iii)(1) or (iii)(3) below) received by it into a Deposit Account or Securities Account subject to the applicable Collateral Agent's Control. The applicable Collateral Agent agrees with each Pledgor that such Collateral Agent shall not give any Entitlement Orders or instructions or directions to any issuer of uncertificated securities, Securities Intermediary or Commodity Intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing rights by such Pledgor, unless an Event of Default has occurred and is continuing or, after giving effect to any such investment and withdrawal rights, would occur. The provisions of this Section 3.4(c) shall not apply to any Financial Assets credited to a Securities Account for which either of the Collateral Agents is the Securities Intermediary. No Pledgor shall grant Control over any Investment Property to any person other than the applicable Collateral Agent.

        (ii)   If any Pledgor shall at any time hold or acquire any certificated securities constituting Investment Property, such Pledgor shall promptly (1) endorse, assign and deliver the same to the applicable Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank, all in form and substance reasonably satisfactory to the Collateral Agents or (2) deliver such securities into a Securities Account with respect to which a Securities Account Control Agreement is in effect in favor of the applicable Collateral Agent.

        (iii)  If any Pledgor shall at any time own or acquire, directly or through a nominee, any uncertificated securities constituting Investment Property, such Pledgor shall promptly notify the Collateral Agents thereof and pursuant to an agreement in form and substance satisfactory to the Collateral Agents, either (1) cause the issuer to agree to comply with instructions from the applicable Collateral Agent as to such securities, without further consent of any Pledgor or such nominee, (2) cause a Security Entitlement with respect to such uncertificated security to be held in a Securities Account with respect to which the applicable Collateral Agent has Control or (3) arrange for the Collateral Agents to become the registered owners of such securities.

        (iv)  As between the Collateral Agents and the Pledgors, the Pledgors shall bear the investment risk with respect to the Investment Property and Pledged Securities, and the risk of loss of, damage to, or the destruction of the Investment Property and Pledged Securities, whether in the possession of, or maintained as a Security Entitlement or deposit by, or subject to the Control of, the Collateral Agents, a Securities Intermediary, a Commodity Intermediary, any Pledgor or any other person.

        (d)    Electronic Chattel Paper and Transferable Records.    As of the date hereof, no amount under or in connection with any of the Pledged Collateral is evidenced by any Electronic Chattel Paper or any "transferable record" (as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction) other than such Electronic Chattel Paper and transferable records listed in Schedule 11 to the Perfection Certificate. If any amount payable under or in connection with any of the Pledged Collateral shall be evidenced by any Electronic Chattel Paper or any transferable record, the Pledgor acquiring such Electronic

12

Chattel Paper or transferable record shall promptly notify the Collateral Agents thereof and shall take such action as the Collateral Agents may reasonably request to vest in the applicable Collateral Agent control of such Electronic Chattel Paper under Section 9-105 of the UCC or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, Section 16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The requirement in the preceding sentence shall not apply to the extent that such amount, together with all amounts payable evidenced by Electronic Chattel Paper or any transferable record in which the applicable Collateral Agent has not been vested control within the meaning of the statutes described in the immediately preceding sentence, does not exceed $500,000 in the aggregate for all Pledgors. The Collateral Agents agree with such Pledgor that the Collateral Agents will arrange, pursuant to procedures satisfactory to the Collateral Agents and so long as such procedures will not result in the Collateral Agents' loss of control, for the Pledgor to make alterations to the Electronic Chattel Paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Pledgor with respect to such Electronic Chattel Paper or transferable record.

        (e)    Letter-of-Credit Rights.    If any Pledgor is at any time a beneficiary under a Letter of Credit now or hereafter issued, such Pledgor shall promptly notify the Collateral Agents thereof and such Pledgor shall, at the reasonable request of the Collateral Agents, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agents, either (i) use reasonable commercial efforts to arrange for the issuer and any confirmer of such Letter of Credit to consent to an assignment to the applicable Collateral Agent of the proceeds of any drawing under the Letter of Credit or (ii) use reasonable commercial efforts to arrange for the applicable Collateral Agent to become the transferee beneficiary of such Letter of Credit, with the Collateral Agents agreeing, in each case, that the proceeds of any drawing under the Letter of Credit are to be applied as provided in the Credit Agreement. The actions in the preceding sentence shall not be required to the extent that the amount of any such Letter of Credit, together with the aggregate amount of all other Letters of Credit for which the actions described above in clause (i) and (ii) have not been taken, does not exceed $1,000,000 in the aggregate for all Pledgors.

        (f)    Commercial Tort Claims.    As of the date hereof, each Pledgor hereby represents and warrants that it holds no Commercial Tort Claims other than those listed in Schedule 13 to the Perfection Certificate. If any Pledgor shall at any time hold or acquire a Commercial Tort Claim, such Pledgor shall promptly notify the Collateral Agents in writing signed by such Pledgor of the brief details thereof and grant to the applicable Collateral Agent in writing a security interest therein and in the Proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to the Collateral Agents. The requirement in the preceding sentence shall not apply to the extent that the amount of such Commercial Tort Claim, together with the amount of all other Commercial Tort Claims held by any Loan Party in which the Collateral Agents do not have a security interest, does not exceed $5,000,000 in the aggregate for all Loan Parties.

        (g)    Landlord's Access Agreements / Bailee Letters.    The amount of the Reserves established by the Collateral Agents under Sections 2.20(b)(ii) and 2.21(b)(ii) of the Credit Agreement on the Closing Date does not in any manner prejudice the rights of the Collateral Agents to (i) revise the amount of such Reserves for applicable locations on the Closing Date and modify the Reserves for such locations in accordance with the terms of the Credit Agreement and (ii) establish Reserves with respect to other locations in accordance with the terms of the Credit Agreement. Upon the request of a Pledgor, the applicable Collateral Agent agrees to provide to such Pledgor preliminary

13

advice on the amount of Reserves it may establish for a particular location; provided that the actual Reserves established by the applicable Collateral Agent with respect to such location may differ from the amount disclosed in such preliminary advice.

        (h)    Motor Vehicles.    Upon the request of the Collateral Agents, each Pledgor shall deliver to the applicable Collateral Agent originals of the certificates of title or ownership for the motor vehicles (and any other Equipment covered by certificates of title or ownership) owned by it, with such Collateral Agent listed as lienholder therein. Such requirement shall not apply if the aggregate value of all motor vehicles (and such other Equipment) as to which any Loan Party has not delivered a certificate of title or ownership is less than $2,000,000.

        (i)    Credit Card Receivables.    Pledgors will deliver to the applicable Collateral Agent an executed Credit Card Processing Control Agreement with respect to all Credit Card Receivables. No Pledgor shall hereafter enter into any Credit Card Agreement unless (1) it shall have given the applicable Collateral Agent thirty (30) days' prior written notice of its intention to enter into any new Credit Card Agreement and (2) such Pledgor and credit card issuer or credit card processor shall have duly executed and delivered to the applicable Collateral Agent a Credit Card Processing Control Agreement with respect to such Credit Card Agreement. Notwithstanding the foregoing, the applicable Collateral Agent shall have the right to waive (or extend) the requirement of a Credit Card Processing Control Agreement with respect to any credit card issuer or credit card processor in their reasonable discretion.

        (j)    Armored Car Control Agreements.    As of the date hereof, no Pledgor has any agreement with any Person which provides armored car services other than the agreements listed in Schedule 17 to the Perfection Certificate. Pledgors will deliver to the applicable Collateral Agent an executed Armored Car Control Agreement with respect to each arrangement between Pledgors and any Person which provides armored car services. No Pledgor shall hereafter enter into any arrangement with an armored car carrier unless (1) it shall have given the applicable Collateral Agent thirty (30) days' prior written notice of its intention to enter into any new Credit Card Agreement and (2) such Pledgor and armored car carrier shall have duly executed and delivered to the applicable Collateral Agent an Armored Car Control Agreement with respect to such arrangement. Notwithstanding the foregoing, the applicable Collateral Agent shall have the right to waive (or extend) the requirement of an Armored Car Control Agreement with respect to any arrangement with an armored car carrier.

        SECTION 3.5.    Joinder of Additional Guarantors.    The Pledgors shall cause each Subsidiary of the Borrower which, from time to time, after the date hereof shall be required to pledge any assets to the Collateral Agents for the benefit of the Secured Parties pursuant to the provisions of the Credit Agreement, to execute and deliver to the Collateral Agents (i) a Joinder Agreement substantially in the form of Exhibit 3 hereto within thirty (30) days of the date on which it was acquired or created and (ii) a Perfection Certificate, in each case, within thirty (30) days of the date on which it was acquired or created and upon such execution and delivery, such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for all purposes hereunder with the same force and effect as if originally named as a Guarantor and Pledgor herein. The execution and delivery of such Joinder Agreement shall not require the consent of any Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor and Pledgor as a party to this Agreement.

        SECTION 3.6.    Supplements; Further Assurances.    Each Pledgor shall take such further actions, and execute and/or deliver to the Collateral Agents such additional financing statements, amendments, assignments, agreements, supplements, powers and instruments, as the Collateral Agents may in their reasonable judgment deem necessary or appropriate in order to create, perfect, preserve and protect the security interest in the Pledged Collateral as provided herein and the rights and interests granted to

14

the Collateral Agents hereunder, to carry into effect the purposes hereof or better to assure and confirm the validity, enforceability and priority of the Collateral Agents' security interest in the Pledged Collateral hereof or permit the applicable Collateral Agent to exercise and enforce their rights, powers and remedies hereunder with respect to any Pledged Collateral, including the filing of financing statements, continuation statements and other documents (including this Agreement) under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with respect to the security interest created hereby and the execution and delivery of Control Agreements, all in form reasonably satisfactory to the Collateral Agents and in such offices (including the United States Patent and Trademark Office and the United States Copyright Office) wherever required by law to perfect, continue and maintain the validity, enforceability and priority of the security interest in the Pledged Collateral as provided herein and to preserve the other rights and interests granted to the Collateral Agents hereunder, as against third parties, with respect to the Pledged Collateral all subject to Section 11.15 hereof. Without limiting the generality of the foregoing, each Pledgor shall make, execute, endorse, acknowledge, file or refile and/or deliver to the applicable Collateral Agent from time to time upon reasonable request by the Collateral Agents, but in any event no more frequently than once a fiscal quarter prior to the occurrence and continuance of an Event of Default, such lists, schedules, descriptions and designations of the Pledged Collateral, copies of warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, supplements, additional security agreements, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, reports and other assurances or instruments as the Collateral Agents shall reasonably request. If an Event of Default has occurred and is continuing, the Collateral Agents may institute and maintain, in their own names or in the name of any Pledgor, such suits and proceedings as the Collateral Agents may be advised by counsel shall be necessary or expedient to prevent any impairment of the security interest in or the perfection thereof in the Pledged Collateral. All of the foregoing shall be at the sole cost and expense of the Pledgors.

ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS

        Each Pledgor represents, warrants and covenants as follows:

        SECTION 4.1.    Title.    Except for the security interest granted to the Collateral Agents for the ratable benefit of the Secured Parties pursuant to this Agreement and Permitted Liens, such Pledgor owns and has rights and, as to Pledged Collateral acquired by it from time to time after the date hereof, will own and have rights in each item of Pledged Collateral pledged by it hereunder, free and clear of any and all Liens or claims of others. In addition, no Liens or claims exist on the Securities Collateral, other than as permitted by Section 6.02 of the Credit Agreement.

        SECTION 4.2.    Validity of Security Interest.    The security interest in and Lien on the Pledged Collateral granted to the Collateral Agents for the benefit of the Secured Parties hereunder constitutes (a) a legal and valid security interest in all the Pledged Collateral securing the payment and performance of the Secured Obligations, and (b) subject to the filings and other actions described in Schedule 7 to the Perfection Certificate (to the extent required to be listed on the schedules to the Perfection Certificate as of the date this representation is made or deemed made), a perfected security interest in all the Pledged Collateral. The security interest and Lien granted to the Collateral Agents for the benefit of the Secured Parties pursuant to this Agreement in and on the Pledged Collateral will at all times constitute a perfected, continuing security interest therein, prior to all other Liens on the Pledged Collateral except for Permitted Liens and subject to Section 11.15 hereof.

        SECTION 4.3.    Defense of Claims; Transferability of Pledged Collateral.    Subject to Section 5.05 of the Credit Agreement, each Pledgor shall, at its own cost and expense, defend title to the Pledged Collateral pledged by it hereunder and the security interest therein and Lien thereon granted to the

15

Collateral Agents and the priority thereof against all material claims and demands of all persons, at its own cost and expense, at any time claiming any interest therein adverse to the Collateral Agents or any other Secured Party other than Permitted Liens. There is no agreement, order, judgment or decree, and no Pledgor shall enter into any agreement or take any other action, that would materially restrict the transferability of any of the Pledged Collateral or otherwise impair or conflict with such Pledgor's obligations or the rights of the Collateral Agents hereunder other than such permits, licenses or agreements in the ordinary course of business.

        SECTION 4.4.    Other Financing Statements.    It has not filed, nor authorized any third party to file (nor will there be), any valid or effective financing statement (or similar statement, instrument of registration or public notice under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Pledged Collateral, except such as have been filed in favor of the Collateral Agents pursuant to this Agreement or in favor of any holder of a Permitted Lien with respect to such Permitted Lien or financing statements or public notices relating to the termination statements listed on Schedule 9 to the Perfection Certificate. No Pledgor shall execute, authorize or permit to be filed in any public office any financing statement (or similar statement, instrument of registration or public notice under the law of any jurisdiction) relating to any Pledged Collateral, except financing statements and other statements and instruments filed or to be filed in respect of and covering the security interests granted by such Pledgor to the holder of the Permitted Liens.

        SECTION 4.5.    Chief Executive Office; Change of Name; Jurisdiction of Organization.    The Collateral Agents may rely on advice of counsel as to whether any or all UCC financing statements of the Pledgors need to be amended as a result of any of the changes described in Section 5.13(a) of the Credit Agreement. If any Pledgor fails to provide information to the Collateral Agents about such changes on a timely basis, the Collateral Agents shall not be liable or responsible to any party for any failure to maintain a perfected security interest in such Pledgor's property constituting Pledged Collateral, for which the Collateral Agents needed to have information relating to such changes. The Collateral Agents shall have no duty to inquire about such changes if any Pledgor does not inform the Collateral Agents of such changes, the parties acknowledging and agreeing that it would not be feasible or practical for the Collateral Agents to search for information on such changes if such information is not provided by any Pledgor.

        SECTION 4.6.    Location of Inventory and Equipment.    It shall not move any Equipment or Inventory to an ultimate location that is not listed in the relevant Schedules to the Perfection Certificate, unless it shall have given the Collateral Agents not less than 10 days' prior written notice of its intention so to do, clearly describing such new location and providing monthly rent expense, if applicable, and such other information in connection therewith as the Collateral Agents may reasonably request; provided that in no event shall any Equipment or Inventory be moved to any ultimate location outside of the continental United States or Canada.

        SECTION 4.7.    Due Authorization and Issuance.    All of the Pledged Securities existing on the date hereof have been, and to the extent any Pledged Securities are hereafter issued, such Pledged Securities will be, upon such issuance, duly authorized, validly issued and fully paid and non-assessable. There is no amount or other obligation owing by any Pledgor to any issuer of the Pledged Securities in exchange for or in connection with the issuance of the Pledged Securities or any Pledgor's status as a partner or a member of any issuer of the Pledged Securities.

        SECTION 4.8.    Consents, etc.    In the event that the applicable Collateral Agent desires to exercise any remedies, voting or consensual rights or attorney-in-fact powers set forth in this Agreement and determines it necessary to obtain any approvals or consents of any Governmental Authority or any other person therefor, then, upon the reasonable request of such Collateral Agent, such Pledgor agrees to use its best efforts to assist and aid the Collateral Agents to obtain as soon as

16

practicable any necessary approvals or consents for the exercise of any such remedies, rights and powers.

        SECTION 4.9.    Pledged Collateral.    All information set forth herein, including the schedules hereto, and all information contained in any documents, schedules and lists heretofore delivered to any Secured Party, including the Perfection Certificate and the schedules thereto, in connection with this Agreement, in each case, relating to the Pledged Collateral, is accurate and complete in all material respects. The Pledged Collateral described on the schedules to the Perfection Certificate constitutes all of the property of such type of Pledged Collateral owned or held by the Pledgors.

        SECTION 4.10.    Insurance.    In the event that the proceeds of any insurance claim are paid to any Pledgor after the applicable Collateral Agent has exercised its right to foreclose after an Event of Default, such Net Cash Proceeds shall be held in trust for the benefit of the Collateral Agents and promptly after receipt thereof shall be paid to the applicable Collateral Agent for application in accordance with the Credit Agreement.

ARTICLE V

CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL

        SECTION 5.1.    Pledge of Additional Securities Collateral.    Each Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of any person, accept the same in trust for the benefit of the Collateral Agents and promptly (but in any event within five Business Days after receipt thereof) deliver to the Collateral Agents a pledge amendment, duly executed by such Pledgor, in substantially the form of Exhibit 2 hereto (each, a "Pledge Amendment"), and deliver to the applicable Collateral Agent the certificates and other documents required under Section 3.1 and Section 3.2 hereof in respect of the additional Pledged Securities or Intercompany Notes which are to be pledged pursuant to this Agreement, and confirming the attachment of the Lien hereby created on and in respect of such additional Pledged Securities or Intercompany Notes. Each Pledgor hereby authorizes the Collateral Agents to attach each Pledge Amendment to this Agreement and agrees that all Pledged Securities or Intercompany Notes listed on any Pledge Amendment delivered to the applicable Collateral Agent shall for all purposes hereunder be considered Pledged Collateral.

        SECTION 5.2.    Voting Rights; Distributions; etc.

        (a)   So long as no Event of Default shall have occurred and be continuing:

        (i)    Each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Securities Collateral or any part thereof; provided, however, that no Pledgor shall in any event exercise such rights in any manner which could reasonably be expected to have a Material Adverse Effect.

        (ii)   Each Pledgor shall be entitled to receive and retain, and to utilize free and clear of the Lien hereof, any and all Distributions, but only if and to the extent made in accordance with the provisions of the Credit Agreement; provided, however, that any and all such Distributions consisting of rights or interests in the form of securities shall be promptly delivered to the applicable Collateral Agent to hold as Pledged Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Collateral Agents, be segregated from the other property or funds of such Pledgor and be promptly (but in any event within five Business Days after receipt thereof) delivered to the applicable Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

        (b)   So long as no Event of Default shall have occurred and be continuing, the Collateral Agents shall be deemed without further action or formality to have granted to each Pledgor all

17

necessary consents relating to voting rights and shall, if necessary, upon written request of any Pledgor and at the sole cost and expense of the Pledgors, from time to time execute and deliver (or cause to be executed and delivered) to such Pledgor all such instruments as such Pledgor may reasonably request in order to permit such Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to Section 5.2(a)(i) hereof and to receive the Distributions which it is authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof.

        (c)   Upon the occurrence and during the continuance of any Event of Default:

        (i)    All rights of each Pledgor to exercise the voting and other consensual rights it would otherwise be entitled to exercise pursuant to Section 5.2(a)(i) hereof shall immediately cease, and all such rights shall thereupon become vested in the Collateral Agents, which shall thereupon have the sole right to exercise such voting and other consensual rights.

        (ii)   All rights of each Pledgor to receive Distributions which it would otherwise be authorized to receive and retain pursuant to Section 5.2(a)(ii) hereof shall immediately cease and all such rights shall thereupon become vested in the Collateral Agents, which shall thereupon have the sole right to receive and hold as Pledged Collateral such Distributions.

        (d)   Each Pledgor shall, at its sole cost and expense, from time to time execute and deliver to the applicable Collateral Agent appropriate instruments as such Collateral Agent may reasonably request in order to permit such Collateral Agent to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 5.2(c)(i) hereof and to receive all Distributions which it may be entitled to receive under Section 5.2(c)(ii) hereof.

        (e)   All Distributions which are received by any Pledgor contrary to the provisions of Section 5.2(c)(ii) hereof shall be received in trust for the benefit of the Collateral Agents, shall be segregated from other funds of such Pledgor and shall immediately be paid over to the applicable Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement).

        SECTION 5.3.    Defaults, etc.    Such Pledgor is not in default in the payment of any material portion of any mandatory capital contribution, if any, required to be made under any agreement to which such Pledgor is a party relating to the Pledged Securities pledged by it, and such Pledgor is not in violation of any other material provisions of any such agreement to which such Pledgor is a party, or otherwise in default or violation thereunder. No Securities Collateral pledged by such Pledgor is subject to any defense, offset or counterclaim, nor have any of the foregoing been asserted or alleged against such Pledgor by any person with respect thereto, and as of the date hereof, there are no certificates, instruments, documents or other writings (other than the Organizational Documents and certificates representing such Pledged Securities that have been delivered to the applicable Collateral Agent) which evidence any Pledged Securities of such Pledgor.

        SECTION 5.4.    Certain Agreements of Pledgors As Issuers and Holders of Equity Interests.

        (a)   In the case of each Pledgor which is an issuer of Securities Collateral, such Pledgor agrees to be bound by the terms of this Agreement relating to the Securities Collateral issued by it and will comply with such terms insofar as such terms are applicable to it.

        (b)   In the case of each Pledgor which is a partner, shareholder or member, as the case may be, in a partnership, limited liability company or other entity, such Pledgor hereby consents to the extent required by the applicable Organizational Document to the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged Securities in such partnership, limited liability company or other entity and, upon the occurrence and during the continuance of an Event of Default, to the transfer of such Pledged Securities to the applicable Collateral Agent or its nominee and to the substitution of the applicable Collateral Agent or its nominee as a substituted

18

partner, shareholder or member in such partnership, limited liability company or other entity with all the rights, powers and duties of a general partner, limited partner, shareholder or member, as the case may be.

ARTICLE VI

CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL

        SECTION 6.1.    Grant of Intellectual Property License.    For the purpose of enabling the Collateral Agents, upon the occurrence of and during the continuance of an Event of Default, to exercise rights and remedies under Article IX hereof at such time as the Collateral Agents shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Pledgor hereby grants to the applicable Collateral Agent, to the extent assignable, an irrevocable, non-exclusive, royalty free, worldwide license or (for third party rights) sublicense to use, assign, license or sublicense any of the Intellectual Property now owned, held or hereafter acquired by such Pledgor, wherever the same may be located. Such license or sublicense shall include access to all media in which any of the applicable items may be recorded or stored and to all computer programs used for the compilation or printout hereof. The Collateral Agents agree to maintain, during the period such license or sublicense is in effect, the quality of all products and services marketed under the Trademarks at a level that the Collateral Agents in good faith believe is in all material respects equal to that maintained by each Pledgor immediately prior to the Event of Default.

        SECTION 6.2.    Protection of Collateral Agents' Security.    On a continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly notify the Collateral Agents if it knows or has reason to know that any application or registration for any Material Intellectual Property may become forfeited, abandoned or dedicated to the public, or of any adverse determination in any proceeding or the institution of any proceeding in any federal, state, foreign or local court or administrative body (including the United States Patent and Trademark Office or the United States Copyright Office or any foreign counterpart thereof) regarding any Material Intellectual Property, such Pledgor's right to register such Material Intellectual Property or its right to keep and maintain such registration in full force and effect, (ii) maintain all Material Intellectual Property as presently used and operated, except as shall be consistent with commercially reasonably business judgment, (iii) continue to use each material Trademark so as to maintain it in full force in each class of goods, except as shall be consistent with commercially reasonably business judgment, (iv) maintain the quality of products and services offered under such Trademark at or above the quality of products and services offered under such Trademark as of the Closing Date, (v) not adopt or use any mark which is confusingly similar to such Trademark unless the Collateral Agents, for the ratable benefit of the Lenders, shall obtain a perfected security interest in such mark pursuant to this Agreement, (vi) use all Intellectual Property with applicable notices and legends, (vii) not permit to lapse or become invalidated or abandoned any Material Intellectual Property, and not settle or compromise any pending or future litigation or administrative proceeding with respect to any such Material Intellectual Property, in either case except as shall be consistent with commercially reasonable business judgment, (viii) maintain, apply and prosecute each registration of the Material Intellectual Property, except as shall be consistent with commercially reasonably business judgment, (ix) upon such Pledgor obtaining knowledge thereof, promptly notify the Collateral Agents in writing of any event which may be reasonably expected to materially and adversely affect the value, validity or utility of any Material Intellectual Property or the rights and remedies of the Collateral Agents in relation thereto including a levy or threat of levy or any legal process against any Material Intellectual Property, (x) not license any Intellectual Property other than licenses entered into by such Pledgor in, or incidental to, the ordinary course of business, or amend or permit the amendment of any of the licenses in a manner that materially and adversely affects the right to receive payments thereunder, or in any manner that would materially impair the

19

value of any Intellectual Property or the Lien on and security interest in the Intellectual Property created therein hereby, without the consent of the Collateral Agents, (xi) diligently keep adequate records respecting all Intellectual Property and (xii) furnish to the Collateral Agents from time to time upon the Collateral Agents' reasonable request therefor reasonably detailed statements and amended schedules further identifying and describing the Intellectual Property and such other materials evidencing or reports pertaining to any Intellectual Property as the Collateral Agents may from time to time reasonably request.

        SECTION 6.3.    After-Acquired Property.    If any Pledgor either by itself or through any agent, employee, licensee or designee, shall at any time after the date hereof (i) obtain any rights to any additional Intellectual Property, (ii) file or otherwise become entitled to the benefit of any additional Intellectual Property or any renewal, registration, application or extension thereof, including any reissue, division, continuation, or continuation-in-part of any Intellectual Property, or any improvement on any Intellectual Property, the provisions hereof shall automatically apply thereto and any such item enumerated in the preceding clause (i) or (ii) shall automatically constitute Intellectual Property as if such would have constituted Intellectual Property at the time of execution hereof and be subject to the Lien and security interest created by this Agreement without further action by any party. Each Pledgor shall promptly (and in no event more than thirty (30) days following the applicable event) provide to the Collateral Agents written notice of any of the foregoing and confirm the attachment of the Lien and security interest created by this Agreement to any rights described in clauses (i) and (ii) above by execution of an instrument in form reasonably acceptable to the Collateral Agents and the filing of any instruments or statements as shall be reasonably necessary to create, preserve, protect or perfect the Collateral Agents' security interest in such Intellectual Property. Further, each Pledgor authorizes the Collateral Agents to modify this Agreement by amending Schedules 12(a) and 12(b) to the Perfection Certificate to include any Intellectual Property of such Pledgor acquired or arising after the date hereof.

        SECTION 6.4.    Litigation.    Unless there shall occur and be continuing any Event of Default, each Pledgor shall take all reasonable and necessary steps to commence and prosecute in its own name, as the party in interest, for its own benefit and at the sole cost and expense of the Pledgors, such applications for protection of the Material Intellectual Property and suits, proceedings or other actions to prevent the material infringement, counterfeiting, unfair competition, dilution, diminution in value or other damage as are necessary to protect the Intellectual Property. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agents shall have the right but shall in no way be obligated to file applications for protection of the Intellectual Property and/or bring suit in the name of any Pledgor, the Collateral Agents or the Secured Parties to enforce the Intellectual Property and any license thereunder. In the event of such suit, each Pledgor shall, at the reasonable request of the Collateral Agents, do any and all lawful acts and execute any and all documents requested by the Collateral Agents in aid of such enforcement and the Pledgors shall promptly reimburse and indemnify the Collateral Agents for all costs and expenses incurred by the Collateral Agents in the exercise of their rights under this Section 6.4 in accordance with Section 10.03 of the Credit Agreement. In the event that the Collateral Agents shall elect not to bring suit to enforce the Intellectual Property, each Pledgor agrees, at the reasonable request of the Collateral Agents, to take all commercially reasonable actions necessary, whether by suit, proceeding or other action, to prevent the infringement, counterfeiting, unfair competition, dilution, diminution in value of or other damage to any of the Intellectual Property by any person.

ARTICLE VII

CERTAIN PROVISIONS CONCERNING RECEIVABLES

        SECTION 7.1.    Maintenance of Records.    Each Pledgor shall keep and maintain at its own cost and expense complete records of each Receivable, in a manner consistent with prudent business

20

practice, including records of all payments received, all credits granted thereon, all merchandise returned and all other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole cost and expense, upon the applicable Collateral Agent's demand made at any time after the occurrence and during the continuance of any Event of Default, deliver all tangible evidence of Receivables, including all documents evidencing Receivables and any books and records relating thereto to such Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Pledgor). Upon the occurrence and during the continuance of any Event of Default, the Collateral Agents may transfer a full and complete copy of any Pledgor's books, records, credit information, reports, memoranda and all other writings relating to the Receivables to and for the use by any person that has acquired or is contemplating acquisition of an interest in the Receivables or the Collateral Agents' security interest therein without the consent of any Pledgor; provided, that such person and their representative shall be obligated to keep any information or knowledge obtained in connection with their review of such books, records, credit information, reports, memoranda or other writings related to the Receivables confidential in accordance with Section 11.12 of the Credit Agreement.

        SECTION 7.2.    Legend.    Each Pledgor shall legend, at the reasonable request of the Collateral Agents and in form and manner satisfactory to the Collateral Agents, the Receivables and the other books, records and documents of such Pledgor evidencing or pertaining to the Receivables with an appropriate reference to the fact that the Receivables have been assigned to the Collateral Agents for the benefit of the Secured Parties and that the Collateral Agents have a security interest therein.

        SECTION 7.3.    Modification of Terms, etc.    No Pledgor shall rescind or cancel any obligations evidenced by any material Receivable or modify any term thereof or make any adjustment with respect thereto except in the ordinary course of business consistent with prudent business practice, or extend or renew any such material obligations except in the ordinary course of business consistent with prudent business practice or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto or sell any Receivable or interest therein except in the ordinary course of business consistent with prudent business practice without the prior written consent of the Collateral Agents. Each Pledgor shall timely fulfill all obligations on its part to be fulfilled under or in connection with the Receivables.

        SECTION 7.4.    Collection.    Each Pledgor shall cause to be collected from the Account Debtor of each of the Receivables, as and when due in the ordinary course of business and consistent with prudent business practice (including Receivables that are delinquent, such Receivables to be collected in accordance with generally accepted commercial collection procedures), any and all amounts owing under or on account of such Receivable, and apply promptly upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable, except that any Pledgor may, with respect to a Receivable, allow in the ordinary course of business (i) a refund or credit due as a result of returned or damaged or defective merchandise and (ii) such extensions of time to pay amounts due in respect of Receivables and such other modifications of payment terms or settlements in respect of Receivables as shall be commercially reasonable in the circumstances, all in accordance with such Pledgor's ordinary course of business consistent with its collection practices as in effect from time to time. The costs and expenses (including attorneys' fees) of collection, in any case, whether incurred by any Pledgor, the Collateral Agents or any Secured Party, shall be paid by the Pledgors.

ARTICLE VIII

TRANSFERS

        SECTION 8.1.    Transfers of Pledged Collateral.    No Pledgor shall sell, convey, assign or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral pledged by it hereunder except as expressly permitted by the Credit Agreement.

21

ARTICLE IX

REMEDIES

        SECTION 9.1.    Remedies.    Upon the occurrence and during the continuance of any Event of Default, the Collateral Agents may from time to time exercise in respect of the Pledged Collateral, in addition to the other rights and remedies provided for herein or otherwise available to them, the following remedies:

        (i)    Personally, or by agents or attorneys, immediately take possession of the Pledged Collateral or any part thereof, from any Pledgor or any other person who then has possession of any part thereof with or without notice or process of law, and for that purpose and/or for the purposes of completing the manufacture and packaging of the Pledged Collateral or sale or other disposition of the Pledged Collateral may enter upon any Pledgor's premises where any of the Pledged Collateral is located, remove such Pledged Collateral, complete the manufacture and packaging of the Pledged Collateral and/or sell or otherwise dispose of the Pledged Collateral, remain present at such premises to receive copies of all communications and remittances relating to the Pledged Collateral and for other purposes set forth in this clause (i) and use in connection with such removal, possession, completion of manufacturing and packaging, sale or other disposition, any and all services, supplies, equipment, aids and other facilities of any Pledgor;

        (ii)   Demand, sue for, collect or receive any money or property at any time payable or receivable in respect of the Pledged Collateral including instructing the obligor or obligors on any agreement, instrument or other obligation constituting part of the Pledged Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the applicable Collateral Agent, and in connection with any of the foregoing, compromise, settle, extend the time for payment and make other modifications with respect thereto; provided, however, that in the event that any such payments are made directly to any Pledgor, prior to receipt by any such obligor of such instruction, such Pledgor shall segregate all amounts received pursuant thereto in trust for the benefit of the Collateral Agents and shall promptly (but in no event later than three (3) Business Days after receipt thereof) pay such amounts to the applicable Collateral Agent;

        (iii)  Sell, assign, grant a license to use or otherwise liquidate, or direct any Pledgor to sell, assign, grant a license to use or otherwise liquidate, any and all investments made in whole or in part with the Pledged Collateral or any part thereof, and take possession of the proceeds of any such sale, assignment, license or liquidation;

        (iv)  Take possession of the Pledged Collateral or any part thereof, by directing any Pledgor in writing to deliver the same to the applicable Collateral Agent at any place or places so designated by the Collateral Agents, in which event such Pledgor shall at its own expense: (A) forthwith cause the same to be moved to the place or places designated by the Collateral Agents and therewith delivered to the applicable Collateral Agent, (B) store and keep any Pledged Collateral so delivered to the applicable Collateral Agent at such place or places pending further action by the Collateral Agents and (C) while the Pledged Collateral shall be so stored and kept, provide such security and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition. Each Pledgor's obligation to deliver the Pledged Collateral as contemplated in this Section 9.1(iv) is of the essence hereof. Upon application to a court of equity having jurisdiction, the Collateral Agents shall be entitled to a decree requiring specific performance by any Pledgor of such obligation;

        (v)   Withdraw all moneys, instruments, securities and other property in any bank, financial securities, deposit or other account of any Pledgor constituting Pledged Collateral for application to the Secured Obligations as provided in Article X hereof;

22

        (vi)  Retain and apply the Distributions to the Secured Obligations as provided in Article X hereof;

        (vii) Exercise any and all rights as beneficial and legal owner of the Pledged Collateral, including perfecting assignment of and exercising any and all voting, consensual and other rights and powers with respect to any Pledged Collateral; and

        (viii) Exercise all the rights and remedies of a secured party on default under the UCC, and the Collateral Agents may also in their sole discretion, without notice except as specified in Section 9.2 hereof, sell, assign or grant a license to use the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Collateral Agents' offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral Agents may deem commercially reasonable. Either of the Collateral Agents or any other Secured Party or any of their respective Affiliates may be the purchaser, licensee, assignee or recipient of the Pledged Collateral or any part thereof at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Pledged Collateral sold, assigned or licensed at such sale, to use and apply any of the Secured Obligations owed to such person as a credit on account of the purchase price of the Pledged Collateral or any part thereof payable by such person at such sale. Each purchaser, assignee, licensee or recipient at any such sale shall acquire the property sold, assigned or licensed absolutely free from any claim or right on the part of any Pledgor, and each Pledgor hereby waives, to the fullest extent permitted by law, all rights of redemption, stay and/or appraisal which it now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agents shall not be obligated to make any sale of the Pledged Collateral or any part thereof regardless of notice of sale having been given. The Collateral Agents may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by law, any claims against the Collateral Agents arising by reason of the fact that the price at which the Pledged Collateral or any part thereof may have been sold, assigned or licensed at such a private sale was less than the price which might have been obtained at a public sale, even if one of the Collateral Agents accept the first offer received and does not offer such Pledged Collateral to more than one offeree.

        SECTION 9.2.    Notice of Sale.    Each Pledgor acknowledges and agrees that, to the extent notice of sale or other disposition of the Pledged Collateral or any part thereof shall be required by law, ten (10) days' prior notice to such Pledgor of the time and place of any public sale or of the time after which any private sale or other intended disposition is to take place shall be commercially reasonable notification of such matters. No notification need be given to any Pledgor if it has signed, after the occurrence of an Event of Default, a statement renouncing or modifying any right to notification of sale or other intended disposition.

        SECTION 9.3.    Waiver of Notice and Claims.    Each Pledgor hereby waives, to the fullest extent permitted by applicable law, notice or judicial hearing in connection with either of the Collateral Agent's taking possession or the Collateral Agent's disposition of the Pledged Collateral or any part thereof, including any and all prior notice and hearing for any prejudgment remedy or remedies and any such right which such Pledgor would otherwise have under law, and each Pledgor hereby further waives, to the fullest extent permitted by applicable law: (i) all damages occasioned by such taking of possession other than those caused by the gross negligence or willful misconduct of the Collateral Agents or their representatives as determined by a final, non-appealable order of a court of competent jurisdiction, (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agents' rights hereunder and (iii) all rights of redemption, appraisal, valuation, stay, extension or moratorium now or hereafter in force under any

23

applicable law. The Collateral Agents shall not be liable for any incorrect or improper payment made pursuant to this Article IX in the absence of gross negligence or willful misconduct on the part of the Collateral Agents as determined by a final, non-appealable order of a court of competent jurisdiction. Any sale of, or the grant of options to purchase, or any other realization upon, any Pledged Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the applicable Pledgor therein and thereto, and shall be a perpetual bar both at law and in equity against such Pledgor and against any and all persons claiming or attempting to claim the Pledged Collateral so sold, optioned or realized upon, or any part thereof, from, through or under such Pledgor.

        SECTION 9.4.    Certain Sales of Pledged Collateral.

        (a)   Each Pledgor recognizes that, by reason of certain prohibitions contained in law, rules, regulations or orders of any Governmental Authority, the Collateral Agents may be compelled, with respect to any sale of all or any part of the Pledged Collateral, to limit purchasers to those who meet the requirements of such Governmental Authority. Each Pledgor acknowledges that any such sales may be at prices and on terms less favorable to the Collateral Agents than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such restricted sale shall be deemed to have been made in a commercially reasonable manner and that, except as may be required by applicable law, the Collateral Agents shall have no obligation to engage in public sales.

        (b)   Each Pledgor recognizes that, by reason of certain prohibitions contained in the Securities Act, and applicable state securities laws, the Collateral Agents may be compelled, with respect to any sale of all or any part of the Securities Collateral and Investment Property, to limit purchasers to persons who will agree, among other things, to acquire such Securities Collateral or Investment Property for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor acknowledges that any such private sales may be at prices and on terms less favorable to the Collateral Agents than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the Securities Act), and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agents shall have no obligation to engage in public sales and no obligation to delay the sale of any Securities Collateral or Investment Property for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the Securities Act or under applicable state securities laws, even if such issuer would agree to do so.

        (c)   Notwithstanding the foregoing, each Pledgor shall, upon the occurrence and during the continuance of any Event of Default, at the reasonable request of the Collateral Agents, for the benefit of the Collateral Agents, cause any registration, qualification under or compliance with any Federal or state securities law or laws to be effected with respect to all or any part of the Securities Collateral as soon as practicable and at the sole cost and expense of the Pledgors. Each Pledgor will use its commercially reasonable efforts to cause such registration to be effected (and be kept effective) and will use its commercially reasonable efforts to cause such qualification and compliance to be effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Securities Collateral including registration under the Securities Act (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with all other requirements of any Governmental Authority. Each Pledgor shall use its commercially reasonable efforts to cause the Collateral Agents to be kept advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, shall furnish to the Collateral Agents such number of prospectuses, offering circulars or other documents incident thereto as the Collateral Agents from time to time may reasonably request, and shall indemnify and shall cause the issuer of the Securities Collateral to indemnify the Collateral Agents and all others

24

participating in the distribution of such Securities Collateral against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading other than any claims, losses, damages and liabilities arising from or by virtue of the gross negligence or willful misconduct or misrepresentation of the Collateral Agents or their representative as determined by a final, non-appealable order of a court of competent jurisdiction.

        (d)   If the Collateral Agents determine to exercise their right to sell any or all of the Securities Collateral or Investment Property, upon written request, the applicable Pledgor shall from time to time furnish to the Collateral Agents all such information as the Collateral Agents may request in order to determine the number of securities included in the Securities Collateral or Investment Property which may be sold by the Collateral Agents as exempt transactions under the Securities Act and the rules of the Securities and Exchange Commission thereunder, as the same are from time to time in effect.

        (e)   Each Pledgor further agrees that a breach of any of the covenants contained in this Section 9.4 will cause irreparable injury to the Collateral Agents and the other Secured Parties, that the Collateral Agents and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 9.4 shall be specifically enforceable against such Pledgor, and such Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing.

        SECTION 9.5.    No Waiver; Cumulative Remedies.

        (a)   No failure on the part of the Collateral Agents to exercise, no course of dealing with respect to, and no delay on the part of the Collateral Agents in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power, privilege or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power, privilege or remedy; nor shall the Collateral Agents be required to look first to, enforce or exhaust any other security, collateral or guaranties. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law or otherwise available.

        (b)   In the event that the Collateral Agents shall have instituted any proceeding to enforce any right, power, privilege or remedy under this Agreement or any other Loan Document by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agents, then and in every such case, the Pledgors, the Collateral Agents and each other Secured Party shall be restored to their respective former positions and rights hereunder with respect to the Pledged Collateral, and all rights, remedies, privileges and powers of the Collateral Agents and the other Secured Parties shall continue as if no such proceeding had been instituted.

        SECTION 9.6.    Certain Additional Actions Regarding Intellectual Property.    If any Event of Default shall have occurred and be continuing, upon the written demand of the Collateral Agents, each Pledgor shall execute and deliver to the Collateral Agents an assignment or assignments of the Intellectual Property and such other documents as are necessary or appropriate to carry out the intent and purposes hereof. Within five (5) Business Days of written notice thereafter from the Collateral Agents, each Pledgor shall make available to the Collateral Agents, to the extent within such Pledgor's power and authority, such personnel in such Pledgor's employ on the date of the Event of Default as the Collateral Agents may reasonably designate to permit such Pledgor to continue, directly or indirectly,

25

to produce, advertise and sell the products and services sold by such Pledgor under the Intellectual Property, and such persons shall be available to perform their prior functions on the Collateral Agents' behalf.

        SECTION 9.7.    Access to Premises.    Each Pledgor will permit Collateral Agents or their designee to visit and inspect the financial records and the property of such Pledgor at reasonable times during regular business hours as often as reasonably requested and at any time upon the occurrence and during the continuance of any Event of Default, make extracts from and copies of such financial records, and to discuss the affairs, finances, accounts and condition of any Pledgor with the officers and employees thereof and advisors therefor (including independent accountants).

ARTICLE X

PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS

        SECTION 10.1.    Application of Proceeds.    The proceeds received by the Collateral Agents in respect of any sale of, collection from or other realization upon all or any part of the Pledged Collateral pursuant to the exercise by either of the Collateral Agents of their remedies shall be applied, together with any other sums then held by the Collateral Agents pursuant to this Agreement, in accordance with the Credit Agreement.

ARTICLE XI

MISCELLANEOUS

        SECTION 11.1.    Concerning Collateral Agents.

        (a)   The Collateral Agents have been appointed as Collateral Agents pursuant to the Credit Agreement. The actions of the Collateral Agents hereunder are subject to the provisions of the Credit Agreement. The Collateral Agents shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking action (including the release or substitution of the Pledged Collateral), in accordance with this Agreement and the Credit Agreement. The Collateral Agents may employ in good faith agents and attorneys-in-fact in connection herewith and shall not be liable except for the gross negligence or willful misconduct of any such agents or attorneys-in-fact selected by it as determined by a final, non-appealable order of a court of competent jurisdiction. Either of the Collateral Agents may resign and a successor Collateral Agent or Collateral Agents may be appointed in the manner provided in the Credit Agreement. Upon the acceptance of any appointment as Collateral Agent by successor Collateral Agent, that successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent under this Agreement, and the retiring Collateral Agent shall thereupon be discharged from its duties and obligations under this Agreement. After any retiring Collateral Agent's resignation, the provisions hereof shall inure to its benefit as to any actions taken or omitted to be taken by it under this Agreement while it was a Collateral Agent.

        (b)   The Collateral Agents shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equivalent to that which the Collateral Agents, in their individual capacities, accord their own property consisting of similar instruments or interests, it being understood that neither the Collateral Agents nor any of the Secured Parties shall have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Securities Collateral, whether or not the Collateral Agents or any

26

other Secured Party has or is deemed to have knowledge of such matters or (ii) taking any necessary steps to preserve rights against any person with respect to any Pledged Collateral.

        (c)   The Collateral Agents shall be entitled to rely upon any written notice, statement, certificate, order or other document or any telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person, and, with respect to all matters pertaining to this Agreement and its duties hereunder, upon advice of counsel selected by it.

        (d)   If any item of Pledged Collateral also constitutes collateral granted to the Collateral Agents under any other deed of trust, mortgage, security agreement, pledge or instrument of any type, in the event of any conflict between the provisions hereof and the provisions of such other deed of trust, mortgage, security agreement, pledge or instrument of any type in respect of such collateral, the terms of this Agreement shall control.

        SECTION 11.2.    Collateral Agents May Perform; Collateral Agents Appointed Attorney-in-Fact.

        (a)   If any Pledgor shall fail to perform any covenants contained in this Agreement (including such Pledgor's covenants to (i) pay the premiums in respect of all required insurance policies hereunder, (ii) pay and discharge any taxes, assessments and special assessments, levies, fees and governmental charges imposed upon or assessed against, and landlords', carriers', mechanics', workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's Liens and other claims arising by operation of law against, all or any portion of the Pledged Collateral, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any obligations of such Pledgor under any Pledged Collateral) or if any representation or warranty on the part of any Pledgor contained herein shall be breached, the Collateral Agents may (but shall not be obligated to) do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose; provided, however, that the Collateral Agents shall in no event be bound to inquire into the validity of any tax, Lien, imposition or other obligation which such Pledgor fails to pay or perform as and when required hereby and which such Pledgor does not contest in accordance with the provisions of the Credit Agreement. Any and all amounts so expended by the Collateral Agents shall be paid by the Pledgors in accordance with the provisions of Section 10.03 of the Credit Agreement. Neither the provisions of this Section 11.2 nor any action taken by the Collateral Agents pursuant to the provisions of this Section 11.2 shall prevent any such failure to observe any covenant contained in this Agreement nor any breach of representation or warranty from constituting an Event of Default. Each Pledgor hereby appoints the Collateral Agents its attorneys-in-fact, with full power and authority in the place and stead of such Pledgor and in the name of such Pledgor, or otherwise, from time to time in the applicable Collateral Agent's discretion to take any action and to execute any instrument consistent with the terms of the Credit Agreement, this Agreement and the other Security Documents which such Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (but the Collateral Agents shall not be obligated to and shall have no liability to such Pledgor or any third party for failure to so do or take action). The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable for the term hereof. Each Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be done by virtue hereof.

        (b)   Without limiting the foregoing, each Pledgor hereby irrevocably designates and appoints each Collateral Agent (and all persons designated by Collateral Agents) as such Pledgor's true and lawful attorney-in-fact, and authorizes Collateral Agents, in such Pledgor's or Collateral Agents' name, to:(i) at any time an Event of Default exists or has occurred and is continuing (1) demand payment on Accounts or other Pledged Collateral, (2) enforce payment of Accounts by legal proceedings or otherwise, (3) exercise all of such Pledgor's rights and remedies to collect any Account or other Pledged Collateral, (4) sell or assign any Account upon such terms, for such

27

amount and at such time or times as the Collateral Agents deems advisable, (5) settle, adjust, compromise, extend or renew an Account, (6) discharge and release any Account, (7) prepare, file and sign such Pledgor's name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any Accounts or other Pledged Collateral, (8) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of Accounts or other proceeds of Pledged Collateral to an address designated by Collateral Agents, and open and dispose of all mail addressed to such Pledgor and handle and store all mail relating to the Pledged Collateral; (9) do all acts and things which are necessary, in Collateral Agents' determination, to fulfill such Pledgor's obligations under this Agreement and the other Loan Documents, (10) endorse such Pledgor's name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Account or any goods pertaining thereto or any other Pledged Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, (11) clear Inventory the purchase of which was financed with a Letter of Credit through U.S. Customs or foreign export control authorities in such Pledgor's, Collateral Agents' name or the name of Collateral Agents' designee, and to sign and deliver to customs officials powers of attorney in such Pledgor's name for such purpose, and to complete in such Pledgor's or Collateral Agents' name, any order, sale or transaction, obtain the necessary documents in connection therewith and collect the proceeds thereof, and (12) sign such Pledgor's name on any verification of Accounts and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof and (ii) at any time after delivery of a Notice of Sole Control (as defined in the form Deposit Account Control Agreement attached hereto as Exhibit 5) or a similar notice to (1) take control in any manner of any item of payment in respect of Accounts or constituting Pledged Collateral or otherwise received in or for deposit in the Concentration Accounts or otherwise received by Collateral Agents or any Lender, (2) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of Accounts or other proceeds of Pledged Collateral are sent or received, and (3) endorse such Pledgor's name upon any items of payment in respect of Accounts or constituting Pledged Collateral or otherwise received by Collateral Agents and any Lender and deposit the same in Collateral Agents' account for application to the Obligations. Each Pledgor hereby releases Collateral Agents and Lenders and their respective officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of Collateral Agents' or any Lender's own gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

        SECTION 11.3.    Continuing Security Interest; Assignment.    This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) be binding upon the Pledgors, their respective successors and assigns and (ii) inure, together with the rights and remedies of the Collateral Agents hereunder, to the benefit of the Collateral Agents and the other Secured Parties and each of their respective successors, transferees and assigns. No other persons (including any other creditor of any Pledgor) shall have any interest herein or any right or benefit with respect hereto. Without limiting the generality of the foregoing clause (ii), any Secured Party may assign or otherwise transfer any indebtedness held by it secured by this Agreement to any other person, and such other person shall thereupon become vested with all the benefits in respect thereof granted to such Secured Party, herein or otherwise, subject however, to the provisions of the Credit Agreement and, in the case of a Secured Party that is a party to a Hedging Agreement, such Hedging Agreement.

        SECTION 11.4.    Termination; Release.

        (a)   When all the Secured Obligations have been paid in full and the Commitments of the Lenders to make any Loan or to issue any Letter of Credit under the Credit Agreement shall have expired or been sooner terminated, all Letters of Credit have been terminated or cash

28

collateralized in an amount equal to not less than 110% of the outstanding amount of Reimbursement Obligations under such Letters of Credit plus interest, fees and costs related to such Letters of Credit or such other arrangement satisfactory to the Issuing Bank, and all reimbursement and indemnification liabilities of the Collateral Agents under Control Agreements have been cash collateralized in an amount reasonably satisfactory to the Collateral Agents, this Agreement shall terminate. Upon termination of this Agreement the Pledged Collateral shall be released from the Lien of this Agreement. Upon such release or any release of Pledged Collateral or any part thereof in accordance with the provisions of the Credit Agreement, the Collateral Agents shall, upon the request and at the sole cost and expense of the Pledgors, assign, transfer and deliver to Pledgor, against receipt and without recourse to or warranty by the Collateral Agents except as to the fact that the Collateral Agents have not encumbered the released assets, such of the Pledged Collateral or any part thereof to be released (in the case of a release) as may be in possession of the Collateral Agents and as shall not have been sold or otherwise applied pursuant to the terms hereof, and, with respect to any other Pledged Collateral, any proper documents and instruments (including UCC-3 termination financing statements or releases) acknowledging the termination hereof or the release of such Pledged Collateral, as the case may be, which the Pledgors may reasonably request.

        (b)   Notwithstanding the foregoing, if (i) the Obligations, other than the Secured Obligations of the type described in clause (b) of the definition of Secured Obligations (the "Remaining Secured Obligations"), have been paid in full and the Commitments of the Lenders to make any Loan or to issue any Letter of Credit under the Credit Agreement shall have expired or been sooner terminated, all Letters of Credit have been terminated or cash collateralized in an amount equal to not less than 110% of the outstanding amount of Reimbursement Obligations under such Letters of Credit plus interest, fees and costs related to such Letters of Credit or such other arrangement satisfactory to the Issuing Bank, and all reimbursement and indemnification liabilities of the Collateral Agents under Control Agreements have been cash collateralized in an amount reasonably satisfactory to the Collateral Agents, (ii) the Remaining Secured Obligations have been cash collateralized in an amount reasonably satisfactory to the Collateral Agents and sufficient to satisfy the terms and conditions governing the Remaining Secured Obligations and (iii) all or a portion of the repayment of the Obligations is financed by the proceeds of Indebtedness of one or more Loan Parties or any affiliate of a Loan Party ("Refinancing Indebtedness") which Refinancing Indebtedness is secured by property of such persons, this Agreement shall terminate as if the Remaining Secured Obligations have been paid in full and the provisions of paragraph (a) of this Section 11.4 shall apply concurrently with the incurrence of the Refinancing Indebtedness and the securing of the Refinancing Indebtedness and the Remaining Secured Obligations on an equal and ratable basis. For the avoidance of doubt, if the Refinancing Indebtedness is not secured, this Agreement shall not terminate but shall remain in full force and effect.

        (c)   The Collateral Agents will release the liens on any part of the Pledged Collateral to the extent required by Section 5.1 of the Intercreditor Agreement.

        SECTION 11.5.    Modification in Writing.    No amendment, modification, supplement, termination or waiver of or to any provision hereof, nor consent to any departure by any Pledgor therefrom, shall be effective unless the same shall be made in accordance with the terms of the Credit Agreement and unless in writing and signed by each party hereto. Any amendment, modification or supplement of or to any provision hereof, any waiver of any provision hereof and any consent to any departure by any Pledgor from the terms of any provision hereof in each case shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement or any other document evidencing the Secured Obligations, no notice to or demand on any Pledgor in any case shall entitle any Pledgor to any other or further notice or demand in similar or other circumstances.

29

        SECTION 11.6.    Notices.    Unless otherwise provided herein or in the Credit Agreement, any notice or other communication herein required or permitted to be given shall be given in the manner and become effective as set forth in the Credit Agreement, as to any Pledgor, addressed to it at the address of the Borrower set forth in the Credit Agreement and as to any Collateral Agent, addressed to it at the address set forth in the Credit Agreement, or in each case at such other address as shall be designated by such party in a written notice to the other party complying as to delivery with the terms of this Section 11.6.

        SECTION 11.7.    Governing Law, Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.Sections 10.09 and 10.10 of the Credit Agreement are incorporated herein, mutatis mutandis, as if a part hereof.

        SECTION 11.8.    Severability of Provisions.    Any provision hereof which is invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without invalidating the remaining provisions hereof or affecting the validity, legality or enforceability of such provision in any other jurisdiction.

        SECTION 11.9.    Execution in Counterparts.    This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        SECTION 11.10.    Business Days.    In the event any time period or any date provided in this Agreement ends or falls on a day other than a Business Day, then such time period shall be deemed to end and such date shall be deemed to fall on the next succeeding Business Day, and performance herein may be made on such Business Day, with the same force and effect as if made on such other day.

        SECTION 11.11.    No Credit for Payment of Taxes or Imposition.    Such Pledgor shall not be entitled to any credit against the principal, premium, if any, or interest payable under the Credit Agreement, and such Pledgor shall not be entitled to any credit against any other sums which may become payable under the terms thereof or hereof, by reason of the payment of any Tax on the Pledged Collateral or any part thereof.

        SECTION 11.12.    No Claims Against Collateral Agents.    Nothing contained in this Agreement shall constitute any consent or request by the Collateral Agents, express or implied, for the performance of any labor or services or the furnishing of any materials or other property in respect of the Pledged Collateral or any part thereof, nor as giving any Pledgor any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making of any claim against either of the Collateral Agents in respect thereof or any claim that any Lien based on the performance of such labor or services or the furnishing of any such materials or other property is prior to the Lien hereof.

        SECTION 11.13.    No Release.    Nothing set forth in this Agreement or any other Loan Document, nor the exercise by the Collateral Agents of any of the rights or remedies hereunder, shall relieve any Pledgor from the performance of any term, covenant, condition or agreement on such Pledgor's part to be performed or observed under or in respect of any of the Pledged Collateral or from any liability to any person under or in respect of any of the Pledged Collateral or shall impose any obligation on either of the Collateral Agents or any other Secured Party to perform or observe any such term, covenant, condition or agreement on such Pledgor's part to be so performed or observed or shall impose any liability on either of the Collateral Agents or any other Secured Party for any act or omission on the part of such Pledgor relating thereto or for any breach of any representation or warranty on the part of such Pledgor contained in this Agreement, the Credit Agreement or the other Loan Documents, or under or in respect of the Pledged Collateral or made in connection herewith or

30

therewith. Anything herein to the contrary notwithstanding, neither the Collateral Agents nor any other Secured Party shall have any obligation or liability under any contracts, agreements and other documents included in the Pledged Collateral by reason of this Agreement, nor shall the Collateral Agents or any other Secured Party be obligated to perform any of the obligations or duties of any Pledgor thereunder or to take any action to collect or enforce any such contract, agreement or other document included in the Pledged Collateral hereunder. The obligations of each Pledgor contained in this Section 11.13 shall survive the termination hereof and the discharge of such Pledgor's other obligations under this Agreement, the Credit Agreement and the other Loan Documents.

        SECTION 11.14.    Obligations Absolute.    All obligations of each Pledgor hereunder shall be absolute and unconditional irrespective of:

        (i)    any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of any other Pledgor;

        (ii)   any lack of validity or enforceability of the Credit Agreement, any Hedging Agreement or any other Loan Document, or any other agreement or instrument relating thereto;

        (iii)  any change in the time, manner or place of payment of, or in any other term of, all or any of the Secured Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any Hedging Agreement or any other Loan Document or any other agreement or instrument relating thereto;

        (iv)  any pledge, exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Secured Obligations;

        (v)   any exercise, non-exercise or waiver of any right, remedy, power or privilege under or in respect hereof, the Credit Agreement, any Hedging Agreement or any other Loan Document except as specifically set forth in a waiver granted pursuant to the provisions of Section 11.5 hereof; or

        (vi)  any other circumstances which might otherwise constitute a defense available to, or a discharge of, any Pledgor.

        SECTION 11.15.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agents pursuant to this Agreement and the exercise of any right or remedy by the applicable Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

        SECTION 11.16.    Collateral Agents.    As appearing herein, the term "Collateral Agents" shall have the meaning assigned to such term in the preamble hereto, provided, however, when reference is made to applicable Collateral Agent, the reference shall be deemed to be (i) to UBS AG, Stamford Branch, as Collateral Agent, if and to the extent that such reference requires a payment to be made or

31

in reference to any Control Agreement and (ii) to Wachovia Bank, National Association as Collateral Agent, if and to the extent that such reference requires action or determination with respect to the reporting or monitoring of the Collateral, the delivery, receipt or possession of any Pledged Collateral (other than in connection with any Control Agreements) or the enforcement of any rights and remedies hereunder (other than in connection with any Control Agreement) and (iii) both Collateral Agents if and to the extent that such reference requires action or determination with respect to other issues.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

32

        IN WITNESS WHEREOF, each Pledgor and the Collateral Agents have caused this Agreement to be duly executed and delivered by their duly authorized officers as of the date first above written.

LINENS HOLDING CO., as Pledgor
By:	Name: Title:
LINENS 'N THINGS, INC. as Pledgor
By:	Name: Title:
LINENS 'N THINGS CENTER, INC. as Pledgor
By:	Name: Title:
BLOOMINGTON MN, L.T., INC. as Pledgor
By:	Name: Title:
VENDOR FINANCE, LLC as Pledgor
By:	Name: Title:
LNT, INC. as Pledgor
By:	Name: Title:
LNT SERVICES, INC. as Pledgor
By:	Name: Title:
LNT LEASING II, LLC as Pledgor
By:	Name: Title:
LNT WEST, INC. as Pledgor
By:	Name: Title:
LNT VIRGINIA, LLC as Pledgor

By:	Name: Title:
LNT MERCHANDISING COMPANY, LLC as Pledgor
By:	Name: Title:
LNT LEASING III, LLC as Pledgor
By:	Name: Title:
CITADEL LNT, LLC as Pledgor
By:	Name: Title:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent
By:	Name: Title:
By:	Name: Title:

EXHIBIT 1

[Form of]

ISSUER'S ACKNOWLEDGMENT

        The undersigned hereby (i) acknowledges receipt of the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (the "Borrowers"), the Guarantors party thereto and UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION as Collateral Agents (in such capacity and together with any successors in such capacity, the "Collateral Agents"), (ii) agrees promptly to note on its books the security interests granted to the Collateral Agents and confirmed under the Security Agreement, (iii) agrees that after receipt of notice pursuant to the Security Agreement, it will comply with instructions of the Collateral Agents with respect to the applicable Securities Collateral without further consent by the applicable Pledgor, (iv) agrees to notify the Collateral Agents upon obtaining knowledge of any interest in favor of any person in the applicable Securities Collateral that is adverse to the interest of the Collateral Agents therein and (v) waives any right or requirement at any time hereafter to receive a copy of the Security Agreement in connection with the registration of any Securities Collateral thereunder in the name of the Collateral Agents or its nominee or the exercise of voting rights by the Collateral Agents or its nominee.

[                                        ]
By:	Name: Title:

EXHIBIT 2

[Form of]

SECURITIES PLEDGE AMENDMENT

        This Securities Pledge Amendment, dated as of [                        ], is delivered pursuant to Section 5.1 of the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER,  INC., a California corporation (the "Borrowers"), the Guarantors party thereto and UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION as Collateral Agents (in such capacity and together with any successors in such capacity, the "Collateral Agents"). The undersigned hereby agrees that this Securities Pledge Amendment may be attached to the Security Agreement and that the Pledged Securities and/or Intercompany Notes listed on this Securities Pledge Amendment shall be deemed to be and shall become part of the Pledged Collateral and shall secure all Secured Obligations. In acting under and by virtue of this Securities Pledge Amendment, the Collateral Agents shall have all of the rights, protections and immunities granted to them under the Security Agreement, all of which are incorporated by reference herein mutatis mutandis.

PLEDGED SECURITIES

ISSUER
CLASS OF
STOCK OR
INTERESTS PAR
VALUE CERTIFICATE
NO(S). NUMBER OF
SHARES OR
INTERESTS PERCENTAGE
OF ALL ISSUED
CAPITAL OR
OTHER EQUITY
INTERESTS
OF ISSUER

INTERCOMPANY NOTES

ISSUER
PRINCIPAL
AMOUNT DATE OF
ISSUANCE INTEREST
RATE MATURITY
DATE

		[                                        ], as Pledgor
		By:	Name: Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION as Collateral Agent
By:	Name: Title:
By:	Name: Title:

EXHIBIT 3

[Form of]

JOINDER AGREEMENT

[Name of New Pledgor]
[Address of New Pledgor]

[Date]

Ladies and Gentlemen:

        Reference is made to the Security Agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement;" capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement), dated as of [                        ], made by LINENS 'N THINGS, INC., a Delaware corporation and LINENS 'N THINGS CENTER, INC., a California corporation (the "Borrowers"), the Guarantors party thereto and UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION as Collateral Agents (in such capacity and together with any successors in such capacity, the "Collateral Agents").

        This Joinder Agreement supplements the Security Agreement and is delivered by the undersigned, [                        ] (the "New Pledgor"), pursuant to Section 3.5 of the Security Agreement. The New Pledgor hereby agrees to be bound as a Guarantor and as a Pledgor party to the Security Agreement by all of the terms, covenants and conditions set forth in the Security Agreement to the same extent that it would have been bound if it had been a signatory to the Security Agreement on the date of the Security Agreement. The New Pledgor also hereby agrees to be bound as a party by all of the terms, covenants and conditions applicable to it set forth in Articles V, VI and VII of the Credit Agreement to the same extent that it would have been bound if it had been a signatory to the Credit Agreement on the execution date of the Credit Agreement. Without limiting the generality of the foregoing, the New Pledgor hereby grants and pledges to the Collateral Agents, as collateral security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations, a Lien on and security interest in, all of its right, title and interest in, to and under the Pledged Collateral and expressly assumes all obligations and liabilities of a Guarantor and Pledgor thereunder. The New Pledgor hereby makes each of the representations and warranties and agrees to each of the covenants applicable to the Pledgors contained in the Security Agreement and Article III of the Credit Agreement.

        Concurrent with the execution of this Agreement, the New Pledgor shall deliver to the Collateral Agents a Perfection Certificate. Such Perfection Certificate shall supplement the disclosures contained in the Security Agreement and shall be deemed to be part of the Security Agreement or the Credit Agreement, as applicable.

        This Joinder Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agents pursuant to this Agreement and the exercise of any right or remedy by the applicable Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

        In acting under and by virtue of this Securities Pledge Amendment, the Collateral Agents shall have all of the rights, protections and immunities granted to them under the Security Agreement, all of which are incorporated by reference herein mutatis mutandis.

        IN WITNESS WHEREOF, the New Pledgor has caused this Joinder Agreement to be executed and delivered by its duly authorized officer as of the date first above written.

		[NEW PLEDGOR]
		By:	Name: Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION as Collateral Agent
By:	Name: Title:
By:	Name: Title:

[Schedules to be attached]

EXHIBIT 4

[Form of]

CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS

        This Control Agreement Concerning Securities Accounts (this "Control Agreement"), dated as of [                        ], by and among [                        ] (the "Pledgor"), UBS AG, Stamford Branch as Collateral Agent ("UBS"), and [            ] (the "Securities Intermediary"), is delivered pursuant to Section 3.4(c) of that certain security agreement (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Security Agreement"), dated as of [                        ], made by the Pledgor and each of the Guarantors listed on the signature pages thereto in favor of UBS AG, Stamford Branch and Wachovia Bank, National Association as Collateral Agents (collectively, the "Collateral Agents"), as pledgees, assignees and secured parties and that certain [Indenture], dated as of [                        ], made by Pledgor and each of the Guarantors referred to therein in favor of The Bank of New York, as Collateral Agent and Indenture Trustee (the "Indenture Trustee") and a secured party. This Control Agreement is for the purpose of perfecting the security interests of the Collateral Agents and the Indenture Trustee granted by the Pledgor in the Designated Accounts described below. All references herein to the "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York. Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Security Agreement.

        Section 1.    Confirmation of Establishment and Maintenance of Designated Accounts.    The Securities Intermediary hereby confirms and agrees that (i) the Securities Intermediary has established for the Pledgor and maintains the account(s) listed in Schedule I annexed hereto (such account(s), together with each such other securities account maintained by the Pledgor with the Securities Intermediary collectively, the "Designated Accounts" and each a "Designated Account"), (ii) each Designated Account will be maintained in the manner set forth herein until termination of this Control Agreement, (iii) this Control Agreement is the valid and legally binding obligation of the Securities Intermediary, (iv) the Securities Intermediary is a "securities intermediary" as defined in Article 8-102(a)(14) of the UCC, (v) each of the Designated Accounts is a "securities account" as such term is defined in Section 8-501(a) of the UCC and (vi) all securities or other property underlying any financial assets which are credited to any Designated Account shall be registered in the name of the Securities Intermediary, endorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to any Designated Account be registered in the name of the Pledgor, payable to the order of the Pledgor or specially endorsed to the Pledgor, except to the extent the foregoing have been specially endorsed to the Securities Intermediary or in blank.

        Section 2.    Controlling Party.    As used herein, "Controlling Party" means UBS or its designee until such time as UBS or its designee has provided Bank with a written notice substantially in the form of Exhibit A hereto that Collateral Agents have ceased to be the Controlling Party hereunder (such notice being the "Controlling Party Notice"), "Controlling Party" means the Indenture Trustee. It is understood and agreed hereby that Bank shall rely exclusively on a Controlling Party Notice as to the determination of whether the Collateral Agents or the Indenture Trustee is the Controlling Party hereunder and shall be under no obligation to make any independent investigation thereof.

        Section 3.    "Financial Assets" Election.    All parties hereto agree that each item of Investment Property and all other property held in or credited to any Designated Account (the "Account Property") shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the UCC.

        Section 4.    Entitlement Order.    Upon receipt of a Notice of Sole Control delivered pursuant to Section 10(i) hereof together with an "entitlement order" (within the meaning of Section 8-102(a)(8) of the UCC) issued by the Controlling Party and relating to any financial asset maintained in one or more of the Designated Accounts, the Securities Intermediary shall comply with such entitlement order without further consent by the Pledgor or any other person. Prior to receipt of such Notice of Sole

Control and "entitlement order", the Securities Intermediary shall comply with instructions directing the Securities Intermediary with respect to the sale, exchange or transfer of any Account Property held in each Designated Account originated by a Pledgor, or any representative of, or investment manager appointed by, a Pledgor. The Securities Intermediary shall comply with, and is fully entitled to rely upon, any entitlement order from the Controlling Party, even if such entitlement order is contrary to any entitlement order that the Pledgor may give or may have given to the Securities Intermediary.

        Section 5.    Subordination of Lien; Waiver of Set-Off.    The Securities Intermediary hereby agrees that any security interest in, lien on, encumbrance, claim or (except as provided in the next sentence) right of setoff against, any Designated Account or any Account Property it now has or subsequently obtains shall be subordinate to the security interest of the Controlling Party in the Designated Accounts and the Account Property therein or credited thereto. The Securities Intermediary agrees not to exercise any present or future right of recoupment or set-off against any of the Designated Accounts or to assert against any of the Designated Accounts any present or future security interest, banker's lien or any other lien or claim (including claim for penalties) that the Securities Intermediary may at any time have against or in any of the Designated Accounts or any Account Property therein or credited thereto; provided, however, that the Securities Intermediary may set off all amounts due to the Securities Intermediary in respect of its customary fees and expenses for the routine maintenance and operation of the Designated Accounts, including overdraft fees and amounts advanced to settle authorized transactions.

        Section 6.    Choice of Law.    Both this Control Agreement and the Designated Accounts shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary's jurisdiction and the Designated Accounts (as well as the security entitlements related thereto) shall be governed by the laws of the State of New York.

        Section 7.    Conflict with Other Agreements; Amendments.    As of the date hereof, there are no other agreements entered into between the Securities Intermediary and the Pledgor with respect to any Designated Account or any security entitlements or other financial assets credited thereto (other than standard and customary documentation with respect to the establishment and maintenance of such Designated Accounts). The Securities Intermediary and the Pledgor will not enter into any other agreement with respect to any Designated Account unless the Controlling Party shall have received prior written notice thereof. The Securities Intermediary and the Pledgor have not and will not enter into any other agreement with respect to (i) creation or perfection of any security interest in or (ii) control of security entitlements maintained in any of the Designated Accounts or purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders with respect to any Account Property held in or credited to any Designated Account as set forth in Section 4 hereof without the prior written consent of the Controlling Party acting in their sole discretion. In the event of any conflict with respect to control over any Designated Account between this Control Agreement (or any portion hereof) and any other agreement now existing or hereafter entered into, the terms of this Control Agreement shall prevail. No amendment or modification of this Control Agreement or waiver of any rights hereunder shall be binding on any party hereto unless it is in writing and is signed by all the parties hereto.

        Section 8.    Certain Agreements.

        (i)    As of the date hereof, the Securities Intermediary has furnished to the Controlling Party the most recent account statement issued by the Securities Intermediary with respect to each of the Designated Accounts and the financial assets and cash balances held therein, identifying the financial assets held therein in a manner acceptable to the Controlling Party. Each such statement accurately reflects the assets held in such Designated Account as of the date thereof.

        (ii)   The Securities Intermediary will, upon its receipt of each supplement to the Security Agreement signed by the Pledgor and identifying one or more financial assets as "Pledged Collateral," enter into its records, including computer records, with respect to each Designated

Account a notation with respect to any such financial asset so that such records and reports generated with respect thereto identify such financial asset as "Pledged."

        Section 9.    Notice of Adverse Claims.    Except for the claims and interest of the Collateral Agent, the Indenture Trustee and of the Pledgor in the Account Property held in or credited to the Designated Accounts, the Securities Intermediary on the date hereof does not know of any claim to, security interest in, lien on, or encumbrance against, any Designated Account or Account Property held in or credited thereto and does not know of any claim that any person or entity other than the Controlling Party has been given "control" (within the meaning of Section 8-106 of the UCC) of any Designated Account or any such Account Property. If the Securities Intermediary becomes aware that any person or entity is asserting any lien, encumbrance, security interest or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process or any claim of control) against any of the Account Property held in or credited to any Designated Account, the Securities Intermediary shall promptly notify the Controlling Party and the Pledgor thereof.

        Section 10.    Maintenance of Designated Accounts.    In addition to the obligations of the Securities Intermediary in Section 4 hereof, the Securities Intermediary agrees to maintain the Designated Accounts as follows:

        (i)    Notice of Sole Control.    If at any time the Controlling Party deliver to the Securities Intermediary a notice substantially in the form of Exhibit B hereto instructing the Securities Intermediary to terminate Pledgor's access to any Designated Account (the "Notice of Sole Control"), the Securities Intermediary agrees that, after receipt of such notice, it will take all instructions with respect to such Designated Account solely from the Controlling Party, terminate all instructions and orders originated by the Pledgor with respect to the Designated Accounts or any Account Property therein, and cease taking instructions from Pledgor, including, without limitation, instructions for investment, distribution or transfer of any financial asset maintained in any Designated Account. Permitting settlement of trades pending at the time of receipt of such notice shall not constitute a violation of the immediately preceding sentence.

        (ii)    Voting Rights.    Until such time as the Securities Intermediary receives a Notice of Sole Control, the Pledgor, or an investment manager on behalf of the Pledgor, shall direct the Securities Intermediary with respect to the voting of any financial assets credited to any Designated Account.

        (iii)    Statements and Confirmations.    The Securities Intermediary will send copies of all statements and other correspondence (excluding routine confirmations) concerning any Designated Account or any financial assets credited thereto simultaneously to each of the Pledgor and the Controlling Party at the address set forth in Section 12 hereof. The Securities Intermediary will provide to the Controlling Party, upon the Controlling Party' request therefor from time to time and, in any event, as of the last business day of each calendar month, a statement of the market value of each financial asset maintained in each Designated Account. The Securities Intermediary shall not change the name or account number of any Designated Account without the prior written consent of the Controlling Party.

        (iv)    Perfection in Certificated Securities.    The Securities Intermediary acknowledges that, in the event that it should come into possession of any certificate representing any security or other Account Property held in or credited to any of the Designated Accounts, the Securities Intermediary shall retain possession of the same on behalf and for the benefit of the Controlling Party and such act shall cause the Securities Intermediary to be deemed holding such certificate for the Controlling Party, if necessary to perfect the Controlling Party' security interest in such securities or assets. The Securities Intermediary hereby acknowledges its receipt of a copy of the Security Agreement, which shall also serve as notice to the Securities Intermediary of a security interest in collateral held on behalf and for the benefit of the Controlling Party.

        Section 11.    Successors; Assignment.    The terms of this Control Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors and permitted assignees.

        Section 12.    Notices.    Any notice, request or other communication required or permitted to be given under this Control Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below.

If to Pledgor:	[                                        ] [Address] Attention: Telecopy: Telephone:
with copy to:	[                                        ] [Address] Attention: Telecopy: Telephone:
If to Securities Intermediary:	[                                        ] [                                        ] [                                        ] Attention: Telecopy: Telephone:
If to any of the Collateral Agents:	UBS AG, Stamford Branch 677 Washington Boulevard Stamford, Connecticut 06901 Attention: Telecopy: Telephone:
with a copy to:	Latham &Watkins LLP 233 South Wacker Drive Sears Tower, Suite 5800 Chicago, IL 60606 Attention: Donald Schwartz Telecopy: (312) 993-9767 Telephone: (312) 876-7631
If to Indenture Trustee:	The Bank of New York [address] Attention: Telecopy: Telephone:
with a copy to:	[                                        ] [address] Attention: [                                        ] Telecopy: [                                        ] Telephone: [                                        ]

        Any party may change its address for notices in the manner set forth above.

        Section 13.    Termination.

        (i)    Except as otherwise provided in this Section 13, the obligations of the Securities Intermediary hereunder and this Control Agreement shall continue in effect until the security interests of both the Collateral Agents and the Indenture Trustee in the Designated Accounts and any and all Account Property held therein or credited thereto have been terminated pursuant to the terms of the Security Agreement and the Indenture and the Controlling Party has notified the Securities Intermediary of such termination in writing. The Controlling Party agrees promptly to provide a Notice of Termination substantially in the form of Exhibit C hereto to the Securities Intermediary upon the request of the Pledgor on or after the termination of the Collateral Agents' or Indenture Trustee's security interest, as applicable, pursuant to the terms of the Security Agreement or Indenture, as applicable. The termination of this Agreement shall not terminate the Designated Accounts or alter the obligations of the Securities Intermediary to the Pledgor pursuant to any other agreement with respect to the Designated Accounts.

        (ii)   The Securities Intermediary, acting alone, may terminate this Control Agreement at any time and for any reason by written notice delivered to the Controlling Party and the Pledgor not less than thirty (30) days prior to the effective termination date.

        (iii)  Prior to any termination of this Control Agreement pursuant to this Section 13, the Securities Intermediary hereby agrees that it shall promptly take, at Pledgor's sole cost and expense, all reasonable actions necessary to facilitate the transfer of any Account Property in or credited to the Designated Accounts as follows: (i) in the case of a termination of this Control Agreement under Section 13(i), to the institution designated in writing by Pledgor; and (ii) in all other cases, to the institution designated in writing by the Controlling Party.

        Section 13.    Fees and Expenses.    The Securities Intermediary agrees to look solely to the Pledgor for payment of any and all fees, costs, charges and expenses incurred or otherwise relating to the Designated Accounts and services provided by the Securities Intermediary hereunder (collectively, the "Account Expenses"), and the Pledgor agrees to pay such Account Expenses to the Securities Intermediary on demand therefor. The Pledgor acknowledges and agrees that it shall be, and at all times remains, solely liable to the Securities Intermediary for all Account Expenses.

        Section 14.    Severability.    If any term or provision set forth in this Control Agreement shall be invalid or unenforceable, the remainder of this Control Agreement, other than those provisions held invalid or unenforceable, shall be construed in all respects as if such invalid or unenforceable term or provision were omitted.

        Section 15.    Counterparts.    This Control Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Control Agreement by signing and delivering one or more counterparts.

[signature page follows]

[                                        ], as Pledgor
By:	Name: Title:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
[                                        ], as Securities Intermediary
By:	Name: Title:

SCHEDULE I

Designated Account(s)

Exhibit A

CONTROLLING PARTY NOTICE

[Letterhead of UBS or its designee]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concerning Securities Account Concentration Account Agreement dated as of                        , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts. We hereby give you notice that the rights of the Collateral Agents under the Control Agreement have terminated.

Very truly yours,

UBS AG, STAMFORD BRANCH,
Collateral Agent

By

Name:
Title:

Exhibit B

NOTICE OF SOLE CONTROL

[Letterhead of applicable Controlling Party]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concentration Securities Accounts dated as of                        , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts.

        This is to notify [                        ] (the "Securities Intermediary") that the Designated Accounts are now under the exclusive control of the undersigned. The Securities Intermediary is hereby instructed to cease complying with instructions given by or on behalf of Pledgor relating to the Designated Accounts, to cease distributing interest earned on property in the Designated Accounts to Pledgor and to refuse to accept any other instructions from Pledgor intended to exercise any authority with respect to the Designated Accounts unless instructed by the undersigned as Controlling Party.

        All future instructions on the Designated Accounts shall be given solely on behalf of the undersigned until the undersigned has notified the Bank in writing that the Agreement, or the undersigned's security interest in the Designated Accounts, is terminated.

	UBS AG, STAMFORD BRANCH, as Collateral Agent(1)
	By
	Name: Title:
	By
	Name: Title:
	THE BANK OF NEW YORK, as Indenture Trustee(2)
	By
	Name: Title:
cc:        Pledgors

(1)

Included only if prior to delivery of the Controlling Party Notice.

(2)

Included only if after delivery of the Controlling Party Notice.

Exhibit C

NOTICE OF TERMINATION

[Letterhead of applicable Controlling Party]

Date:                        , 20            

To:
	Attention:
	Facsimile:

RE:

Control Agreement Concerning Securities Accounts dated as of                        , 2006

Ladies and Gentlemen:

        Reference is made to the Control Agreement Concentration Securities Accounts dated as of                        , 2006 (as amended, restated, supplemented or otherwise modified from time, the "Control Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Control Agreement) among [                        ], as Pledgor, UBS AG, STAMFORD BRANCH, as Collateral Agent, and you regarding the Designated Accounts.

        The undersigned hereby give you notice that the Control Agreement is terminated and that you have no further obligations to the Controlling Party pursuant to such Agreement. Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to the Designated Accounts from the Pledgor. This notice terminates any obligations you may have to the undersigned with respect to such accounts, however nothing contained in this notice shall alter any obligations which you may otherwise owe to the Pledgor pursuant to any other agreement.

	UBS AG, STAMFORD BRANCH, as Collateral Agent(3)
	By
	Name: Title:
	By
	Name: Title:
	THE BANK OF NEW YORK, as Indenture Trustee(4)
	By
	Name: Title:
cc:        Pledgors

(3)

Included only if prior to delivery of the Controlling Party Notice.

(4)

Included only if after delivery of the Controlling Party Notice.

EXHIBIT 5

Form of Deposit Account Control Agreement

[see document # CH\818563.5 attached hereto]

EXHIBIT 6

[Form of]

COPYRIGHT SECURITY AGREEMENT

Copyright Security Agreement, dated as of [                        ], by Linens 'n Things, Inc. (the "Pledgor"), in favor of UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION, in their capacities as Collateral Agents pursuant to the Credit Agreement (in such capacity, the "Collateral Agents").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agents pursuant to which the Pledgor is required to execute and deliver this Copyright Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agents, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Pledgor hereby agrees with the Collateral Agents as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Copyright Collateral.    Pledgor hereby pledges and grants to the Collateral Agents for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor (collectively, the "Copyright Collateral"):

        (a)   Copyrights of Pledgor listed on Schedule I attached hereto;

        (b)   Copyright Licenses of Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Collateral Agents pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights and remedies of the Collateral Agents with respect to the security interest in the Copyright made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement or the other Loan Documents, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Copyright Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agents shall promptly (but in any event within five (5) Business Days) execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Copyright under this Copyright Security Agreement.

        SECTION 6.    Counterparts.    This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agents pursuant to this Agreement and the exercise of any right or remedy by the applicable Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, the Pledgor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

Very truly yours, Linens 'n Things, Inc.
By:	Name: Title:

Accepted and Agreed:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent
By:	Name: Title:

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

OWNER	REGISTRATION NUMBER	TITLE
Linens 'n Things, Inc.	VA-1-056-560	Moon and Stars

Copyright Applications:

OWNER
TITLE

EXHIBIT 7

[Form of]

PATENT SECURITY AGREEMENT

Patent Security Agreement, dated as of [                        ], by [            ] and [                        ] ("Pledgor"), in favor of UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION, in their capacities as Collateral Agents pursuant to the Credit Agreement (in such capacity, the "Collateral Agents").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agents pursuant to which the Pledgor is required to execute and deliver this Patent Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agents, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Pledgor hereby agrees with the Collateral Agents as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Patent Collateral.    Pledgor hereby pledges and grants to the Collateral Agents for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor (collectively, the "Patent Collateral"):

        (a)   Patents of Pledgor listed on Schedule I attached hereto;

        (b)   Patent Licenses of Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Patent Security Agreement is granted in conjunction with the security interest granted to the Collateral Agents pursuant to the Security Agreement and Pledgor hereby acknowledges and affirm that the rights and remedies of the Collateral Agents with respect to the security interest in the Patents made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement or the other Loan Documents, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Patent Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agents shall promptly (but in any event within five Business Days) execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Patents under this Patent Security Agreement.

        SECTION 6.    Counterparts.    This Patent Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Patent Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agents pursuant to this Agreement and the exercise of any right or remedy by the applicable Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, Pledgor has caused this Patent Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		[PLEDGOR](1)
		By:	Name: Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent
By:	Name: Title:

(1)

A separate document needs to be executed by each Borrower and Guarantor which owns a pledged Patent or Patent License.

SCHEDULE I
to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS(2)

Patent Registrations:

OWNER
REGISTRATION NUMBER NAME

Patent Applications:

OWNER
APPLICATION NUMBER NAME

(2)

Note to attorney: These schedules include the minimum information required to perfect in the PTO. A conformed version of perfection certificate would be adequate, provided it contains this information.

EXHIBIT 8

[Form of]

TRADEMARK SECURITY AGREEMENT

Trademark Security Agreement, dated as of [                        ], by LNT Merchandising Company, LLC ("Pledgor"), in favor of UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION, in their capacities as Collateral Agents pursuant to the Credit Agreement (in such capacity, the "Collateral Agents").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agents pursuant to which the Pledgor is required to execute and deliver this Trademark Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agents, for the benefit of the Secured Parties, to enter into the Credit Agreement, the Pledgor hereby agrees with the Collateral Agents as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Trademark Collateral.    Pledgor hereby pledges and grants to the Collateral Agents for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor (collectively, the "Trademark Collateral"):

        (a)   Trademarks of Pledgor listed on Schedule I attached hereto;

        (b)   Trademark Licenses of Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agents pursuant to the Security Agreement and Pledgors hereby acknowledge and affirm that the rights and remedies of the Collateral Agents with respect to the security interest in the Trademarks and Trademark Licenses made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement or the other Loan Documents, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Trademark Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agents shall promptly (but in any event within five Business Days) execute, acknowledge, and deliver to Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Trademarks under this Trademark Security Agreement.

        SECTION 6.    Counterparts.    This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agents pursuant to this Agreement and the exercise of any right or remedy by the applicable Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens "n Things, Inc., Linens Holding Co., Linens "n Things Center, Inc., Linens "n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Toronto Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

        IN WITNESS WHEREOF, Pledgor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		LNT Merchandising Company, LLC
		By:	Name: Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH, as Collateral Agent
By:	Name: Title:
By:	Name: Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agent
By:	Name: Title:

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS

[MORGAN LEWIS TO CONFIRM]

Registered U.S. Trademarks Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
LINENS 'N THINGS	LNT Merchandising Company, LLC	Registered, USA, 42 Int.	72/370206 0934171	09-Sep-1970 16-May-1972
LNT	LNT Merchandising Company, LLC	Registered, USA, Int. 20,24,27 and 35	75/546927 2337611	01-Sep-1998 04-Apr-2000
DREAM BIG, PAY LITTLE	LNT Merchandising Company, LLC	Registered, USA 35	78/497112 3035124	08-Oct-2004 27-Dec-2005
Pending U.S. Applications Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
ATTITUDE	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427854	01-Jun-2004
ATTITUDES	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427863	01-Jun-2004
HOTEL LIVING	LNT Merchandising Company, LLC	Pending, USA 24 Int., 25 Int., 27 Int.	78/438409	21-Jun-2004
LINENS-N-THINGS and DESIGN	LNT Merchandising Company, LLC	Pending, USA 35	78/425295	26-May-2004
[MAKE YOUR HOME HAPPY	LNT Merchandising Company, LLC]	Pending, USA 35	78/257756	03-Jun-2003]
SPA-TEX	LNT Merchandising Company, LLC	Published, USA 24 Int., 25 Int., 27 Int.	78/389104	23-Mar-2004

EXHIBIT 9

FORM OF ARMORED CAR CONTROL AGREEMENTS

[see document # CH\ 845627.1 attached hereto]

EXHIBIT 10

[Form of]

NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY

CERTIFIED MAIL—RETURN RECEIPT REQUESTED

        [                        ], 200 [    ]

TO:

[Bailee's Name]
[Bailee's Address]

Re:

Linens 'n Things, Inc. and Linens 'n Things Center, Inc.

Ladies and Gentlemen:

        In connection with that certain Security Agreement, dated as of February     , 2006 (the "Security Agreement"), made by Linens 'n Things, Inc., a Delaware corporation and Linens 'n Things Center, Inc., a California corporation, the Guarantors party thereto, UBS AG, Stamford Branch as Collateral Agent ("UBS") and Wachovia Bank, National Association as Collateral Agent (together with UBS, the "Collateral Agents"), we have granted to the Collateral Agents a security interest in substantially all of our personal property, including our inventory. In connection that certain Security Agreement, dated as of February 14, 2006, made by Linens 'n Things Center, Inc., a California corporation, the Guarantors party thereto, and The Bank of New York as Collateral Agent and Indenture Trustee (the "Indenture Trustee"), we have granted to the Indenture Trustee a security interest in substantially all of our personal property, including our inventory.

        As used herein, "Controlling Party" means UBS or its designee until such time as UBS or its designee has provided you with a written notice that Collateral Agents have ceased to be the Controlling Party hereunder (such notice being the "Controlling Party Notice"), "Controlling Party" means the Indenture Trustee. It is understood and agreed hereby that you shall rely exclusively on a Controlling Party Notice as to the determination of whether the Collateral Agents or the Indenture Trustee is the Controlling Party hereunder and shall be under no obligation to make any independent investigation thereof.

        This letter constitutes notice to you, and your signature below will constitute your acknowledgment, of the Controlling Party's continuing first priority security interest in all goods with respect to which you are acting as bailee. Until you are notified in writing to the contrary by Controlling Party, however, you may continue to accept instructions from us regarding the delivery of goods stored by you.

        Your acknowledgment also constitutes a waiver and release, for the Collateral Agents' and Indenture Trustee's benefit, of any and all claims, liens, including bailee's liens, and demands of every kind which you have or may later have against such goods (including any right to include such goods in any secured financing to which you may become party).

        In order to complete our records, kindly have a duplicate of this letter signed by an officer of your company and return same to us at your earliest convenience.

Receipt acknowledged, confirmed and approved:		Very truly yours,
[BAILEE]		[APPLICABLE PLEDGOR]
By:	Name: Title:	By:	Name: Title:

cc:

Collateral Agents
Indenture Trustee

QuickLinks

SECURITY AGREEMENT by LINENS 'N THINGS, INC. and LINENS 'N THINGS CENTER, INC., as Borrowers and THE GUARANTORS PARTY HERETO and UBS AG, STAMFORD BRANCH, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Collateral Agents

EX-10.5

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.5

MANAGEMENT SERVICES AGREEMENT

dated as of February 14, 2006

among

LINENS 'N THINGS, INC.,

LINENS HOLDING CO.,

APOLLO MANAGEMENT V, L.P.,

NRDC LINENS B LLC

and

SILVER POINT CAPITAL FUND INVESTMENTS LLC

MANAGEMENT SERVICES AGREEMENT

This MANAGEMENT SERVICES AGREEMENT is dated as of February 14, 2006 (this "Agreement") among Linens 'n Things, Inc., a Delaware corporation ("Linens"), Linens Holding Co., a Delaware corporation formerly known as Laundry Holding Co. ("Holding" and, together with Linens, the "Companies"), Apollo Management V, L.P., a Delaware limited partnership (together with its affiliates, "Apollo"), NRDC Linens B LLC, a Delaware limited liability company ("NRDC"), and Silver Point Capital Fund Investments LLC, a Delaware limited liability company ("Silver Point" and, together with Apollo and NRDC, the "Managers").

        WHEREAS, Holding has on the date hereof consummated the acquisition of Linens (the "Acquisition") pursuant to that certain Agreement and Plan of Merger dated as of November 8, 2005 (the "Merger Agreement") among Holding, Laundry Merger Sub Co. and Linens;

        WHEREAS, reference is hereby made to those certain letter agreements dated as of November 8, 2005 among the Companies and each of Apollo (the "Apollo Commitment Letter"), NRDC Real Estate Advisors I LLC, an affiliate of NRDC (the "NRDC Commitment Letter") and Silver Point (the "Silver Point Commitment Letter" and together with the Apollo Commitment Letter and the NRDC Commitment Letter, the "Commitment Letters"); and

        WHEREAS, this Agreement has been approved by the each of the Companies' board of directors.

        NOW, THEREFORE, in consideration of their mutual promises made herein, and for other good and valuable consideration, receipt of which is hereby acknowledged by each party, the parties, intending to be legally bound, hereby agree as follows:

1.    Retention of Services.

        1.1    General Services.    Subject to the terms and conditions hereof, Apollo hereby agrees, at the Companies' request, to provide investment banking, management, consulting and financial planning services to the Companies on an ongoing basis in connection with the operation and growth of the Companies and their subsidiaries in the ordinary course of their businesses during the term of this Agreement (the "General Services").

        1.2    Real Estate Services.    Subject to the terms and conditions hereof, NRDC hereby agrees, at the Companies' request, to provide real estate services to the Companies (the "Real Estate Services"), including without limitation to advise in connection with the opening of new stores and temporary or seasonal locations and the closing or relocation of stores, and cooperation and consultation with the Companies in order to assist the Companies in developing their real estate plan and strategy.

        1.3    Major Transaction Services.    Subject to the terms and conditions hereof, Apollo hereby agrees, at the Companies' request, to provide financial advisory and investment banking services to the Companies in connection with major financial transactions that may be undertaken by the Companies or their subsidiaries from time to time in the future (the "Major Transaction Services"). The scope of the Major Transaction Services shall be such as reasonably requested by the Companies and agreed to by Apollo from time to time.

2.    Compensation.

        2.1    General Services Fee.    In consideration of the General Services, the Companies shall pay Apollo an annual fee payable in cash equal to $1,500,000 (as such may be adjusted hereunder, the "Apollo Annual Fee"); provided, however, that in the event that (a) NRDC enters into a real estate services agreement with one or both of the Companies, (b) NRDC receives any payments or other compensation (other than the NRDC Annual Fee and other than pursuant to Section 2.6 hereof), whether directly or indirectly, in connection with providing the Real Estate Services or (c) NRDC fails to contribute its Commitment (as defined in the NRDC Equity Commitment Letter), then the Apollo Annual Fee shall be increased by $500,000.

        2.2    Real Estate Services Fee.    In consideration of the Real Estate Services, the Companies shall pay NRDC an annual fee payable in cash equal to $500,000 (as such may be adjusted hereunder, the

"NRDC Annual Fee" and together with the Apollo Annual Fee, the "Annual Fees"); provided, however, that in the event that (a) NRDC or an affiliate thereof enters into a real estate services agreement with one or both of the Companies, (b) NRDC or an affiliate thereof receives any payments or other compensation (other than the NRDC Annual Fee and other than pursuant to Section 2.6 hereof), whether directly or indirectly, in connection with providing the Real Estate Services or (c) NRDC or an affiliate thereof fails to contribute its Commitment (as defined in the NRDC Equity Commitment Letter), then the Companies shall have no obligation to pay to NRDC, and NRDC shall have no right to receive, the NRDC Annual Fee. In furtherance of the immediately preceding clause (b), NRDC hereby agrees to provide the Companies with written notice of the amount of such payments or compensation, the person providing such and the reason provided promptly, and in any event within five business days following receipt thereof or agreement with respect thereto.

        2.3    Payment of Annual Fees.    The Annual Fees shall be payable by the Companies in equal monthly installments in advance, on the first business day of each month commencing on the first such day following the date hereof, without regard to the amount of services actually performed by any Manager.

        2.4    Major Transaction Services Fee.    In consideration of any Major Transaction Services provided by Apollo from time to time, the Companies shall pay Apollo fees as agreed by Apollo and the Companies; provided, however, that, notwithstanding Section 6.6 hereof, such fees shall be subject to the approval of a majority of the disinterested directors of Holding.

        2.5    Transaction Fee.    In connection with the services provided to the Companies in connection with Acquisition and the transactions contemplated by, and pursuant to the terms of, the Merger Agreement, the Companies agree to pay to the Managers a transaction fee in the aggregate amount of $15,000,000 (the "Transaction Fee"), plus reimbursement to Apollo of out-of-pocket expenses incurred by Apollo in connection with the services provided in connection with the Acquisition and the transactions contemplated by, and pursuant to the terms of, the Merger Agreement. The transaction fee and all out-of-pocket expenses to be paid pursuant to this Section 2.5 shall be earned upon the Closing (as such term is defined in the Merger Agreement) and shall be payable in cash in accordance with the following: (a) to Apollo, $10,120,500 (the "Apollo Transaction Fee"), plus reimbursement of Apollo's of out-of-pocket expenses; (b) to NRDC, $3,373,500 (the "NRDC Transaction Fee"); and (c) to Silver Point, $1,506,000 (the "Silver Point Transaction Fee" and together with the Apollo Transaction Fee and the NRDC Transaction Fee, the "Transaction Fees"); provided, however, that in the event NRDC (or an affiliate thereof) or Silver Point or both fails to contribute to Linens Investors, LLC their respective Commitments, the Companies shall have no obligation to pay to such Manager or Managers, and such Manager or Managers shall have no right to receive, such Manager's Transaction Fee; and provided, further, that in such case the Apollo Transaction Fee shall be increased by an amount equal to the Transaction Fee of the Manager or Managers that fail to make their respective Commitments. Subject to the foregoing, the Transaction Fees shall be paid to each Manager, and the reimbursement of Apollo's out-of-pocket expenses shall be paid to Apollo, by the Companies within three business days following the Closing.

        2.6    Expenses.    In addition to the fees to be paid to the Managers under Sections 2.1, 2.2, 2.4 and 2.5 hereof, the Companies shall pay to, or on behalf of, the Managers, promptly as billed, an amount equal to all out-of-pocket expenses incurred by the Managers in connection with the services requested by the Companies to be provided by such Manager pursuant to the terms of this Agreement. Such expenses shall include, among other things, fees and disbursements of counsel, travel expenses, word processing charges, messenger and duplicating services, telephone and facsimile expenses and other customary expenditures.

2

3.    Term.

        3.1    Termination.    This Agreement shall terminate on the fifth anniversary of the date hereof; provided, however, that this Agreement shall, beginning on the fourth anniversary of the date hereof, be automatically renewed for successive two-year terms if there has been no Qualified IPO (as such term is defined in that certain Stockholders' Agreement dated as of the date hereof between Holding and its stockholders); and provided, further, that in connection with a Qualified IPO, the Companies, acting at the direction of a majority of the disinterested directors thereof, shall have the option of terminating this Agreement upon payment to each Manager then performing services of the net present value of any Annual Fees, calculated at a 10% discount rate, that would otherwise be payable to such Managers absent such termination for the remainder of the five-year original term or a two-year renewal term, as applicable and; and provided, further, that notwithstanding any such renewals this Agreement shall terminate at latest on the tenth anniversary of the date hereof.

        3.2    Survival of Certain Obligations.    Notwithstanding any other provision hereof, the obligations of the Companies to pay amounts due with respect to periods prior to the termination hereof pursuant to Section 2 hereof and the provisions of Sections 4 and 5 hereof shall survive any termination of this Agreement; provided, however, that if, pursuant to Section 2.2 hereof, NRDC no longer has the right to receive the NRDC Annual Fee, it will not be paid any further monthly payments of such fee and the related increase in the Apollo Annual Fee contemplated by Section 2.1 hereof shall begin on the next monthly payment of the Apollo Annual Fee.

4.    Decisions and Authority of Managers.

        4.1    Limitation on the Managers' Liability.    The Companies reserve the right to make all decisions with regard to any matter upon which the Managers have rendered their advice and consultation, and there shall be no liability of the Managers for any such advice accepted by the Companies pursuant to the provisions of this Agreement.

        4.2    Independent Contractor.    The Managers shall act solely as independent contractors and shall have complete charge of their respective personnel engaged in the performance of the Services. As an independent contractor, each Manager shall have authority only to act as an advisor to the Companies and shall have no authority to enter into any agreement or to make any representation, commitment or warranty binding upon the Companies or to obtain or incur any right, obligation or liability on behalf of the Companies. Nothing contained in this Agreement shall constitute the Managers or any of their respective partners or members or any of their affiliates, investment managers, investment advisors or partners a partner of or joint venturer with the Companies.

5.    Indemnification.

        5.1    Indemnification; Reimbursement of Expenses.    The Companies shall: (a) indemnify each Manager and each of their respective partners and members and their respective affiliates, investment managers, investment advisors and their respective affiliates, and the partners, directors, officers, employees, agents and controlling persons of the Managers and their respective partners and their affiliates (collectively, the "Indemnified Parties"), to the fullest extent permitted by law, from and against any and all losses, claims, damages and liabilities, joint or several, to which any Indemnified Party may become subject, directly or indirectly caused by, related to or arising out of the Services or any other advice or services contemplated by this Agreement or the engagement of the Manager pursuant to, and the performance by the Managers of the Services contemplated by, this Agreement; and (b) promptly reimburse each Indemnified Party for all costs and expenses (including reasonable attorneys' fees and expenses), as incurred, in connection with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom, whether or not such Indemnified Party is a party, whether or not such claim, action or proceeding is initiated or brought by or on behalf of the Companies and whether or not resulting in any liability.

3

        5.2    Limited Liability.    The Companies shall not be liable pursuant to Section 5.1 hereof with respect to a Manager to the extent that such loss, claim, damage, liability, cost or expense is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such Manager's willful misconduct or gross negligence. The Companies further agree that no Indemnified Party shall have any liability (whether direct or indirect, in contract, tort or otherwise) to the Companies, holders of their securities or their creditors related to or arising out of the engagement of the Managers pursuant to, or the performance by the Managers of the Services contemplated by, this Agreement.

6.    Miscellaneous.

        6.1    Assignment.    None of the parties hereto shall assign this Agreement or the rights and obligations hereunder, in whole or in part, without the prior written consent of Apollo. Subject to the immediately preceding sentence, this Agreement will be binding upon and inure solely to the benefit of the parties hereto and their respective successors and assigns, and no other person shall acquire or have any right hereunder or by virtue hereof.

        6.2    Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware as applied to contracts made and performed within the State of Delaware without regard to principles of conflict of laws.

        6.3    Joint and Several Obligations.    The obligations of the Companies under this Agreement are the joint and several obligations of Linens and Holding. The obligations of the Managers are several and not joint.

        6.4    Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any such terms, provisions, covenants and restrictions which may be hereafter declared invalid, illegal, void or unenforceable.

        6.5    Entire Agreement.    This Agreement contains the entire agreement between the parties with respect to the subject matter of this Agreement and supersedes all written or verbal representations, warranties, commitments and other understandings with respect to the subject matter of this Agreement prior to the date of this Agreement.

        6.6    Further Assurances.    Each party hereto agrees to use all reasonable efforts to obtain all consents and approvals and to do all other things necessary to consummate the transactions contemplated by this Agreement. The parties agree to take such further action and to deliver or cause to be delivered any additional agreements or instruments as any of them may reasonably request for the purpose of carrying out this Agreement and the agreements and transactions contemplated hereby.

        6.7    Attorneys' Fees.    In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party, as determined by a court of competent jurisdiction, shall be entitled to recover reasonable and documented attorneys' fees in addition to any other available remedy.

        6.8    Headings.    The headings in this Agreement are for convenience and reference only and shall not limit or otherwise affect the meaning hereof.

4

        6.9    Amendment and Waiver.    This Agreement may be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may be given, provided that the same are in writing and signed by each of the parties hereto.

        6.10    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[Signature pages follow.]

5

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

Companies
LINENS HOLDING CO.
By:	Name: Title:
LINENS 'N THINGS, INC.
By:	Name: Title:
Managers
APOLLO MANAGEMENT V, L.P.
By:	Name: Title:

Signature Page to Management Services Agreement

NRDC LINENS B LLC
By:	Name: Robert C. Baker Title: Managing Director
- -and -
By:	Name: William Mack Title: Managing Director
SILVER POINT CAPITAL FUND INVESTMENTS LLC
By:	Name: Title:

Signature Page to Management Services Agreement

QuickLinks

MANAGEMENT SERVICES AGREEMENT

EX-10.6

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.6

EXECUTION COPY

INTERCREDITOR AGREEMENT

        This INTERCREDITOR AGREEMENT ("Agreement"), is dated as of February 14, 2006, and entered into by and among LINENS 'N THINGS, INC., a Delaware corporation (the "LNT"), LINENS HOLDING CO., a Delaware corporation ("Holdings"), LINENS 'N THINGS CENTER, INC., a California corporation (the "LNT Center"; and together with LNT. the "Companies" and each individually a " Company"), LINENS 'N THINGS CANADA CORP, a Nova Scotia corporation (the "Canadian Borrower"; and together with the Companies, the "Borrowers" and each individually a "Borrower"), certain subsidiaries of Holdings (the "Subsidiary Guarantors" and together with Holdings, the "Guarantors"), UBS AG, STAMFORD BRANCH, as Administrative Agent (the "Administrative Agent"), UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION, in their capacities as US co-collateral agents for the Revolving Credit Lenders referenced below (including their successors and assigns from time to time, collectively referred to as the "US Revolving Credit Collateral Agent"), UBS AG CANADA BRANCH and WACHOVIA CAPITAL FINANCE CORPORATION (CANADA), in their capacities as Canadian co-collateral agents for the Revolving Credit Lenders (including their successors and assigns from time to time, collectively referred to as the "Canadian Revolving Credit Collateral Agent"; and together with the Administrative Agent, the US Revolving Credit Collateral Agent, collectively referred to as the "Revolving Credit Collateral Agent"), and THE BANK OF NEW YORK, in its capacity as the collateral agent under the Note Lien Security Documents referred to below (including its successors and assigns from time to time, the "Note Lien Collateral Agent"), and any future Note Lien Representative. As described in more detail in Section 8.11 hereof, this Agreement is intended to be binding on all Claimholders and Note Lien Representatives, as well as the Revolving Credit Collateral Agent and the Note Lien Collateral Agent. Capitalized terms used in this Agreement have the meanings assigned to them in Section 1 below.

RECITALS

        The Borrowers, Holdings and the other Guarantors, the lenders (the "Revolving Credit Lenders") and agents from time to time party thereto, and Revolving Credit Collateral Agent have entered into a Credit Agreement dated as of the date hereof providing for a revolving credit facility (as amended, restated, supplemented, modified, replaced or refinanced from time to time, the "Revolving Credit Agreement");

        The Companies are issuing Senior Secured Floating Rate Notes due 2014 in the aggregate principal amount not to exceed $650,000,000 million (including any related exchange notes, the "Notes") pursuant to an Indenture dated as of the date hereof (as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, the "Indenture") among the Company, the guarantors party thereto and The Bank of New York as the trustee thereunder (in such capacity and including its successors and assigns from time to time, the "Trustee") and the Note Lien Collateral Agent;

        The obligations of (i) the Companies to the Revolving Credit Claimholders are secured by Liens (as defined below) on substantially all the assets of the Companies and the Domestic Guarantors, (ii) the Canadian Borrower to the Canadian Revolving Credit Collateral Agent and certain of the other Revolving Credit Claimholders are secured by Liens (as defined below) on substantially all the assets of the Canadian Borrower and the Guarantors, and (iii) the Companies to the Note Lien Claimholders are secured by Liens (as defined below) on substantially all the assets of the Companies and the Domestic Guarantors; and

        As a condition to the closing of each of the Financing Transactions referred to below, each of the Revolving Credit Collateral Agent, the Note Lien Collateral Agents and the various Claimholders have

agreed to the relative priority of their respective Liens on the Collateral (as defined below) and certain other rights, priorities and interests as set forth in this Agreement.

AGREEMENT

        In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

I.    Definitions.

        1.1    Defined Terms.    As used in the Agreement, the following terms shall have the following meanings:

"Access Period" means (a) with respect to all Primary Real Estate Assets, the period, after the commencement of an Enforcement Period, which begins, with respect to all Primary Real Estate Assets, on the day that a Revolving Credit Collateral Agent provides the Note Lien Collateral Agent with the notice of its election to request access with respect to all Primary Real Estate Assets pursuant to Section 3.3(b) below and ends on the earliest of (i) the 180th day after such Revolving Credit Collateral Agent obtains the ability to use, take physical possession of, remove or otherwise control the use or access to the Revolving Credit Collateral located on the Primary Real Estate Assets following Enforcement plus such number of days, if any, after such Revolving Credit Collateral Agent obtains access to such Revolving Credit Collateral that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Revolving Credit Collateral located on the Primary Real Estate Assets or (ii) the date on which all or substantially all of the Revolving Credit Collateral located on the Primary Real Estate Assets is sold, collected or liquidated or (iii) the date on which the Discharge of Revolving Credit Obligations occurs and (b) with respect to each parcel of Other Real Estate, the period, after the commencement of an Enforcement Period, which begins, with respect to such parcel of Other Real Estate, on the day that a Revolving Credit Collateral Agent provides the Note Lien Collateral Agent with the notice of its election to request access with respect to such parcel of Other Real Estate pursuant to Section 3.3(b) below and ends on the earliest of (i) the 180th day after such Revolving Credit Collateral Agent obtains the ability to use, take physical possession of, remove or otherwise control the use or access to the Revolving Credit Collateral located on such Other Real Estate following Enforcement plus such number of days, if any, after such Revolving Credit Collateral Agent obtains access to such Revolving Credit Collateral that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to Revolving Credit Collateral located on such Other Real Estate or (ii) the date on which all or substantially all of the Revolving Credit Collateral located on such Other Real Estate is sold, collected or liquidated or (iii) the date on which the Discharge of Revolving Credit Obligations occurs.

"Accounts" means all now present and future "accounts" and "payment intangibles" (in each case, as defined in Article 9 of the UCC).

"Account Agreements" means any lockbox account agreement, pledged account agreement, blocked account agreement, securities account control agreement, armored car agreements, credit card processing agreement or any similar deposit or securities account agreements among the Note Lien Collateral Agent and/or Revolving Credit Collateral Agent and a Grantor and the relevant service provider, financial institution depository or securities intermediary.

"Administrative Agent" has the meaning assigned to that term in the preamble to this Agreement.

2

"Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person will be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.

"Agreement" means this Intercreditor Agreement, as amended, restated, renewed, extended, supplemented or otherwise modified from time to time.

"Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy," as now and hereafter in effect, or any successor statute.

"Bankruptcy Law" means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

"Board of Directors" means (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board, (2) with respect to a partnership, the Board of Directors of the general partner of the partnership, (3) with respect to a limited liability company, the managing member or members or any controlling committee or board of directors of such company or of the sole member or of the managing member thereof and (4) with respect to any other Person, the board or committee of such Person serving a similar function.

"Borrowers" and "Borrower" have the meanings assigned to those term in the preamble to this Agreement.

"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York City or Toronto, Canada are authorized or required by law to close.

"Canadian" means as to any Person, a Person that is created or organized under the laws of Canada or a Province or territory of Canada.

"Canadian Borrower" has the meaning assigned to that term in the preamble to this Agreement.

"Canadian Collateral" means the assets of the Canadian Borrower and Canadian Subsidiaries of Holdings covered by one or more Revolving Credit Collateral Documents and any other assets of Canadian Borrower or Canadian Subsidiaries of Holdings, real or personal, tangible or intangible, now existing or hereafter acquired, that may at any time be or become subject to a Lien in favor of the Canadian Revolving Credit Collateral Agent and all or some of the other Revolving Credit Claimholders.

"Canadian Revolving Credit Collateral Agent" has the meaning assigned to that term in the preamble to this Agreement.

"Capital Stock" means:

        (1)   in the case of a corporation, corporate stock;

        (2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

        (3)   in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests;

3

        (4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person; and

        (5)   any warrants, options or other rights to acquire any of the foregoing; but

excluding from all of the foregoing interests any debt securities which are convertible into or exchangeable for any of the foregoing equity interests, whether or not such debt securities include any right of participation with Capital Stock.

"Capital Stock Collateral" means:

        (1)   all of the Capital Stock in the Companies;

        (2)   all of the Capital Stock in the Companies' Domestic Subsidiaries (including, without limitation, Bloomington MN, L.T., Inc., LNT, Inc., LNT Services, Inc., LNT West, Inc., Vendor Finance LLC, LNT Leasing II LLC, LNT Leasing III LLC, LNT Virginia LLC, LNT Merchandising Company, LLC and Citadel LNT LLC);

        (3)   65% of the Capital Stock in the Subsidiaries that are not Domestic Subsidiaries but which are directly owned by Holdings, any of the Companies or any Domestic Subsidiary thereof;

        (4)   Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and

        (5)   substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

"Chattel Paper" means all present and future "chattel paper" (as defined in Article 9 of the UCC).

"Claimholders" means the Revolving Credit Claimholders and the Note Lien Claimholders.

"Class" means all Series of Note Lien Debt, taken together.

"Collateral" means all of the assets and property of any Grantor, whether real, personal or mixed, constituting either Revolving Credit Collateral or Note Lien Collateral.

"Companies" and "Company" have the meanings assigned to those terms in the preamble to this Agreement.

"Copyright Licenses" means any and all present and future agreements (whether or not in writing) providing for the granting of any right in, to or under Copyrights (whether the applicable Grantor is licensee or licensor thereunder).

"Copyrights" means, collectively, with respect to each Grantor, all copyrights (whether statutory or common law, whether established or registered in the United States or any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished) and all copyright registrations and applications made by such Grantor, in each case, whether now owned or hereafter created or acquired by or assigned to such Grantor, and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of such copyrights, (ii) reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable with respect thereto, including damages and

4

payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present or future infringements thereof.

"Credit Card Processing Accounts" means any accounts which are not Deposit Accounts or Securities Accounts and which are maintained by or with a person which conducts the processing of credit card payments for any of the Grantors, including all amounts reflecting any reserves or other amounts owing to any of the Grantors and which may be maintained by such processors pursuant to the respective card processing agreements.

"Credit Card Receivables" shall mean, collectively, all present and future rights of the Grantors to payment from (a) any major credit card issuer or major credit card processor arising from sales of goods or rendition of services to customers who have purchased such goods or services using a credit or debit card, (b) any major credit card issuer or major credit card processor in connection with the sale or transfer of Accounts arising pursuant to the sale of goods or rendition of services to customers who have purchased such goods or services using a credit card or a debit card, including, but not limited to, all amounts at any time due or to become due from any major credit card issuer or major credit card processor under the Credit Card Agreements (as defined in the Revolving Credit Agreement) or otherwise and (c) Private Label Credit Cards (as defined in the Revolving Credit Agreement).

"Deposit Accounts" means all present and future "deposit accounts" (as defined in Article 9 of the UCC).

"DIP Financing" has the meaning assigned to that term in Section 6.1.

"Discharge of Note Lien Obligations" means, except to the extent otherwise expressly provided in Section 5.5:

        (1)   termination or expiration of all commitments to extend credit that would constitute Note Lien Debt;

        (2)   payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the Note Lien Documents and constituting Note Lien Debt;

        (3)   discharge or cash collateralization (at the lower of (A) 105% of the aggregate undrawn amount and (b) the percentage of the aggregate undrawn amount required for release of Liens under the terms of the applicable Note Lien Document) of all outstanding letters of credit constituting Note Lien Debt; and

        (4)   payment in full in cash of all other Note Lien Obligations that are outstanding and unpaid at the time the Note Lien Debt is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time);

        If a Discharge of Note Lien Obligations occurs prior to the termination of this Agreement in accordance with Section 8.2, to the extent that additional Note Lien Obligations are incurred or Note Lien Obligations are reinstated in accordance with Section 6.4, the Discharge of Note Lien Obligations shall (effective upon the incurrence of such additional Note Lien Obligations or reinstatement of such Note Lien Obligations, as applicable) be deemed to no longer be effective.

5

"Discharge of Revolving Credit Obligations" means, except to the extent otherwise expressly provided in Section 5.5:

        (1)   termination or expiration of all commitments, if any, to extend credit that would constitute Revolving Credit Obligations;

        (2)   payment in full in cash of the principal of and interest (including interest accruing on or after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest would be allowed in such Insolvency or Liquidation Proceeding), on all Indebtedness outstanding under the Revolving Credit Loan Documents and constituting Revolving Credit Obligations;

        (3)   termination or cash collateralization (in an amount and manner reasonably satisfactory to the Revolving Credit Collateral Agent, but in no event greater than 105% of the aggregate undrawn face amount) of all letters of credit issued under the Revolving Credit Loan Documents and constituting Revolving Credit Obligations; and

        (4)   payment in full in cash of all other Revolving Credit Obligations that are outstanding and unpaid at the time the Indebtedness constituting such Revolving Credit Obligations is paid in full in cash (other than any obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities in respect of which no claim or demand for payment has been made at such time).

        If a Discharge of Revolving Credit Obligations occurs prior to the termination of this Agreement in accordance with Section 8.2, to the extent that additional Revolving Credit Obligations are incurred or Revolving Credit Obligations are reinstated in accordance with Section 6.4, the Discharge of Revolving Credit Obligations shall (effective upon the incurrence of such additional Revolving Credit Obligations or reinstatement of such Revolving Credit Obligations, as applicable) be deemed to no longer be effective.

"Disposition" has the meaning assigned to that term in Section 5.1(b).

"Domestic" means, as to any Person, a Person which is created or organized under the laws of the United States of America, any of its states or the District of Columbia.

"Enforcement" means, collectively or individually for any one of the Revolving Credit Collateral Agent or the Note Lien Collateral Agent when a Revolving Credit Default or a Note Lien Default, as the case may be, has occurred and is continuing, any action taken by such Person to repossess, or exercise any remedies with respect to, any material amount of Collateral (other than Canadian Collateral) or commence the judicial enforcement of any of the rights and remedies with respect to any Collateral under the Revolving Credit Loan Documents or the Note Lien Documents or under any applicable law, but in all cases excluding (i) the demand of the repayment of all the principal amount of any of the Obligations, (ii) the imposition of a default rate or late fee and (iii) the collection and application of, or the delivery of any activation notice with respect to, Accounts or other monies deposited from time to time in Deposit Accounts, Credit Card Processing Accounts or Securities Accounts against the Revolving Credit Obligations pursuant to the Revolving Credit Loan Documents; provided, however, the foregoing exclusion set forth in clause (iii) shall immediately cease to apply upon the earlier of (x) the Revolving Credit Collateral Agent' delivery of written notice to the Borrowers that such exclusion no longer applies, (y) the lapse of ten (10) consecutive Business Days after a Revolving Credit Default in which no "Revolving Loans" are made and no "Letters of Credit" are issued (in each case, as defined in the Revolving Credit Agreement), and (z) the termination of the Revolving Commitments pursuant to Section 8.1 (or any other applicable provision) of the Revolving Credit Agreement.

6

"Enforcement Notice" means a written notice delivered, at a time when a Revolving Credit Default or Note Lien Default has occurred and is continuing, by either the Revolving Credit Collateral Agent or the Note Lien Collateral Agent to the other such Person announcing that an Enforcement Period has commenced, specifying the relevant event of default, stating the current balance of the Revolving Credit Obligations or the current balances owing with respect to Note Lien Obligations, as the case may be, and requesting the current balance owing of the Revolving Credit Obligations or Note Lien Obligations, as the case may be.

        "Enforcement Period" means the period of time following the receipt by either the Revolving Credit Collateral Agent or the Note Lien Collateral Agent of an Enforcement Notice from the other until either (i) in the case of an Enforcement Period commenced by the Note Lien Collateral Agent, the Discharge of Note Lien Obligations, or (ii) in the case of an Enforcement Period commenced by the Revolving Credit Collateral Agent, the Discharge of Revolving Credit Obligations, or (iii) the Revolving Credit Collateral Agent or the Note Lien Collateral Agent (as applicable) agree in writing to terminate the Enforcement Period.

"Equally and Ratably" means, in reference to sharing of Liens or proceeds thereof as between holders of Note Lien Obligations within the same Class that such Liens or proceeds:

        (1)   will be allocated and distributed first to the Note Lien Representative for each outstanding Series of Note Lien Debt, for the account of the holders of such Note Lien Debt, ratably in proportion to the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made under such letters of credit) on each outstanding Series of Note Lien Debt when the allocation or distribution is made; and thereafter,

        (2)   will be allocated and distributed (if any remain after payment in full of all of the principal of, and interest and premium (if any) and reimbursement obligations (contingent or otherwise) with respect to letters of credit, if any, outstanding (whether or not drawings have been made on such letters of credit) on all outstanding Note Lien Obligations) to the Note Lien Representative for each outstanding Series of Note Lien Debt, for the account of the holders of any remaining Note Lien Obligations, ratably in proportion to the aggregate unpaid amount of such remaining Note Lien Obligations due and demanded (with written notice to the applicable Note Lien Representative and the Note Lien Collateral Agent) prior to the date such distribution is made.

"Equipment" means: (i) all "equipment" (as defined in Article 9 of the UCC), (ii) all trade-fixtures, sales displays, lighting, shelving, signage and "fixtures" (as defined in Article 9 of the UCC) and (iii) all accessions or additions thereto, all parts thereof, whether or not at any time of determination incorporated or installed therein or attached thereto, and all replacements therefore, wherever located and whether now or hereafter existing.

"Financing Transactions" means the execution, delivery and initial funding under the Revolving Credit Agreement and the issuance of the Notes.

"General Intangibles" means all present and future "general intangibles" (as defined in Article 9 of the UCC), but excluding "payment intangibles" (as defined in Article 9 of the UCC), Hedge Agreements and Intellectual Property and any rights thereunder.

"Grantors" means Holdings, the Companies, the Canadian Borrower, each Subsidiary Guarantor and each other Person that has or may from time to time hereafter execute and deliver a Security Document as a person granting a Lien or other interest in its property to secure any of the Obligations.

7

"Guarantor" has the meaning set forth in the preamble to this Agreement.

"Hedge Agreements" means any (i) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements, interest rate collar agreements and other agreements or arrangements designed for the purpose of fixing, hedging or swapping interest rate risk; (ii) other agreements or arrangements designed to manage interest rates or interest rate risk; and (iii) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

"Hedging Obligation" of any Person means any Obligation of such Person pursuant to any Hedge Agreement.

"Holdings" has the meaning set forth in the recitals to this Agreement.

"Indebtedness" means and includes all Obligations that constitute "Indebtedness" within the meaning of the Revolving Credit Agreement or the Note Lien Documents, as applicable.

"Insolvency or Liquidation Proceeding" means:

        (1)   any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Grantor;

        (2)   any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding with respect to any Grantor or with respect to a material portion of their respective assets;

        (3)   any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

        (4)   any assignment for the benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

"Instruments" means all present and future "instruments" (as defined in Article 9 of the UCC).

"Intellectual Property" means, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses.

"Intercompany Notes of Subsidiaries" means all indebtedness owing by any of the Companies' Subsidiaries to any of the Companies or any of the Companies' other Subsidiaries, whether or not represented by a note or an agreement.

"Intercreditor Agreement Joinder" means an agreement substantially in the form of Exhibit A.

"Inventory" mean all present and future "inventory" (as defined in Article 9 of the UCC) and, in any event, includes, without limitation, all goods held for sale or lease or to be furnished under contracts of service or so leased or furnished, all raw materials, work in process, finished goods, and materials used or consumed in the manufacture, packing, shipping, advertising, selling, leasing, furnishing or production of such inventory or otherwise used or consumed in any Grantor's business; the purchaser's interest in any goods being manufactured pursuant to any contract or other arrangement with a supplier, all goods in transit from suppliers (whether or not evidenced by a document of title) and all goods in which any Grantor has an interest in mass or a joint or other interest or right of any kind; and all goods which are returned to or repossessed by any Grantor, all computer programs

8

embedded in any goods and all accessions thereto and products thereof (in each case, regardless of whether characterized as inventory under the UCC).

"Investment Property" means all "investment property" (as such term is defined in Section 9-102(a)(49) of the New York UCC).

"Letter of Credit" means any present and future "letter of credit" (as defined in Article 5 of the UCC).

"Letter of Credit Rights" means any "letter-of-credit right" (as defined in Article 9 of the UCC).

"Lien" means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust, UCC financing statement or other preferential arrangement having the practical effect of any of the foregoing.

"Lien Sharing and Priority Confirmation" means the written agreement of the holders of any Series of Note Lien Debt, as set forth in the indentures, credit agreement or other agreement governing such Series of Note Lien Debt, for the enforceable benefit of all holders of each existing and future Series of Priority Lien Debt and Note Lien Debt, each existing and future Note Lien Representative and each existing and future holder of "Permitted Liens" (as defined in the Indenture):

        (a)   that all Note Lien Obligations will be and are secured Equally and Ratably by all Note Liens at any time granted by the Companies or any other Guarantor to secure any Obligations in respect of such Series of Note Lien Debt, whether or not upon property otherwise constituting collateral for such Series of Note Lien Debt, and that all such Note Liens will be enforceable by the Note Lien Collateral Agent for the benefit of all holders of Note Lien Obligations Equally and Ratably;

        (b)   that the holders of Obligations in respect of such Series of Note Lien Debt are bound by the provisions of this Agreement, including the provisions relating to the ranking of Note Liens and the order of application of proceeds from the enforcement of Note Liens;

        (c)   consenting to and directing the Note Lien Collateral Agent to perform its obligations under the Security Documents; and

        (d)   consenting to the terms of this Agreement.

"Mortgaged Premises" means any real property which shall now or hereafter be subject to a Note Lien Mortgage.

"Net Available Cash Account" means any Deposit Account or Securities Account established by the Companies or any other Grantor in accordance with the requirements of the covenant set forth in Section 4.10 of the Indenture and which does not contain proceeds of Inventory, Accounts, Chattel Paper, Instruments, Investment Property (other than Capital Stock Collateral sold prior to the Release Date) or General Intangibles and which has been identified in writing to the Revolving Credit Collateral Agent as such at the time that proceeds from any sale of Note Lien Collateral shall be deposited pending final application in accordance with such covenant.

"New Agent" has the meaning assigned to that term in Section 5.5.

"New Debt Notice" has the meaning assigned to that term in Section 5.5.

9

"Noteholder" means, at any relevant time, a Person in whose name a Note is registered.

"Note Capital Stock Collateral" means, except as provided below:

        (a)   until the Release Date (i) all of the Capital Stock in LNT, Vendor Finance LLC, LNT Virginia LLC, LNT Merchandising Company, LLC, Citadel LNT LLC and the LNT's hereafter acquired Domestic Subsidiaries; and (ii) 65% of the Capital Stock of the Subsidiaries other than Domestic Subsidiaries owned directly by Holdings or its Domestic Sudsidiaries;

        (b)   Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and

        (c)   substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing.

"Note Obligations" means all Obligations with respect to Notes outstanding under the Indenture. "Note Obligations" shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the Indenture whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

"Notes" has the meaning assigned to that term in the recitals to this Agreement.

"Note Lien" means a Lien granted by a security document to the Note Lien Collateral Agent, at any time, upon any property of the Companies or any other Guarantor (other than Canadian Borrower and Canadian Subsidiaries of Holdings) to secure Note Lien Obligations.

"Note Lien Claimholders" means, at any relevant time, the holders of the Note Obligations, including the Noteholders and the Note Lien Representatives.

"Note Lien Collateral" means all now owned or hereafter acquired:

        (a)   any Net Available Cash Account;

        (b)   Equipment;

        (c)   Real Estate Assets;

        (d)   documents of title related to Equipment;

        (e)   Intellectual Property;

        (f)    Note Lien General Intangibles;

        (g)   Note Capital Stock Collateral;

        (h)   Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent related primarily to the foregoing; and

        (i)    substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

provided, however, that the term "Note Lien Collateral" shall include (as provided in Section 3.5 below) Instruments or Chattel Paper to the extent such Instruments or Chattel

10

Paper constitute identifiable proceeds of Note Lien Collateral and other identifiable proceeds (including lease payments under leases of Equipment) of Note Lien Collateral are deposited or held in any such Deposit Accounts, Credit Card Processing Accounts or Securities Accounts after an Enforcement Notice but shall not, in any event, include the Canadian Collateral.

"Note Lien Collateral Agent" has the meaning assigned to that term in the recitals to this Agreement, but shall also include where the context so indicates, any agent or representative of the Note Lien Collateral Agent acting on behalf of the Note Lien Collateral Agent.

"Note Lien Debt" means:

        (1)   the Notes issued and the related guarantees by the Guarantors incurred on the date of the Indenture (including any related exchange notes); and

        (2)   any other Indebtedness of the Companies (including additional notes), which may be guaranteed by the Guarantors, that is secured Equally and Ratably with the Notes by a Note Lien that was permitted to be incurred and so secured under each of the applicable Note Lien Documents and Revolving Credit Loan Documents; provided that in the case of any Indebtedness referred to in clause (2) of this definition:

        (a)   on or before the date on which such Indebtedness is incurred by the Companies, such Indebtedness is designated by the Companies, in an officers' certificate delivered to each Note Lien Representative and the Note Lien Collateral Agent, as "Note Lien Debt" for the purposes of the Indentures and this Agreement;

        (b)   such Indebtedness is governed by an indenture, credit agreement or other agreement that includes a Lien Sharing and Priority Confirmation; and

        (c)   all requirements set forth in this Agreement as to the confirmation, grant or perfection of the Note Collateral Agent's Liens to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if the Companies deliver to the Note Collateral Agent and the Revolving Credit Collateral Agent an officers' certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is "Note Lien Debt").

"Note Lien Default" means an "Event of Default" (as defined in any of the Note Documents), which is no longer subject to any applicable cure or notice period.

"Note Lien General Intangibles" means all General Intangibles pertaining to the other items of property included within clauses (b), (c), (d), (e) and (g) of the definition of Note Lien Collateral, including, without limitation, all contingent rights with respect to warranties on Equipment.

"Note Lien Documents" means, collectively, the Indenture and the indenture, credit agreement or other agreement governing each other Series of Note Lien Debt and the related Security Documents (other than any Security Documents that do not secure Note Lien Obligations).

"Note Lien Mortgages" means a collective reference to each mortgage, deed of trust and other document or instrument under which any Lien on real property owned or leased by any Grantor is granted to secure any Note Lien Obligations or (except for this Agreement) under which rights or remedies with respect to any such Liens are governed.

"Note Lien Obligations" means Note Lien Debt and all other Obligations in respect thereof (including, without limitation, all Note Obligations).

11

"Note Lien Representative" means:

        (1)   in the case of each Series of the Notes, the Note Lien Collateral Agent; or

        (2)   in the case of any other Series of Note Lien Debt, the trustee, agent or representative of the holders of such Series of Note Lien Debt who maintains the transfer register for such Series of Note Lien Debt and is appointed as a Note Lien Representative (for purposes related to the administration of the Security Documents) pursuant to an indenture, credit agreement or other agreement governing such Series of Note Lien Debt, together with its successors in such capacity.

"Obligations" means all obligations of every nature of each Grantor from time to time owed to any agent or trustee, the Revolving Credit Claimholders, the Note Lien Claimholders or any of them or their respective Affiliates, in each case under the Revolving Credit Loan Documents or the Note Lien Documents, whether for principal, interest or payments for early termination of Hedge Agreements, fees, expenses, indemnification or otherwise and all guarantees of any of the foregoing.

"Other Real Estate" means any Real Estate Asset which is not Primary Real Estate Asset.

"Patent Licenses" means all present and future agreements providing for the granting of any right in or to Patents (whether the applicable Grantor is licensee or licensor thereunder).

"Patents" means, collectively, with respect to each Grantor, all letters patent issued or assigned to, and all patent applications and registrations made by, such Grantor (whether established or registered or recorded in the United States or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of any patents, (ii) inventions and improvements described and claimed therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments thereto, and rights to obtain any of the foregoing, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with respect thereto including damages and payments for past, present or future infringements thereof, (v) rights corresponding thereto throughout the world and (vi) rights to sue for past, present or future infringements thereof.

"Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, governmental authority or other entity.

"Pledged Collateral" has the meaning set forth in Section 5.4(a).

"Primary Real Estate Asset" means Mortgaged Premises, distribution centers and warehouses and corporate headquarters and administrative offices.

"Real Estate Asset" means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Grantor in any real property.

"Records" means all present and future "records" (as defined in Article 9 of the UCC).

"Recovery" has the meaning set forth in Section 6.4.

"Refinance" means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other indebtedness, in exchange or replacement for, such Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings.

12

"Release Date" means the later of (1) the date on which the Lien on Capital Stock Collateral is released pursuant to the Indenture; or (2) with respect to each Subsidiary of Holdings, the date on which the Lien on Capital Stock Collateral relating to such Subsidiary triggers a separate reporting requirement with respect to such Subsidiary pursuant to Rule 3-16 of Regulation S-X.

"Revolving Commitments" means the "Revolving Commitments," (as such term is defined in the Revolving Credit Agreement).

"Revolving Credit Agreement" has the meaning assigned to that term in the recitals to this Agreement.

"Revolving Credit Capital Stock Collateral" means all of the Capital Stock Collateral other than the Note Capital Stock Collateral.

"Revolving Credit Claimholders" means, at any relevant time, the holders of Revolving Credit Obligations at that time, including the Revolving Credit Lenders, and the Revolving Credit Collateral Agent, under the Revolving Credit Loan Documents.

"Revolving Credit Collateral" means all now owned or hereafter acquired Collateral other than the Note Lien Collateral, including, without limitation:

        (a)   all Accounts, including, without limitation, Credit Card Receivables,

        (b)   all Chattel Paper,

        (c)   all Instruments (including Intercompany Notes of Subsidiaries);

        (d)   all Letter of Credit Rights;

        (f)    all Deposit Accounts (other than the Net Available Cash Account, to the extent that it constitutes a Deposit Account), Credit Card Processing Accounts and Securities Accounts (other than the Net Available Cash Account, to the extent it constitutes a Securities Account), and all other Investment Property (other than Capital Stock Collateral), including all cash, marketable securities, securities entitlements, financial assets and other funds held in or on deposit in any of the foregoing,

        (g)   all Inventory or documents of title, customs receipts, insurance certificates, shipping documents and other written materials related to the purchase or import of any Inventory;

        (h)   all General Intangibles (other than Intellectual Property and Note Lien General Intangibles) and all rights under Hedge Agreements;

        (i)    all Revolving Credit Capital Stock Collateral;

        (j)    all Records, "supporting obligations" (as defined in Article 9 of the UCC) and related Letters of Credit, commercial tort claims or other claims and causes of action, in each case, to the extent not primarily related to Note Lien Collateral; and

        (k)   substitutions, replacements, accessions, products and proceeds (including, without limitation, insurance proceeds, licenses, royalties, income, payments, claims, damages and proceeds of suit) of any or all of the foregoing;

provided, however, that to the extent that Instruments or Chattel Paper constitute identifiable proceeds of Note Lien Collateral or other identifiable proceeds (including lease payments under leases of Equipment) of Note Lien Collateral are deposited or held in any such Deposit Accounts, Credit Card Processing Accounts or Securities Accounts after an Enforcement

13

Notice, then (as provided in Section 3.5 below) such Instruments, Chattel Paper or other identifiable proceeds shall be treated as Note Lien Collateral.

"Revolving Credit Collateral Agent" has the meaning assigned to that term in the recitals to this Agreement, but shall also include where the context so indicates, any agent or representative of the Revolving Credit Collateral Agent acting on behalf of the Revolving Credit Collateral Agent.

"Revolving Credit Collateral Documents" means the "Security Documents" (as defined in the Revolving Credit Agreement) and any other agreement, document or instrument pursuant to which a Lien is granted securing any Revolving Credit Obligations or under which rights or remedies with respect to such Liens are governed.

"Revolving Credit Default" means an "Event of Default" (as defined in the Revolving Credit Agreement).

"Revolving Credit Lenders" has the meaning assigned to that term in the recitals to this Agreement.

"Revolving Credit Loan Documents" means the Revolving Credit Agreement, the Revolving Credit Collateral Documents and the other Loan Documents (as defined in the Revolving Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other Revolving Credit Obligation, and any other document or instrument executed or delivered at any time in connection with any Revolving Credit Obligations, including any intercreditor or joinder agreement among holders of Revolving Credit Obligations, to the extent such are effective at the relevant time, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with the Revolving Credit Collateral Agent and Revolving Credit Lenders or other agents and lenders or otherwise), in each case in accordance with the provisions of this Agreement.

"Revolving Credit Obligations" means all Obligations outstanding under the Revolving Credit Agreement and the other Revolving Credit Loan Documents. "Revolving Credit Obligations" shall include all interest accrued or accruing (or which would, absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Revolving Credit Loan Document whether or not the claim for such interest is allowed as a claim in such Insolvency or Liquidation Proceeding. For the purposes of extending loans or other financial accommodations under the Revolving Credit Agreement and the other Revolving Credit Loan Documents, or receiving or continuing Liens securing Revolving Credit Obligations, or in any way dealing with any Grantor, the Revolving Credit Claimholders may conclusively rely for a period of 45 days after the delivery thereof on the officers' certificate from the Companies stating that the Companies are in compliance with Sections 4.09 and 4.12 of the Indenture.

"Revolving Credit Standstill Period" has the meaning set forth in Section 3.2(a)(1).

"Securities Accounts" means all present and future "securities accounts" (as defined in Article 8 of the UCC), including all monies, "uncertificated securities," and "securities entitlements" (as defined in Article 8 of the UCC) contained therein.

"Security Documents" means this Agreement, and all security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, collateral agency agreements, control agreements or other grants or transfers for security executed and delivered by the Companies or any other Grantor creating (or purporting to create) a Lien upon Collateral in

14

favor of the Note Lien Collateral Agent, as each may be amended, supplemented, refunded, deferred, restructured, replaced or refinanced from time to time in whole or in part (whether with the First Lien Term Loan Agent, First Lien Term Loan Lenders, the Note Lien Collateral Agents and Noteholders existing on the date of this Agreement or other agents, lenders, trustees and Noteholders or otherwise), in each case in accordance with the provisions of this Agreement.

"Series of Note Lien Debt" means, severally, the Notes and each other issue or series of Note Lien Debt for which a single transfer register is maintained.

"Subsidiary" means, with respect to any specified Person:

        (1)   any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to vote in the election of directors, managers, trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

        (2)   any partnership (A) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (B) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

"Subsidiary Guarantors" has the meaning assigned to that term in the preamble of this Agreement.

"Trademark Licenses" means any and all present and future agreements providing for the granting of any right in or to Trademarks (whether such Grantor is licensee or licensor thereunder).

"Trademarks" means, collectively, with respect to each Grantor, all trademarks, service marks, slogans, logos, certification marks, trade dress, uniform resource locations (URL's), domain names, corporate names, trade names and other source or business identifiers, whether registered or unregistered, owned by or assigned to such Grantor and all registrations and applications for the foregoing (whether statutory or common law and whether established or registered in the United States, any State thereof, or any other country or any political subdivision thereof), and all goodwill associated therewith, now existing or hereafter adopted or acquired, together with any and all (i) rights and privileges arising under applicable law with respect to such Grantor's use of any trademarks, (ii) reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world and (v) rights to sue for past, present and future infringements thereof.

"Trustee" has the meaning assigned to that term in the recitals to this Agreement.

"UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York or when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

"US Borrower" has the meaning assigned to that term in the preamble to this Agreement.

15

"US Revolving Credit Collateral Agent" has the meaning assigned to that term in the preamble to this Agreement.

"Voting Stock" of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

        1.2    Terms Generally.    The definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise:

        (a)   any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, modified, renewed or extended;

        (b)   any reference herein to any Person shall be construed to include such Person's permitted successors and assigns;

        (c)   the words "herein," "hereof" and "hereunder," and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

        (d)   all references herein to Sections shall be construed to refer to Sections of this Agreement;

        (e)   all references to terms defined in the New York UCC shall have the meaning ascribed to them therein (unless otherwise specifically defined herein); and

        (f)    the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

        Whenever any term used in this Agreement is defined or otherwise incorporated by reference to the Indenture, such reference shall be deemed to have the same effect as if the definition of such term had been independently set forth herein in full, and such term shall continue to have the meaning established pursuant to the Indenture (subject to the immediately preceding sentence of this subsection) notwithstanding the termination of the Indentures or redemption of all Note Lien Obligations evidenced thereby.

II.    Lien Priorities.

        2.1    Relative Priorities.    Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Note Lien Obligations granted on the Collateral or of any Liens securing the Revolving Credit Obligations granted on the Collateral and notwithstanding any provision of any UCC, or any other applicable law or the Revolving Credit Loan Documents or the Note Lien Documents or any defect or deficiencies in, or failure to perfect, the Liens securing the Revolving Credit Obligations or Note Lien Obligations or any other circumstance whatsoever, the Revolving Credit Collateral Agent, on behalf of itself and/or the Revolving Credit Claimholders, the Note Lien Collateral Agent, and each Note Lien Representative, for itself on behalf of the respective Note Lien Claimholders hereby each agrees that:

        (a)   any Lien of the Revolving Credit Collateral Agent on the Revolving Credit Collateral, whether now or hereafter held by or on behalf of the Revolving Credit Collateral Agent or any Revolving Credit Claimholder or any agent or trustee therefor, regardless of

16

how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Revolving Credit Collateral securing any Note Lien Obligations; and

        (b)   any Lien of the Note Lien Collateral Agent or any Note Lien Representative on the Note Lien Collateral, whether now or hereafter held by or on behalf of the Note Lien Collateral Agent, any Note Lien Representative, any Note Lien Claimholder or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Liens on the Note Lien Collateral securing any Revolving Credit Obligations.

        2.2    Prohibition on Contesting Liens.    The Revolving Credit Collateral Agent, Revolving Credit Claimholders, the Note Lien Collateral Agent, each Note Lien Representative and the Note Lien Claimholders, each agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of any of the Revolving Credit Claimholders or any of the Note Lien Claimholders in all or any part of the Collateral, or the provisions of this Agreement; provided, that nothing in this Agreement shall be construed to prevent or impair the rights of either any Revolving Credit Collateral Agent or any Revolving Credit Claimholder, the Note Lien Collateral Agent, or the Note Lien Representatives or any Note Lien Claimholder to enforce this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing the Obligations as provided in Sections 2.1, 3.1 and 3.2.

        2.3    Liens Granted to Note Lien Collateral Agent and the Note Lien Representatives; Liens Granted to Revolving Credit Collateral Agent.

        (a)   No Grantor will grant any Lien securing Note Lien Debt to any Person other than the Person then acting as Note Lien Collateral Agent and any Person then acting as Note Lien Representative.

        (b)   No Grantor will grant any Lien securing Revolving Credit Obligations to any Person other than the Person then acting as the Revolving Credit Collateral Agent.

III.    Enforcement.

        3.1    Exercise of Remedies—Restrictions on the Note Lien Collateral Agent, and Note Lien Representatives and Note Lien Claimholders.

        (a)   Until the Discharge of Revolving Credit Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the Note Lien Collateral Agent, each Note Lien Representative and Note Lien Claimholders:

        (1)   will not exercise or seek to exercise any rights or remedies with respect to any Revolving Credit Collateral (including the exercise of any right of setoff or any right under any Account Agreement, landlord waiver or bailee's letter or similar agreement or arrangement to which the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided, however, that the Note Lien Collateral Agent may exercise any or all such rights or remedies after the passage of a period of at least 180 days has elapsed since the earlier of: (x) the date of the commencement of any Insolvency or Liquidation Proceeding by or against any Grantor that has not been dismissed, or (y) the date on which a Note Lien Representative first declares the existence of a Note Lien Default, demands the repayment of all the principal amount of any Note Lien Obligations; and the Revolving

17

Credit Collateral Agent has received notice from the Note Lien Collateral Agent of such declaration of a Note Lien Default, (the "Note Lien Standstill Period"); provided, further, however, that notwithstanding anything herein to the contrary, in no event shall the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder exercise any rights or remedies with respect to the Revolving Credit Collateral if, notwithstanding the expiration of the Note Lien Standstill Period, any Revolving Credit Collateral Agent or Revolving Credit Claimholders shall have commenced and be diligently pursuing the exercise of their rights or remedies with respect to all or any material portion of such Revolving Credit Collateral (prompt notice of such exercise to be given to the Note Lien Collateral Agent);

        (2)   will not contest, protest or object to any foreclosure proceeding or action brought by any Revolving Credit Collateral Agent or any Revolving Credit Claimholder or any other exercise by any Revolving Credit Collateral Agent or any Revolving Credit Claimholder of any rights and remedies relating to the Revolving Credit Collateral, whether under the Revolving Credit Loan Documents or otherwise; and

        (3)   subject to their rights under clause (a)(1) above and except as may be permitted in Section 3.1(c), will not object to the forbearance by any Revolving Credit Collateral Agent or the Revolving Credit Claimholders from bringing or pursuing any Enforcement;

provided, however, that, in the case of (1), (2) and (3) above, the Liens granted to secure the Note Lien Obligations shall attach to any proceeds resulting from actions taken by any Revolving Credit Collateral Agent or any Revolving Credit Claimholder in accordance with this Agreement after application of such proceeds to the extent necessary to meet the requirements of a Discharge of Revolving Credit Obligations.

        (b)   Until the Discharge of Revolving Credit Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have the right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and, in connection therewith (including voluntary Dispositions of Revolving Credit Collateral by the respective Grantors after a Revolving Credit Default) make determinations regarding the release, disposition, or restrictions with respect to the Revolving Credit Collateral without any consultation with or the consent of the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder; provided, however, that the Lien securing the Note Lien Obligations shall remain on the proceeds (other than those properly applied to the Revolving Credit Obligations) of such Collateral released or disposed of subject to the relative priorities described in Section 2. In exercising rights and remedies with respect to the Revolving Credit Collateral, the Revolving Credit Collateral Agents and the Revolving Credit Claimholders may enforce the provisions of the Revolving Credit Loan Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of the Revolving Credit Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction.

        (c)   Notwithstanding the foregoing, the Note Lien Collateral Agent, any Note Lien Representative and any Note Lien Claimholder may:

        (1)   file a claim or statement of interest with respect to the Note Lien Obligations of any Grantor; provided that an Insolvency or Liquidation Proceeding has been commenced by or against such Grantor;

18

        (2)   take any action (not adverse to the priority status of the Liens on the Revolving Credit Collateral, or the rights of the Revolving Credit Collateral Agent or any Revolving Credit Claimholder to exercise remedies in respect thereof) in order to create, perfect, preserve or protect its Lien on any of the Collateral (other than Canadian Collateral);

        (3)   file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Note Lien Claimholders, including any claims secured by the Revolving Credit Collateral, if any, in each case in accordance with the terms of this Agreement;

        (4)   file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency or Liquidation Proceeding or applicable non-bankruptcy law, in each case not prohibited by the terms of this Agreement;

        (5)   vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, not prohibited by the terms of this Agreement, with respect to the Note Lien Obligations;

        (6)   exercise any of its rights or remedies with respect to any of the Revolving Credit Collateral after the termination of the Note Lien Standstill Period to the extent permitted by Section 3.1(a)(1); and

        (7)   make a cash bid on all or any portion of the Revolving Credit Collateral in any foreclosure proceeding or action.

        The Note Lien Collateral Agent and each Note Lien Representative, on behalf of itself and/or its respective Note Lien Claimholders, agrees that it will not take or receive any Revolving Credit Collateral or any proceeds of such Revolving Credit Collateral in connection with the exercise of any right or remedy (including set-off) with respect to any such Revolving Credit Collateral in its capacity as a creditor in violation of this Agreement. Without limiting the generality of the foregoing, unless and until the Discharge of Revolving Credit Obligations has occurred, except as expressly provided in Sections 3.1(a), 6.3(c)(1) and this Section 3.1(c), the sole right of the Note Lien Collateral Agent and any Note Lien Representative or Note Lien Claimholder with respect to the Revolving Credit Collateral is to hold a Lien (if any) on such Collateral pursuant to the respective Note Lien Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Revolving Credit Obligations has occurred.

        (d)   Subject to Sections 3.1(a) and (c) and Section 6.3(c)(1):

        (1)   The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of its respective Note Lien Claimholders, agrees that it will not take any action that would hinder any exercise of remedies under the Revolving Credit Loan Documents or that is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Revolving Credit Collateral, whether by foreclosure or otherwise;

        (2)   The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of its respective Note Lien Claimholders, hereby waives any and all rights the Note Lien Collateral Agent, such Note Lien Representative and the respective Note Lien Claimholders, as applicable, may have as a junior lien creditor or otherwise to object to the manner in which the Revolving Credit Collateral Agent or the Revolving Credit Claimholders seek to enforce or collect the Revolving Credit Obligations or the

19

Liens securing the Revolving Credit Obligations granted in any of the Revolving Credit Loan Documents or undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of the Revolving Credit Collateral Agent or Revolving Credit Claimholders is adverse to the interest of the Note Lien Claimholders;

        (3)   the Note Lien Collateral Agent and each Note Lien Representative hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Note Lien Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of the Revolving Credit Collateral Agent or the Revolving Credit Claimholders with respect to the enforcement of the Liens on the Revolving Credit Collateral as set forth in this Agreement and the Revolving Credit Loan Documents.

        (e)   Except as otherwise specifically set forth in Sections 3.1(a) and (d) and 3.5, the Note Lien Collateral Agent, the Note Lien Representatives and Note Lien Claimholders may exercise rights and remedies as unsecured creditors against any Grantor that has guaranteed or granted Liens to secure the Note Lien Obligations, and the Note Lien Collateral Agent may exercise rights and remedies with respect to the Note Lien Collateral in accordance with the terms of the Note Lien Documents and applicable law; provided, however, that in the event that the Note Lien Collateral Agent, any Note Lien Representative or Note Lien Claimholder becomes a judgment Lien creditor in respect of Revolving Credit Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Note Lien Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Revolving Credit Obligations) as the other Liens securing the Note Lien Obligations are subject to this Agreement.

        (f)    Nothing in this Agreement shall prohibit the receipt by the Note Lien Collateral Agent, any Note Lien Representative or Note Lien Claimholder of the required payments of interest, principal and other amounts owed in respect of its Note Lien Obligations, so long as such receipt is not the direct or indirect result of the exercise by Note Lien Collateral Agent, such Note Lien Representative or Note Lien Claimholder of rights or remedies as a secured creditor in respect of the Revolving Credit Collateral (including set-off) or enforcement in contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies the Revolving Credit Collateral Agent or the Revolving Credit Claimholders may have against the Grantors under the Revolving Credit Loan Documents.

        3.2    Exercise of Remedies—Restrictions on Revolving Credit Collateral Agent and Revolving Credit Claimholders.

        (a)   Until the Discharge of Note Lien Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the Revolving Credit Collateral Agent and Revolving Credit Claimholders:

        (1)   will not exercise or seek to exercise any rights or remedies with respect to any Note Lien Collateral (including the exercise of any right of setoff or any right under any Account Agreements, landlord waiver or bailee's letter or similar agreement or arrangement to which any Revolving Credit Collateral Agent, any Revolving Credit Claimholder is a party) or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure); provided, however, the Revolving Credit Collateral Agent may exercise the rights provided for in Section 3.3 (with respect to any Access Period) and Section 3.4 (with respect to Intellectual Property and Records) and may exercise any or all such rights or remedies after the passage of a period of at least 180 days has elapsed since the earlier of: (x) the date of the commencement of any Insolvency or Liquidation Proceeding by or against any Grantor that has not been

20

dismissed, or (y) the date on which the Revolving Credit Collateral Agent first declares the existence of a Revolving Credit Default, demands the repayment of all the principal amount of any Revolving Credit Obligations and the Note Lien Collateral Agent has received notice from the Revolving Credit Collateral Agent of such declaration of a Revolving Credit Default, (the "Revolving Credit Standstill Period"); provided, further, however, that notwithstanding anything herein to the contrary, in no event shall any Revolving Credit Collateral Agent or any Revolving Credit Claimholder exercise any rights or remedies (other than those under Sections 3.3 and 3.4) with respect to the Note Lien Collateral if, notwithstanding the expiration of the Revolving Credit Standstill Period, the Note Lien Collateral Agent shall have commenced and be diligently pursuing the exercise of its rights or remedies with respect to all or any material portion of such Collateral (prompt notice of such exercise to be given to the Revolving Credit Collateral Agent);

        (2)   will not contest, protest or object to any foreclosure proceeding or action brought by the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder or any other exercise by the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder of any rights and remedies relating to the Note Lien Collateral, whether under the Note Lien Documents or otherwise; and

        (3)   subject to their rights under clause (a)(1) above and except as may be permitted in Section 3.2(c), will not object to the forbearance by the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder from bringing or pursuing any Enforcement;

provided, however, that in the case of (1), (2) and (3) above, the Liens (if any) granted to secure the Revolving Credit Obligations shall attach to any proceeds resulting from actions taken by the Note Lien Collateral Agent, any Note Lien Representative and any Note Lien Claimholder in accordance with this Agreement after application of such proceeds to the extent necessary to meet the requirements of a Discharge of Note Lien Obligations.

        (b)   Until the Discharge of Note Lien Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders shall have the right to enforce rights, exercise remedies (including set-off and the right to credit bid their debt) and make, in connection therewith (including voluntary Dispositions of Note Lien Collateral by the respective Grantors after a Note Lien Default) determinations regarding the release, disposition, or restrictions with respect to the Note Lien Collateral without any consultation with or the consent of any Revolving Credit Collateral Agent or any Revolving Credit Claimholder; provided, however, that the Lien (if any) securing the Revolving Credit Obligations shall remain on the proceeds (other than those properly applied to the Note Lien Obligations) of such Collateral released or disposed of subject to the relative priorities described in Section 2. In exercising rights and remedies with respect to the Note Lien Collateral, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders may enforce the provisions of the Note Lien Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of the Note Lien Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the Bankruptcy Laws of any applicable jurisdiction.

21

        (c)   Notwithstanding the foregoing, the Revolving Credit Collateral Agent and Revolving Credit Claimholders may:

        (1)   file a claim or statement of interest with respect to the Revolving Credit Obligations of any Grantor; provided that an Insolvency or Liquidation Proceeding has been commenced by or against such Grantor;

        (2)   take any action (not adverse to the priority status of the Liens of the Note Lien Collateral Agent on the Note Lien Collateral) in order to create, perfect, preserve or protect its Lien on any of the Collateral;

        (3)   file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Revolving Credit Claimholders;

        (4)   file any pleadings, objections, motions or agreements which assert rights or interests available to unsecured creditors of the Grantors arising under either any Insolvency or Liquidation Proceeding or applicable non-bankruptcy law, in each case not prohibited by the terms of this Agreement;

        (5)   vote on any plan of reorganization, file any proof of claim, make other filings and make any arguments and motions that are, in each case, not prohibited by the terms of this Agreement, with respect to the Revolving Credit Obligations and the Revolving Credit Collateral;

        (6)   exercise any of its rights or remedies with respect to any of the Collateral after the termination of the Revolving Credit Standstill Period, to the extent permitted by Section 3.2(a)(1); and

        (7)   make a cash bid on all or any portion of the Note Lien Collateral in any foreclosure proceeding or action.

        The Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that it will not take or receive any Note Lien Collateral or any proceeds of such Collateral in connection with the exercise of any right or remedy (including set-off) with respect to any such Collateral in its capacity as a creditor in violation of this Agreement. Without limiting the generality of the foregoing, unless and until the Discharge of Revolving Credit Obligations has occurred, except as expressly provided in Sections 3.2(a), 3.3, 3.4, 6.3(c)(2) and this Section 3.2(c), the sole right of the Revolving Credit Collateral Agent or Revolving Credit Claimholder with respect to the Note Lien Collateral is to hold a Lien (if any) on such Collateral pursuant to the respective Revolving Credit Loan Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Note Lien Obligations has occurred.

        (d)   Subject to Sections 3.2(a) and (c) and Sections 3.3 and 6.3(c)(2):

        (1)   the Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, agrees that the Revolving Credit Collateral Agent and the Revolving Credit Claimholders will not take any action that would hinder any exercise of remedies by the Note Lien Collateral Agent under the Note Lien Documents or that is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Note Lien Collateral, whether by foreclosure or otherwise;

        (2)   the Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, hereby waive any and all rights they or the Revolving Credit Claimholders may at any time have as a junior lien creditor or otherwise to object to the

22

manner in which the Note Lien Collateral Agent seeks to enforce or collect the Note Lien Obligations or the Liens securing the Note Lien Collateral granted in any of the Note Lien Documents or undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of the Note Lien Representatives or Note Lien Claimholders is adverse to the interest of the Revolving Credit Claimholders; and

        (3)   the Revolving Credit Collateral Agent hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Revolving Credit Collateral Documents, or any other Revolving Credit Loan Document (other than this Agreement), shall be deemed to restrict in any way the rights and remedies of the Note Lien Collateral Agent, any Note Lien Representative or Note Lien Claimholder with respect to the enforcement of its Liens on the Note Lien Collateral as set forth in this Agreement and the Note Lien Documents.

        (e)   Except as otherwise specifically set forth in Sections 3.2(a) and (d) and 3.5, the Revolving Credit Collateral Agent and the Revolving Credit Claimholders may exercise rights and remedies as unsecured creditors against any Grantor that has guaranteed or granted Liens to secure the Revolving Credit Obligations and may exercise rights and remedies with respect to the Revolving Credit Collateral, in each case, in accordance with the terms of the Revolving Credit Loan Documents and applicable law; provided, however, that in the event that any Revolving Credit Claimholder becomes a judgment Lien creditor in respect of Note Lien Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to the Revolving Credit Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Note Lien Obligations) as the other Liens securing the Revolving Credit Obligations are subject to this Agreement.

        (f)    Nothing in this Agreement shall prohibit the receipt by the Revolving Credit Collateral Agent or any Revolving Credit Claimholder of the required payments of interest, principal and other amounts owed in respect of the Revolving Credit Obligations, so long as such receipt is not the direct or indirect result of the exercise by any Revolving Credit Collateral Agent or any Revolving Credit Claimholder of rights or remedies as a secured creditor in respect of the Note Lien Collateral (including set-off) or enforcement in contravention of this Agreement of any Lien held by any of them. Nothing in this Agreement impairs or otherwise adversely affects any rights or remedies the Note Collateral Agent, the Note Lien Representatives or the Note Lien Claimholders may have against the Grantors under the Note Lien Documents.

        3.3    Exercise of Remedies—Collateral Access Rights.

        (a)   The Revolving Credit Collateral Agent, the Note Collateral Agent and the Note Lien Representatives agree not to commence Enforcement until the earlier of the date on which (A) an Enforcement Notice has been given to the Note Collateral Agent or the Revolving Credit Collateral Agent, as the case may be and (B) any Insolvency or Liquidation Proceeding is commenced by or against any Grantor that has not been dismissed. Subject to the provisions of Sections 3.1 and 3.2 above, either the Revolving Credit Collateral Agent or the Note Collateral Agent may, to the extent permitted by applicable law, join in any judicial proceedings commenced by the other Person to enforce Liens on the Collateral, provided that neither such Person, nor the Revolving Credit Claimholders or Note Lien Claimholders, as the case may be, shall interfere with the Enforcement actions of the other with respect to Collateral in which such party has the benefit of the priority Lien in accordance herewith.

        (b)   If the Note Collateral Agent or any Note Lien Representative or any of their respective agents or representatives, or any third party pursuant to any Enforcement

23

undertaken by the Note Collateral Agent or any Note Lien Representative, as applicable, or any receiver, shall obtain possession or physical control of any of the Primary Real Estate Assets or any of the Other Real Estate, the Note Collateral Agent or such Note Lien Representative, as applicable, shall promptly notify the Revolving Credit Collateral Agent of that fact and the Revolving Credit Collateral Agent shall, within ten (10) Business Days thereafter, notify Note Collateral Agent or Note Lien Representative or, if applicable, any such third party (at such address to be provided by the Note Collateral Agent or such Note Lien Representative, as applicable, in connection with the applicable Enforcement), as to whether the Revolving Credit Collateral Agent desire to exercise access rights under this Agreement, at which time the parties shall confer in good faith to coordinate with respect to the Revolving Credit Collateral Agent' exercise of such access rights. Access rights may apply to differing parcels of Other Real Estate at differing times (i.e. a Revolving Credit Collateral Agent may obtain possession of one store at a different time than it obtains possession of other properties), in which case, a differing Access Period may apply to each such property.

        (c)   Upon delivery of notice to the Note Collateral Agent or the relevant Note Lien Representative as provided in Section 3.3(b), the Access Period shall commence for all of the Primary Real Estate Assets or the subject parcel of Other Real Estate, as applicable. During the Access Period and for any period prior to an Access Period when the Revolving Credit Collateral Agent may have had access and/or use of any Note Lien Collateral (e.g. pursuant to access granted by a landlord of any Real Estate Asset), the Revolving Credit Collateral Agent and their agents, representatives and designees shall have a non-exclusive right to have such access to, and a rent free right to use, the Note Lien Collateral for the purpose of arranging for and effecting the sale or disposition of Revolving Credit Collateral, including the production, completion, packaging, shipping and other preparation of such Revolving Credit Collateral for sale or disposition. During any such Access Period (or period prior to an Access Period), one or more Revolving Credit Collateral Agent and their representatives (and persons employed on their behalf), may continue to operate, service, maintain, process and sell the Revolving Credit Collateral, as well as to engage in bulk sales or other liquidations of Revolving Credit Collateral. Revolving Credit Collateral Agent shall take proper care of any Note Lien Collateral that is used by it during the Access Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by them or their agents, representatives or designees and comply with all applicable laws in connection with its use or occupancy of the Note Lien Collateral. The Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall indemnify and hold harmless the Note Lien Collateral Agent or the relevant Note Lien Claimholders for any injury or damage to Persons or property caused by the acts or omissions of Persons under its control. Revolving Credit Collateral Agent, the Note Collateral Agent and each Note Lien Representative shall cooperate and use reasonable efforts to ensure that their activities during the Access Period as described above do not interfere materially with the activities of the other as described above, including the right of the Note Collateral Agent or any Note Lien Representative to commence foreclosure of the Note Lien Mortgages or to show the Note Lien Collateral to prospective purchasers and to ready the Note Lien Collateral for sale.

        (d)   If the Note Lien Collateral Agent or any Note Lien Representative shall foreclose or otherwise sell any of the Note Lien Collateral, such Person will notify the buyer thereof of the existence of this Agreement and that the buyer is acquiring such Collateral subject to the terms of this Agreement.

        (e)   The Grantors hereby agree with the Note Lien Collateral Agent and the Note Lien Representatives that Revolving Credit Collateral Agent shall have access, during the Access Period, as described herein and each such Grantor that owns any of the Mortgaged Premises

24

grants a non-exclusive easement in gross over its property to permit the uses by Revolving Credit Collateral Agent contemplated by this Section 3.3. The Note Lien Collateral Agent and each Note Lien Representative consents to such easement.

        3.4    Exercise of Remedies—Intellectual Property Rights/Access to Information/Use of Equipment.

        (a)   The Note Lien Collateral Agent and each Note Lien Representative hereby grants (to the full extent of their respective rights and interests) the Revolving Credit Collateral Agent and its agents, representatives and designees a royalty free, rent free license and lease to use all of the Note Lien Collateral exclusive of Intellectual Property but including any computer or other data processing Equipment to operate stores or distribution activities on the Real Estate Assets during any Enforcement Period, to collect all Accounts or amounts owing under Instruments or Chattel Paper, to copy, use or preserve any and all information relating to any of the Collateral, and to complete the manufacture, packaging and sale of Inventory; provided, however, the royalty free, rent free license and lease granted in this clause (a) with respect to Equipment shall immediately expire upon the sale, lease, transfer or other disposition of such Equipment.

        (b)   The Note Lien Collateral Agent and each Note Lien Representative hereby grants (to the full extent of their respective rights and interests) the Revolving Credit Collateral Agent and its agents, representatives and designees solely during the Enforcement Period (A) a nonexclusive, royalty free, worldwide license or sublicense (subject to the terms of the underlying license) to use all of the Note Lien Collateral constituting Intellectual Property solely to the extent necessary to collect all Accounts or amounts owing under Instruments or Chattel Paper and to complete the manufacture, packaging and sale of Inventory and (B) a nonexclusive, royalty free, worldwide license or sublicense (subject to the terms of the underlying license) (which will be binding on any successor or assignee of the Intellectual Property) to use any and all Intellectual Property in connection with its Enforcement; provided, however, that on and after the 30th day following the termination of the Access Period with respect to the Primary Real Estate Assets, the Revolving Credit Collateral Agent, during the term of the above licenses, shall use any Trademarks of such licensed Intellectual Property solely in connection with (x) goods or services which the Revolving Credit Collateral Agent in good faith reasonably believes to be in all material respects of at least the same level of quality offered by, and in a manner in which the Revolving Credit Collateral Agent in good faith reasonably believes to be in all material respects consistent with the practices of, one or more Grantors as of the date of the Enforcement Notice or (y) the disposition of damaged, obsolete or second-quality goods which dispositions the Revolving Credit Collateral Agent in good faith reasonably believes will not materially diminish the distinctiveness and quality characteristics associated with such Intellectual Property or the validity thereof (it being understood and agreed that the Revolving Credit Collateral Agent and its agents, representatives and designees shall comply in all material respects with all laws pertaining to its use of Intellectual Property described hereunder, including notice requirements).

        3.5    Exercise of Remedies—Set Off and Tracing of and Priorities in Proceeds.    The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders, each acknowledges and agrees that, to the extent any such Person exercises its rights of setoff against any Grantors' Deposit Accounts, Credit Card Processing Accounts, Securities Accounts or other assets, the amount of such setoff shall be deemed to be the Revolving Credit Collateral to be held and distributed pursuant to Section 4.3; provided, however, that the foregoing shall not apply to any setoff by any such Person against any Note Lien Collateral (including funds in any Net Available Cash Account) to the extent applied to payment of Note Lien Debt. The Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders agree that prior to an issuance of an Enforcement Notice all funds

25

deposited under Account Agreements and then applied to the Revolving Credit Obligations shall be treated as Revolving Credit Collateral and, unless the Revolving Credit Collateral Agent have actual knowledge to the contrary, any claim that payments made to Revolving Credit Collateral Agent through the Deposit Accounts, Credit Card Processing Accounts or Securities Accounts that are subject to Account Agreements are proceeds of or otherwise constitute Note Lien Collateral, are waived. The Revolving Credit Collateral Agent, Revolving Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each agrees that, prior to an issuance of an Enforcement Notice, any proceeds of Collateral, whether or not deposited under Account Agreements, which are used by any Grantor to acquire other property which is Collateral shall not (as among the Revolving Credit Collateral Agent, the Note Lien Collateral Agent, the Note Lien Representatives and the various Claimholders) be treated as proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired. The Revolving Credit Collateral Agent, Revolving Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each agrees that after an issuance of an Enforcement Notice, each such Person shall cooperate in good faith to identify the proceeds of the Revolving Credit Collateral and the Note Lien Collateral, as the case may be (it being agreed that after an issuance of an Enforcement Notice, unless the Revolving Credit Collateral Agent has actual knowledge to the contrary, all funds deposited under Account Agreements and then applied to the Revolving Credit Obligations shall be presumed to be Revolving Credit Collateral (a presumption that can be rebutted by the Note Lien Collateral Agent); provided, however, that neither any Revolving Credit Claimholder nor any Note Lien Claimholder shall be liable or in any way responsible for any claims or damages from conversion of the Revolving Credit Collateral or Note Lien Collateral, as the case may be (it being understood and agreed that (A) the only obligation of any Revolving Credit Claimholder is to pay over to the Note Lien Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Revolving Credit Claimholder received that have been identified as proceeds of the Note Lien Collateral and (A) the only obligation of any Note Lien Claimholder is to pay over to the Revolving Credit Collateral Agent, in the same form as received, with any necessary endorsements, all proceeds that such Note Lien Claimholder received that have been identified as proceeds of the Revolving Credit Collateral. Each of the Revolving Credit Collateral Agent and the Note Lien Collateral Agent may request from the other an accounting of the identification of the proceeds of Collateral (and the Revolving Credit Collateral Agent and the Note Lien Collateral Agent, as the case may, upon which such request is made shall deliver such accounting reasonably promptly after such request is made).

        3.6    Exercise of Remedies—Capital Stock Collateral after the Release Date.    After the Release Date, the Revolving Credit Collateral Agent may not sell or otherwise dispose of any Revolving Credit Capital Stock Collateral until the earliest to occur:

        (i)    the Discharge of Note Lien Obligations; or

        (ii)   the Revolving Credit Collateral Agent and the Note Lien Collateral Agent agree in writing on the allocation of proceeds from such sale or other disposition of such Revolving Credit Capital Stock Collateral; or

        (iii)  the Revolving Credit Collateral Agent has received a specific written request from the Note Lien Collateral Agent that the Revolving Credit Collateral Agent enforce its Lien on and exercise its rights and remedies with respect to such Revolving Credit Capital Stock Collateral, provided, however, that the Revolving Credit Collateral Agent may refuse such request unless and until it is satisfied in its sole reasonable discretion that it has received from the Noteholders adequate indemnity (as determined in the Revolving Credit Collateral Agent's sole reasonable discretion and which may include security or other payment assurances reasonably required by the Revolving Lien Collateral Agent) against all costs,

26

expenses, losses, damages, actions, judgments, suits and liabilities in connection with or arising from such action; provided, further, however, that any net proceeds received by the Revolving Credit Collateral Agent from such enforcement of its Liens and exercise of its rights and remedies with respect to such Revolving Credit Capital Stock Collateral (such net proceeds being the "Proceeds Amount") shall be applied to the Revolving Credit Obligations, and the Revolving Credit Claimholders' rights in any proceeds of future sale or other disposition of Revolving Credit Collateral on which the Note Lien Collateral Agent has a perfected Lien shall be, to the extent of the Proceeds Amount, subordinated and subject in right of payment to the rights of the Note Lien Claimholders to receive such Proceeds Amount.

        3.7    Exercise of Remedies—Applicable Landlord Agreements.    In respect of each consent/waiver/access agreement between the Revolving Credit Collateral Agent and a landlord leasing real estate to a Grantor which provides that the Note Lien Collateral Agent may be one of the invitees of the Revolving Credit Collateral Agent with respect the right to inspect or remove the personal property of the applicable Grantor from the leased premises (such consent/waiver/access agreement being an "Applicable Landlord Agreement"):

        (i)    subject to the other terms of this Agreement and such Applicable Landlord Agreement, the Note Lien Collateral Agent shall be deemed to be an invitee of the Revolving Credit Collateral Agent with regard to the real estate that is subject to such Applicable Landlord Agreement prior to the Junior Lien Effective Date (as defined below);

        (ii)   if the Note Lien Collateral Agent exercises its rights as such invitee under such Applicable Landlord Agreement, the Note Lien Collateral Agent hereby agrees to reimburse the Revolving Credit Collateral Agent upon demand for any repair by the Revolving Credit Collateral Agent of any damage arising from the removal of the personal property by or on behalf of the Note Lien Collateral Agent; and

        (iii)  the Note Lien Collateral Agent hereby expressly agrees, for the benefit of such landlord and those claiming through such landlord, that (A) such landlord may exclusively deal with the Revolving Credit Collateral Agent until the date (the "Junior Lien Effective Date ") of a delivery of a certificate to such landlord pursuant to the terms of such Applicable Landlord Agreement certifying to the effect that the Discharge of Revolving Credit Obligations has occurred and (B) the Note Lien Collateral Agent has no right to object to any discussions, correspondence or agreements between such landlord and the Revolving Credit Collateral Agent or any amendments or modifications to such Applicable Landlord Agreement prior to the Junior Lien Effective Date; it being understood and agreed, as between the Revolving Credit Collateral Agent and the Note Lien Collateral Agent, that the Revolving Credit Collateral Agent shall not agree without Note Lien Collateral Agent's advance written consent to any amendment or modifications to such Applicable Landlord Agreement the reasonably likely effect of which is to impair Note Lien Collateral Agent's rights as an invitee under such Applicable Landlord Agreement or impact the Note Lien Collateral Agent differently than it would impact the Revolving Credit Collateral Agent under such Applicable Landlord Agreement prior to the Junior Lien Effective Date.

IV.    Payments.

        4.1    Application of Proceeds.

        (a)   Subject to the provisions of Section 6.5 hereof, so long as the Discharge of Revolving Credit Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, all Revolving Credit Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies by the Revolving Credit Collateral Agent or

27

Revolving Credit Claimholders, shall be applied by the Revolving Credit Collateral Agent to the Revolving Credit Obligations in such order as specified in the relevant Revolving Credit Loan Documents. Upon the Discharge of Revolving Credit Obligations, the Revolving Credit Collateral Agent shall deliver to the Note Lien Collateral Agent any Collateral and proceeds of Collateral held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Note Lien Representatives in such order as specified in the Note Lien Documents.

        (b)   Subject to the provisions of Section 6.5 hereof, so long as the Discharge of Note Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, all Note Lien Collateral or proceeds thereof received in connection with the sale or other disposition of, or collection on, such Collateral upon the exercise of remedies by the Note Lien Collateral Agent or Note Lien Claimholders, shall be applied to the Note Lien Obligations in such order as specified in Note Lien Documents. Upon the Discharge of Note Lien Obligations, the Note Lien Collateral Agent shall deliver to the Revolving Credit Agent any Collateral and proceeds of Collateral held by it in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct to be applied by the Revolving Credit Collateral Agent in such order as specified in the Revolving Credit Loan Documents.

        4.2    Payments Over in Violation of Agreement.    Unless and until both the Discharge of Revolving Credit Obligations and the Discharge of Note Lien Obligations have occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against any Grantor, any Collateral or proceeds thereof (including assets or proceeds subject to Liens referred to in the final sentence of Section 2.3) received by any Revolving Credit Claimholder or any Note Lien Claimholder in connection with the exercise of any right or remedy (including set-off) relating to the Collateral in contravention of this Agreement shall be segregated and held in trust and forthwith paid over to the Revolving Credit Collateral Agent or Note Lien Collateral Agent, as appropriate, in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Note Lien Collateral Agent and Revolving Credit Collateral Agent are each hereby authorized to make any such endorsements as agent for the other Person. This authorization is coupled with an interest and is irrevocable until both the Discharge of Revolving Credit Obligations and Discharge of Note Lien Obligations have occurred.

        4.3    Application of Payments.    Subject to the other terms of this Agreement, all payments received by (a) the Revolving Credit Claimholders may be applied, reversed and reapplied, in whole or in part, to the Revolving Credit Obligations to the extent provided for in the Revolving Credit Loan Documents; and (b) the Note Lien Claimholders may be applied, reversed and reapplied, in whole or in part, to the Note Lien Obligations to the extent provided for in the Note Lien Documents.

V.    OTHER AGREEMENTS.

        5.1    Releases.

        (a)   If in connection with the exercise of any Revolving Credit Collateral Agent's remedies in respect of any Collateral as provided for in Section 3.1, the Revolving Credit Collateral Agent, for itself and/or on behalf of any of the other Revolving Credit Claimholders, releases its Liens on any part of the Revolving Credit Collateral, then the Liens, if any, of the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, on the Collateral sold or disposed of in connection with such exercise, shall be automatically, unconditionally and simultaneously released. The Note Lien Collateral Agent, for itself and/or on behalf of any of the Note Lien Claimholders, promptly shall execute and deliver to the Revolving Credit Collateral Agent or such Grantor such termination statements,

28

releases and other documents as the Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.

        (ii)   If in connection with the exercise by any Note Lien Representative of remedies in respect of any Collateral as provided for in Section 3.2, the Note Lien Collateral Agent, for itself and/or on behalf of any of the Note Lien Claimholders, releases all of its Liens on any part of the Note Lien Collateral, then the Liens, if any, of the Revolving Credit Collateral Agent, for itself and/or for the benefit of the Revolving Credit Claimholders, on the Collateral sold or disposed of in connection with such exercise, shall be automatically, unconditionally and simultaneously released. The Revolving Credit Collateral Agent, for itself and/or on behalf of any such Revolving Credit Claimholder shall promptly execute and deliver to the Note Lien Collateral Agent or such Grantor such termination statements, releases and other documents as the Note Lien Collateral Agent or such Grantor may request to effectively confirm such release.

        (b)   If in connection with any sale, lease, exchange, transfer or other disposition of any Collateral (collectively, a "Disposition") permitted under the terms of both the Revolving Credit Loan Documents and the Note Lien Documents (including voluntary Dispositions of Revolving Credit Collateral by the respective Grantors after a Revolving Credit Default and voluntary Dispositions of Note Lien Collateral by the respective Grantors after a Note Lien Default), (i) the Revolving Credit Collateral Agent, for itself and/or on behalf of any of the Revolving Credit Claimholders, releases its Liens on any part of the Revolving Credit Collateral, in each case other than (A) in connection with the Discharge of Revolving Credit Obligations or (B) after the occurrence and during the continuance of a Note Lien Default, then the Liens, if any, of the Note Lien Representatives, for themselves and/or for the benefit of the Note Lien Claimholders, on such Collateral shall be automatically, unconditionally and simultaneously released, and (ii) any Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders, releases all of its Liens on any part of the Note Lien Collateral, in each case other than (A) in connection with the Discharge of Note Lien Obligations or (B) after the occurrence and during the continuance of a Revolving Credit Default, then the Liens, if any, of the Revolving Credit Collateral Agent, for itself and/or for the benefit of the Revolving Credit Claimholders, on such Collateral shall be automatically, unconditionally and simultaneously released. Each Revolving Credit Collateral Agent and Note Lien Representative, each for itself and/or on behalf of any such Revolving Credit Claimholders or Note Lien Claimholder, as the case may be, promptly shall execute and deliver to the Note Lien Collateral Agent, Revolving Credit Collateral Agent or such Grantor such termination statements, releases and other documents as the Note Lien Collateral Agent, Revolving Credit Collateral Agent or such Grantor may request to effectively confirm such release.

        (c)   Until the Discharge of Revolving Credit Obligations shall occur, the Note Lien Collateral Agent and each Note Lien Representative, for itself and/or on behalf of the Note Lien Claimholders, hereby irrevocably constitutes and appoints each Revolving Credit Collateral Agent and any of its officers or agents, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Note Lien Collateral Agent and each Note Lien Representative or such Note Lien Claimholder, whether in the Revolving Credit Collateral Agent's name or, at the option of the Revolving Credit Collateral Agent, in the Note Lien Collateral Agent's, any Note Lien Representative's or any Note Lien Claimholder's own name, from time to time in such Revolving Credit Collateral Agent's discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release.

29

        (d)   Until the Discharge of Note Lien Obligations shall occur, each Revolving Credit Collateral Agent, for itself and/or on behalf of the Revolving Credit Claimholders hereby irrevocably constitutes and appoints the Note Lien Collateral Agent and any of its officers or agents, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Revolving Credit Collateral Agent or such Revolving Credit Claimholder, whether in the Note Lien Collateral Agent's name or, at the option of the Note Lien Collateral Agent, in such Revolving Credit Collateral Agent's or any Revolving Credit Claimholder's own name, from time to time in Note Lien Collateral Agent's discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release.

        5.2    Insurance.

        (a)   Unless and until the Discharge of Revolving Credit Obligations has occurred, subject to the terms of, and the rights of the Grantors under, the Revolving Credit Loan Documents, (i) the Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Revolving Credit Collateral or the Liens with respect thereto in the event of any loss thereunder or with respect thereto and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting such Collateral; (ii) all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to such Collateral and to the extent required by the Revolving Credit Loan Documents shall be paid to the Revolving Credit Collateral Agent for the benefit of the Revolving Credit Claimholders pursuant to the terms of the Revolving Credit Loan Documents (including, without limitation, for purposes of cash collateralization of letters of credit) and thereafter, to the extent no Revolving Credit Obligations are outstanding, and subject to the terms of, and the rights of the Grantors under, the Note Lien Documents, to the Note Lien Collateral Agent for the benefit of the Note Lien Claimholders to the extent required under the Note Lien Documents and then, to the extent no Note Lien Obligations which were secured by such Collateral are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct, and (iii) if the Note Lien Collateral Agent or any Note Lien Representative or any Note Lien Claimholder shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such proceeds over to the Revolving Credit Collateral Agent in accordance with the terms of Section 4.2.

        (b)   Unless and until the Discharge of Note Lien Obligations has occurred, subject to the terms of, and the rights of the Grantors under the Note Lien Documents, (i) the Note Lien Collateral Agent shall have the sole and exclusive right to adjust settlement for any insurance policy covering the Note Lien Collateral or the Liens with respect thereto in the event of any loss thereunder or with respect thereto and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting such Collateral; (ii) all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to such Collateral and to the extent required by the Note Lien Documents shall be paid to the Note Lien Collateral Agent for the benefit of the Note Lien Claimholders pursuant to the terms of the Note Lien Documents and thereafter, to the extent no Note Lien Obligations which were secured by such Collateral are outstanding, and subject to the terms of, and the rights of the Grantors under, the Revolving Credit Collateral Documents to either the Revolving Credit Collateral Agent for the benefit of

30

the Revolving Credit Claimholders to the extent required under such Revolving Credit Collateral Documents and then, to the extent no Revolving Credit Obligations which were secured by such Collateral are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct, and (iii) if the Revolving Credit Collateral Agent, Note Lien Collateral Agent or any Revolving Credit Claimholder shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such proceeds over to the Note Lien Collateral Agent in accordance with the terms of Section 4.2.

        (c)   To effectuate the foregoing, the Revolving Credit Collateral Agent and Note Lien Collateral Agent shall each receive separate lender's loss payable endorsements naming themselves as loss payee and additional insured, as their interests may appear, with respect to policies which insure Collateral hereunder. To the extent any proceeds are received for business interruption or for any liability or indemnification and those proceeds are not compensation for a casualty loss with respect to the Note Lien Collateral, such proceeds shall first be applied to repay the Revolving Credit Obligations and then be applied, to the extent required by the Note Lien Documents, to the Note Lien Obligations.

        5.3    Amendments to Revolving Credit Loan Documents and Note Lien Documents; Refinancing; Legending Provisions.

        (a)   The Revolving Credit Loan Documents and Note Lien Documents may be amended, supplemented or otherwise modified in accordance with the terms of both the Revolving Credit Loan Documents and the Note Lien Documents and the Revolving Credit Obligations and Note Lien Obligations may be Refinanced, in each case, without notice to, or the consent (except to the extent a consent is required to permit the Refinancing transaction under any Revolving Credit Document or any Note Lien Document) of the Revolving Credit Claimholders or the Note Lien Claimholders, as the case may be, all without affecting the Lien subordination or other provisions of this Agreement, provided, however, that the holders of such Refinancing debt bind themselves in an Intercreditor Joinder Agreement or other writing, reasonably acceptable to the Note Lien Collateral Agent and Revolving Credit Collateral Agent and addressed to the Note Lien Collateral Agent or Revolving Credit Collateral Agent, as the case may be, to the terms of this Agreement and any such amendment, supplement, modification or Refinancing shall be in accordance with the provisions of both the Revolving Credit Loan Documents and the Note Lien Documents.

        (b)   The Companies agree that each Note and each promissory note evidencing Revolving Credit Obligations and each security agreement, pledge agreement and mortgage that is a Revolving Credit Collateral Document or Note Lien Document, as the case may be, shall include the following language (or language to similar effect approved by both the Note Lien Collateral Agent and the Revolving Credit Collateral Agent):

"Notwithstanding anything herein to the contrary, the lien and security interest granted to the [the Revolving Credit Collateral Agent, the Note Lien Collateral Agent or other Person, as applicable] pursuant to this Agreement and the exercise of any right or remedy by the [the Revolving Credit Collateral Agent, the Note Lien Collateral Agent or other Person, as applicable] hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as Administrative Agent, (the "Administrative Agent"), UBS AG, Stamford Branch and Wachovia Bank, National Association, as co-agents

31

serving as the "US Revolving Credit Collateral Agent", UBS AG Canada Branch and Wachovia Capital Finance Corporation (Canada), as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York, serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control."

        (c)   The Revolving Credit Collateral Agent, the Note Lien Collateral Agent and each Note Lien Representative shall each use its best efforts to notify the other parties of any written amendment or modification to any Revolving Credit Loan Document or any Note Lien Document, as applicable, but the failure to do so shall not create a cause of action against the party failing to give such notice or create any claim or right on behalf of any third party. In connection with amendments or modifications permitted by Section 5.3, Revolving Credit Collateral Agent, the Note Lien Collateral Agent and each Note Lien Representative, as applicable shall, upon request of the other party, provide copies of all such modifications or amendments and copies of all other relevant documentation to the other Persons.

        5.4    Bailees for Perfection.

        (a)   Revolving Credit Collateral Agent, the Note Lien Collateral Agent and each Note Lien Representative, as the case may be, agree to hold that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC (such Collateral being the "Pledged Collateral") as collateral agent for the Revolving Credit Claimholders and Note Lien Claimholders, as the case may be, and as bailee for the Revolving Credit Collateral Agent, the Note Lien Collateral Agent or the Note Lien Representative, as the case may be, (such bailment being intended, among other things, to satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of the UCC) and any assignee solely for the purpose of perfecting the security interest granted under the Revolving Credit Loan Documents and the Note Lien Documents, as applicable, subject to the terms and conditions of this Section 5.4.

        (b)   No Person shall have any obligation whatsoever to any other Person to ensure that the Pledged Collateral is genuine or owned by any of the Grantors or to preserve rights or benefits of any Person except as expressly set forth in this Section 5.4. The duties or responsibilities under this Section 5.4 shall be limited solely to holding the Pledged Collateral as bailee in accordance with this Section 5.4 and delivering the Pledged Collateral upon a Discharge of Revolving Credit Obligations or Discharge of Note Lien Obligations, as the case may be, as provided in paragraph (d) below, so that, subject to the terms of this Agreement, (A) until a Discharge of Revolving Credit Obligations, the Revolving Credit Collateral Agent shall be entitled to deal with the Pledged Collateral or Collateral within its "control" in accordance with the terms of this Agreement and other Revolving Credit Loan Documents (but only to the extent that such Collateral constitutes Revolving Credit Collateral) as if the Liens (if any) of the Note Lien Collateral Agent or Note Lien Representatives did not exist and (B) until a Discharge of Note Lien Obligations, the Note Lien Collateral Agent shall be entitled to deal with the Pledged Collateral or Collateral within its "control" in accordance with the terms of this Agreement and other Note Lien Documents (but only to the extent that such Collateral constitutes Note Lien Collateral) as if the Liens (if any) of the Revolving Credit Collateral Agent did not exist

32

        (c)   No Person acting pursuant to this Section 5.4 shall have by reason of the Revolving Credit Loan Documents, the Note Lien Documents, this Agreement or any other document, a fiduciary relationship with any other Person with respect to such acts.

        (d)   Upon the Discharge of Revolving Credit Obligations the Revolving Credit Collateral Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, first, to the Note Lien Collateral Agent to the extent the Note Lien Obligations which are secured by such Pledged Collateral remain outstanding, and second, to the applicable Grantor (in each case, so as to allow such Person to obtain possession or control of such Pledged Collateral). The Revolving Credit Collateral Agent further agree to take all other action reasonably requested by the Note Lien Collateral Agent in connection with the Note Lien Collateral Agent obtaining a first-priority interest in the Collateral or as a court of competent jurisdiction may otherwise direct.

        (e)   Upon the Discharge of the Note Lien Obligations, the Note Lien Collateral Agent shall deliver the remaining Pledged Collateral (if any) together with any necessary endorsements, first, to the Revolving Credit Collateral Agent to the extent any Revolving Credit Obligations which are secured by such Pledged Collateral remain outstanding, and second, to the applicable Grantor (in each case, so as to allow such Person to obtain possession or control of such Pledged Collateral). The Note Lien Collateral Agent further agrees to take all other action reasonably requested by the Revolving Credit Collateral Agent in connection with the Revolving Credit Collateral Agent obtaining a first-priority interest in the Collateral or as a court of competent jurisdiction may otherwise direct

        5.5    When Discharge of Revolving Credit Obligations and Discharge of Note Lien Obligations Deemed to Not Have Occurred.    If concurrently with the Discharge of Revolving Credit Obligations or the Discharge of Note Lien Obligations, any of the Companies or any other Borrower enters into any Refinancing of any Revolving Credit Obligation or Note Lien Obligation as the case may be, which Refinancing is permitted by the Note Lien Documents and the Revolving Credit Loan Documents, then such Discharge of Revolving Credit Obligations or the Discharge of Note Lien Obligations, shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken as a result of the occurrence of such first Discharge of Revolving Credit Obligations or the Discharge of Note Lien Obligations) and, from and after the date on which the New Debt Notice (defined below) is delivered to the Note Lien Collateral Agent or the Revolving Credit Collateral Agent, as appropriate, in accordance with the next sentence, the obligations under such Refinancing shall automatically be treated as Revolving Credit Obligations or Note Lien Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the Revolving Credit Collateral Agent or Note Lien Collateral Agent, as the case may be, under such new Revolving Credit Loan Documents or Note Lien Documents shall be the Revolving Credit Collateral Agent or Note Lien Collateral Agent for all purposes of this Agreement. Upon receipt of a notice (the "New Debt Notice") stating that any of the Companies or any other Borrower, as the case may be, has entered into new Revolving Credit Loan Documents or new Note Lien Documents (which notice shall include a complete copy of the relevant new documents and provide the identity of the new agent for such facility, such agent, the "New Agent"), the Revolving Credit Collateral Agent and the Note Lien Collateral Agent shall promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as such Company, such Borrower or such New Agent shall reasonably request in order to provide to the New Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement and (b) deliver, to the extent contemplated by this Agreement, to the New Agent any Pledged Collateral held by it together with any necessary endorsements (or otherwise allow the New Agent to obtain control of such Pledged Collateral). The New Agent shall

33

agree in a writing addressed to the Revolving Credit Collateral Agent, Note Lien Collateral Agent and each Note Lien Representative, the Revolving Credit Claimholders, and Note Lien Claimholders, as the case may be, to be bound by the terms of this Agreement.

VI.    INSOLVENCY OR LIQUIDATION PROCEEDINGS.

        6.1    Finance and Sale Issues.

        (a)   Until the Discharge of Revolving Credit Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Revolving Credit Collateral Agent shall, acting in accordance with the Revolving Credit Agreement, agree to permit the use of "Cash Collateral" (as such term is defined in Section 363(a) of the Bankruptcy Code) other than the identifiable Cash Proceeds of any Note Lien Collateral on which a Lien has been granted to the Revolving Credit Collateral Agent pursuant to the Revolving Credit Loan Documents; or any Grantor to obtain financing, whether from the Revolving Credit Claimholders or any other Person under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law ("DIP Financing"), then each Note Lien Claimholder agrees that it will raise no objection to or contest such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) it is on commercially reasonable terms, (ii) the Note Lien Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use or the DIP Financing that are materially prejudicial to their interests in the Note Lien Collateral (other than any Real Estate Assets upon which such Lien has not been perfected), and (iii) the terms of the DIP Financing (A) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document and (B) do not expressly require the liquidation of the Collateral prior to a default under the DIP Financing documentation or Cash Collateral order. To the extent the Liens securing the Revolving Credit Obligations are subordinated to or pari passu with such DIP Financing which meets the requirements of clauses (i) through (iii) above, each Note Lien Representative will subordinate any Liens in the Revolving Credit Collateral to the Liens securing such DIP Financing (and all Obligations relating thereto) and will not request adequate protection or any other relief in connection therewith (except, as expressly agreed by the Revolving Credit Collateral Agent or to the extent permitted by Section 6.3).

        (b)   Until the Discharge of Note Lien Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Note Lien Representatives shall, acting in accordance with the Note Lien Documents, agree to permit the use of "Cash Collateral" (as such term is defined in Section 363(a) of the Bankruptcy Code consisting solely of the identifiable Cash Proceeds of any Note Lien Collateral on which a Lien has been granted to the Note Lien Representatives pursuant to the Note Lien Documents; then each Revolving Credit Claimholder agrees that it will raise no objection to or contest such Cash Collateral use so long as such Cash Collateral use meets the following requirements: (i) it is on commercially reasonable terms and (ii) Revolving Credit Claimholders retain the right to object to any ancillary agreements or arrangements regarding the Cash Collateral use that are materially prejudicial to their interests in the Note Lien Collateral.

        (c)   Until the Discharge of Revolving Credit Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Revolving Credit Collateral Agent shall, acting in accordance with the Revolving Credit Agreement, agree to permit a sale of the Revolving Credit Collateral free and clear of Liens or other claims, under Section 363 of the Bankruptcy Code or otherwise, then each Note Lien Claimholder agrees that it will not raise any objection to or contest such sale or request adequate protection or

34

any other relief in connection therewith (it being understood that the Note Lien Claimholders still, but subject to this Agreement, have rights with respect to the proceeds of such Collateral).

        (d)   Until the Discharge of Note Lien Obligations has occurred, if any Grantor shall be subject to any Insolvency or Liquidation Proceeding and the Note Lien Representatives shall, acting in accordance with the Note Lien Documents, agree to permit a sale of the Note Lien Collateral free and clear of Liens or other claims, under Section 363 of the Bankruptcy Code or otherwise, then each Revolving Credit Claimholder agrees that it will not raise any objection to or contest such sale or request adequate protection or any other relief in connection therewith (it being understood that the Revolving Credit Claimholders still, but subject to this Agreement, have rights with respect to the proceeds of such Collateral).

        6.2    Relief from the Automatic Stay.

        (a)   Until the Discharge of Revolving Credit Obligations has occurred, the Note Lien Collateral Agent, each Note Lien Representative and each Note Lien Claimholder, agrees that none of them shall seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Revolving Credit Collateral, without the prior written consent of the Revolving Credit Collateral Agent.

        (b)   Until the Discharge of Note Lien Obligations has occurred, each Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders agrees that none of them shall seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Note Lien Collateral (other than to the extent such relief is required to exercise its rights under Section 3.3 or Section 3.4), without the prior written consent of the Note Lien Collateral Agent.

        6.3    Adequate Protection.

        (a)   The Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each agree that none of them shall contest (or support any other Person contesting):

        (1)   any request by any Revolving Credit Collateral Agent for adequate protection with respect to the Revolving Credit Collateral; or

        (2)   any objection by any Revolving Credit Collateral Agent to any motion, relief, action or proceeding based on such Revolving Credit Collateral Agent or the Revolving Credit Claimholders claiming a lack of adequate protection with respect to the Revolving Credit Collateral.

        (b)   Each Revolving Credit Collateral Agent and the Revolving Credit Claimholders, each agree that none of them shall contest (or support any other Person contesting):

        (1)   any request by the Note Lien Collateral Agent for adequate protection with respect to the Note Lien Collateral; or

        (2)   any objection by the Note Lien Collateral Agent to any motion, relief, action or proceeding based on the Note Lien Collateral Agent or any Note Lien Claimholder claiming a lack of adequate protection with respect to the Note Lien Collateral.

        (c)   Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency or Liquidation Proceeding:

        (1)   if the Revolving Credit Claimholders (or any subset thereof) are granted adequate protection with respect to the Revolving Credit Collateral in the form of

35

additional collateral (even if such collateral is not of a type which would otherwise have constituted Revolving Credit Collateral) in connection with any Cash Collateral use or DIP Financing, then the Note Lien Collateral Agent, on behalf of itself or any of the Note Lien Claimholders, may seek or request adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional collateral, which Lien will be subordinated (except to the extent that the Note Lien Collateral Agent already had a Lien on such Collateral (in which case the priorities established by Section 2.1 shall apply)) to the Liens securing the Revolving Credit Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens of the Note Lien Collateral Agent on Revolving Credit Collateral; and

        (2)   in the event any Note Lien Claimholder seeks or requests adequate protection in respect of Note Lien Collateral and such adequate protection is granted in the form of additional collateral (even if such collateral is not of a type which would otherwise have constituted Note Lien Collateral), then the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders each agrees that the Revolving Credit Collateral Agent may also be granted a Lien on the same additional collateral as security for the Revolving Credit Obligations and for any Cash Collateral use or DIP Financing provided by the Revolving Credit Claimholders, each Revolving Credit Collateral Agent and each Revolving Credit Claimholder agrees that any Lien on such additional collateral securing the Revolving Credit Obligations, shall be subordinated (except to the extent that the Revolving Credit Collateral Agent already had a Lien on such Collateral (in which case the priorities established by Section 2.1 shall apply)) to the Liens on such collateral securing the Note Lien Obligations, all on the same basis as the other Liens of the Revolving Credit Collateral Agent on Note Lien Collateral.

        (d)   Except as otherwise expressly set forth in Section 6.1 or in connection with the exercise of remedies with respect to (i) the Revolving Credit Collateral, nothing herein shall limit the rights of any Note Lien Claimholder from seeking adequate protection with respect to their rights in the Note Lien Collateral in any Insolvency or Liquidation Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise) or (ii) the Note Lien Collateral, nothing herein shall limit the rights of any Revolving Credit Claimholder from seeking adequate protection with respect to their rights in the Revolving Credit Collateral in any Insolvency or Liquidation Proceeding (including adequate protection in the form of a cash payment, periodic cash payments or otherwise).

        6.4    Avoidance Issues.    If any Revolving Credit Claimholder or Note Lien Claimholder is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Grantor any amount paid in respect of Revolving Credit Obligations or the Note Lien Obligations, as the case may be, (a "Recovery"), then such Revolving Credit Claimholders or Note Lien Claimholders shall be entitled to a reinstatement of Revolving Credit Obligations or the Note Lien Obligations, as the case may be, with respect to all such recovered amounts. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement.

        6.5    Reorganization Securities.    Notwithstanding anything to the contrary in this Agreement, if, in any Insolvency or Liquidation Proceeding, the Revolving Credit Claimholders or the Note Lien Claimholders (the "Applicable Junior Lien Claimholders") receive pursuant to a plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations ("Junior Lien Reorganization Securities") in whole or in part on account of their junior Liens on the Note Lien Collateral or the Revolving Credit Collateral, as the case may be (such Collateral as to which

36

the applicable Claimholders have a junior Lien, the "Applicable Junior Collateral") that are secured by Liens on such Applicable Junior Collateral, and (ii) the other Claimholders (the "Applicable Senior Lien Claimholders") receive pursuant to such plan of reorganization or similar dispositive restructuring plan a distribution of debt obligations ("Senior Lien Reorganization Securities") in whole or in part on account of their Revolving Credit Obligations or Note Lien Obligations, as the case may be, that are secured by Liens on such Applicable Junior Collateral, then (i) the Applicable Junior Lien Claimholders shall be entitled to retain their Junior Lien Reorganization Securities and shall not be obligated to turnover same to any or all of the Applicable Senior Lien Claimholders, and (ii) to the extent the Junior Lien Reorganization Securities and the Senior Lien Reorganization Securities are secured by Liens upon the same Applicable Junior Collateral, the provisions of this Agreement will survive the distribution of such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and will apply with like effect to the Junior Lien Reorganization Securities and Senior Lien Reorganization Securities, to such Liens securing such Junior Lien Reorganization Securities and Senior Lien Reorganization Securities and to the distribution of proceeds of such Applicable Junior Collateral.

        6.6    Post-Petition Interest.

        (a)   The Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders each agree that none of them shall oppose or seek to challenge any claim by any Revolving Credit Collateral Agent or any Revolving Credit Claimholder for allowance in any Insolvency or Liquidation Proceeding of Revolving Credit Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Lien securing any Revolving Credit Claimholder's claim, without regard to the existence of the Lien of the Note Lien Collateral Agent on behalf of the Note Lien Claimholders on the Collateral.

        (b)   Neither any Revolving Credit Collateral Agent, nor any other Revolving Credit Claimholder shall oppose or seek to challenge any claim by the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder for allowance in any Insolvency or Liquidation Proceeding of Note Lien Obligations consisting of post-petition interest, fees or expenses to the extent of the value of the Lien securing any Note Lien Claimholder's claim, without regard to the existence of the Lien of the Revolving Credit Collateral Agent on behalf of the Revolving Credit Claimholders on the Collateral.

VII.    RELIANCE; WAIVERS; ETC.

        7.1    Reliance.    Other than any reliance on the terms of this Agreement, each Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under its Revolving Credit Loan Documents, acknowledges that it and such Revolving Credit Claimholders have, independently and without reliance on the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into such Revolving Credit Loan Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Revolving Credit Loan Documents or this Agreement. The Note Lien Collateral Agent and each Note Lien Representative, on behalf of itself and the Note Lien Claimholders, acknowledges that it and the Note Lien Claimholders have, independently and without reliance on any Revolving Credit Collateral Agent or any Revolving Credit Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the Note Lien Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the Note Lien Documents or this Agreement.

37

        7.2    No Warranties or Liability.    Each Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under the Revolving Credit Loan Documents, acknowledges and agrees that each of the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Note Lien Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Except as otherwise provided in this Agreement, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the Note Lien Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. The Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, each acknowledges and agrees that the Revolving Credit Collateral Agent and the Revolving Credit Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectibility or enforceability of any of the Revolving Credit Loan Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Except as otherwise provided herein, the Revolving Credit Collateral Agent and the Revolving Credit Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under their respective Revolving Credit Loan Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. The Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders shall have no duty to the Revolving Credit Collateral Agent or any of the Revolving Credit Claimholders, and the Revolving Credit Collateral Agent and the Revolving Credit Claimholders shall have no duty to the Note Lien Collateral Agent, the Note Lien Representatives or any of the Note Lien Claimholders, to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with any Grantor (including the Revolving Credit Loan Documents and the Note Lien Documents), regardless of any knowledge thereof which they may have or be charged with.

        7.3    No Waiver of Lien Priorities.

        (a)   No right of the Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives or the Note Lien Claimholders to enforce any provision of this Agreement, any Revolving Credit Loan Document or any Note Lien Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Grantor or by any act or failure to act by such Persons or by any noncompliance by any such Person with the terms, provisions and covenants of this Agreement, any of the Revolving Credit Loan Documents or any of the Note Lien Documents, regardless of any knowledge thereof which such Persons, or any of them, may have or be otherwise charged with.

        (b)   Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Grantors under the Revolving Credit Loan Documents and Note Lien Documents and subject to the provisions of Section 5.3(a)), the Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders may, at any time and from time to time in accordance with the Revolving Credit Loan Documents and Note Lien Documents and/or applicable law, without the consent of, or notice to, the other Persons (as the case may be), without incurring any liabilities to such Persons and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or

38

other right or remedy is affected, impaired or extinguished thereby) do any one or more of the following:

        (1)   change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the Obligations or any Lien or guaranty thereof or any liability of any Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by the Revolving Credit Collateral Agent or Note Lien Collateral Agent or any rights or remedies under any of the Revolving Credit Loan Documents or the Note Lien Documents;

        (2)   sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Collateral (except to the extent provided in this Agreement) or any liability of any Grantor or any liability incurred directly or indirectly in respect thereof;

        (3)   settle or compromise any Obligation or any other liability of any Grantor or any security therefore or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability in any manner or order that is not inconsistent with the terms of this Agreement; and

        (4)   exercise or delay in or refrain from exercising any right or remedy against any Grantor or any security or any other Grantor or any other Person, elect any remedy and otherwise deal freely with any Grantor.

        7.4    Obligations Unconditional.    All rights, interests, agreements and obligations of the Revolving Credit Collateral Agent and the Revolving Credit Claimholders and the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, respectively, hereunder shall remain in full force and effect irrespective of:

        (a)   any lack of validity or enforceability of any Revolving Credit Loan Documents or any Note Lien Documents;

        (b)   except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the Revolving Credit Obligations or Note Lien Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Revolving Credit Loan Document or any Note Lien Document;

        (c)   except as otherwise expressly set forth in this Agreement, any exchange of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Revolving Credit Obligations or Note Lien Obligations or any guaranty thereof;

        (d)   the commencement of any Insolvency or Liquidation Proceeding in respect of any Grantor; or

        (e)   any other circumstances which otherwise might constitute a defense available to, or a discharge of, any Grantor in respect of any Revolving Credit Collateral Agent, the Revolving Credit Obligations, any Revolving Credit Claimholder, the Note Lien Collateral Agent, the Note Lien Representatives, the Note Lien Obligations or any Note Lien Claimholder in respect of this Agreement.

39

VIII.    MISCELLANEOUS.

        8.1    Conflicts.    In the event of any conflict between the provisions of this Agreement and the provisions of any Revolving Credit Loan Document or any Note Lien Document, the provisions of this Agreement shall govern and control.

        8.2    Effectiveness; Continuing Nature of this Agreement; Severability.    This Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of lien subordination and the Revolving Credit Collateral Agent, the Revolving Credit Claimholders and the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders may continue, at any time and without notice to any of the others, to extend credit and other financial accommodations and lend monies to or for the benefit of any Grantor in reliance hereon. Each such Person hereby waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. All references to any Grantor shall include such Grantor as debtor and debtor-in-possession and any receiver or Note Lien Collateral Agent for any Grantor (as the case may be) in any Insolvency or Liquidation Proceeding. This Agreement shall terminate and be of no further force and effect:

        (a)   with respect to the Revolving Credit Collateral Agent, the Revolving Credit Claimholders and the Revolving Credit Obligations, the date of the Discharge of Revolving Credit Obligations, subject to the rights of the Revolving Credit Collateral Agent and Revolving Credit Claimholders under Section 6.4; and

        (b)   with respect to the Note Lien Collateral Agent, the Note Lien Representatives, the Note Lien Claimholders and the Note Lien Obligations, the date of the Discharge of Note Lien Obligations, subject to the rights of the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders under Section 6.4.

        8.3    Amendments; Waivers.    No amendment, modification or waiver of any of the provisions of this Agreement shall be deemed to be made unless the same shall be in writing signed on behalf of Revolving Credit Collateral Agent and the Note Lien Collateral Agent or their respective authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Notwithstanding the foregoing, no Grantor shall have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement except to the extent its rights are directly affected (which includes, but is not limited to any amendment to the Grantors' ability to cause additional obligations to constitute Revolving Credit Obligations or Note Lien Obligations as the Grantors may designate).

        8.4    Information Concerning Financial Condition of the Companies and their Subsidiaries.    The Revolving Credit Collateral Agent and the Revolving Credit Claimholders, on the one hand, and the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (a) the financial condition of the Companies and their Subsidiaries and all endorsers and/or guarantors of the Revolving Credit Obligations or the Note Lien Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Revolving Credit Obligations or the Note Lien Obligations. Neither the Revolving Credit Collateral Agent and the Revolving Credit Claimholders, on the one hand, nor the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien

40

Claimholders, on the other hand, shall have any duty to advise the other of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that either any Revolving Credit Collateral Agent or any of the Revolving Credit Claimholders, on the one hand, or the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders, on the other hand, undertakes at any time or from time to time to provide any such information to any of the others, it or they shall be under no obligation:

        (a)   to make, and shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided;

        (b)   to provide any additional information or to provide any such information on any subsequent occasion;

        (c)   to undertake any investigation; or

        (d)   to disclose any information, which pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

        8.5    Subrogation.

        (a)   With respect to the value of any payments or distributions in cash, property or other assets that any of the Note Lien Claimholders or the Note Lien Collateral Agent or any Note Lien Representative pays over to the Revolving Credit Collateral Agent or the Revolving Credit Claimholders under the terms of this Agreement, the Note Lien Claimholders, the Note Lien Collateral Agent and any Note Lien Representative shall be subrogated to the rights of the Revolving Credit Collateral Agent and the Revolving Credit Claimholders; provided, however, that, the Note Lien Collateral Agent, any Note Lien Representative and the Note Lien Claimholders, hereby each agrees not to assert or enforce all such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Revolving Credit Obligations has occurred. Each Grantor acknowledges and agrees that, to the extent permitted by applicable law, the value of any payments or distributions in cash, property or other assets received by the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder that are paid over to the Revolving Credit Collateral Agent or the Revolving Credit Claimholders pursuant to this Agreement shall not reduce the amounts which such Grantor shall be obligated to pay the Note Lien Collateral Agent, any such Note Lien Representative or any such Note Lien Claimholder.

        (b)   With respect to the value of any payments or distributions in cash, property or other assets that any of the Revolving Credit Claimholders or any Revolving Credit Collateral Agent pays over to the Note Lien Collateral Agent or any Note Lien Representative or the Note Lien Claimholders under the terms of this Agreement, the Revolving Credit Claimholders and the Revolving Credit Collateral Agent shall be subrogated to the rights of the Note Lien Collateral Agent, any Note Lien Representative and the Note Lien Claimholders; provided, however, that the Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders, hereby agrees not to assert or enforce all such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Note Lien Obligations has occurred. Each Grantor acknowledges and agrees that, to the extent permitted by applicable law, the value of any payments or distributions in cash, property or other assets received by the Revolving Credit Collateral Agent or the Revolving Credit Claimholders that are paid over to the Note Lien Collateral Agent, any Note Lien Representative or any Note Lien Claimholder pursuant to this Agreement shall not reduce the amounts which such

41

Grantor shall be obligated to pay the Revolving Credit Collateral Agent or such Revolving Credit Claimholders.

        8.6    SUBMISSION TO JURISDICTION; WAIVERS.

        (a)   ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:

        (1)   ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

        (2)   WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

        (3)   AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 8.8; AND

        (4)   AGREES THAT SERVICE AS PROVIDED IN CLAUSE (3) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT.

        (b)   EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER HEREOF, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE; MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 8.6(b) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

        (c)   EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT or ANY OTHER REVOLVING CREDIT LOAN DOCUMENT, NOTE LIEN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO.

42

        8.7    Notices.    All notices to the Note Lien Representatives or to the Revolving Credit Claimholders and Note Lien Claimholders permitted or required under this Agreement shall also be sent to the Revolving Credit Collateral Agent and Note Lien Collateral Agent, respectively. Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed. For the purposes hereof, the addresses of the parties hereto shall be as set forth below each party's name on the signature pages hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

        8.8    Further Assurances.    The Revolving Credit Collateral Agent, the Note Lien Collateral Agent, each Note Lien Representative and each of the Claimholders, each agrees that each of them shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the Revolving Credit Collateral Agent or Note Lien Collateral Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement. Without limiting the generality of the foregoing, all such Persons agree upon request by Revolving Credit Collateral Agent or Note Lien Collateral Agent, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the Revolving Credit Collateral or Note Lien Collateral, as applicable, and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the Revolving Credit Loan Documents and the Note Lien Documents.

        8.9    APPLICABLE LAW.    THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

        8.10    Binding Effect on Successors and Assigns and on Claimholders and Note Lien Representatives.    This Agreement shall be binding upon the Revolving Credit Collateral Agent, the Revolving Credit Claimholders, the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders and their respective successors and assigns. Note Lien Collateral Agent represents that it has not agreed to any modification of the provisions in the Note Lien Documents authorizing it to execute this Agreement and bind the Note Lien Claimholders and Note Lien Representatives, and each Revolving Credit Collateral Agent represents that it has not agreed to any modification of the provisions in the Revolving Credit Agreement authorizing it to execute this Agreement and bind the Revolving Credit Claimholders. Notwithstanding any implication to the contrary in any provision in any other section of the Agreement, neither the Note Lien Collateral Agent nor any Revolving Credit Collateral Agent makes any representation regarding the validity or binding effect of the Note Lien Documents or Revolving Credit Loan Documents, respectively, or their authority to bind any of the Claimholder's through their execution of this Agreement.

        8.11    Specific Performance.    Each of the Revolving Credit Collateral Agent and the Note Lien Collateral Agent may demand specific performance of this Agreement. Each Revolving Credit Collateral Agent, on behalf of itself and the Revolving Credit Claimholders under the Revolving Credit Loan Documents, and the Note Lien Collateral Agent, on behalf of itself, the Note Lien Representatives and the Note Lien Claimholders, hereby irrevocably waive any defense based on the adequacy of a remedy at law and any other defense which might be asserted to bar the remedy of specific performance in any action which may be brought by the Revolving Credit Collateral Agent or the Revolving Credit Claimholders or the Note Lien Collateral Agent, the Note Lien Representatives or the Note Lien Claimholders, as the case may be.

43

        8.12    Headings.    Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

        8.13    Counterparts.    This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement or any document or instrument delivered in connection herewith by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement or such other document or instrument, as applicable.

        8.14    Authorization.    By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.

        8.15    No Third Party Beneficiaries.    This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the Revolving Credit Collateral Agent, the Note Lien Collateral Agent, the Note Lien Representatives, the Revolving Credit Claimholders and the Note Lien Claimholders. Nothing in this Agreement shall impair, as between the Grantors and the Revolving Credit Collateral Agent and the Revolving Credit Claimholders, or as between the Grantors and the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders the obligations of the Grantors to pay principal, interest, fees and other amounts as provided in the Revolving Credit Loan Documents and the Note Lien Documents, respectively.

        8.16    Provisions Solely to Define Relative Rights.    The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Revolving Credit Collateral Agent and the Revolving Credit Claimholders on the one hand and the Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders on the other hand. None of the Grantor or any other creditor thereof shall have any rights hereunder and neither the Companies nor any Grantor may rely on the terms hereof. Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Revolving Credit Obligations, and the Note Lien Obligations as and when the same shall become due and payable in accordance with their terms.

        8.17    Marshalling of Assets.    The Note Lien Collateral Agent, the Note Lien Representatives and the Note Lien Claimholders hereby each waive any and all rights to have the Revolving Credit Collateral, or any part thereof, marshaled upon any foreclosure or other enforcement of any Revolving Credit Collateral Agent's or Note Lien Collateral Agent's Liens. Revolving Credit Collateral Agent and each Revolving Credit Claimholder hereby waive any and all rights to have the Note Lien Collateral, or any part thereof, marshaled upon any foreclosure or other enforcement of the Note Lien Collateral Agent's Liens.

[Remainder of Page Intentionally Left Blank]
[Signature Pages Follow]

44

        IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor Agreement as of the date first written above.

US Revolving Credit Collateral Agent
UBS AG, STAMFORD BRANCH, as US Co-Collateral Agent
By:
	Name: Title:
Notice Address:
UBS AG, Stamford Branch 677 Washington Boulevard Stamford, Connecticut 06901 Attention: Doris Mesa Fax No.: (203) 719-4176
With a copy to:
Latham & Watkins, LLP 233 S. Wacker Drive, Suite 5800 Chicago, IL 60606 Attention: Donald L. Schwartz Fax No.: (312) 993-9767

US Revolving Credit Collateral Agent
WACHOVIA BANK, NATIONAL ASSOCIATION, as US Co-Collateral Agent
By:
	Name: Title:
Notice Address:
1133 Avenue of the Americas New York, New York 10036 Attention: Portfolio Manager Fax No.: (212) 445-4283

Canadian Revolving Credit Collateral Agent
UBS AG CANADA BRANCH, as Canadian Co-Collateral Agent
By:
	Name: Title:
Notice Address:
UBS AG Canada Branch 161 Bay Street Suite 4100, BCE Place Toronto, Ontario M5J2S1 Attention: Amy Fung Fax No.: (416) 350-2261
With a copy to:
Latham & Watkins, LLP 233 S. Wacker Drive, Suite 5800 Chicago, IL 60606 Attention: Donald L. Schwartz Fax No.: (312) 993-9767

Canadian Revolving Credit Collateral Agent
WACHOVIA CAPITAL FINANCE CORPORATION (CANADA), as Canadian Co-Collateral Agent
By:
	Name: Title:
Notice Address:
Wachovia Capital Finance Corporation (Canada) 141 Adelaide Street West Suite 1500 Toronto, Ontario M5H 3L5 Attention: Portfolio Manager Fax No.: (416) 364-6068
With a copy to:
Wachovia Bank, National Association 1133 Avenue of the Americas New York, New York 10036 Attention: Portfolio Manager Fax No.: (212) 545-4283

Administrative Agent
UBS AG, STAMFORD BRANCH, as Administrative Agent
By:
	Name: Title:
Notice Address:
UBS AG, Stamford Branch 677 Washington Boulevard Stamford, Connecticut 06901 Attention: Doris Mesa Fax No.: (203) 719-4176
With a copy to:
Latham & Watkins, LLP 233 S. Wacker Drive, Suite 5800 Chicago, IL 60606 Attention: Donald L. Schwartz Fax No.: (312) 993-9767

Note Lien Collateral Agent
THE BANK OF NEW YORK, as Note Lien Collateral Agent
By:
	Name: Title:
Notice Address:
The Bank of New York 101 Barclary Street, 8 W New York, New York 10286 Attention: Corporate Trust Administration Fax No.: 212-815-5707
With a copy to:
Emmet, Marvin & Martin, LLP 120 Broadway 32nd Floor New York, NY 10271 Attention: Deirdre K. Pierson Fax No.: 212-238-3100

Acknowledged and Agreed to by:
LNT
LINENS 'n THINGS, INC.
By:	Name: Title:
Holdings
LINENS HOLING CO.
By:	Name: Title:
LNT Center
LINENS 'n THINGS CENTER, INC.
By:	Name: Title:
Canadian Borrower
LINENS 'n THINGS CANADA CORP
By:	Name: Title:

Subsidiary Guarantors
BLOOMINGTON MN, L.T. INC.
By:	Name: Title:
LNT INC.
By:	Name: Title:
LNT SERVICES, INC.
By:	Name: Title:
LNT WEST
By:	Name: Title:
VENDOR FINANCE LLC
By:	Name: Title:

LNT LEASING II LLC
By:	Name: Title:
LNT VIRGINIA LLC
By:	Name: Title:
LNT MERCHANDISING COMPANY, LLC
By:	Name: Title:
LNT LEASING III, LLC
By:	Name: Title:
CITIDEL LNT, LLC
By:	Name: Title:

EXHIBIT A

FORM OF INTERCREDITOR AGREEMENT JOINDER

        The undersigned,                        , a                        , hereby agrees to become party as [a Grantor] [a Note Lien Representative] under the Intercreditor Agreement dated as of February 14, 2006 (the "Intercreditor Agreement") among Linens 'n Things, Inc., a Delaware corporation ("LNT"), Linens Holing Co., a Delaware corporation ("Holdings"), Linens 'n Things Center, Inc., a California corporation ("LNT Center"; and together with LNT. the "Companies" and each individually a "Company"), Linens 'n Things Canada Corp, a Nova Scotia corporation (the "Canadian Borrower"; and together with the Companies, the "Borrowers" and each individually a " Borrower"), certain subsidiaries of Holdings (the "Subsidiary Guarantors" and together with Holdings, the "Guarantors"), UBS AG, STAMFORD BRANCH, as Administrative Agent (the "Administrative Agent"), UBS AG, STAMFORD BRANCH and WACHOVIA BANK, NATIONAL ASSOCIATION, in their capacities as US co-collateral agents for the Revolving Credit Lenders (including their successors and assigns from time to time, collectively referred to as the "US Revolving Credit Collateral Agent"), UBS AG CANADA BRANCH and WACHOVIA CAPITAL FINANCE CORPORATION (CANADA), in their capacities as Canadian co-collateral agents for the Revolving Credit Lenders (including their successors and assigns from time to time, collectively referred to as the "Canadian Revolving Credit Collateral Agent"; and together with the US Revolving Credit Collateral Agent, the "Revolving Credit Collateral Agent"), and THE BANK OF NEW YORK, in its capacity as the collateral agent under the Note Lien Security Documents referred to below (including its successors and assigns from time to time, the "Note Lien Collateral Agent"), as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, for all purposes thereof on the terms set forth therein, and to be bound by the terms of the Intercreditor Agreement as fully as if the undersigned had executed and delivered the Intercreditor Agreement as of the date thereof.

        The provisions of Article 8 of the Intercreditor Agreement will apply with like effect to this Joinder.

        IN WITNESS WHEREOF, the parties hereto have caused this Intercreditor Agreement Joinder to be executed by their respective officers or representatives as of                        , 20            .

[                                                                                      ]

By:

Name:

Title:

A-1

QuickLinks

INTERCREDITOR AGREEMENT

EX-10.14

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.14

SEPARATION AGREEMENT AND GENERAL RELEASE

        THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the "Agreement") is made and entered into as of the 12^th day of January, 2006, by and between Linens 'n Things, Inc., a Delaware corporation (together with its successors and assigns, the "Company"), and Jack E. Moore, Jr. (the "Executive").

        WHEREAS, the Company and the Executive have previously entered into and executed an Employment Agreement dated as of November 29, 2004 (the "Employment Agreement"), a copy of which is on file with the SEC as Exhibit 10.4 to Current Report on Form 8-K dated November 29, 2004; and

        WHEREAS, the Executive's employment relationship with the Company is terminating, as further described in this Agreement;

        NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein, it is agreed as follows:

1.     Separation Terms; Continuation of Responsibilities; Employment Termination Date.

        (a)   Executive will cease as President and Chief Operating Officer of the Company effective January 12, 2006.

        (b)   Executive will continue as an employee of the Company, and will continue to be entitled to receive his normal base salary and will continue to be covered by his normal medical, health and life insurance benefits, from January 12, 2006 up to and including (but not after) January 31, 2006 (or the Employment Termination Date under Paragraph 1(d) below, if earlier). During such period the Executive will at all times be available for all such assignments and assistance with respect to all of the matters under his responsibility as an executive of the Company prior to January 12, 2006 and, in addition, the Executive will have no right or authority to act on behalf of the or to bind the Company or its subsidiaries or to incur expenses or costs in connection with the Company or its subsidiaries.

        (c)   On January 31, 2006, Executive will be placed, as an employee of the Company, on unpaid leave of absence. Executive will continue on such unpaid leave of absence from January 31, 2006 up to and including (but not after) his Employment Termination Date (as established under and set forth in Paragraph 1(d) below) (the "Unpaid Leave of Absence"). The following shall apply with respect to the period covered by the Unpaid Leave of Absence:

        (i)    Executive's status will be "unpaid leave of absence";

        (ii)   throughout the period of Unpaid Leave of Absence the Executive will at all times be available for assignments, assistance and consultation with respect to any of the matters under his responsibility as an executive of the Company prior to January 12, 2006;

        (iii)  Executive will not receive or be entitled to any base salary or other cash compensation with respect to such period;

        (iv)  Executive will not receive or be eligible for any bonus or other incentive compensation, or to accrue any vacation days or entitlement with respect to such period;

        (v)   Executive will continue to be covered only by his normal medical, health and life insurance benefits;

        (vi)  Executive will not be eligible under or covered by any disability policy, plan or coverage of or sponsored by the Company;

        (vii) Executive will have no right or authority to act on behalf of or to bind the Company or its subsidiaries or to incur expenses or costs in connection with the Company or its subsidiaries;

        (viii) the period of such Unpaid Leave of Absence will not be included or taken into account with respect to any "pro rata annual incentive award for the year in which termination occurs" under Section 10(c)(iii) or 10(e)(iii) of the Employment Agreement, as applicable, pursuant to the provisions of Paragraph 1(d) below; and

        (ix)  the Unpaid Leave of Absence will terminate on the Employment Termination Date as established pursuant to the provisions of Paragraph 1(d) below.

        (d)   The date of employment termination under Section 10 of the Employment Agreement will be the earliest of the following (the "Employment Termination Date"):

        (i)    the closing and consummation of the merger pursuant to the merger agreement dated November 8, 2005 among the Company and the entities formed by Apollo Management V, L.P., NRDC Real Estate Advisors I LLC and Silver Point Capital Fund Investments, LLC (the "Apollo Merger Agreement");

        (ii)   April 18, 2006; or

        (iii)  any termination of the Apollo Merger Agreement.

The Company acknowledges that the closing and consummation of the merger pursuant to the terms of the Apollo Merger Agreement, if such closing and consummation in fact occurs, would constitute a "Change in Control" as defined in Section 10(c) of the Employment Agreement.

In the event that a "Change in Control" (as defined in Section 10(c) of the Employment Agreement) has not occurred on or before the Employment Termination Date as determined under this Paragraph 1(d), then the Executive's employment shall be deemed a termination of employment without Cause prior to a Change in Control pursuant to Section 10(c) of the Employment Agreement and the Company shall satisfy its obligations to the Executive pursuant to Section 10(c) of the Employment Agreement (subject to compliance with Section 409A of the Internal Revenue Code, as amended, and subject to Paragraph 1(c) (viii) above with respect to excluding the period of any Unpaid Leave of Absence for purposes of determining any pro rata annual incentive award for the year of termination under Section 10(c) (iii) of the Employment Agreement).

In the event that a "Change in Control" (as defined in Section 10(c) of the Employment Agreement) has occurred on or before the Employment Termination Date as determined under this Paragraph 1(d), then the Executive's employment shall be deemed a Termination without Cause following a Change in Control pursuant to Section 10(e) of the Employment Agreement and the Company shall satisfy its obligations to the Executive pursuant to Section 10(e) of the Employment Agreement (subject to compliance with Section 409A of the Internal Revenue Code, as amended, and subject to Paragraph 1(c)(viii) above with respect to excluding the period of any Unpaid Leave of Absence for purposes of determining any pro rata annual incentive award for the year of termination under Section 10(e)(iii) of the Employment Agreement).

The payments required to be made to the Executive under Section 10(c) or Section 10(e) of the Employment Agreement, as applicable, in accordance with the two immediately foregoing paragraphs, shall be paid, in the amounts and at the times provided in Section 10(c) or Section 10(e) of the Employment Agreement, as applicable, notwithstanding the death or disability of the Executive during the Unpaid Leave of Absence (and, in such event, the Employment Termination Date shall continue to be the date as established pursuant to the foregoing provisions of this Paragraph 1(d)) or following the Employment Termination Date.

2

In the event that for any reason the Employment Termination Date occurs prior to the commencement of any Unpaid Leave of Absence, then no Unpaid Leave of Absence shall occur and Paragraph 1(c) shall have no effect.

For purposes of the determination of "Base Salary" under Section 10(c) or 10(e) of the Employment Agreement, as applicable, Base Salary shall mean the Executive's Base Salary as in effect on January 12, 2006. In addition, the reference in Section 10(e)(ix)(B) of the Employment Agreement to "clause (vii) of this Section 10(e)" shall mean a reference to "clause (ix) of this Section 10(e)" and the reference to the term "Severance Period" in Section 10(e) of the Employment Agreement shall mean the twenty-four (24) month period beginning on the Employment Termination Date.

This Paragraph 1(d) shall constitute written notice of the effective date of the Executive's employment termination under Section 10 of the Employment Agreement.

The Executive represents and warrants to the Company that he has not engaged any willful material dishonesty with respect to the Company during his term of employment with the Company.

For all purposes of this Agreement, the phrase "normal medical, health and life insurance benefits" shall mean the particular coverage identified in Exhibit B at the benefit levels and individual contribution levels, or any subsequent change in contribution level if that change is applicable to the general Linens N Things employee population identified therein. The Executive shall not be eligible or entitled to any disability benefit or coverage during any Unpaid Leave of Absence or at or following his Employment Termination Date. The Executive will be paid $13,615.38 for 6 unused vacation days up to the Employment Termination Date and will have no other entitlement to vacation pay or accruals.

Notwithstanding any other provisions of this Agreement to the contrary, no earlier than the Employment Termination Date, the Executive agrees to execute and deliver to the Company a general unconditional release in the form set forth in Exhibit A hereto (the "Further Release") and the Executive agrees that the execution, delivery and full effectiveness and validity of the Further Release shall be an absolute condition to the Company's obligation to satisfy and perform each and all of its obligations under Paragraph 1 of this Agreement.

2.     General Release.    In consideration of and return for the particular payments and benefits required to be provided to the Executive under the terms of Paragraph 1(d) of this Agreement, which is acknowledged to be in addition to any payments or benefits which he would otherwise be entitled to receive and the sufficiency of which is hereby acknowledged, the Executive, on behalf of himself and his respective heirs, executors, administrators and assigns (hereinafter the "Releasors"), hereby releases and forever discharges the Company (as well as each of Apollo Management, L.P., Apollo Management V, L.P., NRDC Real Estate Advisors I LLC and Silver Point Capital Fund Investments, LLC), and each of its and their respective parents, subsidiaries, affiliated companies, predecessors, and successors, and each of its and their respective past and present officers, directors, employees, affiliates, agents, attorneys, insurers, benefit committees, trustees, fiduciaries, plans, and trusts, and the respective heirs, executors, administrators, successors and assigns of each of the foregoing (hereinafter the "Releasees"), from any and all actions, causes of action, demands, suits and claims, in law or in equity, whether now known or unknown which he ever had, now has, or could have, including any and all claims arising out of or relating in any way to the Employment Agreement, the Executive's employment with the Company, and the termination of that employment. The claims released include, but are not limited to:

        (a)   all statutory claims including claims arising under the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act, the New Jersey Civil Rights Act, the New Jersey Wage and Hour Laws, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act, the Americans With Disabilities Act, the Family and Medical Leave Act, the New Jersey Family Leave Act, the Fair

3

Labor Standards Act, the Sarbanes-Oxley Act, the Rehabilitation Act, and the Employee Retirement Income Security Act;

        (b)   all claims arising under the United States or New Jersey Constitutions;

        (c)   all claims arising under any Executive Order or derived from or based upon any federal regulations;

        (d)   all common law claims including claims for wrongful discharge, public policy claims, retaliation claims, claims for breach of an express or implied contract (including but not limited to any claims arising in connection with the Employment Agreement and any amendments or supplements thereto), claims for breach of an implied covenant of good faith and fair dealing, intentional or negligent infliction of emotional distress, defamation, conspiracy, loss of consortium, tortious interference with contract or prospective economic advantage, and negligence;

        (e)   other than as required to be provided to the Executive under Section 10(c) or Section 10(e) of the Employment Agreement, as applicable, pursuant to the terms of Paragraph 1(d) above, all claims for any compensation including back wages, front pay, bonuses or awards, severance, fringe benefits, stock options, restricted stock units, deferred compensation, profit sharing, pay in lieu of notice of termination of employment, reinstatement, retroactive seniority, pension benefits, or any other form of economic loss;

        (f)    all claims for person injury, including physical injury, mental anguish, emotional distress, pain and suffering, embarrassment, humiliation, damage to name or reputation, liquidated damages, and punitive damages; and

        (g)   all claims for costs and attorneys' fees on behalf of any attorneys who may have represented him.

Without limiting the foregoing, the parties expressly agree, pursuant to Section 10(j) of the Employment Agreement, that payment and performance in accordance with Paragraph 1 of this Agreement shall operate to fully discharge and release each of the Releasees from any further obligation or liability with respect to the rights of the Executive under or in connection with the Employment Agreement or his employment with the Company or the termination thereof, except only as expressly otherwise set forth in this Agreement.

Without limiting the other provisions of this Agreement, the parties expressly acknowledge and agree that the provisions of Sections 10(g), 10(h)("No Mitigation; No Offset"), 15 ("Remedies"), 16 ("Resolution of Disputes"), 17 ("Indemnification"), 18 ("Excise Tax Gross-Up"), 20 ("Assignability; Binding Nature"), 26 ("Beneficiary/References"), and 30 ("Executive Representations and Warranties") of the Employment Agreement are valid and enforceable and survive the execution and delivery of this Agreement. Further, nothing herein is intended to release the Company from any right of the Executive to be indemnified by the Company under the Company's certificate of incorporation or bylaws to the extent provided for therein.

The parties also acknowledge and agree that the provisions of Sections 11 ("Forfeiture Provisions"), 12 ("Confidentiality; Cooperation with Regard to Litigation; Non-disparagement; Return of Company Materials"), 13 ("Non-Competition"), and 14 ("Non-Solicitation") of the Employment Agreement are valid and enforceable and survive the execution and delivery of this Agreement, that they are not waived or altered by this Agreement, and, in the event of any breach of the terms thereof by the Executive, the Company would be entitled to all of the rights and remedies referred to in Section 15 of the Employment Agreement as well as all such other rights and remedies as may arise or exist at law or in equity. Without limiting the foregoing, the Executive expressly acknowledges that all stock options and restricted stock units and other equity awards heretofore granted by the Company to the Executive are expressly subject to all of the terms and conditions of Section 11 of the Employment Agreement

4

and are subject to (i) the Executive having materially complied, during his Term of Employment, with Section 13 ("Non-Competition") of the Employment Agreement and (ii) the Executive's continued compliance with Section 12 ("Confidentiality; Cooperation with Regard to Litigation; Non-Disparagement; Return of Company Materials") and Section 14 ("Non-Solicitation") of the Employment Agreement during his Term of Employment and for periods stated therein following the Employment Termination Date.

3.     No Filed Charges.    The Executive represents that he has not filed any charge, claim, or complaint of any kind against the Releasees, and he further covenants and represents that no such charge, claim or complaint will be filed against any of the Releasees with respect to any matter released under Paragraph 2 of this Agreement. Nothing contained herein shall prohibit the parties to this Agreement from (a) bringing any action to enforce the terms of this Agreement; (b) filing a timely charge or complaint with the Equal Employment Opportunity Commission ("EEOC") regarding the validity of this Agreement; (c) filing a timely charge or complaint with the EEOC or participating in any investigation or proceeding conducted by the EEOC or any other governmental agency (although the Executive agrees that he has waived any right to personal recovery or personal injunctive relief in connection with any such charge or complaint), or (d) participating or testifying in any action if compelled to do so by judicial subpoena, court order, or as otherwise required by state or federal law.

4.     Cooperation.    The Executive agrees to reasonably cooperate with and to assist the Releasees in connection with the preparation and defense, including but not limited to personal appearances and testimony, of any claim, action or litigation in which any Releasee is, or may become, a party and which relates in any way to matters or actions within the possible scope of the Executive's responsibilities while in the employment of the Company. In seeking the Executive's assistance, the Company will make reasonable efforts to accommodate the Executive's other personal and business obligations. The Company agrees to reimburse the Executive for reasonable and necessary out-of-pocket expenses incurred while so cooperating and assisting the Releasees. The Executive further agrees that he will advise the Company immediately upon becoming aware of any claim or litigation connected in any way to the Company or any of the Releasees in which he is required or requested to appear as a witness or made a party.

5.     Governing Law.    This Agreement shall be construed in accordance with the laws of the State of New Jersey (without regard to its rules as to conflicts of laws).

6.     No Other Consideration.    The Executive acknowledges that the only consideration he has received for executing this Agreement is that set forth herein. No other promise, inducement, threat, agreement or understanding of any kind or description has been made with him or to him or anyone else to cause him to enter into this Agreement.

7.     Entire Agreement.    This Agreement reflects the entire agreement reached by the parties and supersedes all prior agreements which are hereby made null and void, except as to those provisions of the Employment Agreement that pursuant to the express provisions of this Agreement are to continue in full force and effect. There is no other agreement except as stated herein. This Agreement may not be changed or modified unless the change or modification is in writing and signed by the Executive and by a duly authorized representative of the Company or its successor.

8.     Executive's Right to Consult an Attorney.

        (a)   The Executive is advised to consult with an attorney before signing this Agreement. He represents that he has carefully read and fully understands all of the provisions of this Agreement, that he has had an opportunity to review and discuss it with an attorney of his choosing if he wished to do so, and that he is voluntarily executing this Agreement without duress or coercion.

        (b)   The Executive is hereby advised that he is permitted a period of twenty-one (21) days to review and consider this Agreement before signing it. He understands that he is free to use as

5

much of the twenty-one day period as he wishes or considers necessary before signing this Agreement. The Executive is further advised that he may revoke his signature within seven (7) days of signing by delivering written notice of revocation marked "Personal and Confidential" to Brian D. Silva, Senior Vice President, Human Resources, Linens 'n Things, Inc., Six Brighton Road, Clifton, New Jersey. It is understood and agreed that the benefits of this Agreement will not become effective until seven (7) days have passed from the date of execution of this Agreement by the Executive, at which point he will no longer be able to revoke his signature, and this Agreement will become binding and effective.

9.     Resolution of Disputes.    The parties agree that any claim or dispute arising out of or relating to this Agreement will be settled in the manner set forth in Section 16 of the Employment Agreement.

LINENS 'N THINGS, INC.		EXECUTIVE
By:	/s/  BRIAN SILVA	/s/  JACK E. MOORE, JR.
Name:	Brian Silva	Jack E. Moore, Jr.
Title:	SVP Human Resources & Admin
Dated: February 10, 2006		Dated: February 13, 2006

6

QuickLinks

SEPARATION AGREEMENT AND GENERAL RELEASE

EX-10.20

Exhibit 10.20

Trademark Security Agreement, dated as of February 14, 2006, by Bloomington, M.N., L.T. Inc. a Minnesota corporation ("Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Trademark Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Trademark Collateral.    Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Trademark Collateral"):

        (a)   Trademarks of such Pledgor listed on Schedule I attached hereto;

        (b)   Trademark Licenses of such Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Trademarks and Trademark Licenses made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Trademark Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Trademarks and Trademark Licenses under this Trademark Security Agreement.

        SECTION 6.    Counterparts.    This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of

1

any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Canada Branch and Wachovia Capital Finance, Corporation, as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

2

        IN WITNESS WHEREOF, the Pledgor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		Bloomington, M.N., L.T. Inc.
		By:	Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

3

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of Bloomington, M.N., L.T. Inc. a Minnesota corporation; who, being duly sworn, did depose and say that she/he is the                        in such corporation, the corporation described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such corporation; and that she/he acknowledged said instrument to be the free act and deed of said corporation.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

4

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a New York bank holding company; who, being duly sworn, did depose and say that she/he is the                        in such bank holding company, the bank holding company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such bank holding company; and that she/he acknowledged said instrument to be the free act and deed of said bank holding company.

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

5

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS

Pending U.S. Applications

Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
MAKE YOUR HOME HAPPY	Bloomington, M.N., L.T. Inc.	Pending, USA 35	78/257756	03-Jun-2003

6

EX-10.21

Exhibit 10.21

Trademark Security Agreement

Trademark Security Agreement, dated as of February 14, 2006, by LNT Merchandising Company, LLC, a Delaware limited liability company ("Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W I T N E S S E T H:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Trademark Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Trademark Collateral.    Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Trademark Collateral"):

        (a)   Trademarks of such Pledgor listed on Schedule I attached hereto;

        (b)   Trademark Licenses of such Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Trademarks and Trademark Licenses made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Trademark Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Trademarks and Trademark Licenses under this Trademark Security Agreement.

        SECTION 6.    Counterparts.    This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

1

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Canada Branch and Wachovia Capital Finance, Corporation, as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

2

        IN WITNESS WHEREOF, the Pledgor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		LNT Merchandising Company, LLC
		By:	Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:	Name: Title:

3

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of LNT Merchandising, LLC, a Delaware limited liability company; who, being duly sworn, did depose and say that she/he is the                        in such limited liability company, the limited liability company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such limited liability company; and that she/he acknowledged said instrument to be the free act and deed of said limited liability company.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

4

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a New York bank holding company; who, being duly sworn, did depose and say that she/he is the                        in such bank holding company, the bank holding company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such bank holding company; and that she/he acknowledged said instrument to be the free act and deed of said bank holding company.

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

5

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS, APPLICATIONS AND LICENSES

Registered U.S. Trademarks

Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
LINENS 'N THINGS	LNT Merchandising Company, LLC	Registered, USA, 42 Int.	72/370206 0934171	09-Sep-1970 16-May-1972
LNT	LNT Merchandising Company, LLC	Registered, USA, Int. 20, 24, 27 and 35	75/546927 2337611	01-Sep-1998 04-Apr-2000
DREAM BIG, PAY LITTLE	LNT Merchandising Company, LLC	Registered, USA 35	78/497112 3035124	08-Oct-2004

Pending U.S. Applications

Trademark	Owner/Applicant	Status, Country, Classes	App Number Reg Number	App Date Reg Date
ATTITUDE	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427854	01-Jun-2004
ATTITUDES	LNT Merchandising Company, LLC	Pending, USA 21 et al.	78/427863	01-Jun-2004
HOTEL LIVING	LNT Merchandising Company, LLC	Pending, USA 24 Int., 25 Int., 27 Int.	78/438409	21-Jun-2004
LINENS-N-THINGS and DESIGN	LNT Merchandising Company, LLC	Pending, USA 35	78/425295	26-May-2004
MAKE YOUR HOME HAPPY	LNT Merchandising Company, LLC	Pending, USA 35	78/257756	03-Jun-2003
SPA-TEX	LNT Merchandising Company, LLC	Published, USA 24 Int., 25 Int., 27 Int.	78/389104	23-Mar-2004

6

EX-10.22

Exhibit 10.22

Trademark Security Agreement

Trademark Security Agreement, dated as of February 14, 2006, by LNT Services, Inc., a Delaware corporation ("Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W i t n e s s e t h:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Trademark Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Trademark Collateral.    Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Trademark Collateral"):

        (a)   Trademarks of such Pledgor listed on Schedule I attached hereto;

        (b)   Trademark Licenses of such Pledgor listed on Schedule I attached hereto; and

        (c)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Trademark Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Trademarks and Trademark Licenses made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Trademark Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Trademarks and Trademark Licenses under this Trademark Security Agreement.

        SECTION 6.    Counterparts.    This Trademark Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Trademark Security Agreement by signing and delivering one or more counterparts.

1

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Canada Branch and Wachovia Capital Finance, Corporation, as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

2

        IN WITNESS WHEREOF, the Pledgor has caused this Trademark Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		LNT Services, Inc.
		By:
			Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:
	Name: Title:

3

ACKNOWLEDGMENT OF PLEDGOR

STATE OF

COUNTY OF )
) ss
)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of LNT Services, Inc., a Delaware corporation; who, being duly sworn, did depose and say that she/he is the                        in such corporation, the corporation described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such corporation; and that she/he acknowledged said instrument to be the free act and deed of said corporation.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

4

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF

COUNTY OF )
) ss
)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a New York bank holding company; who, being duly sworn, did depose and say that she/he is the                        in such bank holding company, the bank holding company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such bank holding company; and that she/he acknowledged said instrument to be the free act and deed of said bank holding company.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

5

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS, APPLICATIONS AND LICENSES

        License Agreement dated as of July 30, 2004, as amended, by and between Nate Berkus Entertainment, Inc. (NBE) as Licensor and LNT Services, Inc. (LNT) as Licensee granting Licensee an exclusive license to use the following trademarks in connection with the manufacture, distribution, sale, advertising and promotion of certain categories of products, including bedding, bath textiles and accessories, kitchen textiles, dinnerware and flatware:

NATE BERKUS	US Serial No. 78468591
NATE BERKUS	US Serial No. 78468747
NATE BERKUS	US Serial No. 78468738
NATE BERKUS	US Serial No. 78468729
NATE BERKUS	US Serial No. 78468672
NATE BERKUS	US Serial No. 78468664
NATE BERKUS	US Serial No. 78468627
NATE BERKUS	US Serial No. 78468760
NATE BERKUS	US Serial No. 78468750
NATE BERKUS	US Serial No. 78468639
NATE BERKUS	US Serial No. 78468617
NATE BERKUS	US Serial No. 78468569
NATE BERKUS	US Serial No. 78468566
NATE BERKUS	US Serial No. 78468534

6

EX-10.23

Exhibit 10.23

Copyright Security Agreement

Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things, Inc., a New Jersey corporation (the "Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W i t n e s s e t h:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Copyright Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Copyright Collateral.    The Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Copyright Collateral"):

        (a)   The Copyright of such Pledgor listed on Schedule I attached hereto; and

        (b)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Copyright made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Copyright Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Copyright under this Copyright Security Agreement.

        SECTION 6.    Counterparts.    This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

1

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Canada Branch and Wachovia Capital Finance, Corporation, as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

2

        IN WITNESS WHEREOF, the Pledgor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

Very truly yours,
Linens 'n Things, Inc.
By:
	Name: Title:

Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:
	Name: Title:

3

ACKNOWLEDGMENT OF PLEDGOR

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of Linens 'n Things, Inc., a New Jersey corporation; who, being duly sworn, did depose and say that she/he is the                        in such corporation, the corporation described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of corporation; and that she/he acknowledged said instrument to be the free act and deed of said corporation.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

4

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF	)
	) ss
COUNTY OF	)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a New York bank holding company; who, being duly sworn, did depose and say that she/he is the                        in such bank holding company, the bank holding company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such bank holding company; and that she/he acknowledged said instrument to be the free act and deed of said bank holding company.

	Notary Public
(PLACE STAMP AND SEAL ABOVE)

5

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

OWNER	REGISTRATION NUMBER	TITLE
Linens 'n Things, Inc.	VA-1-056-560	Moon and Stars

6

EX-10.24

Exhibit 10.24

Copyright Security Agreement

Copyright Security Agreement, dated as of February 14, 2006, by Linens 'n Things Center, Inc., a California corporation (the "Pledgor"), in favor of THE BANK OF NEW YORK, in its capacity as Collateral Agent pursuant to the Indenture (in such capacity, the "Collateral Agent").

W i t n e s s e t h:

        WHEREAS, the Pledgor is party to a Security Agreement of even date herewith (the "Security Agreement") in favor of the Collateral Agent pursuant to which the Pledgor is required to execute and deliver this Copyright Security Agreement;

        NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent, for the benefit of the Secured Parties, to enter into the Indenture, the Pledgor hereby agrees with the Collateral Agent as follows:

        SECTION 1.    Defined Terms.    Unless otherwise defined herein, terms defined in the Security Agreement and used herein have the meaning given to them in the Security Agreement.

        SECTION 2.    Grant of Security Interest in Copyright Collateral.    The Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in, and right of setoff against all of Pledgor's right, title and interest in, to and under all the following now owned and hereafter acquired Pledged Collateral of such Pledgor ("Copyright Collateral"):

        (a)   The Copyright of such Pledgor listed on Schedule I attached hereto; and

        (b)   all Proceeds of any and all of the foregoing (other than Excluded Property).

        SECTION 3.    Security Agreement.    The security interest granted pursuant to this Copyright Security Agreement is granted in conjunction with the security interest granted to the Collateral Agent pursuant to the Security Agreement and Pledgor hereby acknowledges and affirms that the rights, protections, immunities and remedies of the Collateral Agent with respect to the security interest in the Copyright made and granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein. In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control unless the Collateral Agent shall otherwise determine.

        SECTION 4.    Remedies.    In addition to all other remedies provided in the Security Agreement, the Note Documents, the Intercreditor Agreement or any other related document, Pledgor agrees to assign, transfer and convey, upon demand made upon the occurrence and during the continuation of an Event of Default without requiring further action by either party and to be effective upon such demand, all of Pledgor's right, title and interest in, to and under all Copyright Collateral.

        SECTION 5.    Termination.    Upon the payment in full of the Secured Obligations and termination of the Security Agreement, the Collateral Agent shall execute, acknowledge, and deliver to the Pledgor an instrument in writing in recordable form releasing the collateral pledge, grant, assignment, lien and security interest in the Copyright under this Copyright Security Agreement.

        SECTION 6.    Counterparts.    This Copyright Security Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Copyright Security Agreement by signing and delivering one or more counterparts.

1

        SECTION 7.    Intercreditor Agreement.    Notwithstanding anything herein to the contrary, the lien and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of February 14, 2006 (as amended, restated, supplemented or otherwise modified from time to time, the "Intercreditor Agreement"), among Linens 'n Things, Inc., Linens Holding Co., Linens 'n Things Center, Inc., Linens 'n Things Canada Corp, UBS AG, Stamford Branch, as "Administrative Agent", UBS AG, Stamford Branch and Wachovia Bank National Association, as co-agents serving as the "US Revolving Credit Collateral Agent", UBS AG, Canada Branch and Wachovia Capital Finance, Corporation, as co-agents serving as "Canadian Revolving Credit Collateral Agent", (the Administrative Agent, the US Revolving Credit Collateral Agent and the Canadian Revolving Credit Collateral Agent being referred to collectively as the "Revolving Credit Collateral Agent"), The Bank of New York serving as "Note Lien Collateral Agent" and certain other persons which may be or become parties thereto or become bound thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

[signature page follows]

2

        IN WITNESS WHEREOF, the Pledgor has caused this Copyright Security Agreement to be executed and delivered by its duly authorized offer as of the date first set forth above.

		Very truly yours,
		Linens 'n Things Center, Inc.
		By:
			Name: Title:
Accepted and Agreed:
THE BANK OF NEW YORK, as Collateral Agent
By:
	Name: Title:

3

ACKNOWLEDGMENT OF PLEDGOR

STATE OF

COUNTY OF )
) ss
)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of Linens 'n Things Center, Inc., a California corporation; who, being duly sworn, did depose and say that she/he is the                        in such corporation, the corporation described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of corporation; and that she/he acknowledged said instrument to be the free act and deed of said corporation.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

4

ACKNOWLEDGMENT OF COLLATERAL AGENT

STATE OF

COUNTY OF )
) ss
)

        On the            day of                        , 2006, before me personally came                        , who is personally known to me to be the                        of The Bank of New York, a New York bank holding company; who, being duly sworn, did depose and say that she/he is the                        in such bank holding company, the bank holding company described in and which executed the foregoing instrument; that she/he executed and delivered said instrument pursuant to authority given by the Board of Directors of such bank holding company; and that she/he acknowledged said instrument to be the free act and deed of said bank holding company.

Notary Public

(PLACE STAMP AND SEAL ABOVE)

5

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS

Copyright Registrations:

OWNER	REGISTRATION NUMBER	TITLE
Linens 'n Things Center, Inc.	VA-1-056-560	Moon and Stars

6

EX-14.1

Exhibit 14.1

LINENS HOLDING CO. AND LINENS 'N THINGS, INC.
CODE OF ETHICS
FOR CHIEF EXECUTIVE OFFICER
AND SENIOR FINANCIAL OFFICERS

(Adopted to be effective as of July 21, 2006)

        Linens Holding Co. ("Holding") and Linens 'n Things, Inc. ("LNT" and, collectively, the "Company") is committed to conducting our business in accordance with applicable laws, rules, and regulations and the highest standards of business conduct, and to full and accurate financial disclosure in compliance with applicable law. This Code of Ethics for Chief Executive Officer and Senior Financial Officers (the "Code of Ethics") is applicable to the Company's Chief Executive Officer and Chief Financial Officer and the Company's Controller and other persons performing similar senior financial functions (together, "Senior Officers"), and sets forth specific policies to guide you in the performance of your duties.

        As a Senior Officer, you must not only comply with applicable law, you also must engage in and promote honest and ethical conduct. You must also abide by the Linens 'n Things Code of Business Conduct and Ethics (the "Code of Business Conduct") distributed annually to all members of management, and applicable to all directors, members of management, and employees of the Company and the Company's direct and indirect subsidiaries, and other Company policies and procedures that govern the conduct of our business. Your leadership responsibilities include creating a culture of ethical business conduct and commitment to compliance, maintaining a work environment that encourages employees to raise concerns, and promptly addressing employee compliance concerns.

        The Code of Business Conduct is expressly incorporated into this Code of Ethics by reference. To the extent of any conflict between this Code of Ethics and the Code of Business Conduct, the provisions of this Code of Ethics shall control.

Compliance with Laws, Rules, and Regulations and Code of Ethics

        You are required to comply with the laws, rules, and regulations that govern the conduct of our business. If you know of or suspect a violation of applicable laws, rules or regulations or this Code of Ethics, you must immediately report that information to the Chief Legal Officer, any member of the Audit Committee of the Board of Directors of Holding and/or LNT (collectively, the "Audit Committee") and/or any director of the Company. No one will be subject to retaliation because of a good faith report of a suspected violation.

        Violations of this Code of Ethics may result in disciplinary action, up to and including discharge or termination of service. The Audit Committee shall determine, or shall designate appropriate persons to determine, appropriate action in response to violations of this Code of Ethics.

Conflicts Of Interest

        Your obligation to conduct the Company's business in an honest and ethical manner includes the ethical handling of actual or apparent conflicts of interest between personal and professional relationships. No Senior Officer shall make any investment, accept any position or benefits, participate in any transaction or business arrangement, or otherwise act in a manner that creates or appears to create a conflict of interest unless the Senior Officer makes full disclosure of all facts and circumstances to, and obtains the prior written approval of, the Chief Legal Officer, chairperson of the Audit Committee, and/or the Board of Directors of Holding and/or LNT (collectively, the "Board"), and is otherwise in compliance with the Code of Business Conduct.

1

Disclosures

        It is Company policy to make full, fair, accurate, timely, and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that the Company files with, or submits to, the Securities and Exchange Commission ("SEC") and in all other public communications made by the Company. As a Senior Officer, you are required to promote compliance with this policy and to abide by Company standards, policies, and procedures designed to promote compliance with this policy.

Waivers or Amendments

        There shall be no waiver of any part of this Code of Ethics, except as specifically permitted by this Code of Ethics.

        Any request for a waiver must be submitted in writing and must include a detailed description of the transaction, details, and circumstances for which the waiver is requested. Any request for a waiver made by a Senior Officer must be submitted to the Audit Committee. The determination by the Audit Committee whether or not to grant the waiver shall be final and binding. Generally, the granting of waivers is discouraged.

        A waiver of, or amendment to, this Code of Ethics will be promptly disclosed as required by law, including the rules and regulations promulgated by the SEC.

Administration and Reporting Ethical Violations

        The Board has delegated to the Audit Committee the authority to administer, interpret, and enforce this Code of Ethics. The Audit Committee will review and reassess the adequacy of this Code of Ethics annually and recommend any proposed changes to the Board.

        Senior Officers must consult with the Audit Committee (1) about observed illegal or unethical behavior and/or violations of this Code of Ethics, (2) about observed accounting or auditing concerns, or (3) when in doubt about the best course of action in a particular situation.

No Rights Created

        This Code of Ethics is a statement of certain fundamental principles, policies, and procedures that govern the Senior Officers in the conduct of the Company's business. It is not intended to and does not create any rights for any employee, customer, supplier, vendor, manufacturer, contractors, competitor, stockholder, or any other third party.

2

CERTIFICATION OF COMPLIANCE

        I have read the attached Linens Holding Co. and Linens 'n Things, Inc. Code of Ethics for Chief Executive Officer and Senior Financial Officers and the Linens 'n Things Code of Business Conduct and Ethics. I have familiarized myself with all policies and procedures contained therein.

        I hereby certify that I am in compliance with all provisions of the Code of Ethics and the Code of Business Conduct and Ethics except for the following matters (if none, state "none"):

        I further certify that, I have provided written disclosure of all matters that must be disclosed.

Senior Officer Signature

Title

Printed Name

Date

3

EX-23.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Linens Holding Co.:

        We consent to the use of our report included herein and to the reference of our firm under the heading "Experts" and "Selected Financial Data" in the registration statement.

        Our report refers to a change in the method of accounting for vendor allowance arrangements to conform to the requirements of Emerging Issue Task Force Issue No. 02-16 in fiscal 2004.

KPMG LLP
New York, New York

August 9, 2006

QuickLinks

Consent of Independent Registered Public Accounting Firm

EX-25.1

Exhibit 25.1

FORM T-1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)        o

THE BANK OF NEW YORK (Exact name of trustee as specified in its charter)
New York (State of incorporation if not a U.S. national bank)	13-5160382 (I.R.S. employer identification no.)
One Wall Street, New York, N.Y. (Address of principal executive offices)	10286 (Zip code)

LINENS HOLDING CO. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	20-4192917 (I.R.S. employer identification no.)
LINENS 'N THINGS, INC. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	22-3463939 (I.R.S. employer identification no.)

LINENS 'N THINGS CENTER, INC. (Exact name of obligor as specified in its charter)
California (State or other jurisdiction of incorporation or organization)	59-2740308 (I.R.S. employer identification no.)
Bloomington MN., L.T., Inc. (Exact name of obligor as specified in its charter)
Minnesota (State or other jurisdiction of incorporation or organization)	22-2708498 (I.R.S. employer identification no.)
Vendor Finance, LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	81-0665543 (I.R.S. employer identification no.)
LNT, Inc. (Exact name of obligor as specified in its charter)
New Jersey (State or other jurisdiction of incorporation or organization)	22-2074668 (I.R.S. employer identification no.)
LNT Services, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	20-0392093 (I.R.S. employer identification no.)
LNT Leasing II, LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	26-0004182 (I.R.S. employer identification no.)
LNT West, Inc. (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	20-0391975 (I.R.S. employer identification no.)

2

LNT Virginia LLC (Exact name of obligor as specified in its charter)
Virginia (State or other jurisdiction of incorporation or organization)	22-0379453 (I.R.S. employer identification no.)
LNT Merchandising Company LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	20-0422616 (I.R.S. employer identification no.)
LNT Leasing III, LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	51-0503599 (I.R.S. employer identification no.)
Citadel LNT, LLC (Exact name of obligor as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)	33-1092479 (I.R.S. employer identification no.)
6 Brighton Road Clifton, New Jersey (Address of principal executive offices)	07015 (Zip code)

Senior Secured Floating Rate Notes due 2014
(Title of the indenture securities)

3

1.     General information. Furnish the following information as to the Trustee:

(a)

Name and address of each examining or supervising authority to which it is subject.

Name	Address
Superintendent of Banks of the State of New York	One State Street, New York, N.Y. 10004-1417, and Albany, N.Y. 12223
Federal Reserve Bank of New York	33 Liberty Street, New York, N.Y. 10045
Federal Deposit Insurance Corporation	Washington, D.C. 20429
New York Clearing House Association	New York, New York 10005

(b)

Whether it is authorized to exercise corporate trust powers.

Yes.

2.

Affiliations with Obligor.

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

16.

List of Exhibits.

Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).

1.

A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672, Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637 and Exhibit 1 to Form T-1 filed with Registration Statement No. 333-121195.)



4.

A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 333-121195.)



6.

The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 333-106702.)



7.

A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority.

4

SIGNATURE

        Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 4th day of August, 2006.

THE BANK OF NEW YORK
By:	/S/  CHERYL CLARKE
	Name:  CHERYL CLARKE
	Title:  VICE PRESIDENT

5

EXHIBIT 7

Consolidated Report of Condition of

THE BANK OF NEW YORK

of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,

a member of the Federal Reserve System, at the close of business March 31, 2006, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

		Dollar Amounts In Thousands
ASSETS
Cash and balances due from depository institutions:
	Noninterest-bearing balances and currency and coin	$	3,230,000
	Interest-bearing balances		6,440,000
Securities:
	Held-to-maturity securities		2,165,000
	Available-for-sale securities		22,631,000
Federal funds sold and securities purchased under agreements to resell
	Federal funds sold in domestic offices		2,955,000
	Securities purchased under agreements to resell		315,000
Loans and lease financing receivables:
	Loans and leases held for sale		0
	Loans and leases, net of unearned income		32,983,000
	LESS: Allowance for loan and lease losses		415,000
	Loans and leases, net of unearned income and allowance		32,568,000
Trading assets			6,861,000
Premises and fixed assets (including capitalized leases)			828,000
Other real estate owned			0
Investments in unconsolidated subsidiaries and associated companies			298,000
Not applicable
Intangible assets:
	Goodwill		2,148,000
	Other intangible assets		760,000
Other assets			6,551,000
Total assets		$	87,750,000

LIABILITIES
Deposits:
	In domestic offices	$	35,956,000
	Noninterest-bearing		16,637,000
	Interest-bearing		19,319,000
	In foreign offices, Edge and Agreement subsidiaries, and IBFs		30,215,000
	Noninterest-bearing		578,000
	Interest-bearing		29,637,000
Federal funds purchased and securities sold under agreements to repurchase
	Federal funds purchased in domestic offices		825,000
	Securities sold under agreements to repurchase		123,000
Trading liabilities			2,509,000
Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases)			1,890,000
Not applicable
Not applicable
Subordinated notes and debentures			1,955,000
Other liabilities			5,573,000
Total liabilities		$	79,046,000
Minority interest in consolidated subsidiaries			151,000
EQUITY CAPITAL
Perpetual preferred stock and related surplus			0
Common stock			1,135,000
Surplus (exclude all surplus related to preferred stock)			2,107,000
Retained earnings			5,487,000
Accumulated other comprehensive income			-176,000
Other equity capital components			0
Total equity capital			8,553,000
Total liabilities, minority interest, and equity capital		$	87,750,000

        I, Thomas J. Mastro, Executive Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief.

Thomas J. Mastro,                                       
Executive Vice President and Comptroller                                        

        We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell Directors

EX-99.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 99.1

LETTER OF TRANSMITTAL

LINENS HOLDING CO.
LINENS 'N THINGS, INC.
LINENS 'N THINGS CENTER, INC.

Exchange Offer of $650,000,000 aggregate principal amount of Senior Secured Floating Rate
Notes due 2014, which have been registered under the Securities Act of 1933,
for all outstanding Senior Secured Floating Rate Notes due 2014

Pursuant to the Prospectus, dated                        , 2006

        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                                                           , 2006 UNLESS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To: The Bank of New York Trust Company, N.A., as Exchange Agent

By Registered, Certified, or Regular Mail, by Overnight Courier, or by Hand Delivery:

The Bank of New York
Corporate Trust Operations
Reorganization Unit
101 Barclay Street — 7^th Floor East
New York, NY 10286
Attention: David Mauer

Or
By Facsimile Transmission:
212-298 1915

Telephone:
212-815-3687

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. YOU SHOULD READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL BEFORE COMPLETING IT.

        The undersigned acknowledges that he or she has received the prospectus, dated                                                           , 2006 (the "Prospectus"), of Linens Holding Co., a Delaware corporation, together with its consolidated subsidiaries, including Linens 'n Things, Inc., a Delaware corporation, and Linens 'n Things Center, Inc., a California corporation (collectively, the "Company"), and this letter of transmittal (the "Letter of Transmittal"), which together constitute the Company's offer (the "Exchange Offer") to exchange an aggregate principal amount of up to $650,000,000 of its Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for its Senior Secured Floating Rate Notes due 2014 (the "Old Notes") that are currently outstanding. The terms of the Exchange Notes are substantially identical to the terms of the Old Notes except that the Exchange Notes have been registered under the Securities Act of 1933, as amended, and, therefore, are freely transferable. Capitalized terms used but not defined herein shall have the same meanings given them in the Prospectus. The Exchange Offer is subject to all of the terms and conditions set forth in the

1

Prospectus. In the event of any conflict between the Letter of Transmittal and the Prospectus, the Prospectus shall govern.

        The terms of the Exchange Notes are substantially identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Old Notes for which they may be exchanged pursuant to the Exchange Offer, but the Exchange Notes are freely transferable by holders thereof (except as provided herein or in the Prospectus). For each Old Note accepted for exchange, the holder of such Old Note will receive an Exchange Note having a principal amount equal to that of the surrendered Old Note.

        The Company reserves the right to extend the Exchange Offer at our discretion, in which case the term "Expiration Date" shall mean the latest time and date to which the Exchange Offer is extended. In order to extend the Exchange Offer, we will notify the Exchange Agent and each registered holder of any extension by oral or written notice prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date and will also disseminate notice of any extension by press release or other public announcement prior to 9:00 a.m., New York City time.

        This Letter of Transmittal is to be completed by a holder of Old Notes either if certificates are to be forwarded herewith or if a tender of certificates for Old Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company ("DTC") pursuant to the procedures set forth in the section of the Prospectus entitled "The Exchange Offer—Procedures for Tendering." Holders of Old Notes whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Notes into the Exchange Agent's account at DTC (a "Book-Entry Confirmation") and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, must tender their Old Notes according to the guaranteed delivery procedures set forth in the section of the Prospectus entitled "The Exchange Offer—Guaranteed Delivery Procedures." See Instruction 2. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

        PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE EXCHANGE AGENT. SEE INSTRUCTION 13.

        The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

2

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

        Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Company the aggregate principal amount of Old Notes indicated in Box 1 below. Subject to, and effective upon, the acceptance for exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Old Notes as are being tendered hereby.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Company. The undersigned further represents that: (i) any Exchange Notes received by the undersigned pursuant to the Exchange Offer are being acquired in the ordinary course of business, (ii) the undersigned does not have an arrangement or understanding with any person to participate in the distribution of the Old Notes or the Exchange Notes within the meaning of the Securities Act, (iii) the undersigned is not an "affiliate" of the Company, as defined under Rule 405 under the Securities Act, or if the undersigned is an affiliate, the undersigned will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if the undersigned is not a broker-dealer, that it is not engaged in and does not intend to engage in a distribution of the Exchange Notes, and (v) if the undersigned is a broker-dealer, that it will receive Exchange Notes for its own account in exchange for Old Notes that were acquired as a result of market-making or other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes.

        If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Old Notes, where the Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of the Exchange Notes, for a period of 180 days after the expiration date. However, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the true and lawful agent and attorney-in-fact of the undersigned with respect to the tendered Old Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (1) deliver the tendered Old Notes to the Company or cause ownership of the tendered Old Notes to be transferred to, or upon the order of, the Company, on the books of the registrar for the Old Notes and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Company upon receipt by the Exchange Agent, as the undersigned's agent, of the Exchange Notes to which the undersigned is entitled upon acceptance by the Company of the tendered Old Notes pursuant to the Exchange Offer, and (2) receive all benefits and otherwise exercise all rights of beneficial ownership of the tendered Old Notes, all in accordance with the terms of the Exchange Offer.

        The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Old Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, personal representatives, executors, administrators, trustees in bankruptcy and other legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in "The Exchange Offer—Withdrawal Rights" section of the Prospectus.

3

        Unless otherwise indicated herein in the section entitled "Special Issuance Instructions" below (Box 2), please issue the Exchange Notes in the name of the undersigned or, in the case of a book-entry delivery of Old Notes, please credit the book-entry account indicated below maintained at DTC (Box 5). Similarly, unless otherwise indicated under the section entitled "Special Delivery Instructions" below (Box 3), please send the Exchange Notes (and, if applicable, substitute certificates representing Old Notes for any Old Notes not exchanged) to the undersigned at the address shown in Box 1 below.

        THE UNDERSIGNED, BY COMPLETING BOX 1 BELOW AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS SET FORTH IN BOX 1.

Please Check the Appropriate Box:

o

Check here if tendered Old Notes are being delivered with this Letter of Transmittal.

o

Check here if tendered Old Notes are being delivered pursuant to a Notice of Guaranteed Delivery previously delivered to the Exchange Agent and complete Box 4 below.

o

Check here if tendered Old Notes are being delivered by Book-Entry Transfer made to the account maintained by the Exchange Agent with DTC and complete Box 5 below.

o

Check here if you are a Broker-Dealer and wish to receive ten additional copies of the Prospectus and ten copies of any amendments or supplements to the Prospectus.

Name:

Address:

4

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES

All Tendering Holders Complete this Box:

BOX 1 DESCRIPTION OF OLD NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
Name(s) and Address(es) of Registered Holders(s) Exactly as Name(s) Appear(s) on Note Certificate(s) (Please fill in, if blank)		Certificate Number(s) of Old Notes*	Aggregate Principal Amount Represented by Certificate(s)	Aggregate Principal Amount Tendered**
		Total:
*	Need not be completed if Old Notes are being tendered by book-entry transfer.
**	The minimum permitted tender is $1,000 in principal amount of Old Notes. All other tenders must be in integral multiples of $1,000 of principal amount. Unless otherwise indicated in this column, the aggregate principal amount of the Old Notes represented by the certificates identified in this Box 1 or delivered to the Exchange Agent herewith shall be deemed tendered. See Instruction 4.

5

BOX 2	BOX 3
SPECIAL ISSUANCE INSTRUCTIONS (See Instructions 5, 6 and 7)	SPECIAL DELIVERY INSTRUCTIONS (See Instructions 5, 6 and 7)
To be completed ONLY if certificates for Old Notes not exchanged and/or Exchange Notes are to be issued in the name of and sent to someone other than the undersigned or if Old Notes delivered by Book-Entry Transfer which are not accepted for exchange are to be returned by credit to an account maintained at DTC other than the account set forth in Box 5.	To be completed ONLY if certificates for Old Notes not exchanged and/or Exchange Notes are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above.
Issue New Note(s) and/or Old Notes to:	Mail New Note(s) and any untendered Old Notes to:
Name(s):	Name(s):
(Please Type or Print)	(Please Type or Print)
Address:	Address:
(include Zip Code)	(include Zip Code)
(Tax Identification or Social Security Number)
o Credit unexchanged Old Notes delivered by book-entry transfer to the DTC account set forth below:
(DTC Account Number)
BOX 4	BOX 5
USE OF GUARANTEED DELIVERY (See Instruction 2)	USE OF BOOK-ENTRY TRANSFER (See Instruction 1)
To be completed only if Old Notes are being tendered by means of a Notice of Guaranteed Delivery.	To be completed only if delivery of Old Notes is to be made by Book-Entry Transfer.
Name(s) of Registered Holder(s):	Name(s) of Tendering Holder(s):
Date of Execution of Notice of Guaranteed Delivery:	Name of DTC Participant:
Name of Eligible Institution that Guaranteed Delivery:	DTC Participant Number:
	Contact at DTC Participant:
	Transaction Code Number:

6

BOX 6
TENDERING HOLDER SIGNATURE

(See Instructions 1 and 5)
In addition, complete Substitute Form W-9 herein or applicable Form W-8

x

x

(Signature of Registered Holder(s) or Authorized Signatory)

NOTE:	The above lines must be signed by the Registered Holder(s) of Old Notes as their name(s) appear(s) on the Old Notes or on the DTC Security Position with respect thereto, or by person(s) authorized to become Registered Holder(s) (evidence of which authorization must be transmitted with this Letter of Transmittal). If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer, or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. See Instruction 5.
Name(s):
Capacity:

Street Address:

(Include Zip Code)

Area Code and
Telephone Number:

Tax Identification or Social Security Number:

Signature Guarantee
(If required by Instruction 5)

Authorized Signature

x

Name:

(Please Print)

Title:

Name of Firm:

(Must be an Eligible Institution as defined in Instruction 2)

Address:

(Include Zip Code)

Area Code and
Telephone Number:

Dated:

7

PAYER'S NAME: THE BANK OF NEW YORK
SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service	Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See Instructions if your name has changed.):	Part 3 — Check the box if you are not subject to backup withholding under the provisions of Section 3406(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. o
	Address:
Payer's Request for
Taxpayer Identification	City, State and Zip Code:
Number (TIN)	List Account Number(s) here (Optional):
	Part 1 — PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY BY SIGNING AND DATING BELOW
	TIN
	Part 2 —
	TIN APPLIED FOR: o
	CERTIFICATION — Under the penalties of perjury, I certify that the information provided on this form is true, correct and complete.
	SIGNATURE:	DATE:
	NAME:

NOTE:

FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

8

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
	I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that, if I do not provide a taxpayer identification number to the Exchange Agent, 28% of all reportable payments made to me thereafter will be withheld, but will be refunded if I provide a certified taxpayer identification number within 60 days.
	Signature	Date
	Name (Please Print)

9

INSTRUCTIONS TO LETTER OF TRANSMITTAL

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

        1.     Delivery of this Letter of Transmittal and Old Notes.    A properly completed and duly executed copy of this Letter of Transmittal, including Substitute Form W-9, and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein, and either certificates for tendered Old Notes must be received by the Exchange Agent at its address set forth herein or such tendered Old Notes must be transferred pursuant to the procedures for book-entry transfer described in the Prospectus under the caption "The Exchange Offer—Procedures for Tendering" (and a confirmation of such transfer received by the Exchange Agent), in each case prior to 5:00 p.m., New York City time, on the Expiration Date. The, method of delivery of certificates for tendered Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent is at the election and risk of the tendering holder and the delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Instead of delivery by mail, it is recommended that the holder use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. No Letter of Transmittal or Old Notes should be sent to the Company. Neither the Company nor the registrar is under any obligation to notify any tendering holder of the Company's acceptance of tendered Old Notes prior to the closing of the Exchange Offer.

        2.     Guaranteed Delivery Procedures.    Holders who wish to tender their Old Notes but whose Old Notes are not immediately available or who cannot deliver their Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth below, including completion of Box 4 above. Pursuant to such procedures: (1) such tender must be made through a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" as defined by Rule 17Ad-15 under the Exchange Act (in any such case, an "Eligible Institution"), (2) prior to the Expiration Date, the Exchange Agent must have received from an Eligible Institution a properly completed and duly executed Letter of Transmittal (or facsimile thereof) and Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the tendering holder, the certificate number(s) of the tendered Old Notes and the principal amount of the Old Notes tendered, and stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery, this Letter of Transmittal, together with the certificate(s) representing the tendered Old Notes and any other required documents, will be deposited by the Eligible Institution with the Exchange Agent; and (3) the certificate(s) representing all tendered Old Notes in proper form for transfer, or a confirmation of book-entry transfer of such tendered Old Notes into the Exchange Agent's account at DTC, as the case may be, and all other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. Any holder who wishes to tender Old Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery within the time period prescribed above. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a holder who attempted to use the guaranteed delivery process.

        3.     Beneficial Owner Instructions to Registered Holders.    Only a holder in whose name tendered Old Notes are registered on the books of the registrar (or the legal representative or attorney-in-fact of such registered holder), or whose name appears on a DTC security position listing as a holder of Old Notes, may execute and deliver this Letter of Transmittal. Any Beneficial Owner of tendered Old Notes

9

who is not the registered holder must arrange promptly with the registered holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the registered holder of the Instruction to Registered Holder and/or DTC Participant from Beneficial Owner form.

        4.     Partial Tenders.    Tenders of Old Notes will be accepted only in integral multiples of $1,000 in principal amount. If less than the entire principal amount of Old Notes held by the holder is tendered, the tendering holder should fill in the principal amount tendered in the column labeled "Aggregate Principal Amount Tendered" of Box 1 above. The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Old Notes held by the holder is not tendered, then Old Notes for the principal amount of Old Notes not tendered and Exchange Notes issued in exchange for any Old Notes tendered and accepted will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal, as soon as practicable following the Expiration Date.

        5.     Signatures on the Letter of Transmittal; Bond Powers and Endorsements; Guarantee of Signatures.    If this Letter of Transmittal is signed by the registered holder(s) of the tendered Old Notes, the signature must correspond with the name (s) as written on the face of the tendered Old Notes, or whose name appears on a security position listing with DTC as the owner of the tendered Old Notes, in each case without any change whatsoever.

        If any of the tendered Old Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Notes are held in different names, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different names in which tendered Notes are held.

        If this Letter of Transmittal is signed by the registered holder(s) of tendered Old Notes, and Exchange Notes issued in exchange therefor are to be issued (and any untendered principal amount of Old Notes is to be reissued) in the name of the registered holder(s), then such registered holder(s) need not and should not endorse any tendered Old Notes, nor provide a separate bond power. In any other case, such registered holder(s) must either properly endorse the tendered Old Notes or transmit a properly completed separate bond power with this Letter of Transmittal, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution.

        If this Letter of Transmittal is signed by a person other than the registered holder(s) of any tendered Old Notes, such tendered Old Notes must be endorsed or accompanied by appropriate bond powers, in each case signed exactly as the name(s) of the registered holder(s) appear(s) on the tendered Old Notes, with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution.

        If this Letter of Transmittal or any tendered Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Company, evidence satisfactory to the Company of their authority to so act must be submitted with this Letter of Transmittal.

        Endorsements, on tendered Old Notes or signatures on bond powers required by this Instruction 5 must be guaranteed by an Eligible Institution.

        Signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution unless the tendered Old Notes are tendered (1) by a registered holder who has not completed Box 2 set forth herein (entitled "Special Issuance Instructions"), (2) by a registered holder who has not completed Box 3 set forth herein (entitled "Special Delivery Instructions") or (3) by an Eligible Institution.

10

        6.     Special Issuance and Delivery Instructions.    Tendering holders should indicate, in the appropriate box (Box 2 or Box 3), the name and address to which the Exchange Notes and/or substitute certificates evidencing Old Notes for principal amounts not tendered or not accepted for exchange are to be sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated and such person must properly complete a Form W-9, a Form W-8BEN, a Form W-8ECI or a Form W-8IMY, as applicable. Holders of Old Notes tendering Old Notes by book-entry transfer may request that Old Notes not exchanged be credited to such account maintained at DTC as such Holder may designate hereon. If no such instructions are given, such Old Notes not exchanged will be returned to the name or address of the person signing this Letter of Transmittal.

        7.     Transfer Taxes.    The Company will pay all transfer taxes, if any, applicable to the exchange of tendered Old Notes pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Old Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Notes tendered hereby, or if tendered Old Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer and exchange of tendered Old Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered holder or on any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder and/or withheld from any payment due with respect to the Old Notes tendered by such holder.

        Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the tendered Old Notes listed in this Letter of Transmittal.

        8.     Tax Identification Number.    Federal income tax law requires that the holder(s) of any tendered Old Notes that are accepted for exchange must provide the Exchange Agent (as payor) with its correct taxpayer identification number ("TIN") which, in the case of a holder who is an individual, is his or her social security number or Internal Revenue Service individual taxpayer identification number ("ITIN") on Form W-9 or, alternatively, to establish another basis for exemption from backup withholding. If the Exchange Agent is not provided with the correct TIN or ITIN or an exemption from backup withholding is not otherwise established, the holder may be subject to 28% federal income tax backup withholding and a $50 penalty imposed by the Internal Revenue Service. (If withholding results in an overpayment of taxes, a refund may be obtained.) Certain holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements.

        To prevent backup withholding, each holder of tendered Old Notes must provide such holder's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN) and that (1) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding. If the tendered Old Notes are registered in more than one name or are not in the name of the actual owner, consult the "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for information on which TIN to report. A tendering holder that is not a United States person may qualify as an exempt recipient by submitting to the Exchange Agent a properly completed Form W-8BEN, Form W-8ECI, or Form W-8IMY, as applicable, signed under penalty of perjury and attesting to that holder's exempt status.

        The Company reserves the right in its sole discretion to take whatever steps are necessary to comply with the Company's obligation regarding backup withholding.

11

        9.     Validity of Tenders.    All questions as to the validity, form, eligibility (including time of receipt), acceptance and withdrawal of tendered Old Notes will be determined by the Company, which determination will be final and binding. The Company reserves the absolute right to reject any and all tenders of Old Notes not in proper form or the acceptance of which for exchange may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any conditions of the Exchange Offer or any defect or irregularity in the tender of Old Notes. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Company shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent, nor any other person shall be under any duty to give notification of defects or irregularities to holders of Old Notes or incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived, or if Old Notes are submitted in principal amount greater than the principal amount of Old Notes being tendered, such unaccepted or non-exchanged Old Notes will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date.

        10.   Waiver of Conditions.    The Company reserves the absolute right to waive any of the conditions in the Exchange Offer in the case of any tendered Old Notes.

        11.   No Conditional Tenders.    No alternative, conditional, irregular, or contingent tender of Old Notes or transmittal of this Letter of Transmittal will be accepted.

        12.   Mutilated, Lost, Stole or Destroyed Old Notes.    Any holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions.

        13.   Requests for Assistance or Additional Copies.    Questions and requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address and telephone number indicated herein. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer.

        14.   Acceptance of Tendered Old Notes and Issuance of Old Notes; Return of Old Notes.    Subject to the terms and conditions of the Exchange Offer, the Company will accept for exchange all validly tendered Old Notes as soon as practicable after the Expiration Date and will issue Exchange Notes therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Company shall be deemed to have accepted tendered Old Notes when, as and if the Company has given written or oral notice (immediately followed in writing) thereof to the Exchange Agent. If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Old Notes will be returned, without expense, to the undersigned at the address shown in Box 1 or at such different address as may be indicated herein under "Special Delivery Instructions" (Box 3).

        15.   Withdrawal.    Tenders may be withdrawn only pursuant to the procedures set forth in the Prospectus under the caption "The Exchange Offer—Withdrawal Rights."

12

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

        GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. Social Security Numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the Payer.

FOR THIS TYPE OF ACCOUNT:			GIVE THE SOCIAL SECURITY NUMBER OF:
1.	An individual's account		The individual
2.	Two or more individuals (joint account)		The actual owner of the account or, if combined funds, the first individual on the account (1)
3.	Husband and wife (joint account)		The actual owner of the account, or if joint funds, either person (1)
4.	Custodian account of a minor (Uniform Gift to Minors Act)		The minor (2)
5.	Adult and minor (joint account)		The adult or, if the minor is the only contributor, the minor (1)
6.	Account in the name of the guardian or committee for a designated ward, minor, or incompetent person		The ward, minor, or incompetent person (3)
7.	a.	The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee (1)
	b.	So-called trust account that is not a legal or valid trust under State law	The actual owner (1)
8.	Sole proprietorship account		The owner (4)
9.	A valid trust, estate, or pension trust		The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself if not designated in the account title) (5)
10.	Corporate account		The corporation
11.	Religious, charitable, or educational organization account		The organization
12.	Partnership account held in the name of the business		The partnership
13.	Association, club, or other tax-exempt organization		The organization
14.	A broker or registered nominee		The broker or nominee

(1)

List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security Number, that person's number must be furnished.



(2)

Circle the minor's name and furnish minor's social security number.



(3)

Circle the ward's, minor's or incompetent person's name and furnish such person's Social Security Number.



(4)

You must show your individual name, but you may also enter your business or "doing business as" name. You may also use either your Social Security Number or Employer Identification Number (if you have one).



(5)

List first and circle the name of the legal trust, estate or pension trust.

13

        NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

OBTAINING A NUMBER

If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

Payees specifically exempted from backup withholding on ALL payments include the following:

(1)

An organization exempt from tax under section 501(a), an individual retirement plan or a custodial account under Section 403(b)(7).



(2)

The Unites States or an agency or instrumentality thereof.



(3)

A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof.



(4)

A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof.



(5)

An international organization or any agency or instrumentality thereof.

Other payees that may be exempt from backup withholding include the following:

(6)

A corporation;



(7)

A foreign central bank of issue.



(8)

A dealer in securities or commodities required to registered in the United States, the District of Columbia, or a possession of the United States.



(9)

A futures commission merchant registered with the Commodity Futures Trading Commission.



(10)

A real estate investment trust.



(11)

An entity registered at all times during the tax year under the Investment Company Act of 1940.



(12)

A common trust fund operated by a bank under section 584(a).



(13)

A financial institution.



(14)

A middleman known in the investment community as a nominee or custodian.



(15)

An exempt charitable remainder trust, or a non-exempt trust described in Section 4947(a)(1).

For interest and dividend payments, all listed payees are exempt except the payee in item (9). For broker transactions, all payees listed in items (1) through (13) are exempt, and a person registered under the Investment Advisors Act of 1940 who regularly acts as broker is also exempt. For barter exchange transactions and patronage dividends, only payees listed in items (1) through (5) are exempt from backup withholding. Payments subject to reporting under sections 6041 and 6041A are generally exempt from backup withholding only if made to payees listed in items (1) through (7). However, a corporation is not exempt from backup withholding on medical and health care payments, attorneys fees and payments for services paid by a federal executive agency that are reportable on Form 1099-MISC.

14

PAYMENTS NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING:

Payment of dividends and patronage dividends not generally subject to backup withholding include the following:

•

Payments to nonresident aliens subject to withholding under section 1441.



•

Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident alien partner.



•

Payments of patronage dividends where the amount received is not paid in money.



•

Payments made by certain foreign organizations.



•

Section 404(k) payments made by an ESOP.

Payments of interest not generally subject to backup withholding include the following:

•

Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer.



•

Payments of tax-exempt interest (including exempt-interest dividends under Section 852).



•

Payments described in section 6049(b)(5) to non-resident aliens.



•

Payments on tax-free covenant bonds under section 1451.



•

Payments made by certain foreign organizations.



•

Mortgage or student loan interest paid to you.

EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CHECK "EXEMPT" IN PART 3 OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.

Certain payments, other than interest, dividends and patronage dividends, that are subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A, 6045, 6050A and 6050N.

PRIVACY ACT NOTICE—Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 30% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

PENALTIES

(1)

PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.    If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.



(2)

CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDER.    If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.



(3)

CRIMINAL PENALTY FOR FALSIFYING INFORMATION.    Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
ADVISOR OR THE INTERNAL REVENUE SERVICE.

15

QuickLinks

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

EX-99.2

Exhibit 99.2

NOTICE OF GUARANTEED DELIVERY

LINENS HOLDING CO.
LINENS 'N THINGS, INC.
LINENS 'N THINGS CENTER, INC.

Exchange Offer of $650,000,000 aggregate principal amount of Senior Secured Floating Rate
Notes due 2014, which have been registered under the Securities Act of 1933,
for all outstanding Senior Secured Floating Rate Notes due 2014

        This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Linens Holding Co., a Delaware corporation, together with its consolidated subsidiaries, including Linens "n Things, Inc., a Delaware corporation, and Linens "n Things Center, Inc., a California corporation (collectively, the "Company"), made pursuant to the prospectus, dated                        , 2006 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of Transmittal"), if certificates for Old Notes of the Company are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date (as defined below) of the Exchange Offer. This form may be delivered or transmitted by facsimile transmission, overnight courier, or hand, regular, registered, or certified mail to The Bank of New York Trust Company, N.A. (the "Exchange Agent") as set forth below. Capitalized terms used but not defined herein shall have the same meanings given them in the Prospectus or the Letter of Transmittal.

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                        , 2006 UNLESS EXTENDED (SUCH DATE AND TIME, AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To: The Bank of New York Trust Company, N.A., as Exchange Agent

By Registered, Certified, or Regular Mail, by Overnight Courier, or by Hand Delivery:

The Bank of New York
Corporate Trust Operations
Reorganization Unit
101 Barclay Street — 7^th Floor East
New York, NY 10286
Attention: David Mauer

Or
By Facsimile Transmission:
212-298 1915

Telephone:
212-815-3687

DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

This form is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an Eligible Guarantor Institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of Transmittal.

Ladies and Gentlemen:

        Upon the terms and conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to the Company the principal amount of Old Notes set forth below, pursuant to the guaranteed delivery procedure described in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus. By so tendering, the undersigned does hereby make, at and as of the date hereof, the representations and warranties of a tendering holder of Old Notes set forth in the Letter of Transmittal.

        The undersigned understands that tenders of Old Notes will be accepted only in authorized denominations. The undersigned understands that tenders of Old Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., New York City time, on the Expiration Date. Tenders of Old Notes may be withdrawn if the Exchange Offer is terminated or as otherwise provided in the Prospectus.

        All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the successors, assigns, heirs, personal representatives, executors, administrators, trustees in bankruptcy and other legal representatives of the undersigned.

Principal Amount of Old Notes Tendered:*	If Old Notes will be delivered by book-entry transfer, provide account number.
$	Account Number:
Certificate Nos. (if available):
Total Principal Amount Represented by Old Notes Certificate(s):
$

* Must be in denominations of principal amount of $1,000 and any integral multiple thereof.

PLEASE SIGN HERE

X
X
Signature(s) of Holder(s) or Authorized Signatory	Date

        This Notice of Guaranteed Delivery must be signed by the holder(s) of Old Notes exactly as their name(s) appear(s) on the certificate(s) for the Old Notes or, if delivered by a participant in The Depository Trust Company, exactly as such participants name appears on a security position listing as the owner of Old Notes or by person(s) authorized to become holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If any signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below beside "Capacity" and submit evidence satisfactory to the Company of such person's authority to so act as provided in the Letter of Transmittal.

Please Type or Print

Name(s):

Capacity:

Address(es):

Area Code and Telephone Number:

GUARANTEE

        The undersigned, a member of a registered national securities exchange, or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended, hereby guarantees that the certificates representing the principal amount of Old Notes tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Old Notes into the Exchange Agent's account at The Depository Trust Company pursuant to the procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus, together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, within three business days after the Expiration Date.

Name of Firm:
	Authorized Signature
Address:	Name:
	(Please Type or Print)
	Title:
Area Code and Tel. No.:
Date:

DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR OLD NOTES SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.

EX-99.3

Exhibit 99.3

BROKER DEALER LETTER

LINENS HOLDING CO.
LINENS 'N THINGS, INC.
LINENS 'N THINGS CENTER, INC.

Exchange Offer of $650,000,000 aggregate principal amount of Senior Secured Floating Rate
Notes due 2014, which have been registered under the Securities Act of 1933,
for all outstanding Senior Secured Floating Rate Notes due 2014

Pursuant to the Prospectus dated                        , 2006

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                        , 2006, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

        , 2006

To Securities Dealers, Commercial Banks,
Trust Companies and Other Nominees:

        Enclosed for your consideration is a Prospectus dated                        , 2006 (the "Prospectus") and a Letter of Transmittal (the "Letter of Transmittal") that together constitute the offer (the "Exchange Offer") by Linens Holding Co., a Delaware corporation, together with its consolidated subsidiaries, including Linens "n Things, Inc., a Delaware corporation, and Linens "n Things Center, Inc., a California corporation (collectively, the "Company"), to exchange an aggregate principal amount of up to $650,000,000 of its Senior Secured Floating Rate Notes due 2014 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for its Senior Secured Floating Rate Notes due 2014 (the "Old Notes") that are currently outstanding upon the terms and subject to the conditions described in the Prospectus.

        We are asking you to contact your clients for whom you hold Old Notes registered in your name or in the name of your nominee. In addition, we ask you to contact your clients who, to your knowledge, hold Old Notes registered in their own name.

        Enclosed are copies of the following documents:

1.

The Prospectus;

2.

The Letter of Transmittal for your use in connection with the tender of Old Notes and for the information of your clients;

3.

The Notice of Guaranteed Delivery to be used to accept the Exchange Offer if the Old Notes and all other required documents cannot be delivered to the Exchange Agent prior to the Expiration Date; and

4.

Return envelopes addressed to The Bank of New York Trust Company, N.A., as Exchange Agent.

Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on                        , 2006, unless extended by the Company. We urge you to contact your clients as promptly as possible.

        Upon request, the Company may reimburse you for customary and reasonable mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Company will not pay any fee or commission to any broker or dealer or to any other person (other than the Exchange Agent for the Exchange Offer).

        To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Old Notes should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.

        The Depository Trust Company ("DTC") participants will be able to execute tenders through the DTC Automated Tender Offer Program.

        If holders of Old Notes wish to tender, but it is impracticable for them to forward their certificates for Old Notes prior to the expiration of the Exchange Offer or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under "The Exchange Offer—Guaranteed Delivery Procedures."

Very truly yours,

LINENS HOLDING CO.
LINENS 'N THINGS, INC.
LINENS "N THINGS CENTER, INC.

        Any inquiries you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to the Exchange Agent for the Old Notes, at its address and telephone number set forth on the front of the Letter of Transmittal.

Nothing herein or in the enclosed documents shall constitute you or any person as an agent of the Company or the Exchange Agent, or authorize you or any other person to make any statements on behalf of either of them with respect to the Exchange Offer, except for statements expressly made in the Prospectus and the Letter of Transmittal.