S-4

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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on July 9, 2012.

Registration Statement No. 333-          

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

Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

99¢ ONLY STORES
(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of
incorporation or organization) 5331
(Primary Standard Industrial
Classification Code Number) 95-2411605
(I.R.S. Employer
Identification Number)

4000 East Union Pacific Avenue
City of Commerce, California 90023
(323) 980-8145
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

Russell Wolpert
99¢ Only Stores
4000 Union Pacific Avenue
City of Commerce, California 90023
(323) 980-8145
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With a copy to:

Philippa M. Bond, Esq.
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, California 90067
(310) 557-2900/(310) 557-2193 (Facsimile)

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 being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, 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, 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

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer ý
(Do not check if a
smaller reporting company) Smaller reporting company o

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee
11% Senior Notes due 2019	$250,000,000	100%	$250,000,000	$28,650.00
Guarantees of 11% Senior Notes due 2019(2)	—	—	—	—

(1)

Determined pursuant to Rule 457(i) under the Securities Act solely for purposes of calculating the registration fee.

(2)

The 11% Senior Notes due 2019 are guaranteed by the Co-Registrants on a senior basis. No separate consideration will be paid in respect of the guarantees. Pursuant to Rule 457(n) under the Securities Act, no filing fee is required.

The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrant 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 or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANT SUBSIDIARY GUARANTORS

Exact Name Specified in Charter*	State or other Jurisdiction of Organization	Primary Standard Industrial Classification Number		I.R.S. Employer Identification Number
99 Cents Only Stores	Nevada		5331		94-3391842
99 Cents Only Stores Texas, Inc.	Delaware		5331		54-2091229

*

Address and telephone number of principal executive offices are the same as 99¢ Only Stores.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JULY 9, 2012

PRELIMINARY PROSPECTUS

99¢ Only Stores

Offer to Exchange

Up to $250 million aggregate principal amount of its 11% Senior Notes due 2019 which have been registered under the Securities Act of 1933, as amended (the "exchange notes") for any and all of its outstanding 11% Senior Notes due 2019 (the "outstanding notes")

The Exchange Notes:

•

The terms of the exchange notes are substantially identical to the outstanding notes, except that some of the transfer restrictions and registration rights relating to the outstanding notes will not apply to the exchange notes.

•

The exchange notes will be guaranteed on a senior unsecured basis by each of our existing and future restricted subsidiaries that are guarantors under our credit facilities and certain other indebtedness. If we fail to make payments on the exchange notes, the guarantors must make them instead.

•

There is no established trading market for the exchange notes or the outstanding notes and we do not intend to apply for listing on any market or exchange.


The Exchange Offer:

•

The exchange offer will expire at 5:00 p.m., New York City time, on                        , 2012, unless we extend the exchange offer.

•

The exchange offer is not subject to any conditions other than that it not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.

•

Subject to the satisfaction or waiver of specified conditions, we will exchange all outstanding notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer.

•

You may withdraw tenders of outstanding notes at any time prior to the expiration or termination of the exchange offer.

•

The exchange offer is subject to the conditions set forth under "The Exchange Offer—Conditions to the Exchange Offer" in this prospectus.

•

We will not receive any proceeds from the exchange offer.

•

We issued the outstanding notes in a transaction not requiring registration under the Securities Act, and as a result, their transfer is restricted. We are making the exchange offer to satisfy your registration rights, as a holder of the outstanding notes.

         All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the outstanding notes under the Securities Act.

         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 Letter of Transmittal states that by so acknowledging 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. 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 the outstanding notes where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. We have agreed that, for a period of up to 180 days after the effective date of the registration statement, of which this prospectus is a part, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution" in this prospectus.

See "Risk Factors" beginning on page 14 for a discussion of certain risks that you should consider before participating in the exchange offer.

Neither the Securities and Exchange Commission nor any state securities commission has passed upon the accuracy or adequacy of this prospectus or the investment merits of the exchange notes. Any representation to the contrary is a criminal offense.

The date of this prospectus is                        , 2012

TABLE OF CONTENTS

	Page
Summary		1
Risk Factors		14
The Exchange Offer		31
Use of Proceeds		42
Unaudited Pro Forma Condensed Consolidated Financial Information		43
Selected Consolidated Historical Financial Data		46
Management's Discussion and Analysis of Financial Condition and Results of Operations		48
Business		72
Management		85
Security Ownership of Certain Beneficial Owners		99
Certain Relationships and Related Party Transactions		100
Description of Our Credit Facilities		102
Description of Exchange Notes		105
Material Federal Income Tax Considerations		171
Plan of Distribution		176
Legal Matters		176
Experts		177
Where You Can Find More Information		177
Index to Consolidated Financial Statements		F-1

        This prospectus contains summaries of the material terms of certain documents and refers you to certain documents that we have filed with the Securities and Exchange Commission (the "SEC"). See "Where You Can Find More Information" in this prospectus. Copies of these documents, except for certain exhibits and schedules, will be made available to you without charge upon written or oral request to:

99¢ Only Stores
4000 Union Pacific Avenue
City of Commerce, California 90023
(323) 980-8145

In order to obtain timely delivery of such materials, you must request information from us no later than five business days prior to the expiration of the exchange offer.

        No information in this prospectus constitutes legal, business or tax advice, and you should not consider it as such. You should consult your own attorney, business advisor and tax advisor for legal, business and tax advice regarding the exchange offer.

        You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus is not an offer to sell or a solicitation of an offer to buy the notes in any jurisdiction or under any circumstances in which the offer or sale is unlawful. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

FORWARD LOOKING STATEMENTS

        This prospectus contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933. The words "expect," "estimate," "anticipate," "predict," "will," "project," "plan," "believe" and other similar expressions and variations thereof are intended to identify forward-looking statements. Such statements and discussions containing such forward-looking statements may be found under "Risk Factors," "Unaudited Pro Forma Condensed Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" in this prospectus, as well as within this prospectus generally, and include statements regarding the intent, belief or current expectations of 99¢ Only Stores and its directors or officers with respect to, among other things, (a) trends affecting the financial condition or results of operations of the Company, and (b) the business and growth strategies of the Company (including the Company's new store opening growth rate), that are not historical in nature. Readers are cautioned not to put undue reliance on such forward-looking statements. Such forward-looking statements are and will be based upon our then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements, but we may not realize our expectations and our estimates and assumptions may not prove correct. In addition, such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected in this prospectus, for the reasons, among others, discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" in this prospectus. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether or not to participate in the exchange offer. For a more complete understanding of our Company and this exchange offer you should read this entire prospectus, including the information set forth under the heading "Risk Factors" in this prospectus and the consolidated financial statements and the notes thereto included in this prospectus.

As part of the transactions described under the heading "—The Merger," on January 13, 2012, Number Merger Sub, Inc. ("Merger Sub") merged with and into 99¢ Only Stores, with 99¢ Only Stores being the surviving corporation (such merger, the "Merger") and the acquisition described in this prospectus (the "Acquisition") was completed. In this prospectus, the terms "we," "us," "our," "99¢ Only" and the "Company" refer to 99¢ Only Stores and its consolidated subsidiaries, after giving effect to the consummation of the Merger, unless expressly stated otherwise or the context otherwise required, and in particular, with respect to historical financial information of 99¢ Only Stores. Unless otherwise indicated, the term "sales" refers to "net sales." As the result of the Merger, the accompanying financial information is presented for the "Predecessor" and "Successor" periods relating to the periods preceding and succeeding the Merger, respectively. Our fiscal year 2012 ("fiscal 2012") is presented as a Successor period from January 15, 2012 to March 31, 2012 consisting of 11 weeks (the "fiscal 2012 Successor period") and a Predecessor period from April 3, 2011 to January 14, 2012 consisting of 41 weeks (the "fiscal 2012 Predecessor period"), for a total of 52 weeks. Our fiscal year 2011 ("fiscal 2011") (Predecessor) began on March 28, 2010 and ended on April 2, 2011, consisting of 53 weeks with one additional week included in the fourth quarter and fiscal year 2010 ("fiscal 2010") (Predecessor) consisting of 52 weeks beginning March 29, 2009 and ending March 27, 2010. Where meaningful, we have presented disclosures with respect to the combination of the Successor and Predecessor periods, on a pro forma basis, which we refer to as "pro forma fiscal year 2012." Our fiscal year 2013 ("fiscal 2013") will consist of 52 weeks beginning April 1, 2012 and ending March 30, 2013.

Our Company

        With over 29 years of operating experience, we are a leading operator of extreme value retail stores in the southwestern United States with 298 stores located in the states of California (219 stores), Texas (37 stores), Arizona (29 stores) and Nevada (13 stores) as of March 31, 2012. Our stores offer consumable products with an emphasis on name brands and our items are primarily priced at 99.99¢ or less. We carry a wide assortment of regularly available products as well as a broad variety of first-quality closeout merchandise. We carry many fresh produce, deli, dairy and frozen food products found in traditional grocery stores, which we sell at generally lower, sometimes significantly lower, prices. Our core philosophy is that every item in our store be a good to great value. We believe that our differentiated merchandise mix, combined with outstanding value, enable us to appeal to a broad consumer demographic, increase overall customer traffic and frequency of customer visits, as well as strengthen customer loyalty. Our stores are significantly larger than traditional dollar stores, enabling us to offer a wider assortment of merchandise and provide our customers with a spacious, comfortable shopping experience.

        In pro forma fiscal 2012, on a comparable 52-week period, our stores open for the full year averaged net sales of $5.2 million per store and $309 per estimated saleable square foot, which we believe is the highest among all dollar store chains. We opened 13 new stores during pro forma fiscal 2012, including eight stores in California, two in Arizona, one in Nevada and two in Texas. We did not close any stores during pro forma fiscal 2012. In fiscal 2013, we plan to increase our store count by approximately 10%, with the majority of new stores expected to be opened in California during the second half of fiscal 2013.

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        We also sell merchandise through our Bargain Wholesale division at prices generally below normal wholesale levels to retailers, distributors and exporters. The Bargain Wholesale division complements our retail operations by exposing us to a broader selection of opportunistic buys and generating additional sales with relatively small incremental operating expenses. Bargain Wholesale represented 2.8% of our total sales in pro forma fiscal 2012.

Stores

        Our stores are typically clustered around densely populated areas where it is convenient for our customers to do their weekly household shopping. We believe that our stores offer our customers an attractive and inviting shopping experience. Our stores are brightly lit, clean and well maintained. The interiors of our stores feature attractively displayed products, consistent merchandise displays, and low shelving height that permits visibility throughout the store. We emphasize a strong visual presentation in all key traffic areas of each store. We maintain and update our displays throughout the day to improve our customers' shopping experience.

Merchandise

        Our merchandising strategy is centered on our philosophy that every item in our store be a good to great value. Approximately 55% of our gross sales are from re-orderable products that are routinely in stock and generally available to our customers each time they visit our stores. We believe that by consistently offering a wide selection of basic consumable items, we encourage our customers to shop our stores regularly for everyday household needs. Approximately 45% of our sales are from closeout merchandise, which is also known as special- situation merchandise, stock-lots or remainders. Closeout merchandise represents products obtained from suppliers at lower to substantially lower than wholesale cost due to factors such as manufacturing overruns, approaching sell-by dates, and excess inventory or package changes. We offer a significantly larger percentage of closeout merchandise than traditional dollars stores, some of whom carry few or no closeouts. We believe that offering a large and frequently changing selection of closeout merchandise, including many name brands, creates a sense of urgency, fun and treasure-hunt excitement in our stores.

        We have one of the largest product offerings in the dollar store industry. We differentiate ourselves from traditional dollar stores by offering a wider assortment of food and grocery items, including perishables, which collectively account for approximately 56% of our gross sales. Substantially all of our stores have free-standing fresh and refrigerated produce displays as well as full-sized built-in refrigerated and frozen food wall units. We believe that many of our customers shop at our stores weekly for their groceries and frequently shop 99¢ Only first before supplementing such purchases at other food stores.

        We focus on name-brand consumables. The range and quality of our name-brand merchandise allows our customers to benefit from the value of our prices while purchasing brands they know and trust.

        We estimate that approximately one-third of our sales are derived from products produced outside the United States, varying depending on the season and closeout activity. In addition to our significant amount of name-brand offerings, we offer secondary and generic brands, plus a smaller portion of domestically and internationally sourced private label merchandise. We believe that opportunities exist to increase the volume of private label and directly sourced foreign merchandise.

        We purchase our merchandise from a wide variety of suppliers with whom we have long-standing and mutually beneficial buying relationships. We are a trusted partner and a preferred buyer to our suppliers, many of whom we believe contact 99¢ Only first when selling closeout inventory.

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The Merger

        On January 13, 2012, pursuant to the Agreement and Plan of Merger, dated as of October 11, 2011 (the "Merger Agreement"), by and among 99¢ Only Stores, Number Holdings, Inc., a Delaware corporation ("Parent"), and Merger Sub, a subsidiary of Parent, Merger Sub merged with and into 99¢ Only Stores, with 99¢ Only Stores being the surviving corporation. As a result of the Merger, we became a subsidiary of Parent. Parent is controlled by affiliates of Ares Management LLC ("Ares"), Canada Pension Plan Investment Board ("CPPIB") (together, the "Sponsors") and the Rollover Investors (as defined below).

        Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company's common stock, no par value ("Company common stock"), was converted into the right to receive $22.00 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration"), excluding (1) shares held by any shareholders who were entitled to and who have properly exercised dissenters' rights under California law, and (2) shares held by Parent, Merger Sub or any other wholly owned subsidiary of Parent, which included the shares contributed to Parent prior to the completion of the Merger by Eric Schiffer, the Company's Chief Executive Officer, Jeff Gold, the Company's President and Chief Operating Officer, Howard Gold, the Company's Executive Vice President, Karen Schiffer and The Gold Revocable Trust dated October 26, 2005 (collectively, the "Rollover Investors"). In addition, each outstanding stock option was cancelled and converted into the right to receive an amount in cash equal to the excess, if any, of the Merger Consideration over the exercise price for each share subject to the applicable option. Each restricted stock unit ("RSU") was cancelled and converted into the right to receive an amount in cash equal to the number of unforfeited shares of Company common stock then subject to the RSU multiplied by the Merger Consideration. Each performance stock unit ("PSU") was cancelled and converted into the right to receive an amount in cash equal to the number of unforfeited shares of Company common stock then subject to the PSU multiplied by the Merger Consideration.

        At the effective time of the Merger, each share of Company common stock was converted into the right to receive the Merger Consideration. As a result of the Merger, the Company's common stock was delisted from the New York Stock Exchange and the Company ceased to be a publicly held and traded corporation.

        The total cash merger consideration paid was approximately $1.6 billion, which was funded from equity contributions from the Sponsors and cash of the Company, as well as proceeds received by Merger Sub in connection with debt financing consisting of (i) $535 million of funded debt provided by Royal Bank of Canada, Bank of Montreal, Deutsche Bank Trust Company Americas, City National Bank, a National Banking Association, Siemens Financial Services, Inc. and HSBC Bank USA, N.A. under (a) a $525 million first lien term loan facility (as amended (see description below), the "First Lien Term Loan Facility"), and (b) $10 million of borrowings under a $175 million first lien based revolving credit facility (the "ABL Facility" and together with the First Lien Term Loan Facility, the "Credit Facilities") and (ii) issuance of $250 million outstanding notes, which we are offering to exchange, upon the terms and subject to the conditions set forth in this prospectus and the accompanying letter of transmittal, for all of our exchange notes. In addition, the Rollover Investors contributed approximately 4,545,451 shares of Company common stock, valued at the $22.00 per share merger consideration, to Parent, in exchange for approximately 15.73% of the outstanding common stock of Parent.

        On April 4, 2012, we amended the terms of our existing seven-year $525 million First Lien Term Facility, net of refinancing costs of $11.2 million. The amendment decreased the Applicable Margin per the London Interbank Offered Rate ("LIBOR") plus 5.50% (or base rate plus 4.50%) to LIBOR plus 4.00% (or base rate plus 3.00%) and the LIBOR floor from 1.50% to 1.25%. The maximum capital

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expenditures covenant in the First Lien Term Facility was amended to permit an additional $5 million in capital expenditures each year throughout the term of the First Lien Term Facility.

        For further information on the Acquisition, see "Description of Our Credit Facilities" and "Description of Exchange Notes."

Our Financial Sponsors

        Ares Management LLC is a global alternative asset manager and SEC registered investment adviser with approximately $52 billion of total committed capital under management and over approximately 500 employees as of April 30, 2012. The firm is headquartered in Los Angeles with professionals located across the United States, Europe and Asia and has the ability to invest in all levels of a company's capital structure—from senior debt to common equity. The firm's investment activities are managed by dedicated teams in its Private Equity, Private Debt and Capital Markets investment platforms.

        Ares Management was built upon the fundamental principle that each platform benefits from being part of the greater whole. This multi-asset class synergy provides its professionals with insights into industry trends across the globe, access to significant deal flow and the ability to assess relative value.

        The Ares Private Equity Group pursues majority or shared control investments, principally in middle market companies with strong business franchises and in situations where its capital can serve as a catalyst for growth. Ares' senior partners average more than 20 years of experience investing in, controlling, advising, and restructuring companies.

        CPPIB is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPPIB assets, CPPIB invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, CPPIB is governed and managed independently of the Canada Pension Plan and at arm's length from governments. As of March 31, 2012, the assets of the Canada Pension Plan Fund totaled C$162 billion, of which C$28 billion was invested in private equity.

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Corporate Structure

(1)

Parent guarantees our Credit Facilities, but does not guarantee the outstanding notes or the exchange notes.

(2)

The Credit Facilities consist of (i) a first lien asset based revolving credit facility in an aggregate principal amount equal to $175 million, and (ii) a first lien term loan facility in an aggregate principal amount equal to $525 million. See "Description of Our Credit Facilities" in this prospectus.

(3)

99¢ Only Stores operates all of the California, Arizona and Nevada stores. Ares holds 10% of the Company's Class B Common Stock, which carry de minimis economic rights and the right to vote solely with respect to the election of directors. See "Security Ownership of Certain Beneficial Owners" in this prospectus.

Corporate Information

        99¢ Only Stores was initially incorporated on August 31, 1965 as a California corporation. Our principal executive offices are located at 4000 Union Pacific Avenue, City of Commerce, California 90023. Our telephone number at that address is (323) 980-8145 and our corporate website is www.99only.com. Our website and the information contained on our website are not part of this prospectus.

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SUMMARY OF THE EXCHANGE OFFER

The summary below describes the principal terms of the exchange offer. The description below is subject to important limitations and exceptions. Please read the section entitled "The Exchange Offer" in this prospectus which contains a more detailed description of the exchange offer. In this prospectus, the term "outstanding notes" refers to the outstanding 11% Senior Notes due 2019. The term "exchange notes" refers to the 11% Senior Notes due 2019, as registered under the Securities Act. The term "notes" refers collectively to the outstanding notes and the exchange notes.

The Exchange Offer	We are offering to exchange the exchange notes, which have been registered under the Securities Act, for the outstanding notes, which have not been registered under the Securities Act. Merger Sub issued the outstanding notes on December 29, 2011 pursuant to an indenture between Merger Sub and Wilmington Trust, National Association, as trustee (the "Trustee"). Concurrently with the consummation of the Acquisition, the Company, the subsidiary guarantors party thereto and the Trustee executed a supplemental indenture, dated as of January 13, 2012, pursuant to which the Company assumed the obligations of Merger Sub under the indenture governing the outstanding notes and the outstanding notes, and the guarantors guaranteed the outstanding notes on a senior unsecured basis.
	In order to exchange your outstanding notes, you must promptly tender them before the expiration date (as described herein). All outstanding notes that are validly tendered and not validly withdrawn will be exchanged. We will issue the exchange notes on or promptly after the expiration date.
	You may only exchange outstanding notes with a minimum denomination of $2,000 or an integral multiple of $1,000 in excess thereof.
Registration Rights Agreement	Merger Sub sold the outstanding notes on December 29, 2011 to RBC Capital Markets, LLC, BMO Capital Markets Corp., and Deutsche Bank Securities Inc. Simultaneously with that sale, Merger Sub signed a registration rights agreement with RBC Capital Markets, LLC, as representative of the initial purchasers, relating to the outstanding notes that requires us to conduct this exchange offer. Concurrently with the consummation of the Acquisition, the Company and the guarantors entered into a registration rights agreement joinder pursuant to which the Company and the guarantors assumed all of the rights and obligations of Merger Sub under the registration rights agreement.

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	You have the right under the registration rights agreement to exchange your outstanding notes for exchange notes. The exchange offer is intended to satisfy such right. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your outstanding notes.
	For a description of the procedures for tendering outstanding notes, see "The Exchange Offer—Procedures for Tendering Outstanding Notes" in this prospectus.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on                    , 2012, unless we extend it. In that case, the expiration date will be the latest date and time to which we extend the exchange offer. See "The Exchange Offer—Expiration Date; Extensions; Amendments" in this prospectus. We do not currently intend to extend the expiration date.
Conditions to the Exchange Offer	The exchange offer is subject to conditions that we may waive in our sole discretion. The exchange offer is not conditioned upon any minimum principal amount of outstanding notes being tendered for exchange. See "The Exchange Offer—Conditions to the Exchange Offer" in this prospectus.
Procedures for Tendering outstanding notes	If you are a record holder of outstanding notes and wish to participate in the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of such letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of such letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal.
	If you hold outstanding notes through The Depository Trust Company ("DTC") and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things:
	• you are not our "affiliate" within the meaning of Rule 405 under the Securities Act;
	• you do not have an arrangement or understanding with any person or entity to participate in the distribution of the exchange notes; and

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	• if you are a broker-dealer that will receive exchange notes for your own account in exchange for outstanding notes that were acquired as a result of market-making activities or other trading activities, that you will deliver a prospectus, as required by law, in connection with any resale of such exchange notes.
Special Procedures for Beneficial Owners	If you are a beneficial owner of outstanding notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offer, you should contact the registered holder promptly and instruct the registered holder to tender those outstanding notes 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 outstanding notes, either make appropriate arrangements to register ownership of the outstanding notes in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date of the exchange offer.
Guaranteed Delivery Procedures	If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents, or you cannot comply with the procedures under DTC's Automated Tender Offer Program for transfer of book-entry interests, prior to the expiration date, you must tender your outstanding notes according to the guaranteed delivery procedures as described in "The Exchange Offer—Guaranteed Delivery Procedures" in this prospectus.
Withdrawal Rights	You may withdraw the tender of your outstanding notes at any time prior to the expiration of the exchange offer. We will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offer. See "The Exchange Offer—Withdrawal Rights" in this prospectus.

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Resales of Exchange Notes	Based on an interpretation by the staff of the SEC set forth in no-action letters issued to third parties, we believe that the exchange notes issued pursuant to the exchange offer exchange for outstanding notes may be offered for resale, resold and otherwise transferred by you (unless you are our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that:
	• you are acquiring the exchange notes in the ordinary course of your business; and
	• you have not engaged in, do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the exchange notes.
	If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making activities or other trading activities, you must acknowledge that you will deliver this prospectus in connection with any resale of the exchange notes. See "Plan of Distribution." Any holder of outstanding notes that:
	• is our affiliate;
	• does not acquire exchange notes in the ordinary course of its business; or
	• tenders its outstanding notes in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes;
	cannot rely on the position of the staff of the SEC enunciated in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC's letter to Shearman & Sterling, dated available July 2, 1993, or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

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Effect on Holders of Outstanding Notes	As a result of the making of, and upon acceptance for exchange of all validly tendered outstanding notes pursuant to the terms of the exchange offer, we will have fulfilled a covenant under the registration rights agreement, and the payment of Additional Interest (as defined in the registration rights agreement) will cease. If you do not tender your outstanding notes in the exchange offer, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the indenture that governs the notes, except that we will not have any further obligation to you to provide for the exchange and registration of the outstanding notes under the registration rights agreement. To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for outstanding notes could be adversely affected.
Consequences of Failure to Exchange	If you do not exchange your outstanding notes for exchange notes in the exchange offer, you will still have the restrictions on transfer provided in the outstanding notes and in the indenture that governs the notes. In general, the outstanding notes may not be offered or sold unless registered or exempt from registration under the Securities Act, or in a transaction not subject to the Securities Act and applicable state securities laws. We do not plan to register the outstanding notes under the Securities Act. See "Risk Factors—Risks Related to the Exchange Offer" and "The Exchange Offer—Consequences of Failure to Exchange" in this prospectus.
Exchange Agent	The exchange agent for the exchange offer is Wilmington Trust, National Association. The address, telephone number and facsimile number of the exchange agent are provided under "The Exchange Offer—Exchange Agent" in this prospectus, as well as in the letter of transmittal.
Use of Proceeds	We will not receive any cash proceeds from the issuance of the exchange notes. See "Use of Proceeds" in this prospectus.
Material Federal Income Tax Considerations	For a discussion of the material federal income tax considerations relating to the exchange of outstanding notes for the exchange notes as well as the ownership of the exchange notes, see "Material Federal Income Tax Considerations" in this prospectus.

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SUMMARY DESCRIPTION OF EXCHANGE NOTES

The following summary contains basic information about the exchange notes and is not intended to be complete. It may not contain all of the information that may be important to you. The terms of the exchange notes are identical in all material respects to the terms of the outstanding notes, except that the registration rights and related liquidated damages provisions and the transfer restrictions applicable to the outstanding notes are not applicable to the exchange notes. The exchange notes will evidence the same debt as the outstanding notes and will be governed by the same indenture relating to that series of notes. For a more complete description of the exchange notes, see "Description of Exchange Notes" in this prospectus. In this summary of the offering, the words "we," "us," and "our" refer only to 99¢ Only Stores and not to any of our subsidiaries.

Issuer and Guarantors	99¢ Only Stores, a California corporation.
	The exchange notes will be guaranteed by the guarantors as described under "Description of Exchange Notes—Guarantees" in this prospectus.
Securities Offered	We are offering to exchange up to $250 million aggregate principal amount of outstanding notes. The exchange notes and the outstanding notes will be considered to be a single class for all purposes under the indenture that governs the notes, including waivers, amendments, redemptions and offers to purchase.
Maturity Date	The exchange notes will mature on December 15, 2019.
Interest	June 15 and December 15 of each year, beginning June 15, 2012. Interest will accrue from December 29, 2011.
Guarantees	The exchange notes will be jointly and severally and fully and unconditionally guaranteed on a senior unsecured basis by each of our existing and future direct or indirect wholly owned restricted subsidiaries, subject to certain exceptions described herein. See "Description of Exchange Notes—Guarantees" in this prospectus.
Ranking	The exchange notes and the guarantees, respectively, will be our and the guarantors' senior unsecured obligations and will:
	• rank senior in right of payment to any of our and the guarantors' existing and future subordinated indebtedness;
	• rank equally in right of payment to all of our and the guarantors' existing and future senior indebtedness;
	• be effectively junior in right of payment to all of our and the guarantors' existing and future secured indebtedness (including obligations under our Credit Facilities) to the extent of the value of the interest of the holders of that secured indebtedness in the assets securing such indebtedness; and
	• be effectively junior in right of payment to all existing and future liabilities of our non-guarantor subsidiaries;

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	As of March 31, 2012, we had outstanding on a consolidated basis:
	• $250 million of senior unsecured indebtedness outstanding consisting of the exchange notes;
	• $513.6 million of senior secured indebtedness outstanding under the First Lien Term Loan Facility;
	• an additional $175 million of available borrowings under our ABL Facility and, subject to certain limitations and the satisfaction of certain conditions, the option to seek to obtain additional incremental term loans under the First Lien Term Facility in an aggregate principal amount of up to $150 million and an increase in the asset-based revolving credit facility commitments under the ABL Facility in an aggregate principal amount of up to $50 million; and
	• all of our existing subsidiaries are guarantors.
Optional Redemption	We may redeem some or all of the exchange notes at any time on or after December 15, 2014 at a redemption price set forth under "Description of Exchange Notes—Optional Redemption" in this prospectus. On or prior to December 15, 2014, we may redeem up to 35% of the exchange notes with the net proceeds of certain equity offerings, at the prices set forth under "Description of Exchange Notes—Optional Redemption" in this prospectus. On or prior to December 15, 2014, we may, at our option redeem some or all of the exchange notes at the "make whole" prices set forth under "Description of Exchange Notes—Optional Redemption" in this prospectus.
Change of Control	If a change of control occurs, we must give holders of the exchange notes an opportunity to sell to us their exchange notes at a purchase price of 101% of the principal amount of such exchange notes, plus accrued and unpaid interest and additional interest, if any, to the date of purchase. See "Description of Exchange Notes—Certain Definitions—Change of Control" in this prospectus.
Certain Covenants	The indenture governing the exchange notes contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries (as described in "Description of Exchange Notes" in this prospectus) to:
	• incur or guarantee additional indebtedness;
	• create or incur certain liens;
	• pay dividends or make other restricted payments;
	• incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries;
	• make certain investments;

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	• transfer or sell assets;
	• engage in transactions with affiliates; or
	• merge or consolidate with other companies or transfer all or substantially all of our assets.
	These covenants are subject to a number of important limitations and exceptions described under "Description of Exchange Notes—Certain Covenants" in this prospectus.
	If the exchange notes are assigned investment grade ratings by both Moody's Investors Services, Inc. ("Moody's") and Standard & Poor's Ratings Services, a divisions of The McGraw-Hill Companies, Inc. ("S&P") and no default or event of default has occurred and is continuing, certain covenants will be suspended. See "Description of Exchange Notes—Certain Covenants" in this prospectus.
No Prior Market	The exchange notes will be freely transferable, but will be a new issue of securities for which there is currently no established trading market, and the exchange notes will not be listed on any securities exchange or quoted on any automated inter-dealer quotation system. Accordingly, a liquid market for the exchange notes may not be developed or be maintained.
Risk Factors	Tendering your outstanding notes in the exchange offer involves substantial risks. You should carefully consider all of the risks described in "Risk Factors" beginning on page 14 in addition to the other information contained in this prospectus before tendering any outstanding notes.

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RISK FACTORS

You should carefully consider the following risk factors and all other information contained in this prospectus before deciding whether to tender your outstanding notes in the exchange offer. The following risks comprise all the material risks of which we are aware; however, these risks and uncertainties may not be the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe are immaterial may also adversely affect our business or financial performance. The following risks could materially harm our business, financial condition, future results, and cash flow. If that occurs, you could lose all or part of your original investment. Information in this section may be considered "forward-looking statements." See "Forward-Looking Statements" in this prospectus for a discussion of certain qualifications regarding such statements.

Risks Related to the Exchange Notes

         We have substantial indebtedness and lease obligations, which could affect our ability to meet our obligations under our indebtedness, including the exchange notes, and may otherwise restrict our activities

        Our total indebtedness, as of March 31, 2012, was $763.6 million, consisting of borrowings under our First Lien Term Facility of $513.6 million and $250 million of outstanding notes. We have an additional $175 million of available borrowings under our ABL Facility and, subject to certain limitations and the satisfaction of certain conditions, we are also permitted to incur up to an aggregate of $200 million of additional borrowings under incremental facilities in our ABL Facility and First Lien Term Facility.

        We also have, and will continue to have, significant lease obligations. As of March 31, 2012, our minimum annual rental obligations under long-term operating leases for fiscal 2013 are $46.7 million.

        Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under the exchange notes and our Credit Facilities. Our substantial indebtedness could have important consequences, including:

•

increasing our vulnerability to adverse economic, industry or competitive developments;

•

requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities;

•

exposing us to the risk of increased interest rates because certain of our borrowings, including borrowings under our Credit Facilities, are at variable rates of interest;

•

making it more difficult for us to satisfy our obligations with respect to our indebtedness, including the exchange notes, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indenture governing the exchange notes and the agreements governing such other indebtedness;

•

restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

•

imposing restrictions on the operation of our business that may hinder our ability to take advantage of strategic opportunities or to grow our business;

•

limiting our ability to obtain additional financing for working capital, capital expenditures (including real estate acquisitions and store expansion), debt service requirements and general corporate or other purposes, which could be exacerbated by further volatility in the credit markets; and

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•

limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to any of our competitors who are less leveraged and who therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.

         We and our subsidiaries are still able to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness

        We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The indenture governing the exchange notes and our Credit Facilities each contain restrictions on the incurrence of additional indebtedness. However, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. Accordingly, we and our subsidiaries may be able to incur substantial additional indebtedness in the future. We have an additional $175 million of available borrowings under our ABL Facility. Subject to certain limitations and the satisfaction of certain conditions, we are also permitted to incur up to an aggregate of $200 million of additional borrowings under incremental facilities in our ABL Facility and First Lien Term Facility. If new debt is added to our and our subsidiaries' current debt levels, the risks that we now face as a result of our leverage would intensify and could have a negative impact on our credit rating. See "Description of Our Credit Facilities" and "Description of Exchange Notes" in this prospectus.

         We may not be able to generate sufficient cash to service all of our indebtedness, including the exchange notes, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful

        Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal of, and premium, if any, and additional interest, if any, on, our indebtedness, including the exchange notes.

        If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the exchange notes. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. The terms of the indenture governing the exchange notes and our Credit Facilities or any future debt instruments that we may enter into may restrict us from adopting some of these alternatives. In addition, any failure to make payments of interest and principal on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

         Our debt agreements contain restrictions that limit our flexibility in operating our business

        Our Credit Facilities and the indenture governing the exchange notes contain various covenants that limit our ability to engage in specified types of transactions. These covenants limit our Parent's (solely with respect to our Credit Facilities) and our restricted subsidiaries' ability to, among other things:

•

incur additional indebtedness or issue certain preferred shares;

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•

pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;

•

make certain investments;

•

transfer or sell certain assets;

•

create or incur liens;

•

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and

•

enter into certain transactions with our affiliates.

        A breach of any of these covenants could result in a default under one or more of these agreements, including as a result of cross default provisions, and, in the case of our Credit Facilities, permit the lenders to cease making loans to us. Upon the occurrence of an event of default under our Credit Facilities, the lenders could elect to declare all amounts outstanding under our Credit Facilities to be immediately due and payable and terminate all commitments to extend further credit under the ABL Facility. Such actions by those lenders could cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under our Credit Facilities could proceed against the collateral granted to them to secure that indebtedness. We have pledged a significant portion of our assets as collateral under our Credit Facilities. If the lenders under our Credit Facilities accelerate the repayment of borrowings, we may not have sufficient assets to repay our Credit Facilities as well as our other indebtedness, including the exchange notes.

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

        Borrowings under our Credit Facilities are at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on our variable rate indebtedness will increase even though the amount borrowed would remain the same, and our net income and cash flow, including cash available for servicing our indebtedness, will correspondingly decrease. Although subsequent to March 31, 2012, we entered into interest rate cap and swap agreements to hedge the variability of cash flows related to our floating rate indebtedness, these measures may not fully mitigate our risk or may not be effective.

         We may be unable to repay or repurchase the exchange notes at maturity

        At maturity, the entire outstanding principal amount of the exchange notes, together with accrued and unpaid interest, will become due and payable. We may not have the funds to fulfill these obligations or the ability to renegotiate these obligations. If upon the maturity date other arrangements prohibit us from repaying the exchange notes, we could try to obtain waivers of such prohibitions from the lenders and holders under those arrangements, or we could attempt to refinance the borrowings that contain the restrictions. In these circumstances, if we were not able to obtain such waivers or refinance these borrowings, we would be unable to repay the exchange notes.

         If we default on our obligations to pay our other indebtedness, we may not be able to make payments on the exchange notes

        Any default under the agreements governing our current or future indebtedness, including a default under our Credit Facilities, that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness, could prevent us from paying the principal of, and premium, if any, on, the exchange notes and substantially decrease the market value of the exchange notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal of, and premium, if any, on, our indebtedness, or if we otherwise fail to

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comply with the various covenants, including financial and operating covenants in the instruments governing our indebtedness (including covenants in our Credit Facilities and the indenture governing the exchange notes), there could be an event of default under the terms of the agreements governing such indebtedness, including our Credit Facilities and the indenture governing the exchange notes. If such an event of default occurs and is continuing:

•

the holders of such indebtedness may be able to cause all of our available cash flow to be used to pay such indebtedness and, in any event, could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest;

•

the lenders under our Credit Facilities could elect to terminate their commitments thereunder, cease making further loans and institute foreclosure proceedings against our assets; and

•

we could be forced into bankruptcy or liquidation.

        If our operating performance declines, we may in the future need to obtain waivers from the required lenders under our Credit Facilities to avoid being in default. If we breach our covenants under our Credit Facilities and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, there would be an event of default under our Credit Facilities, the lenders could exercise their rights, as described above, and we could be forced into bankruptcy or liquidation.

         The exchange notes and the guarantees are unsecured, therefore, our secured creditors (including the lenders under our ABL Facility and First Lien Term Facility) would have a prior claim, ahead of the holders of the exchange notes, on our assets and the guarantors' assets to the extent such assets secure such debt

        The exchange notes and the guarantees are our and the guarantors' general unsecured senior obligations and rank equal in right of payment to our and the guarantors' other existing and future unsecured senior debt. The exchange notes are not secured by any of our or our subsidiary guarantors' assets. Any future claims of secured lenders to the extent of the value of their interest in the assets securing their loans will be prior to any claim of the holders of the exchange notes with respect to those assets.

        As a result, upon any distribution to our creditors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or our property, the holders of our secured debt and the guarantors, including the lenders under our ABL Facility and First Lien Term Facility, will be entitled to be paid in full to the extent of the value of their interest in our assets securing that secured debt before any payment may be made with respect to the exchange notes. In addition, if we fail to meet our payments or other obligations under any secured debt, including our ABL Facility and First Lien Term Facility, the holders of that secured debt would be entitled to foreclose on our assets securing that secured debt and liquidate those assets to the exclusion of the holders of the exchange notes, even if an event of default existed under the indenture governing the exchange notes at such time.

        As of March 31, 2012, the exchange notes and the guarantees are effectively subordinated to approximately $513.6 million of senior secured indebtedness under our Credit Facilities to the extent of the value of the interest of the lenders in the assets securing such debt. We have an additional $175 million of available borrowings under our ABL Facility and, subject to certain limitations and the satisfaction of certain conditions, the option to seek to obtain additional incremental term loans under the First Lien Term Facility in an aggregate principal amount of up to $150 million and increased asset-based revolving credit facility commitments under the ABL Facility in an aggregate principal amount of up to $50 million. All of those borrowings would be secured indebtedness and, therefore, effectively senior to the exchange notes and the guarantees to the extent of the value of the assets securing such debt. Our and the guarantors' obligations under the Credit Facilities are secured by, among other things, a lien on substantially all of our and the guarantors' respective tangible and intangible personal property (including but not limited to cash, cash equivalents, accounts receivable, inventory, and

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intellectual property), and a lien on our and the guarantors' capital stock and certain owned real property.

         The exchange notes will be structurally subordinated to all liabilities of our non-guarantor subsidiaries

        The exchange notes will be structurally subordinated to the indebtedness and other liabilities of our future subsidiaries that do not guarantee the exchange notes. These non-guarantor subsidiaries will be separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any amounts due pursuant to the exchange notes, or to make any funds available therefore, whether by dividends, loans, distributions or other payments. Any right that we or the subsidiary guarantors have to receive any assets of any future non-guarantor subsidiaries upon the liquidation or reorganization of those subsidiaries, and the consequent rights of holders of exchange notes to realize proceeds from the sale of any of those subsidiaries' assets, will be structurally subordinated to the claims of those subsidiaries' creditors, including trade creditors and holders of preferred equity interests of those subsidiaries. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any such future non-guarantor subsidiaries, such non-guarantor subsidiaries will pay the holders of their debts, holders of preferred equity interests and their trade creditors before they will be able to distribute any of their assets to us.

         Federal and state fraudulent transfer or conveyance laws permit a court, under certain circumstances, to void the exchange notes and guarantees, and, if that occurs, you may not receive any payments on the exchange notes

        The issuance of the exchange notes and the guarantees may be subject to review under federal and state fraudulent transfer and conveyance statutes if a bankruptcy, liquidation or reorganization case or a lawsuit, including under circumstances in which bankruptcy is not involved, were commenced at some future date by us, by the guarantors or on behalf of our unpaid creditors or the unpaid creditors of a guarantor. While the relevant laws may vary from state to state, the incurrence of the obligations in respect of the exchange notes and the guarantees will generally be a fraudulent transfer or conveyance if (i) the consideration was paid with the intent of hindering, delaying or defrauding creditors or (ii) we or any of our subsidiary guarantors, as applicable, received less than reasonably equivalent value or fair consideration in return for issuing either the exchange notes or a guarantee, and, in the case of (ii) only, one of the following is also true:

•

we or any of our subsidiary guarantors were or was insolvent or rendered insolvent by reason of issuing the exchange notes or the guarantees;

•

payment of the consideration left us or any of our subsidiary guarantors with an unreasonably small amount of capital to carry on the business;

•

we or any of our subsidiary guarantors intended to, or believed that we or it would, incur debts beyond our or its ability to pay as they mature; or

•

we or any of the guarantors were or was a defendant in an action for money damages, or had a judgment for money damages docketed against us or such guarantor if, in either case, after final judgment, the judgment is unsatisfied.

        If a court were to find that the issuance of the exchange notes or a guarantee was a fraudulent transfer or conveyance, the court could void the payment obligations under the exchange notes or such guarantee or subordinate the exchange notes or such guarantee to presently existing and future indebtedness of ours or such subsidiary guarantor or require the holders of the exchange notes to repay any amounts received with respect to the exchange notes or such guarantee. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the exchange notes. Further, the voidance of the exchange notes could result in an event of default with respect to

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our other debt and that of our subsidiary guarantors that could result in acceleration of such debt. The measures of insolvency for purposes of fraudulent transfer or conveyance laws vary depending upon the law of the jurisdiction that is being applied. Generally, an entity would be considered insolvent if, at the time it incurred indebtedness (including by issuing a guaranty):

•

the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets;

•

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or

•

it could not pay its debts as they become due.

        We cannot be certain as to the standards a court would use to determine whether or not we or the subsidiary guarantors were solvent at the relevant time, or regardless of the standard used, that the issuance of the exchange notes and the guarantees would not be subordinated to our or any subsidiary guarantor's other debt. If the guarantees were legally challenged, any guarantee could also be subject to the claim that, since the guarantee was incurred for our benefit, and only indirectly for the benefit of the subsidiary guarantor, the obligations of the applicable subsidiary guarantor were incurred for less than reasonably equivalent value or fair consideration. Therefore, a court could void the obligations under the guarantees, subordinate them to the applicable subsidiary guarantor's other debt or take other action detrimental to the holders of the exchange notes.

         Because each guarantor's liability under its guarantees may be reduced to zero, avoided or released under certain circumstances, you may not receive any payments from some or all of the guarantors

        You have the benefit of the guarantees of the guarantors. However, the guarantees by the guarantors are intended to be limited to the maximum amount that the guarantors are permitted to guarantee under applicable law. As a result, a guarantor's liability under its guarantee could be reduced to zero, depending on the amount of other obligations of such guarantor. Further, under the circumstances discussed more fully above, a court under Federal or state fraudulent transfer or fraudulent conveyance statute or similar laws affecting the rights of creditors generally could void the obligations under a guarantee or subordinate it to all other obligations of the guarantor. In addition, you will lose the benefit of a particular guarantee if it is released under certain circumstances described under "Description of Exchange Notes—Guarantees" in this prospectus. You will not have a claim as a creditor against any subsidiary that is no longer a guarantor of the exchange notes, and the indebtedness and other liabilities, including trade payables, whether secured or unsecured, of those subsidiaries will effectively be senior to claims of holders of the exchange notes.

         We may not be able to repurchase the exchange notes upon a change of control

        Upon a change of control, as defined in the indenture governing the exchange notes, we will be required to make an offer to repurchase all outstanding exchange notes at a price equal to 101% of their principal amount, together with any accrued and unpaid interest and additional interest, if any, unless we have previously given notice of our intention to exercise our right to redeem the exchange notes or unless such obligation is suspended. We may not have sufficient financial resources to purchase all of the exchange notes that are tendered upon a change of control offer or, if then permitted under the indenture governing the exchange notes, to redeem the exchange notes. A failure to make the applicable change of control offer or to pay the applicable change of control purchase price when due would result in a default under the indenture governing the exchange notes, which would in turn be a default under our Credit Facilities or other indebtedness. In addition, a change of control may constitute an event of default under our Credit Facilities or other indebtedness. A default under our Credit Facilities or other indebtedness would result in an event of default under the

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indenture governing the exchange notes if the lenders accelerate the debt under our Credit Facilities or other indebtedness.

        If a change of control occurs, we may not have enough assets to satisfy all obligations under our Credit Facilities, the indenture governing the exchange notes or other indebtedness. Upon the occurrence of a change of control we could seek to refinance the indebtedness under our Credit Facilities, the exchange notes or other indebtedness or obtain a waiver from the lenders or you as a holder of the exchange notes. We cannot assure you, however, that we would be able to obtain a waiver or refinance our indebtedness on commercially reasonable terms, if at all. No assurances can be given that any court would enforce the change of control provisions in the indenture governing the exchange notes as written for the benefit of the holders, or as to how these change of control provisions would be impacted were we to become a debtor in a bankruptcy case. See "Description of Exchange Notes—Change of Control" in this prospectus.

         You may not be able to determine when a change of control giving rise to your right to have the exchange notes repurchased by us has occurred following a sale of "substantially all" of our assets

        A change of control, as defined in the indenture governing the exchange notes, will require us to make an offer to repurchase all exchange notes. The definition of change of control includes a phrase relating to the sale, lease or transfer of "all or substantially all" of our assets. There is no precisely established definition of the phrase "substantially all" under applicable law. Accordingly, the ability of a holder of exchange notes to require us to repurchase their exchange notes as a result of a sale, lease or transfer of less than all of our assets to another individual, group or entity may be uncertain.

         During any period in which the exchange notes are rated investment grade, certain covenants contained in the indenture will not be applicable

        The indenture governing the exchange notes provides that certain covenants will not apply to us during any period in which the exchange notes are rated investment grade from each of S&P's and Moody's and no default has otherwise occurred and is continuing under the indenture. The covenants that would be suspended include, among others, limitations on and our restricted subsidiaries' ability to pay dividends, incur indebtedness, sell certain assets and enter into certain other transactions. Any actions that we take while these covenants are not in force will be permitted even if the exchange notes are subsequently downgraded below investment grade and such covenants are subsequently reinstated. There can be no assurance that the exchange notes will ever be rated investment grade, or that if they are rated investment grade, the exchange notes will maintain such ratings. See "Description of Exchange Notes—Certain Covenants" in this prospectus.

         A downgrade, suspension or withdrawal of the rating assigned by a rating agency to the Company or the exchange notes, if any, could cause the liquidity or market value of the exchange notes to decline

        Credit rating agencies continually revise their ratings for the companies that they follow, including us. The credit rating agencies also evaluate our industry as a whole and may change their credit ratings for us based on their overall view of the industry. In addition, the exchange notes have been rated by Moody's and S&P and may in the future be rated by additional rating agencies. We cannot assure you that any rating assigned will remain for any given period of time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in that rating agency's judgment, circumstances relating to the basis of the rating, such as adverse changes in our business, so warrant. Any downgrade, suspension or withdrawal of a rating by a rating agency of us or the exchange notes (or any anticipated downgrade, suspension or withdrawal) could reduce the liquidity or market value of the exchange notes. Any future lowering of our ratings or the ratings of the exchange notes may make it more difficult or more expensive for us to obtain additional debt financing. If any credit rating initially assigned to the exchange notes is subsequently lowered or withdrawn for any reason, or there is a negative change to our ratings, you may lose some or all of the value of your investment in the exchange notes.

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         We are controlled by Ares and CPPIB, whose interests as equity holders may conflict with yours as creditor

        We are controlled by Ares and CPPIB. Ares and CPPIB control the election of a majority of our directors and thereby have the power to control our affairs and policies, including the appointment of management, the issuance of additional stock and the declaration and payment of dividends. Ares and CPPIB do not have any liability for any obligations under the exchange notes and their interests may be in conflict with yours. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, Ares and CPPIB may pursue strategies that favor equity investors over debt investors. In addition, our equity holders may have an interest in pursuing acquisitions, divestitures, financing or other transactions that, in their judgment, could enhance their equity investments, even though such transactions may involve risk to you as a holder of the exchange notes. Additionally, Ares and CPPIB may make investments in businesses that directly or indirectly compete with us, or may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. For information concerning our arrangements with Ares and CPPIB, see "Certain Relationships and Related Party Transactions" in this prospectus.

Risks Related to the Exchange Offer

         Your outstanding notes will not be accepted for exchange if you fail to follow the exchange offer procedures.

        We will not accept your outstanding notes for exchange if you do not follow the exchange offer procedures. We will issue registered notes as part of the exchange offer only after a timely receipt of your outstanding notes, a properly completed and duly executed letter of transmittal and all other required documents. If we do not receive your outstanding notes, letter of transmittal and other required documents by the time of expiration of the exchange offer, we will not accept your outstanding notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange. If there are defects or irregularities with respect to your tender of outstanding notes, we will not accept your outstanding notes for exchange.

         If you do not exchange your outstanding notes, there will be restrictions on your ability to resell your outstanding notes.

        Following the exchange offer, outstanding notes that you do not tender or that we do not accept will be subject to transfer restrictions. Absent registration, any untendered outstanding notes may therefore be offered or sold only in transactions that are not subject to, or that are exempt from, the registration requirements of the Securities Act and applicable state securities laws.

         Your ability to transfer the exchange notes may be limited by the absence of an active trading market, and there is no assurance that any active trading market will develop for the exchange notes

        The exchange notes are a new issue of securities for which there is no established public market. We do not intend to have the exchange notes listed on a national securities exchange or included in any automated quotation system. Accordingly, an active market for any of the exchange notes may not develop or, if developed, it may not continue. The liquidity of any market for the exchange notes will depend upon the number of holders of the exchange notes, our performance, the market for similar securities, the interest of securities dealers in making a market in the exchange notes and other factors. A liquid trading market may not develop for the exchange notes. If a market develops, the exchange notes could trade at prices that may be lower than the initial offering price of the exchange notes. If an active market does not develop or is not maintained, the price and liquidity of the exchange notes may be adversely affected.

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         The market price for the exchange notes may be volatile

        Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the exchange notes. The market for the exchange notes, if any, may be subject to similar disruptions. Any such disruptions may adversely affect the value of your exchange notes. In addition, subsequent to their initial issuance, the exchange notes may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market for similar exchange notes, our performance and other factors.

Risks Related to Our Business

         Inflation may affect our ability to keep pricing almost all of our merchandise at 99.99¢ or less

        Our ability to provide quality merchandise for profitable resale primarily at a price point of 99.99¢ or less is subject to certain economic factors, which are beyond our control. Inflation could have a material adverse effect on our business and results of operations, especially given the constraints on our ability to pass on incremental costs due to price increases or other factors. A sustained trend of significantly increased inflationary pressure could require us to abandon our customary practice of pricing our merchandise primarily at no more than a 99.99¢, which could have a material adverse effect on our business and results of operations. We can pass price increases on to customers to a certain extent, such as by selling smaller units for the same price and increasing the price of merchandise presently sold at less than 99.99¢ (e.g., we currently price some items at 29.99¢, 59.99¢, and the like, and also sell other items at two at 99.99¢, three at 99.99¢, and so forth), but there are limits to the ability to effectively increase prices on a sufficiently wide range of merchandise in this manner while rarely exceeding a dollar. In certain circumstances, we have discontinued and may continue to discontinue some items from our offerings due to vendor wholesale price increases or availability, which may adversely affect sales. In September 2008, we increased our primary price point to 99.99¢ from 99¢, and also added 99/100¢ to our price points on almost all items.

         We are dependent in part on new store openings for future growth

        Our ability to generate growth in sales and operating income depends in part on our ability to successfully open and operate new stores both within and outside of our existing markets and to manage future growth profitably. Our strategy depends on many factors, including our ability to identify suitable markets and sites for new stores, negotiate leases or purchases with acceptable terms, refurbish stores, successfully compete against local competition and the increasing presence of large and successful companies entering or expanding into the markets in which we operate, upgrade our financial and management information systems and controls, gain brand recognition and acceptance in new markets, and manage operating expenses and product costs. In addition, we must be able to hire, train, motivate, and retain competent managers and store personnel at increasing distances from our headquarters. Many of these factors are beyond our control or are difficult to manage. As a result, we cannot assure that we will be able to achieve our goals with respect to growth. Any failure by us to achieve these goals on a timely basis, differentiate ourselves and obtain acceptance in markets in which we currently have limited or no presence, attract and retain management and other qualified personnel, appropriately upgrade our financial and management information systems and controls, and manage operating expenses could adversely affect our future operating results and our ability to execute our business strategy.

        A variety of factors, including store location, store size, local demographics, rental terms, competition, the level of store sales, availability of locally sourced merchandise, locally prevailing wages and labor pools, distance and time from existing distribution centers, local regulations, and the level of initial advertising, influence if and when a store becomes profitable. Assuming that planned expansion occurs as anticipated, the store base will include a portion of stores with relatively short operating

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histories. New stores may not achieve the sales per estimated saleable square foot and store-level operating margins historically achieved at existing stores. If new stores on average fail to achieve these results, planned expansion could decrease overall sales per estimated saleable square foot and store-level operating margins. Increases in the level of advertising and pre-opening expenses associated with the opening of new stores could also contribute to a decrease in operating margins. New stores opened in existing and in new markets have in the past and may in the future be less profitable than existing stores and/or may reduce retail sales of existing stores, negatively affecting comparable store sales. As we expand, differences in the available labor pool and potential customers could adversely impact us.

         Our operations are concentrated in California

        As of March 31, 2012, 219 of the Company's 298 stores were located in California (with 37 stores in Texas, 29 stores in Arizona and 13 stores in Nevada). We expect that we will continue to open additional stores in as well as outside of California. For the foreseeable future, our results of operations will depend significantly on trends in the California economy. Declines in retail spending on higher margin discretionary items and continuing trends of increasing demand for lower margin food products due to continuing poor economic conditions in California may negatively impact our profitability. California has also historically enacted minimum wages that exceed federal standards (and certain of our cities have enacted "living wage" laws that exceed State minimum wage laws) and California typically has other factors making compliance, litigation and workers' compensation claims more prevalent and costly. Additional local regulation in certain California jurisdictions may further pressure margins.

         The impact of our Texas stores on our profitability is uncertain

        We have historically experienced, and currently continue to experience, lower sales per store and sales per estimated saleable square foot in our Texas stores compared to our Western States stores. There can be no assurance that our Texas operations will have any sustained positive contribution to our profitability.

         Material damage to, or interruptions to, our information systems as a result of external factors, staffing shortages and difficulties in updating our existing software or developing or implementing new software could have a material adverse effect on our business or results of operations

        We depend on information technology systems for the efficient functioning of our business. Such systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches and natural disasters. Any material interruptions or the cost of replacements may have a material adverse effect on our business or results of operations.

        We also rely heavily on our information technology staff. If we cannot meet our staffing needs in this area, we may not be able to maintain or improve our systems in the future. Further, we still have certain legacy systems that are not generally supportable by outside vendors, and should those of our information technology team who are conversant with such systems leave, these legacy systems could be without effective support.

        We rely on certain software vendors to maintain and periodically upgrade many of these systems. The software programs supporting many of our systems are maintained and supported by independent software companies. The inability of these companies to continue to maintain and upgrade these information systems and software programs might disrupt or reduce the efficiency of our operations if we were unable to convert to alternate systems in an efficient and timely manner. In addition, costs and potential interruptions associated with the implementation of new or upgraded systems and technology could also disrupt or reduce the efficiency of our operations.

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         Natural disasters, unusually adverse weather conditions, pandemic outbreaks, terrorist acts, and global political events could cause temporary or permanent distribution center or store closures, impair our ability to purchase, receive or replenish inventory, or decrease customer traffic, all of which could result in lost sales and otherwise adversely affect our financial performance

        The occurrence of natural disasters, such as hurricanes, fires, floods, earthquakes and tsunamis, unusually adverse weather conditions, pandemic outbreaks, terrorist acts or disruptive global political events, such as civil unrest in countries in which our suppliers are located, or similar disruptions could adversely affect our operations and financial performance. These events could result in the closure of one or more of our distribution centers or a significant number of stores, the temporary or long-term disruption in the supply of products from some local and overseas suppliers, the temporary disruption in the transport of goods from overseas, delay in the delivery of goods to our distribution centers or stores, the temporary reduction in the availability of products in our stores, and disruption to our information systems.

         Our current insurance program may expose us to unexpected costs and negatively affect our financial performance

        Our insurance coverage reflects deductibles, self-insured retentions, limits of liability and similar provisions that we believe are prudent. However, there are types of losses we may incur but against which we cannot be insured or which we believe are not economically reasonable to insure, such as losses due to employment practices, acts of war, employee, blackouts and certain other crime and some natural disasters, including earthquakes and tsunamis. If we incur these losses and they are material, our business could suffer. In addition, we self-insure a significant portion of expected losses under our workers' compensation and general liability programs. Unanticipated changes in any applicable actuarial assumptions and management estimates underlying our recorded liabilities for these losses could result in materially different amounts of expense than expected under these programs, which could have a material adverse effect on our financial condition and results of operations. Although we continue to maintain property insurance for catastrophic events, we are effectively self-insured for property losses up to the amount of our deductibles. If we experience a greater number of these losses than we anticipate, our financial performance could be adversely affected.

         We have extended our current insurance program to include self-insurance for a portion of our health insurance program that may expose us to unexpected costs and negatively affect our financial performance

        Prior to the Merger, we began self-insuring for a portion of our employee medical benefit claims. The liability for the self-funded portion of our health insurance program is determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. We maintain stop loss insurance coverage to limit our exposure for the self-funded portion of our health insurance program. Liabilities associated with these losses include estimates of both claims filed and losses incurred but not yet reported. Unanticipated changes in any applicable actuarial assumptions and management estimates underlying our recorded liabilities for these losses could result in materially different amounts of expense than expected under these programs, which could have a material adverse effect on our financial condition and results of operations.

         We could experience disruptions in receiving and distribution

        Our success depends upon whether receiving and shipments are processed timely, accurately and efficiently. As we continue to grow, we may face increased or unexpected demands on warehouse operations, as well as unexpected demands on our transportation network. In addition, new store locations receiving shipments from distribution centers that are increasingly further away will increase transportation costs and may create transportation scheduling strains. The very nature of our closeout business makes it uniquely susceptible to periodic interruptions and difficult to foresee

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warehouse/distribution center overcrowding caused by spikes in inventory resulting from opportunistic closeout purchases. Such demands could cause delays in delivery of merchandise to and from warehouses and/or to stores. We periodically evaluate new warehouse distribution and merchandising systems and could experience interruptions during implementations of new facilities and systems. A fire, earthquake, or other disaster at our warehouses could also hurt our business, financial condition and results of operations, particularly because much of our merchandise consists of closeouts and other irreplaceable products. We also face the possibility of future labor unrest that could disrupt our receiving, processing, and shipment of merchandise.

         We depend upon our relationships with suppliers and the availability of closeout and other special-situation merchandise

        Our success depends in large part on our ability to locate and purchase quality closeout and other special-situation merchandise at attractive prices. This supports a changing mix of name-brand and other merchandise primarily at or below 99.99¢ price point. We cannot be certain that such merchandise will continue to be available in the future at prices consistent with our business plan and/or historical costs. Further, we may not be able to find and purchase merchandise in necessary quantities, particularly as we grow, and therefore require a greater quantity of such merchandise at competitive prices. Additionally, suppliers sometimes restrict the advertising, promotion and method of distribution of their merchandise. These restrictions in turn may make it more difficult for us to quickly sell these items from inventory. Although we believe our relationships with suppliers are good, we typically do not have long-term agreements or pricing commitments with any suppliers. As a result, we must continuously seek out buying opportunities from existing suppliers and from new sources. There is increasing competition for these opportunities with other wholesalers and retailers, discount and deep-discount stores, mass merchandisers, food markets, drug chains, club stores, and various other companies and individuals as the extreme value retail segment continues to expand outside and within existing retail channels. There is also a trend towards consolidation among vendors and suppliers of merchandise targeted by us. A disruption in the availability of merchandise at attractive prices could impair our business.

         We purchase in large volumes and our inventory is highly concentrated

        To obtain inventory at attractive prices, we take advantage of large volume purchases, closeouts and other special situations. As a result, we carry high inventory levels relative to our sales and from time to time this can result in overcrowding in our warehouses and place stress on our distribution operations as well as the back rooms of our retail stores. This can also result in inventory shrinkage due to spoilage if merchandise cannot be sold in the anticipated timeframes. Our short-term and long-term store and warehouse inventory, net of allowance, approximated $220.8 million and $196.1 million at March 31, 2012 and April 2, 2011, respectively. We periodically review the net realizable value of our inventory and make adjustments to our carrying value when appropriate. The current carrying value of inventory reflects our belief that it will realize the net values recorded on the balance sheet. However, we may not do so, and if we do not, this may result in overcrowding and supply chain difficulties. If we sell large portions of inventory at amounts less than their carrying value or if we write down or otherwise dispose of a significant part of inventory, cost of sales, gross profit, operating income, and net income could decline significantly during the period in which such event or events occur. Margins could also be negatively affected should the grocery category sales become a larger percentage of total sales in the future, and by increases in shrinkage and spoilage from perishable products.

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         If we fail to protect our brand name, competitors may adopt trade names that dilute the value of our brand name

        We may be unable or unwilling to strictly enforce our trademark in each jurisdiction in which we do business. Also, we may not always be able to successfully enforce our trademarks against competitors or against challenges by others. Our failure to successfully protect our trademarks could diminish the value and efficacy of our brand recognition, and could cause customer confusion, which could, in turn, adversely affect our sales and profitability.

         We face strong competition

        We compete in both the acquisition of inventory and sale of merchandise with other wholesalers and retailers, discount and deep-discount stores, single price point merchandisers, mass merchandisers, food markets, drug chains, club stores and other retailers. We also compete for retail real estate sites. In the future, new companies may also enter the extreme value retail industry. It is also becoming more common for superstores to sell products competitive with our product offerings. Additionally, we currently face increasing competition for the purchase of quality closeout and other special-situation merchandise, and some of these competitors are entering or may enter our traditional markets. Also, as we expand, we will enter new markets where our own brand is weaker and established brands are stronger, and where our own brand value may have been diluted by other retailers with similar names, appearances and/or business models. Some of our competitors have substantially greater financial resources and buying power than we do, as well as nationwide name-recognition and organization. Our ability to compete will depend on many factors including the ability to successfully purchase and resell merchandise at lower prices than competitors and the ability to differentiate ourselves from competitors that do not share our price and merchandise attributes, yet may appear similar to prospective customers. We also face competition from other retailers with similar names and/or appearances. We cannot assure that we will be able to compete successfully against current and future competitors in both the acquisition of inventory and the sale of merchandise.

         We are subject to governmental regulations, procedures and requirements. A significant change in, or noncompliance with, these regulations could have a material adverse effect on our financial performance

        Our business is subject to numerous federal, state and local laws and regulations. We routinely incur costs in complying with these regulations. New laws or regulations, particularly those dealing with healthcare reform, product safety, and labor and employment, among others, or changes in existing laws and regulations, especially those governing the sale of products, may result in significant added expenses or may require extensive system and operating changes that may be difficult to implement and/or could materially increase our cost of doing business. In addition, such changes or new laws may require the write off and disposal of existing product inventory, resulting in significant adverse financial impact to us. Untimely compliance or noncompliance with applicable regulations or untimely or incomplete execution of a required product recall can result in the imposition of penalties, including loss of licenses or significant fines or monetary penalties, in addition to reputational damage.

         Litigation may adversely affect our business, financial condition and results of operations

        Our business is subject to the risk of litigation by employees, consumers, suppliers, competitors, shareholders, government agencies and others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. The outcome of litigation, particularly class action lawsuits, regulatory actions and intellectual property claims, is difficult to assess or quantify. Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, and the magnitude of the potential loss relating to these lawsuits may remain unknown for substantial periods of time. In addition, certain of these lawsuits, if decided adversely to us or settled by us, may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes

26

to our business operation are required. The cost to defend future litigation may be significant. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations. See "Business—Legal Proceedings" in this prospectus.

         We face risks associated with international sales and purchases

        International sales historically have not been important to our overall net sales. However, some of our inventory is manufactured outside the United States and there are many risks associated with doing business internationally. International transactions may be subject to risks such as:

•

political instability;

•

lack of knowledge by foreign manufacturers of or compliance with applicable federal and state product, content, packaging and other laws, rules and regulations;

•

foreign currency exchange rate fluctuations;

•

uncertainty in dealing with foreign vendors and countries where the rule of law is less established;

•

risk of loss due to overseas transportation;

•

import and customs review can delay delivery of products as could labor disruptions at ports;

•

changes in import and export regulations, including "trade wars" and retaliatory responses;

•

changes in tariff, import duties and freight rates; and

•

testing and compliance.

        The United States and other countries have at times proposed various forms of protectionist trade legislation. Any resulting changes in current tariff structures or other trade policies could result in increases in the cost of and/or store level reduction in the availability of certain merchandise and could adversely affect our ability to purchase such merchandise.

         We have potential risks regarding our store physical inventories

        Although we have a perpetual inventory system in our warehouses, we currently do not have a perpetual inventory system in our stores and believe that such a system will not be feasible to implement in the near future. Furthermore, physical inventories in all existing stores are not performed at the end of each fiscal period, and there are additional processes and procedures surrounding store physical inventories that we believe need to be improved. In particular, we have identified that certain personnel managing or performing store physical inventories need additional training in order to consistently follow our physical inventory processes and procedures, and properly document the physical inventory results.

        If these physical inventory processes and procedures are not improved, this could have an adverse affect on our physical inventory results, shrinkage and margins.

         We could encounter risks related to transactions with affiliates

        Prior to the Merger, we leased 13 store locations and a parking lot associated with one of these stores from the Rollover Investors and their affiliates, of which 12 stores were leased on a month to month basis. In connection with the Merger, we entered into new lease agreements for these 13 stores and one parking lot. Even if terms were negotiated that are acceptable to us, we cannot be certain that terms negotiated are no less favorable than a negotiated arm's length transaction with a third party.

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         We rely heavily on our executive management team

        We rely heavily on the continued service of our executive management team. In connection with the Merger, we entered into employment agreements with certain of our executive officers, including our Chief Executive Officer and President, but we do not and will not maintain key person life insurance on any of our officers. Our future success will depend on our ability to identify, attract, hire, train, retain and motivate other highly skilled management personnel. Competition for such personnel is intense, and we may not successfully attract, assimilate or sufficiently retain the necessary number of qualified candidates.

         Our operating results may fluctuate and may be affected by seasonal buying patterns

        Historically, our highest net sales and highest operating income have occurred during the quarter ended on or near December 31, which includes the Christmas and Halloween selling seasons. During pro forma fiscal 2012 and fiscal 2011, we generated approximately 26.4% and 25.7%, respectively, of our net sales during this quarter. If for any reason our net sales were to fall below norms during this quarter, it could have an adverse impact on profitability and impair the results of operations for the entire fiscal year. Transportation scheduling, warehouse capacity constraints, supply chain disruptions, adverse weather conditions, labor disruptions or other disruptions during the peak holiday season could also affect net sales and profitability for the fiscal year.

        In addition to seasonality, many other factors may cause the results of operations to vary significantly from quarter to quarter. These factors, some beyond our control, include the following:

•

the number, size and location of new stores and timing of new store openings;

•

the distance of new stores from existing stores and distribution sources;

•

the level of advertising and pre-opening expenses associated with new stores;

•

the integration of new stores into operations;

•

the general economic health of the extreme value retail industry;

•

changes in the mix of products sold;

•

increases in fuel, shipping merchandise and energy costs;

•

the ability to successfully manage inventory levels and product mix across our multiple distribution centers and our stores;

•

changes in personnel;

•

the expansion by competitors into geographic markets in which they have not historically had a strong presence;

•

fluctuations in the amount of consumer spending; and

•

the amount and timing of operating costs and capital expenditures relating to the growth of the business and our ability to uniformly capture such costs.

         We could be exposed to product liability or packaging violation claims

        We purchase many products on a closeout basis, some of which are manufactured or distributed by overseas entities, and some of which are purchased by us through brokers or other intermediaries as opposed to directly from their manufacturing or distribution sources. Many products are also sourced directly from manufacturers. The closeout nature of certain of these products and transactions may impact our opportunity to investigate all aspects of these products. We attempt to ensure compliance, and to test products when appropriate, as well as to procure product insurance from our vendors and

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to be listed as an additional insured for certain products and/or by certain product vendors, and we do not purchase merchandise when we are cognizant of or foresee a problem, but there can be no assurance that we will consistently succeed in these efforts. We have or have had, and in the future could face, labeling, environmental, or other claims, from private litigants as well as from governmental agencies.

         We face risks related to protection of customers' banking and merchant card data, as well as other data related to our employees, customers, vendors and other parties

        In connection with merchant card sales and other transactions, including bank cards, debit cards, credit cards and other merchant cards, we transmit confidential banking and merchant card information. Additionally, as part of our normal business activities, we collect and store certain information, related to our employees, customers, vendors and other parties. We have certain procedures and technology in place to protect such data, but third parties may have the technology or know-how to breach the security of this information, and our security measures and those of our banks, merchant card processing and other technology vendors may not effectively prohibit others from obtaining improper access to this information. Any security breach could expose us to risks of data loss, litigation and liability and could seriously disrupt our operations and any resulting negative publicity could significantly harm our reputation.

         We are subject to environmental regulations

        Under various federal, state and local environmental laws and regulations, current or previous owners or occupants of property may face liability associated with hazardous substances. These laws and regulations often impose liability without regard to fault. In the future, we may be required to incur substantial costs for preventive or remedial measures associated with hazardous materials. We have several storage tanks at our warehouse facilities, including: an aboveground and an underground diesel storage tank at the City of Commerce, California main warehouse; ammonia storage tanks at the Southern California cold storage facility and the Texas warehouse; aboveground diesel and propane storage tanks at the Texas warehouse; an aboveground propane storage tank at the main Southern California warehouse; an aboveground propane storage tank at our leased Slauson distribution center in the City of Commerce, California; and an aboveground propane tank located at the warehouse we owned in Eagan, Minnesota, which was sold in June 2012. Except as disclosed in "Business—Legal Proceedings" in this prospectus, we have not been notified of, and are not aware of, any potentially material current environmental liability, claim or non-compliance. We could incur costs in the future related to owned properties, leased properties, storage tanks, or other business properties and/or activities. In the ordinary course of business, we handle or dispose of commonplace household products that are classified as hazardous materials under various environmental laws and regulations. We have adopted policies regarding the handling and disposal of these products, but we cannot be assured that our policies and training are comprehensive and/or are consistently followed, and we are still potentially subject to liability under, or violations of, these environmental laws and regulations in the future even if our policies are consistently followed.

         Changes to accounting rules or regulations may adversely affect our results of operations

        New accounting rules or regulations and varying interpretations of existing accounting rules or regulations have occurred and may occur in the future. A change in accounting rules or regulations may even affect our reporting of transactions completed before the change is effective, and future changes to accounting rules or regulations or the questioning of current accounting practices may adversely affect our results of operations.

        The Financial Accounting Standards Board ("FASB") is focusing on several broad-based convergence projects, including accounting standards for financial instruments, revenue recognition and

29

leases. In August 2010, the FASB issued an exposure draft outlining proposed changes to current lease accounting under GAAP in FASB Accounting Standards Codification 840, "Leases." In July 2011, the FASB made the decision to issue a revised exposure draft, which is expected to occur in the second half of 2012, with a final standard expected to be issued in 2013. Currently, substantially all of our leased properties are accounted for as operating leases with limited related assets and liabilities recorded on our balance sheet. The proposed new accounting standard, if ultimately adopted in its proposed form, would treat each lease as creating an asset and a liability and require the capitalization of such leases on the balance sheet. While this change would not impact the cash flow related to our store leases, we would expect our assets and liabilities to increase relative to the current presentation, which may impact our ability to raise additional financing from banks or other sources in the future. The guidance as proposed may also affect the future reporting of our results from operations as both income and expense on leases previously accounted for as operating leases would be front-end loaded as compared to the existing accounting requirements. However, even if the new guidance is adopted as proposed, certain incurrence ratios and other provisions under the indenture governing the notes and under the Credit Facilities permit us to account for leases in accordance with the existing accounting requirements. See "Description of Exchange Notes—Definitions" and "Description of Our Credit Facilities" in this prospectus. As a result, our ability to incur additional debt or otherwise comply with such covenants may not directly correlate to our financial condition or results from operations as each would be reported under GAAP as so amended.

         Impairment of our goodwill or our intangible assets could negatively impact our net income and stockholders' equity

        A substantial portion of our total assets consists of goodwill and intangible assets. Goodwill and certain intangible assets are not amortized, but are tested for impairment at least annually and between annual tests if events or circumstances indicate that it is more likely than not that the fair value of our net assets is less than its carrying amount. Testing for impairment involves an estimation of the fair value of our net assets and other factors and involves a high degree of judgment and subjectivity. There are numerous risks that may cause the fair value of our net assets to fall below its carrying amount, including those described elsewhere in this prospectus. If we have an impairment of our goodwill or intangible assets, the amount of any impairment could be significant and could negatively impact our net income and stockholders' equity for the period in which the impairment charge is recorded.

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THE EXCHANGE OFFER

Purpose and Effect of the Exchange Offer

        On December 29, 2011, Merger Sub entered into a registration rights agreement with RBC Capital Markets, LLC, as representative of the initial purchasers of the outstanding notes in which Merger Sub agreed, under certain circumstances, to use its commercially reasonable efforts to file a registration statement relating to an offer to exchange the outstanding notes for the exchange notes and thereafter cause the registration statement to become effective under the Securities Act and complete the exchange offer no later than 300 days following the closing date of the issuance of the outstanding notes. Concurrently with the consummation of the Acquisition, the Company and the guarantors entered into a registration rights agreement joinder pursuant to which the Company and the guarantor assumed all of the rights and obligations of Merger Sub under the registration rights agreement. The exchange notes will have terms identical in all material respects to the outstanding notes, except that the exchange notes will not contain terms with respect to transfer restrictions, registration rights and additional interest for failure to observe certain obligations in the registration rights agreement. The outstanding notes were issued on December 29, 2011.

        Under the circumstances set forth below, we will use our commercially reasonable efforts to cause the SEC to declare effective a shelf registration statement with respect to the resale of the outstanding notes within the time periods specified in the registration rights agreement and keep the registration statement effective for up to one year after its effective date. These circumstances include:

•

if any changes in applicable law or SEC policy do not permit us to consummate the exchange offer as contemplated by the registration rights agreement;

•

if the exchange offer is not consummated by the 300^th day following the closing date of the issuance of the outstanding notes;

•

if any holder of the outstanding notes notifies us within 30 days after such holder becomes aware of the following restrictions;

•

such holder is prohibited by applicable law or SEC policy from participating in the exchange offer;

•

such holder may not resell the exchange notes acquired by it in the exchange offer to the public without delivering a prospectus and that this prospectus is not appropriate or available for such resales by such holder; or

•

such holder is a broker-dealer who elects to exchange the outstanding notes acquired for its own account as a result of market-making activities or other trading activities for the exchange notes, and holds outstanding note acquired directly from us or one of our affiliates.

        Under the registration rights agreement, if we fail to complete the exchange offer (other than in the event we file a shelf registration statement) or the shelf registration statement, if required thereby, is not declared effective, in either case on or prior to 300 days after the issue date (the "target registration date"), the interest rate on the outstanding notes will be increased by (x) 0.25% per annum for the first 90-day period immediately following the target registration date and (y) an additional 0.25% per annum with respect to each subsequent 90-day period, in each case, until the exchange offer is completed or the shelf registration statement, if required, is declared effective by the SEC or the outstanding notes cease to constitute transfer restricted notes, up to a maximum of 1.00% per annum of additional interest. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part.

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        If you wish to exchange your outstanding notes for exchange notes in the exchange offer, you will be required to make the following written representations:

•

you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 of the Securities Act;

•

you are not engaged in, and you do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of the exchange notes; and

•

you are acquiring the exchange notes in the ordinary course of your business.

        Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where the broker-dealer acquired the outstanding notes as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution" in this prospectus.

Resale of Exchange Notes

        Based on interpretations by the SEC staff set forth in no-action letters issued to third parties, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offer without complying with the registration and prospectus delivery provisions of the Securities Act, if:

•

you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 under the Securities Act;

•

you are not engaged in, and you do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution (within the meaning of the Securities Act) of the exchange notes; and

•

you are acquiring the exchange notes in the ordinary course of your business.

        If you are our affiliate or an affiliate of any guarantor, or are engaging in, or intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or are not acquiring the exchange notes in the ordinary course of your business:

•

you cannot rely on the position of the SEC set forth in Morgan Stanley & Co. Incorporated (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC's letter to Shearman & Sterling, dated July 2, 1993, or similar no-action letters; and

•

in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

        This prospectus may be used for an offer to resell, resale or other transfer of exchange notes only as specifically set forth in this prospectus. With regard to broker-dealers, only broker-dealers that acquired the outstanding notes as a result of market-making activities or other trading activities may participate in the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for outstanding notes, where such outstanding notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution" in this prospectus for more details regarding the transfer of exchange notes.

32

Terms of the Exchange Offer

        On the terms and subject to the conditions set forth in this prospectus and in the accompanying letters of transmittal, we will accept for exchange in the exchange offer any outstanding notes that are validly tendered and not validly withdrawn prior to the expiration date, outstanding notes may only be tendered with a minimum denomination of $2,000 or an integral multiple of $1,000 in excess thereof. We will issue the principal amount of exchange notes in exchange for the principal amount of outstanding notes surrendered in the exchange offer.

        The form and terms of the exchange notes will be identical in all material respects to the form and terms of the outstanding notes, except that the exchange notes will be registered under the Securities Act, will not bear legends restricting their transfer and will not provide for any additional interest upon our failure to fulfill our obligations under the registration rights agreement to complete the exchange offer, or file, and cause to be effective, a shelf registration statement, if required thereby, within the specified time period. The exchange notes will evidence the same debt as the outstanding notes. The exchange notes will be issued under, and entitled to the benefits of, the same indentures that authorized the issuance of the outstanding notes. For a description of the indenture governing the exchange notes, see "Description of Exchange Notes" in this prospectus.

        The exchange offer is not conditioned upon any minimum aggregate principal amount of outstanding notes being tendered for exchange.

        This prospectus and the letters of transmittal are being sent to all registered holders of outstanding notes. There will be no fixed record date for determining registered holders of outstanding notes entitled to participate in the exchange offer. We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act, and the rules and regulations of the SEC. outstanding notes that are not tendered for exchange in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits such holders have under the indenture relating to such holders' series of outstanding notes and the registration rights agreement, except we will not have any further obligation to you to provide for the registration of the outstanding notes under the registration rights agreement.

        We will be deemed to have accepted for exchange properly tendered outstanding notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the tendering holders for the purposes of receiving the exchange notes from us and delivering exchange notes to holders. Subject to the terms of the registration rights agreement, we expressly reserve the right to amend or terminate the exchange offer and to refuse to accept the occurrence of any of the conditions specified below under "—Conditions to the Exchange Offer."

        If you tender your outstanding notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes. We will pay all charges and expenses, other than certain applicable taxes described below in connection with the exchange offer. It is important that you read "—Fees and Expenses" below for more details regarding fees and expenses incurred in the exchange offer.

Expiration Date; Extensions, Amendments

        As used in this prospectus, the term "expiration date" means 5:00 p.m., New York City time, on                , 2012. However, if we, in our sole discretion, extend the period of time for which the exchange offer is open, the term "expiration date" will mean the latest time and date to which we shall have extended the expiration of the exchange offer.

33

        To extend the period of time during which the exchange offer is open, we will notify the exchange agent of any extension by written notice, followed by notification by press release or other public announcement to the registered holders of the outstanding notes no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

        We reserve the right, in our sole discretion:

•

to delay accepting for exchange any outstanding notes (if we amend or extend the exchange offer);

•

to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under "—Conditions to the Exchange Offer" have not been satisfied, by giving written notice of such delay, extension or termination to the exchange agent; and

•

subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner, provided that in event of a material change in the terms of the exchange offer, including the waiver of a material condition, we will extend the offer period if necessary so that at least five business days remain in the exchange offer following notice of the material change;

provided that we will at all times comply with applicable securities laws, including our obligation to issue the exchange notes or return the outstanding notes deposited by or on behalf of security holders promptly after expiration or withdrawal of the exchange offer.

        Any delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice to the registered holders of the outstanding notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose the amendment in a manner reasonably calculated to inform the holders of outstanding notes of that amendment.

Conditions to the Exchange Offer

        Despite any other term of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any outstanding notes and we may terminate or amend the exchange offer as provided in this prospectus prior to the expiration date if in our reasonable judgment:

•

the exchange offer or the making of any exchange by a holder violates any applicable law or interpretation of the SEC; or

•

any action or proceeding has been instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer that, in our judgment, would reasonably be expected to impair our ability to proceed with the exchange offer.

        In addition, we will not be obligated to accept for exchange the outstanding notes of any holder that has not made to us:

•

the representations described under "—Procedures for Tendering Outstanding Notes" and "Plan of Distribution;" or

•

any other representations as may be reasonably necessary under applicable SEC rules, regulations, or interpretations to make available to us an appropriate form for registration of the exchange notes under the Securities Act.

        We expressly reserve the right at any time or at various times to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any outstanding notes by giving oral or written notice of such extension to their holders. We will return any outstanding notes

34

that we do not accept for exchange for any reason without expense to their tendering holder promptly after the expiration or termination of the exchange offer.

        We expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any outstanding notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the outstanding notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

        These conditions are for our sole benefit and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times prior to the expiration date in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or at various times prior to the expiration date.

        In addition, we will not accept for exchange any outstanding notes tendered, and will not issue exchange notes in exchange for any such outstanding notes, if at such time any stop order is threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indentures under the Trust Indenture Act of 1939 (the "TIA").

Procedures for Tendering Outstanding Notes

        To tender your outstanding notes in the exchange offer, you must comply with either of the following:

•

complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature(s) on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver such letter of transmittal or facsimile thereof to the exchange agent at the address set forth below under "—Exchange Agent" prior to the expiration date; or

•

comply with DTC's Automated Tender Offer Program procedures described below.

        In addition, either:

•

the exchange agent must receive certificates for outstanding notes along with the letter of transmittal prior to the expiration date;

•

the exchange agent must receive a timely confirmation of book-entry transfer of outstanding notes into the exchange agent's account at DTC according to the procedures for book-entry transfer described below or a properly transmitted agent's message prior to the expiration date; or

•

you must comply with the guaranteed delivery procedures described below.

        Your tender, if not withdrawn prior to the expiration date, constitutes an agreement between us and you upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal.

        The method of delivery of outstanding notes, letters of transmittal, and all other required documents to the exchange agent is at your election and risk. We recommend that instead of delivery by mail, you use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure timely delivery to the exchange agent before the expiration date. You should not send letters of transmittal or certificates representing outstanding notes to us. You may request that your broker, dealer, commercial bank, trust company or nominee effect the above transactions for you.

35

        If you are a beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and you wish to tender your outstanding notes, you should promptly contact the registered holder and instruct the registered holder to tender on your behalf. If you wish to tender the outstanding notes yourself, you must, prior to completing and executing the letter of transmittal and delivering your outstanding notes, either:

•

make appropriate arrangements to register ownership of the outstanding notes in your name; or

•

obtain a properly completed bond power from the registered holder of outstanding notes.

        The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration date.

        Signatures on the letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by 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 another "eligible guarantor institution" within the meaning of Rule 17A(d)-15 under the Exchange Act unless the outstanding notes surrendered for exchange are tendered:

•

by a registered holder of the outstanding notes who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal; or

•

for the account of an eligible guarantor institution.

        If the letter of transmittal is signed by a person other than the registered holder of any outstanding notes listed on the outstanding notes, such outstanding notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the outstanding notes and an eligible guarantor institution must guarantee the signature on the bond power.

        If the letter of transmittal or any certificates representing outstanding 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 also indicate when signing and, unless waived by us, they should also submit evidence satisfactory to us of their authority to so act.

        Any financial institution that is a participant in DTC's system may use DTC's Automated Tender Offer Program to tender. Participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, electronically transmit their acceptance of the exchange by causing DTC to transfer the outstanding notes to the exchange agent in accordance with DTC's Automated Tender Offer Program procedures for transfer. DTC will then send an agent's message to the exchange agent. The term "agent's message" means a message transmitted by DTC, received by the exchange agent and forming part of the book-entry confirmation, which states that:

•

DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation;

•

the participant has received and agrees to be bound by the terms of the letter of transmittal, or in the case of an agent's message relating to guaranteed delivery, that such participant has received and agrees to be bound by the notice of guaranteed delivery; and

•

we may enforce that agreement against such participant.

        DTC is referred to herein as a "book-entry transfer facility."

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Acceptance of Exchange Notes

        In all cases, we will promptly after expiration of the exchange offer issue exchange notes for outstanding notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

•

outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agent's account at the book-entry transfer facility; and

•

a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.

        By tendering outstanding notes pursuant to the exchange offer, you will represent to us that, among other things:

•

you are not our affiliate or an affiliate of any guarantor within the meaning of Rule 405 under the Securities Act;

•

you do not have an arrangement or understanding with any person or entity to participate in a distribution of the exchange notes; and

•

you are acquiring the exchange notes in the ordinary course of your business

        In addition, each broker-dealer that is to receive exchange notes for its own account in exchange for outstanding notes must represent that such outstanding notes were acquired by that broker-dealer as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus that meets the requirements of the Securities Act in connection with any resale of the exchange notes. The letter of transmittal states that by so acknowledging 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. See "Plan of Distribution" in this prospectus.

        We will interpret the terms and conditions of the exchange offer, including the letters of transmittal and the instructions to the letters of transmittal, and will resolve all questions as to the validity, form, eligibility, including time of receipt, and acceptance of outstanding notes tendered for exchange. Our determinations in this regard will be final and binding on all parties. We reserve the absolute right to reject any and all tenders of any particular outstanding notes not properly tendered or to not accept any particular outstanding notes if the acceptance might, in our or our counsel's judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities as to any particular outstanding notes prior to the expiration date.

        Unless waived, any defects or irregularities in connection with tenders of outstanding notes for exchange must be cured within such reasonable period of time as we determine. Neither we, the Trustee, the exchange agent, nor any other person will be under any duty to give notification of any defect or irregularity with respect to any tender of outstanding notes for exchange, nor will any of them incur any liability for any failure to give notification. Any outstanding notes received by the exchange agent that are not properly tendered and as to which the irregularities have not been cured or waived will be returned by the exchange agent to the tendering holder, unless otherwise provided in the letter of transmittal, promptly after the expiration date.

Book-Entry Delivery Procedures

        Promptly after the date of this prospectus, the exchange agent will establish an account with respect to the outstanding notes at DTC and, as the book-entry transfer facility, for purposes of the exchange offer. Any financial institution that is a participant in the book-entry transfer facility's system may make book-entry delivery of the outstanding notes by causing the book-entry transfer facility to transfer those outstanding notes into the exchange agent's account at the facility in accordance with the

37

facility's procedures for such transfer. To be timely, book-entry delivery of outstanding notes requires receipt of a confirmation of a book-entry transfer, a "book-entry confirmation," prior to the expiration date. In addition, although delivery of outstanding notes may be effected through book-entry transfer into the exchange agent's account at the book-entry transfer facility, the letter of transmittal or a manually signed facsimile thereof, together with any required signature guarantees and any other required documents, or an "agent's message," as defined below, in connection with a book-entry transfer, must, in any case, be delivered or transmitted to and received by the exchange agent at its address set forth on the cover page of the letter of transmittal prior to the expiration date to receive exchange notes for tendered outstanding notes, or the guaranteed delivery procedure described below must be complied with. Tender will not be deemed made until such documents are received by the exchange agent. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent.

        Holders of outstanding notes who are unable to deliver confirmation of the book-entry tender of their outstanding notes into the exchange agent's account at the book-entry transfer facility or all other documents required by the letter of transmittal to the exchange agent on or prior to the expiration date must tender their outstanding notes according to the guaranteed delivery procedures described below.

Guaranteed Delivery Procedures

        If you wish to tender your outstanding notes but your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal or any other required documents to the exchange agent or comply with the procedures under DTC's Automated Tender Offer Program in the case of outstanding notes, prior to the expiration date, you may still tender if:

•

the tender is made through an eligible guarantor institution;

•

prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail, or hand delivery or a properly transmitted agent's message and notice of guaranteed delivery, that (1) sets forth your name and address, the certificate number(s) of such outstanding notes and the principal amount of outstanding notes tendered; (2) states that the tender is being made thereby; and (3) guarantees that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and

•

the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as certificate(s) representing all tendered outstanding notes in proper form for transfer or a book-entry confirmation of transfer of the outstanding notes into the exchange agent's account at DTC all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the expiration date.

        Upon request, the exchange agent will send to you a notice of guaranteed delivery if you wish to tender your outstanding notes according to the guaranteed delivery procedures.

38

Withdrawal Rights

        Except as otherwise provided in this prospectus, you may withdraw your tender of outstanding notes at any time prior to 5:00 p.m., New York City time, on the expiration date.

        For a withdrawal to be effective:

•

the exchange agent must receive a written notice, which may be by telegram, telex, facsimile or letter, of withdrawal at its address set forth below under "—Exchange Agent"; or

•

you must comply with the appropriate procedures of DTC's Automated Tender Offer Program system.

        Any notice of withdrawal must:

•

specify the name of the person who tendered the outstanding notes to be withdrawn;

•

identify the outstanding notes to be withdrawn, including the certificate numbers and principal amount of the outstanding notes; and

•

where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from that of the withdrawing holder.

        If certificates for outstanding notes have been delivered or otherwise identified to the exchange agent, then, prior to the release of such certificates, you must also submit:

•

the serial numbers of the particular certificates to be withdrawn; and

•

a signed notice of withdrawal with signatures guaranteed by an eligible institution unless you are an eligible guarantor institution.

        If outstanding notes have been tendered pursuant to the procedures for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn outstanding notes and otherwise comply with the procedures of the facility. We will determine all questions as to the validity, form, and eligibility, including time of receipt of notices of withdrawal and our determination will be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any outstanding notes that have been tendered for exchange but that are not exchanged for any reason will be promptly returned to their holder, without cost to the holder, or, in the case of book-entry transfer, the outstanding notes will be promptly credited to an account at the book-entry transfer facility, promptly after withdrawal or termination of the exchange offer. Properly withdrawn outstanding notes may be retendered by following the procedures described under "—Procedures for Tendering Outstanding Notes" above at any time on or prior to the expiration date.

Exchange Agent

        Wilmington Trust, National Association has been appointed as the exchange agent for the exchange offer. Wilmington Trust, National Association also acts as Trustee under the indenture governing the notes. You should direct all executed letters of transmittal and all questions and requests

39

for assistance, requests for additional copies of this prospectus or of the letters of transmittal, and requests for notices of guaranteed delivery to the exchange agent addressed as follows:

By Registered Mail or	By Facsimile Transmission:	By Hand Delivery:
Overnight Carrier:	(302) 636-4137	Wilmington Trust, National
Wilmington Trust, National		Association, as Exchange Agent
Association, as Exchange Agent	To Confirm by Telephone:	c/o Wilmington Trust Company
c/o Wilmington Trust Company	(302) 636-6181	Rodney Square North
Rodney Square North		1100 North Market Street
1100 North Market Street	For Information Call:	Wilmington, DE 19890-1626
Wilmington, DE 19890-1626	(302) 636-6181	Attention: Sam Hamed
Attention: Sam Hamed

        If you deliver the letter of transmittal to an address other than the one set forth above or transmit instructions via facsimile other than the one set forth above, that delivery or those instructions will not be effective.

Fees and Expenses

        The registration rights agreement provides that we will bear all expenses in connection with the performance of our obligations relating to the registration of the exchange notes and the conduct of the exchange offer. These expenses include registration and filing fees, accounting and legal fees and printing costs, among others. We will pay the exchange agent reasonable and customary fees for its services and reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees and fiduciaries for customary mailing and handling expenses incurred by them in forwarding this prospectus and related documents to their clients that are holders of outstanding notes and for handling or tendering for such clients.

        We have not retained any dealer-manager in connection with the exchange offer and will not pay any fee or commission to any broker, dealer, nominee or other person, other than the exchange agent, for soliciting tenders of outstanding notes pursuant to the exchange offer.

Accounting Treatment

        We will record the exchange notes in our accounting records at the same carrying value as the outstanding notes, which is the aggregate principal amount as reflected in our accounting records on the date of exchanges. Accordingly, we will not recognize any gain or loss for accounting purposes upon the consummation of the exchange offer. We will record the expenses of the exchange offer as incurred.

Transfer Taxes

        We will pay all transfer taxes, if any, applicable to the exchange of outstanding notes under the exchange offer. If, however, certificates representing exchange notes or outstanding notes for principal amounts not tendered or accepted for exchange 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 outstanding notes tendered, or if tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal, or if a transfer tax is imposed for any reason other than the exchange of outstanding notes pursuant to the exchange offer, then the amount of any such transfer taxes, whether imposed on the registered holder or any other persons, will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the letter of transmittal, the amount of such transfer taxes will be billed by us directly to such tendering holder.

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Consequences of Failure to Exchange

        If you do not exchange your outstanding notes for exchange notes under the exchange offer, your outstanding notes will remain subject to the restrictions on transfer of such outstanding notes:

•

as set forth in the legend printed on the outstanding notes as a consequence of the issuance of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and

•

as otherwise set forth in the prospectus distributed in connection with the private offerings of the outstanding notes.

        In general, you may not offer or sell your outstanding notes unless they are registered under the Securities Act or if the offer or sale is exempt from registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the outstanding notes under the Securities Act.

Other

        Participating in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your own decision on what action to take.

        We may in the future seek to acquire untendered outstanding notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plans to acquire any outstanding notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered outstanding notes.

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USE OF PROCEEDS

        The exchange offer is intended to satisfy our obligations under the registration rights agreement. We will not receive any cash proceeds from the issuance of the exchange notes. In exchange for the exchange notes, we will receive outstanding notes in like principal amount. We will retire or cancel all of the outstanding notes tendered in the exchange offer. Accordingly, the issuance of the exchange notes will not result in any change in our capitalization.

        We used the net proceeds from the offering of the outstanding notes, together with borrowings under our Credit Facilities, to finance a portion of the Acquisition. Merger Sub contributed the debt proceeds, after payment of fees and expenses, to us, which we then loaned such net proceeds to Parent. Parent used those proceeds, together with the Sponsors' equity contributions, the Rollover Equity and cash on hand, to pay the Merger Consideration, and pay fees and expenses related to the Acquisition.

42

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

        The following unaudited pro forma condensed consolidated statement of operations has been developed by applying pro forma adjustments to our audited statements of operations for the Predecessor period from April 3, 2011 through January 14, 2012, and for the Successor period from January 15, 2012 to March 31, 2012. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended March 31, 2012 gives effect to the Merger as if it had occurred on April 3, 2011.

        The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial data is presented for informational purposes only. The unaudited pro forma condensed consolidated financial data does not purport to represent what our results of operations would have been had the Merger actually occurred on the dates indicated and does not purport to project our results of operations for any future period. The unaudited pro forma condensed consolidated financial statement should be read in conjunction with the information contained in other sections of this prospectus including "Selected Consolidated Historical Financial Data," in our consolidated financial statements and related notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed consolidated statement of operations.

        The unaudited pro forma condensed consolidated financial information has been prepared to give effect to the Merger including the accounting for the acquisition of our business as a purchase business combination in accordance with ASC 805, "Business Combinations."

        The unaudited pro forma condensed consolidated statement of operations does not reflect non-recurring charges that have been incurred in connection with the Merger, including (i) certain non-recurring expenses related to the Merger estimated at approximately $25.8 million, and (ii) the

43

stock-based compensation expense of approximately $1.0 million relating to the accelerated vesting of stock based awards to management and associates that vested as a result of the Merger.

	For the Fiscal Year Ended March 31, 2012
	Historical Successor			Historical Predecessor			Pro Forma Adjustments			Pro Forma
	(Amounts in thousands)
Net Sales:
99¢ Only Stores	$	329,361		$	1,158,733		$	—		$	1,488,094
Bargain Wholesale		9,555			34,047			—			43,602
Total sales		338,916			1,192,780			—			1,531,696
Cost of sales (excluding depreciation and amortization expense shown separately below)		203,775			711,002			—			914,777
Gross profit		135,141			481,778			—			616,919
Selling, general and administrative expenses:
Operating expenses		110,477			376,122			(25,069)	(a)		461,530
Depreciation		11,361			21,855			9,272	(b)		42,488
Amortization of intangible assets		374			14			1,376	(c)		1,764
Total selling, general and administrative expenses		122,212			397,991			(14,421	)		505,782
Operating income		12,929			83,787			14,421			111,137
Other (income) expenses:
Interest income		(29	)		(291	)		—			(320	)
Interest expense		16,223			381			53,025	(d)		69,629
Other-than-temporary investment impairment due to credit loss		—			357			—			357
Other		(75	)		(107	)		—			(182	)
Total other expense, net		16,119			340			53,025			69,484
(Loss) income before provision for income taxes		(3,190	)		83,447			(38,604	)		41,653
Provision for income taxes		2,103			33,699			(16,178)	(e)		19,624
Net (loss) income	$	(5,293	)	$	49,748		$	(22,426	)	$	22,029

(a)

Represents adjustments to increase historical expenses for ongoing expenses incurred in connection with the Merger and adjustments to eliminate one-time historical expenses incurred in connection with the Merger (in thousands):

	Fiscal Year Ended March 31, 2012(1)
Credit facility annual administration fee(i)	$	158
Favorable/unfavorable lease amortization, net(ii)		155
Executive compensation(iii)		583
Rent expenses (renegotiated leases)(iv)		788
Subtotal—ongoing expenses		1,684
One-time merger costs(v)		(26,753	)
Total operating expenses	$	(25,069	)

(1)

Represents adjustments to the predecessor period from April 3, 2011 to January 14, 2012, as the successor period from January 15, 2012 to March 31, 2012 already includes these adjustments.

(i)

Represents adjustments to administrative fees associated with the First Lien Term Facility and the ABL Facility in connection with the Merger.

44

(ii)

Represents adjustments resulting from the amortization of favorable lease assets and unfavorable lease liability recorded in connection with the Merger, amortized on a straight-line basis over the remaining lease terms of each lease.

(iii)

Represents adjustments to compensation expense resulting from new executive salaries of certain named executives based on new employment arrangements in connection with the Merger.

(iv)

Represents adjustments resulting from the renegotiation of certain leases with the Rollover Investors and their affiliates in connection with the Merger.

(v)

Represents adjustments to eliminate one-time historical expenses incurred in connection with the Merger, principally legal and financial advisory fees.

(b)

Represents adjustments resulting from the increase in the net book value ("step-up") of depreciable property and equipment of approximately $150 million depreciated on a straight-line basis over their respective remaining useful lives.

(c)

Represents adjustments resulting from the increase in the estimated fair market values of finite-lived intangible assets. Finite-lived intangibles include the Rinso and Halsa private label brands which will be amortized over a remaining useful life of 20 years and the Bargain Wholesale customer relationships which will be amortized over a remaining useful life of 12 years.

(d)

Represents the following adjustments to interest expense, net (in thousands):

	Fiscal Year Ended March 31, 2012(1)
Pro forma cash interest expense(i)	$	48,160
Pro forma deferred financing costs amortization expense(i)		4,865
Less: interest expense, historical(ii)		—
Additional expense	$	53,025

(1)

Represents adjustments to the predecessor period from April 3, 2011 to January 14, 2012, as the successor period from January 15, 2012 to March 31, 2012 already includes these adjustments.

(i)

Reflects the adjustments to interest expense as a result of the increase in annual interest expense associated with borrowings under the First Lien Term Facility and the issuance of the outstanding notes, including the amortization of deferred financing costs associated with outstanding notes, the First Lien Term Facility and the ABL Facility and accretion of the original issue discount associated with the First Lien Term Facility. The deferred financing costs and original issue discount is being recognized over the respective terms of the debt agreements using the effective interest method.

(ii)

Historical interest expense has not been adjusted for interest income as amounts are not material and has not been adjusted for interest related to tax matters.

(e)

To reflect the tax effect of the pro forma adjustments, using a combined federal and state statutory tax rate of approximately 40%, and excludes adjustments that result in no tax benefit.

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA

The following table sets forth selected financial and operating data of the Company for the periods indicated. The data set forth below should be read in conjunction with the consolidated financial statements and notes thereto included in this prospectus, "Unaudited Pro Forma Condensed Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" in this prospectus. The consolidated statements of income and company operating data for the Predecessor period from April 3, 2011 to January 14, 2012 and the Successor period from January 15, 2012 to March 31, 2012, and the fiscal years ended April 2, 2011, March 27, 2010, March 28, 2009 and March 29, 2008 and the consolidated retail operating and balance sheet data as of March 31, 2012, April 2, 2011, March 27, 2010, March 28, 2009 and March 29, 2008 are derived from our consolidated financial statements. The Successor period January 15, 2012 to March 31, 2012 contains 11 weeks. The Predecessor period April 3, 2011 to January 14, 2012 contains 41 weeks. The Predecessor fiscal year ended on April 2, 2011 is comprised of 53 weeks while the earlier Predecessor periods presented are comprised of 52 weeks.

	For the Periods						Years Ended
	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012			April 2, 2011			March 27, 2010			March 28, 2009			March 29, 2008
	(Successor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)
	(Amounts in thousands, except operating and other data)
Statements of Income Data:
Net Sales:
99¢ Only Stores	$	329,361		$	1,158,733		$	1,380,357		$	1,314,214		$	1,262,119		$	1,158,856
Bargain Wholesale		9,555			34,047			43,521			40,956			40,817			40,518
Total sales		338,916			1,192,780			1,423,878			1,355,170			1,302,936			1,199,374
Cost of sales (excluding depreciation and amortization expense as shown separately below)		203,775			711,002			842,756			797,748			791,121			738,499
Gross profit		135,141			481,778			581,122			557,422			511,815			460,875
Selling, general and administrative expenses:
Operating expenses		110,477			376,122			436,034			436,608			464,635			433,940
Depreciation		11,361			21,855			27,587			27,381			34,224			33,286
Amortization of intangible assets		374			14			18			17			42			35
Total operating expenses		122,212			397,991			463,639			464,006			498,901			467,261
Operating income (loss)		12,929			83,787			117,483			93,416			12,914			(6,386	)
Other expense (income), net		16,119			340			(741	)		(135	)		(993	)		(6,674	)
(Loss) income before provision for income taxes and income attributed to noncontrolling interest		(3,190	)		83,447			118,224			93,551			13,907			288
Provision (benefit) for income taxes		2,103			33,699			43,916			33,104			4,069			(2,605	)
Net (loss) income including noncontrolling interest		(5,293	)		49,748			74,308			60,447			9,838			2,893
Net income attributable to noncontrolling interest		—			—			—			—			(1,357	)		—
Net (loss) income attributable to 99¢ Only Stores	$	(5,293	)	$	49,748		$	74,308		$	60,447		$	8,481		$	2,893
Company Operating Data:
Sales Growth:
99¢ Only Stores		N/A			N/A			5.0	%		4.1	%		8.9	%		8.9	%
Bargain Wholesale		N/A			N/A			6.3	%		0.3	%		0.7	%		0.8	%
Total sales		N/A			N/A			5.1	%		4.0	%		8.6	%		8.6	%
Gross margin		39.9	%		40.4	%		40.8	%		41.1	%		39.3	%		38.4	%
Operating margin		3.8	%		7.0	%		8.3	%		6.9	%		1.0	%		(0.5	)%
Net (loss) income		(1.6	)%		4.2	%		5.2	%		4.5	%		0.7	%		0.2	%
Other Data:
Ratio of earnings to fixed charges(a)		0.8x			18.2x			21.3x			15.8x			3.0x			1.0x

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	March 31, 2012		April 2, 2011			March 27, 2010			March 28, 2009			March 29, 2008
	(Successor)		(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)
	(Amounts in thousands, except operating data)
Retail Operating Data(b):
99¢ Only Stores at end of period		298		285			275			279			265
Change in comparable stores net sales(c)		N/A		0.7	%		3.9	%		3.7	%		4.0	%
Average net sales per store open the full year		N/A	$	4,874		$	4,848		$	4,642		$	4,547
Average net sales per estimated saleable square foot(d)		N/A	$	291	(e)	$	289	(f)	$	273	(g)	$	263	(h)
Estimated saleable square footage at year end		4,948,344		4,758,432			4,606,728			4,703,630			4,521,091
Balance Sheet Data:
Working capital	$	161,536	$	323,314		$	263,905		$	192,365		$	170,581
Total assets	$	1,768,041	$	824,215		$	745,986		$	662,873		$	649,410
Capital lease obligation, including current portion	$	431	$	448		$	519		$	584		$	643
Long-term debt, including current portion	$	763,601	$	—		$	—		$	—		$	7,319
Total shareholders' equity	$	630,767	$	681,549		$	600,422		$	523,857		$	526,491

(a)

The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For purposes of computing this ratio of earnings to fixed charges, "fixed charges" includes interest expense on all indebtedness, whether expensed or capitalized, including amortization of debt issuance costs, plus the portion of rental expense that is representative of the interest factor within these rentals. "Earnings" consist of pre-tax income (loss) from continuing operations plus fixed charges, including unamortized capitalized debt issuance costs.

(b)

Includes retail operating data solely for our 99¢ Only Stores. For comparability purposes, comparable stores net sales, average net sales per store and average net sales per estimated saleable square foot are based on comparable 52 weeks, for all periods presented.

(c)

Change in comparable stores net sales compares net sales for all stores open at least 15 months. We normally do not relocate stores or close them if renovations are taking place. In a rare situation where a store is relocated, or closed and later re-opened at the same location, the relocated or re-opened store is considered a new store for any comparable store sales analysis, and would only be included in the comparable store sales analysis once it has been open, or re-opened, for 15 months.

(d)

Computed based upon estimated total saleable square footage of stores open for the full year.

(e)

Includes 32 Texas stores open for a full year. Texas stores open for the full year had average sales of $3.4 million per store and average sales per estimated saleable square foot of $181. All Western States stores open for the full year had average sales of $5.1 million per store and $307 of average sales per estimated saleable square foot.

(f)

Includes 31 Texas stores open for a full year. Texas stores open for the full year had average sales of $3.4 million per store and average sales per estimated saleable square foot of $180. All Western States stores open for the full year had average sales of $5.0 million per store and $305 of average sales per estimated saleable square foot.

(g)

Includes 39 Texas stores open for a full year. Texas stores open for the full year had average sales of $2.7 million per store and average sales per estimated saleable square foot of $142. All Western States stores open for the full year had average sales of $5.0 million per store and $301 of average sales per estimated saleable square foot.

(h)

Includes 39 Texas stores open for a full year. Texas stores open for the full year had average sales of $2.6 million per store and average sales per estimated saleable square foot of $128. All Western States stores open for the full year had average sales of $4.9 million per store and $291 of average sales per estimated saleable square foot.

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

You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations in connection with the information under the heading "Selected Consolidated Historical Financial Data" and "Unaudited Pro Forma Condensed Consolidated Financial Information" in this prospectus and the consolidated financial statements and the notes thereto included in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

        We follow a fiscal calendar consisting of four quarters with 91 days, each ending on the Saturday closest to the calendar quarter-end, and a 52-week fiscal year with 364 days, with a 53-week year every five to six years. Unless otherwise stated, references to years in this prospectus relate to fiscal years rather than calendar years. On January 13, 2012, we completed the Merger. As a result of the Merger, we have prepared separate discussion and analysis of our consolidated operating results, financial condition and liquidity for the "Predecessor" and "Successor" periods relating to the periods preceding and succeeding the Merger, respectively. Our fiscal year 2012 ("fiscal 2012") is presented as a Successor period from January 15, 2012 to March 31, 2012 consisting of 11 weeks (the "fiscal 2012 Successor period") and a Predecessor period from April 3, 2011 to January 14, 2012 consisting of 41 weeks (the "fiscal 2012 Predecessor period"), for a total of 52 weeks. Our fiscal year 2011 ("fiscal 2011") began on March 28, 2010 and ended on April 2, 2011, consisting of 53 weeks with one additional week included in the fourth quarter and our fiscal year 2010 ("fiscal 2010") began on March 29, 2009 and ended March 27, 2010, consisting of 52 weeks. For comparability purposes, annual same-store sales, average annual sales per store and annual sales per estimated saleable square foot calculations included in this prospectus are based on comparable 52 weeks, ended on March 31, 2012 for fiscal 2012, ended on March 26, 2011 for fiscal 2011 and ended on March 27, 2010 for fiscal 2010. Our fiscal year 2013 ("fiscal 2013") will consist of 52 weeks beginning April 1, 2012 and ending March 30, 2013.

        In accordance with generally accepted accounting principles in the United States of America ("GAAP"), we are required to separately present our results for the Predecessor and Successor periods. We have also prepared supplemental discussion and analysis of the combined Predecessor and Successor periods, on a pro forma basis ("pro forma fiscal year 2012"). Management believes that reviewing our results on a pro forma basis is important in identifying trends or reaching conclusions regarding our overall performance.

        During the fiscal 2012 Successor period, we had net sales of $338.9 million, operating income of $12.9 million and a net loss of $5.3 million. During the fiscal 2012 Predecessor period, we had net sales of $1,192.8 million, operating income of $83.8 million and net income of $49.7 million.

        During pro forma fiscal 2012, we had net sales of $1,531.7 million, operating income of $111.1 million and net income of $22.0 million. Net sales for pro forma fiscal 2012 increased 7.6% over fiscal 2011 primarily due to the 13 new store openings since the end of fiscal 2011 and a 7.3% increase in same-store sales, offset by one additional week in fiscal 2011. Average sales per store open the full year, on a comparable 52-week period, increased to $5.2 million in pro forma fiscal 2012 from $4.9 million in fiscal 2011. Average net sales per estimated saleable square foot (computed for stores open for the full year) on a comparable 52-week period increased to $309 per square foot for pro forma

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fiscal 2012 from $291 per square foot for fiscal 2011. This increase reflects our opening of smaller locations for our new stores and increases in same-store sales. Existing stores at March 31, 2012 averaged approximately 21,000 gross square feet. We are currently targeting new store openings of approximately 18,000 gross square feet.

        In pro forma fiscal 2012, we continued to expand our store base by opening 13 new stores. Of these newly opened stores, eight stores are located in California, two in Arizona, one in Nevada, and two in Texas. We did not close any stores during fiscal 2012. In fiscal 2013, we plan to increase our store count by approximately 10%, with the majority of new stores expected to be opened in California during the second half of fiscal 2013. We believe that near term growth in fiscal 2013 will primarily result from new store openings in our existing territories and increases in same-store sales.

Critical Accounting Policies and Estimates

        The preparation of financial statements requires management to make estimates and assumptions that affect reported earnings. These estimates and assumptions are evaluated on an on-going basis and are based on historical experience and other factors that management believes are reasonable. Estimates and assumptions include, but are not limited to, the areas of inventories, long-lived asset impairment, legal reserves, self-insurance reserves, leases, taxes and share-based compensation.

        We believe that the following items represent the areas where more critical estimates and assumptions are used in the preparation of our financial statements:

        Inventory valuation.    Inventories are valued at the lower of cost (first in, first out) or market. Valuation allowances for shrinkage, as well as excess and obsolete inventory are also recorded. Shrinkage is estimated as a percentage of sales for the period from the last physical inventory date to the end of the applicable period. Such estimates are based on experience and the most recent physical inventory results. Physical inventories are taken at each of our retail stores at least once a year by an independent inventory service company. Additional store level physical inventories are taken by the service companies from time to time based on a particular store's performance and/or book inventory balance. We also perform inventory reviews and analysis on a quarterly basis for both warehouse and store inventory to determine inventory valuation allowances for excess and obsolete inventory. Our policy is to analyze all items held in inventory that would not be sold through at current sales rates over a twenty-four month period to determine what merchandise should be reserved for as excess and obsolete. The valuation allowances for excess and obsolete inventory in many locations (including various warehouses, store backrooms, and sales floors of our stores) require management judgment and estimates that may impact the ending inventory valuation as well as gross margins. We do not believe that there is a reasonable likelihood that there will be a material change in the future estimates or assumptions that we use to calculate these inventory valuation reserves. As an indicator of the sensitivity of this estimate, a 10% increase in our estimates of expected losses from shrinkage and the excess and obsolete inventory provision at March 31, 2012, would have increased these reserves by approximately $1.6 million and $0.4 million, respectively and reduced pre-tax earnings in the 2012 Successor period by the same amounts.

        In order to obtain inventory at attractive prices, we take advantage of large volume purchases, closeouts and other similar purchase opportunities. Consequently, our inventory fluctuates from period to period and the inventory balances vary based on the timing and availability of such opportunities. Our inventory was $214.3 million as of March 31, 2012 and $191.5 million as of April 2, 2011.

        Long-lived asset impairment.    In accordance with ASC 360, "Accounting for the Impairment or Disposal of Long-lived Assets" ("ASC 360"), we assess the impairment of long-lived assets annually or when events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to expected future net cash flows generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted

49

future cash flows, the carrying amount is compared to its fair value and an impairment charge is recognized to the extent of the difference. Factors that we consider important which could individually or in combination trigger an impairment review include the following. (1) significant underperformance relative to expected historical or projected future operating results; (2) significant changes in the manner we use of the acquired assets or the strategy for our overall business; and (3) significant changes in our business strategies and/or negative industry or economic trends. On a quarterly basis, we assess whether events or changes in circumstances occur that potentially indicate that the carrying value of long-lived assets may not be recoverable. Considerable management judgment is necessary to estimate projected future operating cash flows. Accordingly, if actual results fall short of such estimates, significant future impairments could result. During the Successor and Predecessor periods of fiscal 2012 and fiscal 2011, we did not record any long-lived asset impairment charges. In fiscal 2010, due to the underperformance of one California store, we concluded that the carrying value of our long-lived asset was not recoverable and accordingly recorded an asset impairment charge of $0.4 million. See "Note 11—Texas Market" to the consolidated financial statements included in this prospectus for further information regarding the charges related to our Texas operations. We have not made any material changes to our long-lived asset impairment methodology during the Successor and Predecessor periods of fiscal 2012.

        Goodwill and other intangible assets.    The Merger was accounted for as a purchase business combination, whereby the purchase price paid was allocated to recognize the acquired assets and liabilities at their fair value. In connection with the purchase price allocation, intangible assets were established for the 99¢ trademark, and the Rinso and Halsa label brands were revalued. The purchase price in excess of the fair value of assets and liabilities was recorded as goodwill.

        Indefinite-lived intangible assets, such as the 99¢ trademark and goodwill, are not subject to amortization. We assess the recoverability of indefinite-lived intangibles whenever there are indicators of impairment, or at least annually in the fourth quarter. If the recorded carrying value of an intangible asset exceeds our estimated fair value, we record a charge to write the intangible asset down to its fair value.

        Intangible assets with a definite life, including the Rinso and Halsa label brands, as well as the Bargain Wholesale customers, are amortized on a straight line basis over their useful lives. Amortizable intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on undiscounted cash flows, and, if impaired, the assets are written down to fair value based on either discounted cash flows or appraised values.

        Considerable management judgment is necessary in estimating future cash flows, market interest rates, discount rates and other factors affecting the valuation of goodwill and intangibles.

        Legal reserves.    We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of business. A number of these lawsuits, proceedings and claims may exist at any given time. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, and litigation is inherently unpredictable, in management's opinion, none of these matters arising in the ordinary course of business are expected to have a material adverse effect on our financial position, results of operations, or overall liquidity. Material pending legal proceedings (other than ordinary routine litigation incidental to our business) and material proceedings known to be contemplated by governmental authorities are reported in our Securities Exchange Act reports. In accordance with ASC 450, "Accounting for Contingencies" ("ASC 450"), we record a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

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        There were no material changes in the estimates or assumptions used to determine legal reserves during the Successor and Predecessor periods of fiscal 2012 and a 10% change in legal reserves would not be material to our consolidated financial position or results of operations.

        Self-insured workers' compensation liability.    We self-insure for workers' compensation claims in California and Texas. We have established a reserve for losses of both estimated known claims and incurred but not reported claims. The estimates are based on reported claims and actuarial valuations of estimated future costs of reported and incurred but not yet reported claims. Should the estimates fall short of the actual claims paid, the liability recorded would not be sufficient and additional workers' compensation costs, which may be significant, would be incurred. We do not discount the projected future cash outlays for the time value of money for claims and claim related costs when establishing our workers' compensation liability. As an indicator of the sensitivity of this estimate, at March 31, 2012, a 10% increase in our estimate of expected losses from workers compensation claims would have increased this reserve by approximately $3.9 million and increased the Successor period of fiscal 2012 pre-tax loss by the same amount.

        Self-insured health insurance liability.    During the second quarter of fiscal 2012, we began self-insuring for a portion of our employee medical benefit claims. The liability for the self-funded portion of our health insurance program is determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. We maintain stop loss insurance coverage to limit our exposure for the self-funded portion of our health insurance program. At March 31, 2012, a 10% change in self-insurance liability would not have been material to our consolidated financial position or results of operations.

        Operating leases.    We recognize rent expense for operating leases on a straight-line basis (including the effect of reduced or free rent and rent escalations) over the applicable lease term. The difference between the cash paid to the landlord and the amount recognized as rent expense on a straight-line basis is included in deferred rent. Cash reimbursements received from landlords for leasehold improvements and other cash payments received from landlords as lease incentives are recorded as deferred tenant improvements. Deferred rent related to landlord incentives is amortized as an offset to rent expense using the straight-line method over the applicable lease term.

        For store closures where a lease obligation still exists, we record the estimated future liability associated with the rental obligation on the cease use date (when the store is closed) in accordance with ASC 420, "Exit or Disposal Cost Obligations" ("ASC 420"). Liabilities are established at the cease use date for the present value of any remaining operating lease obligations, net of estimated sublease income, and at the communication date for severance and other exit costs, as prescribed by ASC 420. Key assumptions in calculating the liability include the timeframe expected to terminate lease agreements, estimates related to the sublease potential of closed locations, and estimation of other related exit costs. If actual timing and potential termination costs or realization of sublease income differ from our estimates, the resulting liabilities could vary from recorded amounts. These liabilities are reviewed periodically and adjusted when necessary.

        During the Successor period from January 15, 2012 to March 31, 2012, we accrued an additional $0.1 million in lease termination costs associated with the closing of Texas stores in prior periods. During the Predecessor period from April 3, 2011 to January 14, 2012, we accrued an additional $0.3 million in lease termination costs associated with the closing of Texas stores in prior periods. During fiscal 2011, we accrued $0.4 million in lease termination costs associated with the closing of Texas stores in prior periods. During fiscal 2010, we closed 12 of our Texas stores and accrued approximately $3.0 million in lease termination costs associated with the closing of seven out of the 12 Texas stores. Of the $3.0 million lease termination costs accrual, we recognized a net expense of $2.5 million as these costs were partially offset by a reduction in expenses of $0.5 million due to the reversal of deferred rent and tenant improvements related to these stores during fiscal 2010.

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See "Note 11—Texas Market" to the consolidated financial statements included in this prospectus for further information regarding the lease termination charges related to our Texas operations.

        Tax Valuation Allowances and Contingencies.    We account for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. We had approximately $189.0 million of net deferred tax liabilities as of March 31, 2012, which was comprised of approximately $26.0 million of current deferred tax assets and $215.0 million of non-current deferred tax liabilities, net of tax valuation allowance of $10.3 million. We had approximately $54.7 million in net deferred tax assets that was net of a tax valuation allowance of $5.8 million as of April 2, 2011. Management evaluated the available evidence in assessing our ability to realize the benefits of our deferred tax assets at March 31, 2012 and April 2, 2011, and concluded it is more likely than not that we will not realize a portion of our deferred tax assets. Income tax contingencies are accounted for in accordance with ASC 740-10-50 and may require significant management judgment in estimating final outcomes. There are no uncertain tax positions at March 31, 2012.

        Share-Based Compensation.    Subsequent to the Merger, Parent issued options to acquire shares of common stock of our Parent to certain of our executive officers and employees. We account for stock-based compensation expense under the fair value recognition provisions of ASC 718, "Compensation—Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense ratably over the requisite service periods, which is generally a vesting term of five years. Stock options have a term of 10 years. We estimate the fair value for each option award as of the date of grant using the Black-Scholes option pricing model. Assumptions utilized to value options in the Successor fiscal 2012 period include estimating the fair value of Parent's common stock (which is not publicly traded), the term that the options are expected to be outstanding, an estimate of the volatility of Parent's stock price (which is based on a peer group of publicly traded companies), applicable interest rates and the expected dividend yield of Parent's common stock. Other factors involving judgments that affect the expensing of share-based payments include estimated forfeiture rates of stock-based awards.

Predecessor Periods

        We recognized stock-based compensation expense ratably over the requisite service periods, which was generally a vesting term of three years. Such stock options typically had a term of 10 years and were valued using the Black-Scholes option pricing model. The fair value of the PSUs and RSUs was based on the stock price on the grant date. The compensation expense related to PSUs was recognized only when it was probable that the performance criteria would be met. The compensation expense related to RSUs was recognized based on the number of shares expected to vest. Stock-based awards outstanding prior to the Merger vested in full in connection with the Merger and were converted into a right to receive Merger Consideration.

Results of Operations

        The following discussion defines the components of the statement of income and should be read in conjunction with "Selected Consolidated Historical Financial Data" in this prospectus.

        Net Sales.    Revenue is recognized at the point of sale in our 99¢ Only Stores ("retail sales"). Bargain Wholesale sales revenue is recognized on the date merchandise is shipped. Bargain Wholesale sales are primarily shipped free on board shipping point.

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        Cost of Sales.    Cost of sales includes the cost of inventory, freight in, inter-state warehouse transportation costs, inventory shrinkage (obsolescence, spoilage and shrink), and is net of discounts and allowances. Cash discounts for satisfying early payment terms are recognized when payment is made, and allowances and rebates based upon milestone achievements such as reaching a certain volume of purchases of a vendor's products are included as a reduction of cost of sales when such contractual milestones are reached in accordance with ASC 605-50-25, "Revenue Recognition—Customer Payments and Incentives-Recognition." In addition, we analyze our inventory levels and related cash discounts received to arrive at a value for cash discounts to be included in the inventory balance. We do not include purchasing, receiving, distribution, warehouse costs and transportation to and from stores in our cost of sales, which totaled $15.6 million, $56.0 million, $67.5 million and $66.3 million for the 2012 Successor period, 2012 Predecessor period, fiscal 2011 and fiscal 2010, respectively. Due to this classification, our gross profit rates may not be comparable to those of other retailers that include costs related to their distribution network in cost of sales.

        Selling, General, and Administrative Expenses.    Selling, general, and administrative expenses include purchasing, receiving, inspection and warehouse costs, the costs of selling merchandise in stores (payroll and associated costs, occupancy and other store-level costs), distribution costs (payroll and associated costs, occupancy, transportation to and from stores, and other distribution-related costs), and corporate costs (payroll and associated costs, occupancy, advertising, professional fees, stock-based compensation expense and other corporate administrative costs). Selling, general, and administrative expenses also include depreciation and amortization expense.

        Other (Income) Expense.    Other expense (income) relates primarily to interest expense on our debt, capitalized leases and the impairment charges related to our marketable securities, net of interest income on our marketable securities.

        The following table sets forth for the periods indicated, certain selected income statement data, including such data as a percentage of net sales. The Successor period from January 15, 2012 to March 31, 2012 consists of 11 weeks while the Predecessor period from April 3, 2011 to January 14,

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2012 consists of 41 weeks. The period ended on April 2, 2011 is comprised of 53 weeks while the period ended March 27, 2010 consists of 52 weeks (the percentages may not add up due to rounding):

	For the Periods											Years Ended
	January 15, 2012 to March 31, 2012			% of Net Sales			April 3, 2011 to January 14, 2012		% of Net Sales			April 2, 2011			% of Net Sales			March 27, 2010			% of Net Sales
	(Successor)						(Predecessor)					(Predecessor)						(Predecessor)
	(Amounts in thousands, except percentages)
Net Sales:
99¢ Only Stores	$	329,361			97.2	%	$	1,158,733		97.1	%	$	1,380,357			96.9	%	$	1,314,214			97.0	%
Bargain Wholesale		9,555			2.8			34,047		2.9			43,521			3.1			40,956			3.0
Total sales		338,916			100.0			1,192,780		100.0			1,423,878			100.0			1,355,170			100.0
Cost of sales		203,775			60.1			711,002		59.6			842,756			59.2			797,748			58.9
Gross profit		135,141			39.9			481,778		40.4			581,122			40.8			557,422			41.1
Selling, general and administrative expenses:
Operating expenses		110,477			32.6			376,122		31.5			436,034			30.6			436,608			32.2
Depreciation		11,361			3.4			21,855		1.8			27,587			1.9			27,381			2.0
Amortization of intangible assets		374			0.1			14		0.0			18			0.0			17			0.0
Total operating expenses		122,212			36.1			397,991		33.4			463,639			32.6			464,006			34.2
Operating income		12,929			3.8			83,787		7.0			117,483			8.3			93,416			6.9
Other (income)/expenses, net		16,119			4.8			340		0.0			(741	)		(0.1	)		(135	)		(0.0	)
(Loss) Income before
provision for income taxes		(3,190	)		(0.9	)		83,447		7.0			118,224			8.3			93,551			6.9
Provision for income taxes		2,103			0.6			33,699		2.8			43,916			3.1			33,104			2.4
Net (loss)income attributable to 99¢ Only Stores	$	(5,293	)		(1.6	)%	$	49,748		4.2	%	$	74,308			5.2	%	$	60,447			4.5	%

        The following discussion of our financial performance also includes supplemental unaudited pro forma consolidated financial information for fiscal years 2012 and 2011. Because the Merger occurred during the fourth fiscal quarter of fiscal 2012, we believe this information aids in the comparison between the years presented. The pro forma information does not purport to represent what our results of operations would have been had the Merger and related transactions actually occurred at the beginning of the years indicated, and they do not purport to project our results of operations or financial condition for any future period. The following table contains selected pro forma income statement data for 2012 compared to selected pro forma income statement data for fiscal year 2011,

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including such data as a percentage of net sales. See "—Unaudited Pro Forma Condensed Consolidated Financial Information" below.

	Pro Forma Fiscal Years Ended
	March 31, 2012			% of Net Sales			April 2, 2011			% of Net Sales
	(Amounts in thousands, except percentages)
Net Sales:
99¢ Only Stores	$	1,488,094			97.2	%	$	1,380,357			96.9	%
Bargain Wholesale		43,602			2.8			43,521			3.1
Total sales		1,531,696			100.0			1,423,878			100.0
Cost of sales (excluding depreciation and amortization expense shown separately below)		914,777			59.7			842,756			59.2
Gross profit		616,919			40.3			581,122			40.8
Selling, general and administrative expenses:
Operating expenses		461,530			30.1			438,170			30.8
Depreciation		42,488			2.8			39,338			2.8
Amortization of intangible assets		1,764			0.1			1,766			0.1
Total selling, general and administrative expenses		505,782			33.0			479,274			33.7
Operating income		111,137			7.3			101,848			7.2
Other (income) expenses:
Interest income		(320	)		(0.0	)		(865	)		(0.1	)
Interest expense		69,629			4.5			70,476			4.9
Other-than-temporary investment impairment due to credit loss		357			0.0			129			0.0
Other		(182	)		(0.0	)		(82	)		(0.0	)
Total other expense, net		69,484			4.5			69,658			4.9
Income before provision for income taxes		41,653			2.7			32,190			2.3
Provision for income taxes		19,624			1.3			14,203			1.0
Net income	$	22,029			1.4	%	$	17,987			1.3	%

For the Period from January 15, 2012 to March 31, 2012 (Successor)

        Net sales.    Total net sales for the Successor period were $338.9 million, an 11-week period. Net retail sales for the Successor period were $329.4 million. Bargain Wholesale net sales were $9.5 million in the Successor period.

        During the Successor period, we added six new stores: five in California and one in Texas. We did not close any stores during the Successor period. On March 31, 2012, we had 298 stores. Gross retail square footage as of March 31, 2012 was approximately 6.29 million.

        Gross profit.    During the Successor period, gross profit was $135.1 million. As a percentage of net sales, overall gross margin was 39.9% during the Successor period. Among gross profit components, cost of products sold was 57.5% of net sales for the Successor period. Freight costs for the Successor period were 0.2% and shrinkage was 2.4% of net sales.

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        Operating expenses.    During the Successor period, operating expenses were $110.5 million. As a percentage of net sales, operating expenses were 32.6% for the Successor period. Retail operating expenses for the Successor period were 21.5% of net sales. Distribution and transportation expenses were 4.6% of net sales for the Successor period. Corporate operating expenses for the Successor period were 3.2% of net sales. The remaining operating expenses for the Successor period were 3.3% of net sales. The Successor period included legal and professional fees of $10.6 million related to the Merger.

        Depreciation and amortization.    During the Successor period, depreciation and amortization of intangibles were $11.4 million and $0.4 million, respectively. Depreciation was 3.4% of net sales and amortization was 0.1% of net sales. Depreciation and amortization expense in the Successor period includes the step-up in basis to fair value of our property and equipment and revaluation of intangible assets as a result of the Merger.

        Operating income.    Operating income was $12.9 million for the Successor period. Operating income was 3.8% of net sales.

        Other expense, net.    Other expense was $16.1 million for the Successor period, which included $16.2 million of interest expense, reflecting debt service on borrowings used to finance the Merger. The interest income for the Successor period was not significant due to liquidation of a substantial part of our previously-held investment portfolio.

        Provision for income taxes.    The income tax provision in the Successor period was $2.1 million. The effective tax rate for the Successor period was (65.9%). The effective combined federal and state income tax rates are higher than the statutory rates due to non-deductibility of certain transaction costs associated with the Merger.

        Net loss.    As a result of the items discussed above, we recorded a net loss of $5.3 million. Net loss as a percentage of net sales was (1.6%) during the Successor period.

For the Period from April 3, 2011 to January 14, 2012 (Predecessor)

        Net sales.    Total net sales for the 2012 Predecessor period were $1,192.8 million, a 41-week period. Net retail sales for the 2012 Predecessor period were $1,158.7 million. Bargain Wholesale net sales were $34.1 million in the Successor period.

        During the 2012 Predecessor period, we added seven new stores: three in California, two in Arizona, one in Nevada, and one in Texas. We did not close any stores in California during the Predecessor period.

        Gross profit.    During the 2012 Predecessor period, gross profit was $481.8 million. As a percentage of net sales, overall gross margin was 40.4% during the Predecessor period. Among gross profit components, cost of products sold was 56.7% of net sales for the 2012 Predecessor period. Freights costs for 2012 Predecessor period were 0.4% and shrinkage were 2.5% of net sales.

        Operating expenses.    During the 2012 Predecessor period, operating expenses were $376.1 million. As a percentage of net sales, operating expenses were 31.5%. Retail operating expenses for the 2012 Predecessor period were 21.8% of net sales. Distribution and transportation expenses were 4.7% of net sales. Corporate operating expenses were 3.4% of net sales. Other operating expenses for the period were 1.7% of net sales. The 2012 Predecessor period included legal and professional fees of $15.2 million related to the Merger.

        Depreciation and amortization.    During the 2012 Predecessor period, depreciation and amortization was $21.9 million. Depreciation and amortization was 1.8% of net sales.

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        Operating income.    Operating income was $83.8 million for the 2012 Predecessor period. Operating income as a percentage of net sales was 7.0%.

        Other income/expense, net.    Other expense was $0.3 million for the 2012 Predecessor period, of which $0.4 million was investment impairment charges related to credit losses on our auction rate securities and $0.4 million related to interest expense. The interest income for the 2012 Predecessor period was $0.3 million.

        Provision for income taxes.    The income tax provision in the 2012 Predecessor period was $33.7 million. The effective tax rate for the 2012 Predecessor period was 40.4%. The effective combined federal and state income tax rates are higher than the statutory rates due to non-deductibility of certain transaction costs associated the Merger, partially offset by tax credits and the effect of certain revenues and/or expenses that are not subject to taxation.

        Net income.    As a result of the items discussed above, we recorded a net income of $49.8 million. Net income as a percentage of net sales was 4.2%.

Fiscal Year Ended April 2, 2011 Compared to Fiscal Year Ended March 27, 2010

        Net sales.    Total net sales increased $68.7 million, or 5.1%, to $1,423.9 million in fiscal 2011, a 53-week period, from $1,355.2 million in fiscal 2010, a 52-week period. Net retail sales increased $66.1 million, or 5.0%, to $1,380.4 million in fiscal 2011 from $1,314.2 million in fiscal 2010, and include the benefit of one additional week included in the fourth quarter of fiscal 2011, which contributed an additional $26.9 million of retail sales. Of the remaining $39.2 million increase in net retail sales, $9.5 million was due to a 0.7% increase in comparable stores net sales for all stores open at least 15 months in fiscal 2011 and 2010, calculated on a comparable 52-week period. The comparable stores net sales increase was attributable to a 1.0% increase in transaction counts and a decrease in average ticket size by 0.3% to $9.58 from $9.61. The full year fiscal 2011 effect of new stores opened in fiscal 2010 increased sales by $20.9 million and the effect of 11 new stores opened during fiscal 2011 increased net retail sales by $16.0 million, based on a 52-week period. The increase in sales was partially offset by a decrease in sales of approximately $7.2 million due to the effect of closing one store in California upon expiration of its lease during fiscal 2011 and closing 12 stores in Texas and one store in California during fiscal 2010. Bargain Wholesale net sales increased approximately by $2.6 million, or 6.3%, to $43.5 million in fiscal 2011 from $41.0 million in fiscal 2010. Of the $2.6 million increase in Bargain Wholesale net sales, $1.0 million was due to the effect of the additional week included in the fourth quarter of fiscal 2011.

        During fiscal 2011, we added eleven new stores: six in California, two in Arizona and three in Texas. We closed one store in California during fiscal 2011. At the end of fiscal 2011, we had 285 stores compared to 275 as of the end of fiscal 2010. Gross retail square footage at the end of fiscal 2011 and fiscal 2010 was 6.05 million and 5.86 million, respectively. For 99¢ Only Stores open all of fiscal 2011, the average net sales per estimated saleable square foot, on a comparable 52-week period, was $291 and the average annual net sales per store were $4.9 million, including the Texas stores open for the full year. Western states stores net sales averaged $5.1 million per store and $307 per square foot. Texas stores open for a full year averaged net sales of $3.4 million per store and $181 per square foot.

        Gross profit.    Gross profit increased $23.7 million, or 4.3%, to $581.1 million in fiscal 2011 from $557.4 million in fiscal 2010. As a percentage of net sales, overall gross margin decreased to 40.8% in fiscal 2011 from 41.1% in fiscal 2010. Among gross profit components, cost of products sold increased to 56.4% of net sales for fiscal 2011compared to 56.1% of net sales for fiscal 2010 due to merchandise price increases and a shift in product mix. The freight costs for fiscal 2011 increased by 30 basis points compared to fiscal 2010. For fiscal 2011, shrinkage decreased to 2.5% of net sales compared to 2.6% of

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net sales for fiscal 2010. The remaining change was made up of decreases in other less significant items included in cost of sales.

        Operating expenses.    Operating expenses decreased by $0.6 million, or 0.1%, to $436.0 million in fiscal 2011 from $436.6 million in fiscal 2010. As a percentage of net sales, operating expenses decreased to 30.6% for fiscal 2011 from 32.2% for fiscal 2010. Of the 160 basis point decrease in operating expenses as a percentage of net sales, retail operating expenses decreased by 40 basis points, distribution and transportation costs decreased by 20 basis points, corporate expenses decreased by 30 basis points, and other items decreased by 70 basis points as described below.

        Retail operating expenses for fiscal 2011 decreased as a percentage of net sales by 40 basis points to 22.5% of net sales, compared to 22.9% of net sales for fiscal 2010. The majority of the decrease as a percentage of net sales was due to lower rent expenses and lower payroll-related expenses as a result of improvement in labor productivity. These decreases were partially offset by a slight increase in outside service fees, advertising and various other expenses as a percentage of net sales.

        Distribution and transportation expenses for fiscal 2011 decreased as a percentage of net sales by 20 basis points to 4.7% of net sales, compared to 4.9% of net sales for fiscal 2010. The decrease as a percentage of net sales was primarily due to overall improvements in efficiencies.

        Corporate operating expenses for fiscal 2011 decreased as a percentage of net sales by 30 basis points to 3.2% of net sales, compared to 3.5% of net sales for fiscal 2010. The decrease was primarily due to lower payroll and payroll related expenses and various other expenses which were partially offset by a slight increase in repair and maintenance costs.

        The remaining operating expenses for fiscal 2011 decreased as a percentage of net sales by 70 basis points to 0.3% of net sales, compared to 1.0% for fiscal 2010. The decrease in other operating expenses was primarily due to the reduction of stock-based compensation by approximately $4.8 million, compared to fiscal 2010, related to a decrease in performance stock unit expense. The performance stock unit expense was higher in fiscal 2010 because the majority of the performance criteria were met in fiscal 2010. In addition, the decrease in other operating expenses in fiscal 2011, compared to fiscal 2010, was due to the proceeds from a legal settlement from a third party administrator related to workers' compensation of approximately $2.2 million, which was received in fiscal 2011, and net lease termination and closing costs of approximately $2.5 million, which were included in fiscal 2010.

        Depreciation and amortization.    Depreciation and amortization increased $0.2 million, or 0.8%, to $27.6 million in fiscal 2011 from $27.4 million in fiscal 2010. The increase was primarily a result of new depreciable assets added as a result of new store openings. Depreciation decreased to 1.9% from 2.0% of net sales due to the increase in sales.

        Operating income.    Operating income was $117.5 million for fiscal 2011 compared to operating income of $93.4 million for fiscal 2010. Operating income as a percentage of net sales was 8.3% in fiscal 2011 compared to operating income as a percentage of net sales of 6.9% in fiscal 2010. This was primarily due to the changes in gross margin and operating expenses discussed above.

        Other income, net.    Other income increased to $0.7 million in fiscal 2011 compared to $0.1 million in fiscal 2010. The increase in other income of $0.6 million was primarily due to a lower investment impairment charge of $0.1 million for fiscal 2011 compared to an investment impairment charge of $0.8 million for fiscal 2010 related to credit losses on our available for sale securities. This change was offset by lower interest income which decreased to $0.9 million for fiscal 2011 from $1.1 million for fiscal 2010, primarily due to lower interest rates. Interest expense decreased to $0.1 million for fiscal 2011 compared to interest expense of $0.2 million for fiscal 2010.

        Provision for income taxes.    The income tax provision in fiscal 2011 was $43.9 million compared to $33.1 million in fiscal 2010, due to the increase in pre-tax income. The effective tax rate for fiscal 2011

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was 37.1% compared to an effective tax rate of 35.4% for fiscal 2010. The effective tax rate for fiscal 2011 was higher than fiscal 2010, primarily due to a one-time benefit of approximately $1.4 million in fiscal 2010 related to the expiration of the statutes of limitations related to uncertain tax positions, which equates to an approximately 1% reduction in effective tax rate for fiscal 2010. The effective combined federal and state income tax rates are less than the statutory rates in each period due to tax credits and the effect of certain revenues and/or expenses that are not subject to taxation.

        Net income.    As a result of the items discussed above, net income increased $13.9 million, or 22.9%, to $74.3 million in fiscal 2011 from $60.4 million in fiscal 2010. Net income as a percentage of net sales increased to 5.2% in fiscal 2011 from 4.5% in fiscal 2010.

Supplemental Analysis—Pro Forma Fiscal Year Ended March 31, 2012 Compared to Pro Forma Fiscal Year Ended April 2, 2011

        Net sales.    Total net sales increased $107.8 million, or 7.6%, to $1,531.7 million in pro forma fiscal 2012, a 52-week period, from $1,423.9 million in pro forma fiscal 2011, a 53-week period. Net retail sales increased $107.7 million, or 7.8%, to $1,488.1 million in pro forma fiscal 2012 from $1,380.4 million in pro forma fiscal 2011. Bargain Wholesale net sales increased approximately by $0.1 million, or 0.2%, to $43.6 million in pro forma fiscal 2012 from $43.5 million in pro forma fiscal 2011. Of the $107.7 million increase in net retail sales, $97.9 million was due to a 7.3% increase in comparable stores net sales. The comparable stores net sales increase was attributable to approximately 4.9% increase in transaction counts and increase in average ticket size by approximately 2.3% to $9.81 from $9.58. The full year pro forma fiscal 2012 effect of stores opened in fiscal 2011 increased sales by $24.9 million and the effect of 13 new stores opened during pro forma fiscal 2012 increased net retail sales by $19.9 million, based on a 52-week period. The increase in retail sales was partially offset by the impact of one additional week included in the fourth quarter of fiscal 2011, resulting in $26.9 million of additional retail sales, and by a decrease in sales of approximately $2.0 million due to the effect of the closing of one store in California upon expiration of its lease during pro forma fiscal 2011. The increase in Bargain Wholesale net sales was partially offset by the extra week of $1.0 million in pro forma fiscal 2011.

        During pro forma fiscal 2012, we added 13 new stores: eight in California, two in Arizona, one in Nevada, and two in Texas. We did not close any stores in California during pro forma fiscal 2012. As of March 31, 2012, we had 298 stores compared to 285 as of the end of fiscal 2011. Gross retail square footage March 31, 2012 and April 2, 2011 was approximately 6.29 million and 6.05 million, respectively. For 99¢ Only Stores open during all of pro forma fiscal 2012, the average net sales per estimated saleable square foot, on a comparable 52-week period, was approximately $309 and the average annual net sales per store were approximately $5.2 million, including the Texas stores open for the full year.

        Gross profit.    Gross profit increased $35.8 million, or 6.2%, to $616.9 million in pro forma fiscal 2012 from $581.1 million in pro forma fiscal 2011. As a percentage of net sales, overall gross margin decreased to 40.3% in pro forma fiscal 2012 from 40.8% in pro forma fiscal 2011. Among gross profit components, cost of products sold increased to 56.9% of net sales for pro forma fiscal 2012 compared to 56.4% of net sales for pro forma fiscal 2011 due to merchandise price increases and a shift in product mix. Freight costs for pro forma fiscal 2012 increased by 20 basis points compared to pro forma fiscal 2011. For pro forma fiscal 2012 and pro forma fiscal 2011, shrinkage was flat at 2.5% of net sales. The remaining change was made up of decreases in other less significant items included in cost of sales.

        Operating expenses.    Operating expenses increased by $23.4 million, or 5.3%, to $461.5 million in pro forma fiscal 2012 from $438.2 million in fiscal pro forma 2011. As a percentage of net sales, operating expenses decreased to 30.1% for fiscal pro forma 2012 from 30.8% for fiscal pro forma 2011. Of the 70 basis point decrease in operating expenses as a percentage of net sales, retail operating

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expenses decreased by 80 basis points, distribution and transportation costs were flat, corporate expenses increased by 10 basis points, and other items were flat as described below.

        Retail operating expenses for pro forma fiscal 2012 decreased as a percentage of net sales by 70 basis points to 21.8% of net sales, compared to 22.5% of net sales for pro forma fiscal 2011. The majority of the decrease was due to payroll-related expenses and occupancy expenses, primarily resulting from increases in same-store sales. These decreases were partially offset by a slight increase in repairs and maintenance expenses as a percentage of net sales.

        Distribution and transportation expenses were flat at 4.7% as a percentage of net sales for both pro forma fiscal 2012 and pro forma fiscal 2011.

        Corporate operating expenses for fiscal pro forma 2012 increased as a percentage of net sales by 10 basis points to 3.4% of net sales, compared to 3.3% of net sales for pro forma fiscal 2011. The increase as a percentage of net sales was primarily due to legal costs which were partially offset by decreases in payroll and payroll-related expenses.

        The remaining operating expenses for pro forma fiscal 2012 were flat as a percentage of net sales at 0.2% of net sales compared to pro forma fiscal 2011 due to lower stock-based compensation costs in pro forma fiscal 2012, offset by the proceeds from a legal settlement from a third party administrator related to workers' compensation of approximately $2.2 million which was received in pro forma fiscal 2011.

        Depreciation and amortization.    Depreciation increased $3.2 million, or 8.0%, to $42.5 million in pro forma fiscal 2012 from $39.3 million in pro forma fiscal 2011. The increase was primarily the result of adding new depreciable assets from new store openings. Depreciation as a percentage of net sales was 2.8% for both pro forma fiscal 2012 and pro forma fiscal 2011. Amortization was $1.8 million in both pro forma fiscal 2012 and pro forma fiscal 2011.

        Operating income.    Operating income was $111.1 million for pro forma fiscal 2012 compared to operating income of $101.9 million for pro forma fiscal 2011. Operating income as a percentage of net sales was 7.3% in pro forma fiscal 2012 compared to 7.2% in pro forma fiscal 2011. This was primarily due to the changes in operating expenses partially offset changes in gross margin discussed above.

        Other income/expense, net.    Other expense, net was $69.5 million and $69.7 million for pro forma fiscal years 2012 and 2011, respectively. Other expense, net in pro forma fiscal years 2012 and 2011 primarily included $69.6 million and $70.5 million in interest expense, reflecting debt service on borrowings used to finance the Merger. The interest income for pro forma fiscal 2012 was $0.3 million compared to the interest income of $0.9 million for the pro forma fiscal 2011.

        Provision for income taxes.    The income tax provision in pro forma fiscal 2012 was $19.6 million compared to $14.2 million in pro forma fiscal 2011, due to the increase in pre-tax income. The effective tax rate for pro forma fiscal 2012 was 47.1% compared to an effective tax rate of 44.1% for pro forma fiscal 2011. The effective combined federal and state income tax rates for pro forma fiscal 2012 and 2011 are higher than the statutory rates in each period due to non-deductible tax differences arising out of the Merger.

        Net income.    As a result of the items discussed above, pro forma net income increased $4.0 million, or 22.5%, to $22.0 million in pro forma fiscal 2012 from $18.0 million in pro forma fiscal 2011. Net income as a percentage of net sales was 1.4% in pro forma fiscal 2012 and 1.3% in pro forma fiscal 2011.

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Unaudited Pro Forma Condensed Consolidated Financial Information

        The following unaudited pro forma condensed consolidated statements of operations have been developed by applying pro forma adjustments to our audited statement of operations for the fiscal year ended April 2, 2011 and our consolidated financial statements for the Predecessor period from April 3, 2011 through January 14, 2012, and for the Successor period from January 15, 2012 to March 31, 2012. The unaudited pro forma condensed consolidated statements of operations for the fiscal year ended April 2, 2011 and fiscal year ended March 31, 2012 gives effect to the Merger as if it had occurred on March 28, 2010.

        The unaudited pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable under the circumstances. The unaudited pro forma condensed consolidated financial data is presented for informational purposes only. The unaudited pro forma condensed consolidated financial data does not purport to represent what our results of operations would have been had the Merger actually occurred on the dates indicated and does not purport to project our results of operations for any future period. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the information contained in other sections of this prospectus including "Selected Consolidated Historical Financial Data," our historical audited consolidated financial statements and related notes thereto, and other sections of this "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing elsewhere in this prospectus. All pro forma adjustments and their underlying assumptions are described more fully in the notes to our unaudited pro forma condensed consolidated statements of operations.

        The unaudited pro forma condensed consolidated financial information has been prepared to give effect to the Merger including the accounting for the acquisition of our business as a purchase business combination in accordance with ASC 805, "Business Combinations."

        The unaudited pro forma condensed consolidated statements of operations do not reflect non-recurring charges that have been incurred in connection with the Merger, including (i) certain non-recurring expenses related to the Merger estimated at approximately $25.8 million, and (ii) the

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stock-based compensation expense of approximately $1.0 million relating to the accelerated vesting of stock based awards to management and associates that vested as a result of the Merger.

	For the Fiscal Year Ended March 31, 2012
	Historical Successor			Historical Predecessor			Pro Forma Adjustments			Pro Forma
	(Amounts in thousands)
Net Sales:
99¢ Only Stores	$	329,361		$	1,158,733		$	—		$	1,488,094
Bargain Wholesale		9,555			34,047			—			43,602
Total sales		338,916			1,192,780			—			1,531,696
Cost of sales (excluding depreciation and amortization expense shown separately below)		203,775			711,002			—			914,777
Gross profit		135,141			481,778			—			616,919
Selling, general and administrative expenses:
Operating expenses		110,477			376,122			(25,069)	(a)		461,530
Depreciation		11,361			21,855			9,272	(b)		42,488
Amortization of intangible assets		374			14			1,376	(c)		1,764
Total selling, general and administrative expenses		122,212			397,991			(14,421	)		505,782
Operating income		12,929			83,787			14,421			111,137
Other (income) expenses:
Interest income		(29	)		(291	)		—			(320	)
Interest expense		16,223			381			53,025	(d)		69,629
Other-than-temporary investment impairment due to credit loss		—			357			—			357
Other		(75	)		(107	)		—			(182	)
Total other expense, net		16,119			340			53,025			69,484
(Loss) income before provision for income taxes		(3,190	)		83,447			(38,604	)		41,653
Provision for income taxes		2,103			33,699			(16,178)	(e)		19,624
Net (loss) income	$	(5,293	)	$	49,748		$	(22,426	)	$	22,029

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	For the Fiscal Year Ended April 2, 2011
	Historical Predecessor			Pro Forma Adjustments			Pro Forma
	(Amounts in thousands)
Net Sales:
99¢ Only Stores	$	1,380,357		$	—		$	1,380,357
Bargain Wholesale		43,521			—			43,521
Total sales		1,423,878			—			1,423,878
Cost of sales (excluding depreciation and amortization expense shown separately below)		842,756			—			842,756
Gross profit		581,122			—			581,122
Selling, general and administrative expenses:
Operating expenses		436,034			2,136	(a)		438,170
Depreciation		27,587			11,751	(b)		39,338
Amortization of intangible assets		18			1,748	(c)		1,766
Total selling, general and administrative expenses		463,639			15,635			479,274
Operating income		117,483			(15,635	)		101,848
Other (income) expenses:
Interest income		(865	)		—			(865	)
Interest expense		77			70,399	(d)		70,476
Other-than-temporary investment impairment due to credit loss		129			—			129
Other		(82	)		—			(82	)
Total other (income) expense, net		(741	)		70,399			69,658
Income before provision for income taxes		118,224			(86,034	)		32,190
Provision for income taxes		43,916			(29,713)	(e)		14,203
Net income (loss)	$	74,308		$	(56,321	)	$	17,987

(a)

Represents adjustments to increase historical expenses for ongoing expenses incurred in connection with the Merger and adjustments to eliminate one-time historical expenses incurred in connection with the Merger (in thousands):

	Fiscal Year Ended March 31, 2012(1)			Fiscal Year Ended April 2, 2011
Credit facility annual administration fee(i)	$	158		$	200
Favorable/unfavorable lease amortization, net(ii)		155			182
Executive compensation(iii)		583			754
Rent expenses (renegotiated leases)(iv)		788			1,000
Subtotal—ongoing expenses		1,684			2,136
One-time merger costs(v)		(26,753	)		—
Total operating expenses	$	(25,069	)	$	2,136

(1)

Represents adjustments to the predecessor period from April 3, 2011 to January 14, 2012, as the successor period from January 15, 2012 to March 31, 2012 already includes these adjustments.

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(i)

Represents adjustments to administrative fees associated with the First Lien Term Facility and the ABL Facility in connection with the Merger.

(ii)

Represents adjustments resulting from the amortization of favorable lease assets and unfavorable lease liability recorded in connection with the Merger, amortized on a straight-line basis over the remaining lease terms of each lease.

(iii)

Represents adjustments to compensation expense resulting from new executive salaries of certain named executives based on new employment arrangements in connection with the Merger.

(iv)

Represents adjustments resulting from the renegotiation of certain leases with the Rollover Investors and their affiliates in connection with the Merger.

(v)

Represents adjustments to eliminate one-time historical expenses incurred in connection with the Merger, principally legal and financial advisory fees.

(b)

Represents adjustments resulting from the step-up of depreciable property and equipment of approximately $150 million depreciated on a straight-line basis over their respective remaining useful lives.

(c)

Represents adjustments resulting from the increase in the estimated fair market values of finite-lived intangible assets. Finite-lived intangibles include the Rinso and Halsa private label brands which will be amortized over a remaining useful life of 20 years and the Bargain Wholesale customer relationships which will be amortized over a remaining useful life of 12 years.

(d)

Represents the following adjustments to interest expense, net (in thousands):

	Fiscal Year Ended March 31, 2012(1)		Fiscal Year Ended April 2, 2011
Pro forma cash interest expense(i)	$	48,160	$	65,864
Pro forma deferred financing costs amortization expense(i)		4,865		4,535
Less: interest expense, historical(ii)		—		—
Additional expense	$	53,025	$	70,399

(1)

Represents adjustments to the predecessor period from April 3, 2011 to January 14, 2012, as the successor period from January 15, 2012 to March 31, 2012 already includes these adjustments.

(i)

Reflects the adjustments to interest expense as a result of the increase in annual interest expense associated with borrowings under the First Lien Term Facility and the issuance of Senior Notes, including the amortization of deferred financing costs associated with Senior Notes, the First Lien Term Facility and the ABL Facility and accretion of the original issue discount associated with the First Lien Term Facility. The deferred financing costs and original issue discount is being recognized over the respective terms of the debt agreements using the effective interest method.

(ii)

Historical interest expense has not been adjusted for interest income as amounts are not material and has not been adjusted for interest related to tax matters.

(e)

To reflect the tax effect of the pro forma adjustments, using a combined federal and state statutory tax rate of approximately 40%, and excludes adjustments that result in no tax benefit.

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Effects of Inflation

        We experienced increases in health care costs, fuel costs and some vendor prices during the Predecessor and Successor periods of fiscal 2012. During fiscal 2011, inflation had a minimal impact on our overall operations. Increases in various costs due to future inflation may impact our operating results to the extent that such increases cannot be passed along to our customers. See "Risk Factors—Risks Related to Our Business—Inflation may affect our ability to keep pricing almost all of our merchandise at 99.99¢ or less" in this prospectus.

Liquidity and Capital Resources

        We historically funded our operations principally from cash provided by operations, short-term investments and cash on hand, and until the Merger, did not generally rely upon external sources of financing. After the Merger, our primary sources of liquidity are the combination of net cash flow from operations, existing cash balances and the availability under the Credit Facilities described in this prospectus. Our capital requirements result primarily from purchases of inventory, expenditures related to new store openings, working capital requirements for new and existing stores, debt service requirements and other obligations.

Credit Facilities and Outstanding Notes

        On January 13, 2012, in connection with the Merger, we obtained Credit Facilities provided by a syndicate of lenders arranged by Royal Bank of Canada as administrative agent, as well as other agents and lenders that are parties to these Credit Facilities. The Credit Facilities include (a) $175 million in commitments under the ABL Facility, and (b) an aggregate principal amount under the First Lien Term Loan Facility amounting to $525 million. At the closing of the Merger, $10 million of the ABL Facility was drawn on January 13, 2012 to finance a portion of the Merger consideration and transaction expenses, and in February 2012, we repaid the entire $10 million.

First Lien Term Loan Facility

        The First Lien Term Loan Facility provides for $525 million of borrowings (which may be increased by up to $150.0 million in certain circumstances). All obligations under the First Lien Term Loan Facility are guaranteed by Parent and each of our direct or indirect wholly owned subsidiaries (collectively, the "Credit Facilities Guarantors"). In addition, the First Lien Term Loan Facility is secured by pledges of certain of our equity interests and the equity interests of each Credit Facilities Guarantor.

        We are required to make scheduled quarterly payments each equal to 0.25% of the original principal amount of the term loan (approximately $1.3 million), with the balance due on the maturity date, January 13, 2019. Borrowings under the First Lien Term Loan Facility bear interest at an annual rate equal to an applicable margin plus, at our option, (A) a Base Rate determined by reference to the highest of (a) the prime rate of Royal Bank of Canada (3.25% as of March 31, 2012), (b) the federal funds effective rate plus 0.50% and (c) an adjusted Eurocurrency rate for one month (determined by reference to the greater of the Eurocurrency rate for the interest period multiplied by the Statutory Reserve Rate or 1.50% per annum) plus 1.00%, or (B) an Adjusted Eurocurrency Rate. The applicable margin used is 5.50% for Eurocurrency loans and 4.50% for base rate loans. As of March 31, 2012, subject to certain exceptions, the interest rate charged on the First Lien Term Loan Facility was 7.00% (1.50% Eurocurrency rate, plus the Eurocurrency loan margin of 5.50%). As of March 31, 2012, the principal amount outstanding under the First Lien Term Loan Facility was $513.6 million. See "Description of Our Credit Facilities" in this prospectus and "Note 17—Subsequent Events" to the consolidated financial statements included in this prospectus for more information regarding certain amendments to, and agreements entered into in connection with, the First Lien Term Loan Facility.

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        The First Lien Term Loan Facility includes restrictions on our ability and the ability of the Parent and certain of our subsidiaries to, incur or guarantee additional indebtedness, pay dividends on, or redeem or repurchase, our capital stock, make certain acquisitions or investments, materially change our business, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, make capital expenditures or merge or consolidate with or into, another company.

        On April 4, 2012, we amended the terms of our existing seven-year $525 million First Lien Term Facility, net of refinancing costs of $11.2 million. The amendment decreased the Applicable Margin per the London Interbank Offered Rate ("LIBOR") plus 5.50% (or base rate plus 4.50%) to LIBOR plus 4.00% (or base rate plus 3.00%) and the LIBOR floor from 1.50% to 1.25%. The maximum capital expenditures covenant in the First Lien Term Facility was amended to permit an additional $5 million in capital expenditures each year throughout the term of the First Lien Term Facility.

        During the first quarter of fiscal 2013, we entered into an interest rate swap agreement to limit the variability of cash flows associated with interest payments on our First Lien Term Loan Facility that result from fluctuations in the LIBOR rate. The swap limits our interest exposure on a notional value of $261.8 million to 1.36% plus an applicable margin of 4.00%. The term of the swap is from November 29, 2013 through May 31, 2016. The fair value of the swap on the trade date was zero as we neither paid nor received any value to enter into the swap, which was entered into at market rates.

        In addition, during the first quarter of fiscal 2013, we entered into an interest rate cap agreement. The interest rate cap agreement limits our interest exposure on a notional value of $261.8 million to 3.00% plus an applicable margin of 4.00%. The term of the interest rate cap is from May 29, 2012 to November 29, 2013. We paid $0.05 million to enter into the interest rate cap agreement.

ABL Facility

        The ABL Facility provides for up to $175.0 million of borrowings (which may be increased by up to $50.0 million in certain circumstances), subject to certain borrowing base limitations. All obligations under the ABL Facility are guaranteed by the Company, our immediate Parent, 99 Cents Only Stores (Nevada) and 99 Cents Only Stores, Texas Inc. (collectively, the "ABL Guarantors"). The ABL Facility is secured by substantially all of our assets and the assets of the ABL Guarantors.

        Borrowings under the ABL Facility bear interest for an initial period until June 30, 2012 at an applicable margin plus, at our option, a fluctuating rate equal to (A) the highest of (a) Federal Funds Rate plus 0.50%, (b) rate of interest determined by agent as "Prime Rate" (3.25% at the date of the Merger), and (c) Adjusted Eurocurrency Rate (determined to be the LIBOR rate multiplied by the Statutory Reserve Rate) on day for an Interest Period of one (1) month plus 1.00% or (B) the Adjusted Eurocurrency Rate. Thereafter, borrowings under the ABL Facility will have variable pricing and will be based, at our option, on (a) LIBOR plus an applicable margin to be determined or (b) the determined base rate plus an applicable margin to be determined, in each case based on a pricing grid depending on average daily excess availability for the most recently ended quarter. The interest rate charged on borrowings under the ABL Facility from the date of the Merger until March 31, 2012 was 4.25% (the base rate (prime rate at 3.25%) plus the applicable margin of 1.00%).

        In addition to paying interest on outstanding principal under the Credit Facilities, we are required to pay a commitment fee to the lenders under the ABL Facility on unutilized commitments at a rate of 0.375% for the period from the date of the Merger until June 30, 2012. Thereafter, the commitment fee will be adjusted at the beginning of each quarter based upon the average historical excess availability of the prior quarter. We must also pay customary letter of credit fees and agency fees.

        As of March 31, 2012, we had no outstanding borrowings under the ABL Facility. See "Description of Our Credit Facilities" in this prospectus and "Note 17—Subsequent Events" to the consolidated

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financial statements included in this prospectus for more information regarding certain amendments to the ABL Facility.

        The ABL Facility includes restrictions on our ability, and the ability of the Parent and certain of our subsidiaries to, incur or guarantee additional indebtedness, pay dividends on, or redeem or repurchase, our capital stock, make certain acquisitions or investments, materially change our business, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, make capital expenditures or merge or consolidate with or into, another company. The ABL Facility was amended on April 4, 2012 to permit an additional $5 million in capital expenditures for each year during the term of the ABL Facility.

11% Senior Notes due 2019

        On December 29, 2011, we issued $250 million of outstanding notes. The outstanding notes are guaranteed by each of our subsidiaries, 99 Cents Only Stores Texas, Inc. and 99 Cents Only Stores (Nevada) (the "Senior Notes Guarantors").

        In connection with the issuance of the outstanding notes, we entered into a registration rights agreement that requires us to conduct this exchange offer enabling holders to exchange the outstanding notes for exchange notes, subject to the terms and conditions set forth in this prospectus.

        Pursuant to the terms of the indenture governing the exchange notes, we may redeem all or a part of the exchange notes at certain redemption prices applicable based on the date of redemption.

        The exchange notes will be (i) junior in right of payment to all of our existing and future indebtedness and that of the Senior Notes Guarantors; (ii) unconditionally guaranteed on a senior unsecured unsubordinated basis by the Senior Notes Guarantors; and (iii) junior to the liabilities of our subsidiaries that are not guarantors. We are not required to make any mandatory redemptions or sinking fund payments, and may at any time or from time to time purchase notes in the open market.

        The indenture governing the exchange notes contains covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to incur or guarantee additional indebtedness, create or incur certain liens, pay dividends or make other restricted payments, incur restrictions on the payment of dividends or other distributions from our restricted subsidiaries, make certain investments, transfer or sell assets, engage in transactions with affiliates, or merge or consolidate with other companies or transfer all or substantially all of our assets.

        As of March 31, 2012, we were in material compliance with the terms of the indenture governing the outstanding notes.

Cash Flows

        Net cash provided by operating activities in the 2012 Successor period, the 2012 Predecessor period, fiscal 2011 and fiscal 2010 was $22.0 million, $44.3 million, $79.8 million, and $74.9 million, respectively, consisting primarily of $6.8 million, $58.8 million, $117.3 million, and $89.9 million, respectively, of net income adjusted for depreciation and other non-cash items. Net cash provided by (used in) working capital activities was $15.2 million, $(15.4) million, $(37.2) million and $(12.9) million in the 2012 Successor period, 2012 Predecessor period, fiscal 2011 and fiscal 2010, respectively. Net cash provided by working capital activities during the 2012 Successor period primarily reflects decreases in inventories and deposits and other assets and an increase in accrued expenses, which were partially offset by a decrease in accounts payable. Net cash provided by working capital activities during 2012 Predecessor period primarily reflects the increases in inventories and a decrease workers' compensation liability, which were partially offset by the increase in accounts payable, accrued expenses and a decrease in income tax receivable. Net cash used by working capital activities in fiscal 2011 primarily reflects the increases in inventories, deposits and other assets, and income taxes receivable and a

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decrease in workers' compensation liability, which were partially offset by the increase in accounts payable and a decrease in accounts receivable. Net cash used by working capital activities in fiscal 2010 primarily reflects the increases in inventories and income taxes receivable, which were partially offset by the increases in accounts payable, accrued expenses and workers' compensation liability. During the 2012 Successor period, our inventories decreased by $17.9 million. The decrease in inventories was primarily due to seasonal (primarily Easter) inventory. During the 2012 Predecessor period, our inventories increased by approximately $42.5 million. The increase in inventories was primarily due to purchase of seasonal (primarily Easter) items and opportunistic buys. In fiscal 2011, our inventories increased by approximately $20.0 million compared to fiscal 2010, primarily due to growth in the number of stores and increased in-stock levels at the stores.

        Net cash used in investing activities in the 2012 Successor period was $1,293.3 million, primarily as a result of the Merger that required cash payments of $1,477.6 million. Net cash used in investing activities during the 2012 Predecessor period was $36.6 million. Net cash used in investing activities during fiscal 2011 and fiscal 2010 was $86.7 million and $83.6 million, respectively. In the 2012 Successor period, 2012 Predecessor period, fiscal 2011 and fiscal 2010, we used $13.2 million, $33.6 million, $61.1 million, and $34.8 million, respectively, for property acquisitions, leasehold improvements, fixtures and equipment for new store openings, information technology projects and other capital projects. In the 2012 Successor period, 2012 Predecessor period, fiscal 2011 and fiscal 2010, the we received cash inflows of $24.5 million, $226.8 million, $43.6 million, and $31.5 million, respectively, from the sale and maturity of available for sale securities, and paid $6.3 million, $52.6 million, $69.3 million, and $81.1 million, respectively, for the purchases of investments. The investing activities in the 2012 Successor period, 2012 Predecessor period, fiscal 2011 and fiscal 2010 also reflect the proceeds of $1.9 million, $0.1 million, $0.2 million and $0.8 million, respectively, from the disposal and sale of fixed assets.

        Net cash provided by financing activities in the 2012 Successor period was $1,267.7 million, and primarily reflected proceeds of $774.5 million from debt issuances and $535.9 million in equity contributions, partially offset by payment of debt issuance costs of $31.4 million and repayments of debt of $11.3 million. Net cash provided by financing activities in the 2012 Predecessor period was $7.0 million, consisting primarily of proceeds of $3.4 million from the exercise of stock options partially offset by payments of $1.7 million to satisfy employee tax obligations related to the issuance of performance stock units as part of our Predecessor equity incentive plan. Net cash provided by financing activities during fiscal 2011 was $3.7 million, consisting primarily of proceeds of $5.0 million from the exercise of stock options partially offset by payments of $2.3 million to satisfy employee tax obligations related to the issuance of performance stock units as part of our Predecessor equity incentive plan. Net cash provided by financing activities during fiscal 2010 was $6.7 million, consisting primarily of proceeds of $7.8 million from the exercise of stock options partially offset by payments of $2.7 million to satisfy employee tax obligations related to the issuance of performance stock units as part of our Predecessor equity incentive plan. We also paid approximately $0.3 million to acquire the remaining non-controlling interest in a partnership during fiscal 2010.

        We estimate that total capital expenditures in fiscal year 2013 will be approximately $51 million and relate primarily to approximately $34 million for leasehold improvements and fixtures and equipment for new store openings, approximately $12 million for information technology projects and approximately $5 million for other capital projects. We intend to fund our liquidity requirements in fiscal 2013 from net cash provided by operations, short-term investments, and cash on hand.

Off-Balance Sheet Arrangements

        As of March 31, 2012, we had no off-balance sheet arrangements.

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Contractual Obligations

        The following table summarizes our consolidated contractual obligations (in thousands) as of March 31, 2012.

	Payment due by period
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Debt obligations	$	763,601	$	5,250	$	10,500	$	10,500	$	737,351
Interest payments(a)		402,480		56,619		112,240		111,088		122,533
Capital lease obligations		431		77		172		182		—
Operating lease obligations		233,479		46,683		81,117		49,688		55,991
Purchase obligations(b)		109,146		109,109		37		—		—
Deferred compensation liability		5,136		—		—		—		5,136
Total	$	1,514,273	$	217,738	$	204,066	$	171,458	$	921,011

(a)

Includes interest expense on fixed and variable debt. Variable debt interest expense based on amended First Lien Facility Agreement; see "Note 17—Subsequent Events" to the consolidated financial statements included in this prospectus.

(b)

Purchase obligations primarily consist of purchase orders for merchandise.

        We do not have any liabilities related to uncertain tax positions as of March 31, 2012. See "Note 5—Income Tax Provision" to the consolidated financial statements included in this prospectus.

Lease Commitments

        We lease various facilities under operating leases (except for one location that is classified as a capital lease), which will expire at various dates through fiscal year 2031. Most of the lease agreements contain renewal options and/or provide for fixed rent escalations or increases based on the Consumer Price Index. Total minimum lease payments under each of these lease agreements, including scheduled increases, are charged to operations on a straight-line basis over the term of each respective lease. Most leases require us to pay property taxes, maintenance and insurance. Rental expense charged to operating expenses for the periods of January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012 was $13.1 million and $44.0 million, respectively. Rental expense charged to operations in fiscal 2011 and 2010 were approximately $56.7 million and $60.7 million, respectively. We typically seek leases with a five-year to ten-year term and with multiple five-year renewal options. See "Business—Properties" in this prospectus. The large majority of our store leases were entered into with multiple renewal periods, which are typically five years and occasionally longer.

Variable Interest Entities

        At March 31, 2012 and April 2, 2011, we no longer have any variable interest entities.

Seasonality and Quarterly Fluctuations

        We have historically experienced and expect to continue to experience some seasonal fluctuations in our net sales, operating income, and net income. The highest sales periods for us are the Christmas, Halloween and Easter seasons. A proportionately greater amount of our net sales and operating and net income is generally realized during the quarter ended on or near December 31. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of certain holidays such as Easter, the timing of new store openings and the merchandise mix.

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New Authoritative Standards

        In April 2011, FASB issued ASU 2011-04, "Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs") ("ASU 2011-04"). ASU 2011-04 amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. The new guidance is effective for fiscal year and interim periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have any impact on our consolidated financial position or results of operations.

        In June 2011, FASB issued ASU 2011-05, "Presentation of Comprehensive Income," (ASU 2011-05). ASU 2011-05 allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While ASU 2011-05 changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. The new guidance is effective for fiscal year and interim periods beginning after December 15, 2011. The adoption of ASU 2011-05 did not have any impact on our consolidated financial position or results of operations, other than presentation.

        On September 15, 2011, the FASB issued ASU No. 2011-08 concerning the testing of goodwill for impairment. This guidance modifies goodwill impairment testing by allowing the inclusion of qualitative factors in the assessment of whether a two-step goodwill impairment test is necessary. Thus, entities are no longer required to calculate the fair value of a reporting unit unless they conclude through an assessment of qualitative factors that it is more likely than not that the unit's carrying value is greater than its fair value. When an entity's qualitative assessment reveals that goodwill impairment is more likely than not, the entity must perform the two-step goodwill impairment test. The adoption of ASU 2011-08 did not have any impact on our consolidated financial position or results of operations.

        On December 23, 2011, the FASB issued ASU 2011-12, which indefinitely defers the provision of ASU 2011-5 related to the requirement that entities present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. The adoption of ASU 2011-12 did have any impact on our consolidated financial position or results of operations, other than presentation.

Quantitative and Qualitative Disclosures About Market Risk

        We are exposed to interest rate risk for our debt borrowings and to investments in marketable securities.

        Our principal interest rate exposure relates to outstanding amounts under our Credit Facilities. As of March 31, 2012, we had variable rate borrowings of $523.7 million under our First Lien Term Facility and no borrowings under our ABL Facility. The maximum commitment under our ABL Facility was $175 million on March 31, 2012. The Credit Facilities provide interest rate options based on certain indices as described in "Note 6—Debt" to the consolidated financial statements included in this prospectus. A change in interest rates on variable rate debt impacts our pre-tax earnings and cash flows. Based on our variable rate borrowing levels, the annualized effect of a 1% point increase in applicable interest rates would result in a reduction of our pre-tax earnings and cash flows of approximately $5.2 million. Assuming all revolving loans are drawn under the $175 million ABL Facility, a 1% change in applicable interest rate would result in a reduction of our pre-tax earnings and cash flow by approximately $1.8 million.

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        During the first quarter of fiscal year 2013, we entered into interest rate swap and an interest rate cap agreements to hedge against rising interest rates associated with our First Lien Term Facility. Additional information relating to our derivative instruments is presented in "Note 17—Subsequent Events" to the consolidated financial statements included in this prospectus.

        At March 31, 2012, the Company had $3.6 million in securities maturing at various dates through April 2042. We intend to liquidate all available for sale securities within one year. At March 31, 2012, our investment portfolio contains money market funds and auction rate securities, and therefore, should not bear any interest risk due to early disposition. At March 31, 2012, the fair value of our investments approximated the carrying value.

Management's Report on Internal Control Over Financial Reporting

        Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, pursuant to Rule 13a-15(c) of the Securities Exchange Act. This system is intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

        A company's internal control over financial reporting includes policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

        Management uses the framework in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations ("COSO") of the Treadway Commission, for evaluating the effectiveness of the Company's internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies or procedures may deteriorate.

        Based on its assessment, management concluded that the Company's internal control over financial reporting was effective as of March 31, 2012. The Company's independent registered public accounting firm, BDO USA LLP, has audited the Company's consolidated financial statements and has issued an attestation report on the effectiveness of the Company's internal control over financial reporting, which is included in this prospectus.

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BUSINESS

Our Company

        With over 29 years of operating experience, we are a leading operator of extreme value retail stores in the southwestern United States with 298 stores located in the states of California (219 stores), Texas (37 stores), Arizona (29 stores) and Nevada (13 stores) as of March 31, 2012. Our stores offer consumable products with an emphasis on name brands and our items are primarily priced at 99.99¢ or less. We carry a wide assortment of regularly available products as well as a broad variety of first-quality closeout merchandise. We carry many fresh produce, deli, dairy and frozen food products found in traditional grocery stores, which we sell at generally lower, sometimes significantly lower, prices. Our core philosophy is that every item in our store be a good to great value. We believe that our differentiated merchandise mix, combined with outstanding value, enables us to appeal to a broad consumer demographic, increases overall customer traffic and frequency of customer visits, as well as strengthens customer loyalty. Our stores are significantly larger than traditional dollar stores, enabling us to offer a wider assortment of merchandise and provide our customers with a spacious, comfortable shopping experience.

        In pro forma fiscal 2012, on a comparable 52-week period, our stores open for the full year averaged net sales of $5.2 million per store and $309 per estimated saleable square foot, which we believe is the highest among all dollar store chains. We opened 13 new stores during pro forma fiscal 2012, including eight stores in California, two in Arizona, one in Nevada and two in Texas. We did not close any stores during pro forma fiscal 2012. In fiscal 2013, we plan to increase our store count by approximately 10%, with the majority of new stores expected to be opened in California during the second half of fiscal 2013.

        We also sell merchandise through our Bargain Wholesale division at prices generally below normal wholesale levels to retailers, distributors and exporters. The Bargain Wholesale division complements our retail operations by exposing us to a broader selection of opportunistic buys and generating additional sales with relatively small incremental operating expenses. Bargain Wholesale represented 2.8% of our total sales in pro forma fiscal 2012.

Our Competitive Strengths

Differentiated Retail Concept

        We believe our stores offer consumers an extreme value shopping experience that is unique in our industry due to:

•

Our current average store size of approximately 21,000 gross square feet and our target average store size of approximately 18,000 gross square feet, both of which are significantly larger than traditional dollar stores, enabling us to carry a wider assortment of merchandise in a clean, attractive and comfortable shopping environment;

•

Our large selection of food and grocery items, which at approximately 56% of gross sales is higher than traditional dollar stores, and includes many of the fresh produce, deli, dairy and frozen food items found in traditional grocery stores, generally at lower, sometimes significantly lower, prices. We believe our extensive food and grocery offerings drive recurring traffic from customers who rely on 99¢ Only Stores for their weekly household needs;

•

Our wide assortment of closeout merchandise, which helps create an atmosphere of treasure-hunt excitement within our stores. We believe that our wide assortment of closeout merchandise is a competitive advantage as many of our competitors lack the supplier relationships, management expertise or logistical capabilities to handle as large a percentage of sales as we do in closeout merchandise; and

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•

Our core philosophy that every item in our store be a good to great value.

        We believe that our differentiated merchandise mix, combined with outstanding value, drives increased overall traffic, frequency of customer visits, and strong customer loyalty, which enables us to have the most productive stores among leading U.S. publicly reporting dollar store chains when ranked by sales per store and average sales per square foot.

Attractive Industry Fundamentals

        The U.S. dollar store industry is large and growing, and we believe benefits from a number of attractive industry fundamentals which will continue to support our growth, including:

•

Historical and projected growth in dollar store revenues driven by the addition of new dollar stores and the increasing acceptance of dollar stores among consumers;

•

Strong same store sales growth among U.S. publicly reporting dollar store chains, which are outperforming many other retail channels, particularly U.S. publicly reporting traditional grocery stores;

•

Within the dollar store industry, the opportunity for larger chains, including 99¢ Only, to grow faster than the overall industry, the balance of which consists of independent store operators; and

•

Strong historical performance by dollar stores throughout economic cycles.

        We believe that these attractive industry fundamentals, when combined with the large population size and favorable income and demographic attributes within our existing markets, represent growth opportunities for 99¢ Only.

Leading Store Footprint

        We have over 29 years of experience owning and operating our stores. We currently operate a large network of extreme value retail stores in California and have a strong presence in other southwestern states. Our stores are typically clustered in and around densely populated areas. We believe that many of our stores are more convenient than traditional "big box" retailers who typically occupy larger buildings that are located in less urban areas as a result of their store size requirements. We have clustered many of our stores around major cities we serve which enable us to leverage our strong brand awareness as well as achieve significant economies of scale in the areas of advertising, distribution and store logistics. We believe that our store footprint is a competitive advantage and would be difficult to replicate.

        We believe that our southwestern markets have attractive attributes that support our business model. Our markets generally have large, growing and ethnically diverse populations. Many of the cities we serve are significantly underpenetrated and have high proportions of low-income consumers, as well as nearby middle and upper middle income consumers, who we believe are increasingly shopping dollar stores.

Strong Supplier Relationships and Sourcing Expertise

        We believe that our sourcing expertise and our long-standing, mutually beneficial supplier relationships are competitive advantages. Many of our suppliers have been supplying products to us for over 20 years. We are a trusted partner and a preferred buyer to our suppliers, many of whom we believe contact 99¢ Only first when they are selling closeout inventory. We believe we are a preferred buyer due to our ability to, among other things:

•

Make immediate buying decisions;

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•

Acquire large volumes of inventory and take possession of goods immediately;

•

Pay cash or accept abbreviated credit terms; and

•

Purchase goods that have a shorter than normal shelf life or are off-season or near the end of a selling season.

        Our preferred buyer status is further supported by the fact that we have never cancelled a purchase order in our history. We believe our supplier relationships are also strengthened by our ability to minimize channel conflict for the manufacturer as well as our ability to quickly and discreetly sell products through well-maintained, attractively merchandised stores, which protects the supplier's brand image.

Strong Financial Performance and Compelling Unit Economics

        Our store base is profitable and growing. Our stores continue to demonstrate strong revenue growth, having posted positive same stores sales growth in 9 out of the 10 past years with same store sales growth of 7.3% in pro forma fiscal 2012.

        With our industry-leading store sales productivity metrics, our new store model generates attractive cash on cash returns. Our newly opened stores ramp up quickly and typically reach near full sales volumes within the first 12 months. Historically, our new stores have demonstrated relatively consistent profitability levels as a percentage of sales across fiscal years. Our stores have a low cost operating model with attractive margins, low maintenance capital expenditures and low ongoing working capital needs.

Experienced and Committed Management Team and Financial Sponsors

        Our experienced management team, which includes members of our Company's founding family, has guided us through our recent strategic and operating initiatives and the Merger transaction, and remains committed to our business. Our three executive officers have been with our Company for an average of over 20 years. Our management team is augmented by the addition of our financial sponsors, both of whom have considerable experience in the retail industry.

Our Business Strategy

Continue to Deliver Great Merchandise at Exceptional Value to Our Customers

        Our merchandising strategy is centered around our core philosophy that every item in the store be a good to great value. Our convenient retail format, differentiated product offering and strong value proposition appeal to a broad consumer demographic and have been the cornerstones of our success. By continuing to leverage our sourcing expertise, vendor relationships, existing store network and economies of scale in purchasing, warehousing and distribution, we believe that we will be able to further strengthen our brand, increase our revenues and enhance our profitability.

Further Strengthen Our Merchandising Strategy

        We plan to continue improving our merchandise assortment and in-store merchandising. We believe that opportunities exist to increase the average sales transaction size by reducing the frequency of out of stock items, optimizing display size, improving cross merchandising of related products (e.g., flashlights adjacent to batteries), implementing additional plan-o-gram sections and enhancing category management. In addition, we believe that considerable opportunities exist to increase the sales of private label and directly sourced imported products which typically carry higher than average gross margins. By improving our merchandising strategy we believe we can increase our sales and profitability and improve customer satisfaction.

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Continue to Improve Store Operations and Logistics

        We intend to continue to implement best practices to strengthen the operational performance of our stores. At the store level, we intend to optimize the flow of goods to and through the store, reduce stocking costs, improve product displays and better utilize our shelf space. We also believe there are opportunities to further improve our operations through automated replenishment, automated labor scheduling and time and attendance tracking to better control our product flow and store level expenses. At our warehouses, we intend to continue to drive operating efficiencies through consolidating and improving our warehouse, labor and logistics systems as well as drive integrated supply chain initiatives to reduce operating costs. Through our operationally focused strategies, we believe we can further improve our profitability and competitive position.

Pursue Measured Store Growth

        Our proven new store model, which has been refined over the past 29 years, enables us to identify and successfully open new stores. This process leverages the expertise of our real estate team which has a detailed understanding of the markets in which we compete, currently available and potential real estate locations, and local demographics which are required to support a successful new store.

        We believe that considerable opportunities exist to open new stores within our existing markets. Following the Merger, we currently intend to open an average of approximately 25 to 30 stores per annum over the next five years, the majority of which are expected to be in California and substantially all of which are expected to be leased. We believe that by continuing to open stores in our markets we can continue to grow our brand awareness, increase sales and leverage our existing infrastructure.

Retail Operations

        Our stores offer customers a wide assortment of regularly available consumer goods, as well as a broad variety of quality, closeout merchandise, which we sell at generally significant discounts from standard retail prices. Merchandise sold in our 99¢ Only stores is priced primarily at or below 99.99¢ per item.

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        The following table sets forth certain relevant information with respect to our retail operations (dollar amounts in thousands, except percentages and sales per square footage):

	Years Ended
	March 31, 2012(a)			April 2, 2011			March 27, 2010			March 28, 2009			March 29, 2008
	(Pro Forma)			(Predecessor)			(Predecessor)			(Predecessor)			(Predecessor)
Net retail sales	$	1,488,094		$	1,380,357	(d)	$	1,314,214		$	1,262,119		$	1,158,856
Annual net retail sales growth rate		7.8	%		5.0	%(d)		4.1	%		8.9	%		8.9	%
Store count at beginning of year		285			275			279			265			251
New stores		13			11			9			19			16
Stores closed		—	(b)		1	(e)		13	(g)		5	(i)		2	(k)
Total store count at year-end		298			285			275			279			265
Average net sales per store open the full years(m)	$	5,152	(c)	$	4,874	(f)	$	4,848	(h)	$	4,642	(j)	$	4,547	(l)
Estimated store saleable square foot		4,948,344			4,758,432			4,606,728			4,703,630			4,521,091
Average net sales per estimated saleable square foot(m)	$	309	(c)	$	291	(f)	$	289	(h)	$	273	(j)	$	263	(l)
Change in comparable net sales(n)		7.3	%		0.7	%		3.9	%		3.7	%		4.0	%

(a)

The amount in pro forma fiscal year ended March 31, 2012 column represent the mathematical combination of the Predecessor financial data from April 3, 2011 to January 14, 2012 and the Successor financial data from January 15, 2012 to March 31, 2012 included in the consolidated financial statements.

(b)

For pro forma fiscal 2012, there were no closed stores.

(c)

Includes 35 Texas stores open for a full year. Texas stores open for the full year on a comparable 52-week period had average sales of $3.6 million per store and average sales per estimated saleable square foot of $197. All Western States stores open for the full year on a comparable 52-week period had average sales of $5.4 million per store and $326 of average sales per estimated saleable square foot.

(d)

For fiscal 2011, net retail sales were $1,380.4 million and based on a 53-week period, compared to a 52-week period for the other periods presented.

(e)

One California store was closed due to the expiration of its lease.

(f)

Includes 32 Texas stores open for a full year. Texas stores open for the full year on a comparable 52-week period had average sales of $3.4 million per store and average sales per estimated saleable square foot of $181. All Western States stores open for the full year on a comparable 52-week period had average sales of $5.1 million per store and $307 of average sales per estimated saleable square foot.

(g)

12 underperforming stores in Texas were closed in fiscal 2010 and one California store was closed due to the expiration of its lease. See "Note 11—Texas" to the consolidated financial statements included in this prospectus for additional information regarding the Texas Market.

(h)

Includes 31 Texas stores open for a full year. Texas stores open for the full year had average sales of $3.4 million per store and average sales per estimated saleable square foot of $180. All Western States stores open for the full year had average sales of $5.0 million per store and $305 of average sales per estimated saleable square foot.

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(i)

Four underperforming stores in Texas were closed in fiscal 2009 and one additional Texas store was closed due to a hurricane which was re-opened in May 2009. The leases had expired for two of the four stores that were closed in fiscal 2009.

(j)

Includes 39 Texas stores open for a full year. Texas stores open for the full year had average sales of $2.7 million per store and average sales per estimated saleable square foot of $142. All Western States stores open for the full year had average sales of $5.0 million per store and $301 of average sales per estimated saleable square foot.

(k)

Two underperforming stores closed in Houston, Texas.

(l)

Includes 39 Texas stores open for a full year. Texas stores open for the full year had average sales of $2.6 million per store and average sales per estimated saleable square foot of $128. All Western States stores open for the full year had average sales of $4.9 million per store and $291 of average sales per estimated saleable square foot.

(m)

For stores open for the entire fiscal year.

(n)

Change in comparable store net sales compares net sales for all stores open at least 15 months. The Company normally does not relocate stores or close them if renovations are taking place. In a rare situation where a store is relocated, or closed and later re-opened at the same location, the relocated or re-opened store is considered a new store for any comparable store sales analysis, and would only be included in the comparable store sales analysis once it has been open, or re-opened, for 15 months.

        Merchandising.    All of our stores offer a broad variety of first-quality, name-brand and other closeout merchandise as well as a wide assortment of regularly available consumer goods. We also carry private-label consumer products made for us. Our merchandising strategy is centered on our philosophy that every item in our store be a good to great value. We believe that the success of our 99¢ Only stores concept arises in part from the value inherent in pricing consumable items primarily at 99.99¢ or less per item, many of which are name-brands, and most of which typically retail elsewhere at higher prices.

        Approximately 55% of our gross sales are from products available for reorder including many branded consumable items. The mix and the specific brands of merchandise frequently changes, depending primarily upon the availability of closeout and other special-situation merchandise at suitable prices. Approximately 45% of our sales are from closeout merchandise, which represents a significantly larger percentage of closeout merchandise than traditional dollars stores, some of whom carry few or no closeouts. Since commencing our closeout purchasing strategy for our stores, we have been able to obtain sufficient name-brand closeouts, as well as re-orderable merchandise, at attractive prices. We believe that the frequent changes in specific name-brands and products found in our stores from one week to the next, encourage impulse and larger volume purchases, result in customers shopping more frequently, and help to create a sense of urgency, fun and excitement. Unlike many extreme value retailers, we rarely impose limitations on the quantity of specific value-priced items that may be purchased in a single transaction.

        We differentiate ourselves from traditional dollar stores by offering a wider assortment of food and grocery items, including perishables, which collectively account for approximately 56% of our revenue. Substantially all of our stores have free-standing fresh and refrigerated produce displays as well as built-in refrigerated and frozen food wall units. We believe that many of our customers shop at our stores weekly for their groceries and frequently shop 99¢ Only first before supplementing these purchases at other food stores.

        We estimate that approximately one-third of our sales are derived from products produced outside the United States, varying depending on the season and closeout activity. In addition to our significant name-brand offerings, we offer secondary and generic brands, plus a smaller portion of domestically and internationally sourced private label merchandise. We believe that opportunities exist to increase the volume of private label and directly sourced foreign merchandise.

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        Our retail sales by product category for pro forma fiscal 2012, fiscal 2011 and fiscal 2010 are set forth below:

	Years Ended
	March 31, 2012			April 2, 2011			March 27, 2010
	(Pro Forma)			(Predecessor)			(Predecessor)
Product Category:
Food and grocery		56	%		55	%		54	%
Household and housewares		14	%		14	%		14	%
Health and beauty care		9	%		10	%		10	%
Hardware		3	%		3	%		3	%
Stationery and party		6	%		5	%		5	%
Seasonal		4	%		4	%		4	%
Other		8	%		9	%		10	%
		100	%		100	%		100	%

        We target value-conscious consumers from a wide range of socio-economic backgrounds with diverse demographic characteristics. Purchases are by cash, credit card, debit card or EBT (electronic benefit transfers). Our stores currently do not accept checks or manufacturer's coupons. Our stores are open every day except Christmas, with operating hours designed to meet the needs of families.

        Store Size, Layout and Locations.    We strive to provide stores that are attractively merchandised, brightly lit, clean, well-maintained, "destination" locations. Our stores are typically clustered around densely populated areas where it is convenient for our customers to do their weekly household shopping. The layout of each of our stores is customized to the configuration of the individual location. The interior of each store is designed to reflect a generally uniform format, featuring attractively displayed products in windows, consistent merchandise displays, bright lighting, low shelving height that allows visibility throughout the store, customized check-out counters and a distinctive color scheme on its interior and exterior signage, price tags, baskets and shopping bags. We emphasize a strong visual presentation in all key traffic areas of each store. Merchandising displays are maintained and updated throughout the day and often incorporate seasonal themes to improve our customers' shopping experience. We believe that the frequently changing value priced name-brand products, our convenient and inviting layout, and the low shelving height help encourage the typical customer to shop more of the whole store.

        Advertising.    Advertising expenditures were $5.5 million, $5.5 million and $4.1 million or 0.4%, 0.4% and 0.3% of net retail sales for pro forma fiscal 2012, fiscal 2011 and fiscal 2010, respectively. We allocate the majority of our advertising budget to print advertising. Our advertising strategy emphasizes the offering of nationally recognized, name-brand merchandise at significant savings. We manage our advertising expenditures by an efficient implementation of our advertising program combined with word-of-mouth publicity, locations with good visibility, and efficient signage. Because of our distinctive grand opening promotional campaign, which usually includes the pricing of nine televisions and other high value items at only 99¢ each, grand openings often attract long lines of customers and receive media coverage.

Purchasing

        We believe a primary factor contributing to our success is our ability to identify and take advantage of opportunities to purchase merchandise with high customer appeal and interest at prices lower than regular wholesale. We purchase most merchandise directly from the manufacturer. Other sources of merchandise include wholesalers, manufacturers' representatives, importers, barter companies, auctions, professional finders and other retailers, varying on the season and closeout

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activity. We develop new sources of merchandise primarily by attending industry trade shows, advertising, distributing marketing brochures, cold calling, and obtaining referrals.

        We seldom have continuing contracts for the purchase of merchandise and must continuously seek out buying opportunities from both our existing suppliers and new sources. No single supplier accounted for more than 5% of the Company's total purchases in pro forma fiscal 2012. During pro forma fiscal 2012, the Company purchased merchandise from more than 999 suppliers, including 3M, Colgate-Palmolive, Dole, Energizer Battery, Frito-Lay, General Mills, Georgia Pacific, Hasbro, Heinz, Hershey Foods, Johnson & Johnson, Kellogg's, Kraft, Nestle, Procter & Gamble, Quaker and Unilever. Many of these companies have been supplying products to us for over twenty years.

        A significant portion of the merchandise purchased by us in pro forma fiscal 2012 was closeout or special-situation merchandise. We have developed strong relationships with many manufacturers and distributors who recognize that our special-situation merchandise can be moved quickly through our retail and wholesale distribution channels. Our buyers search continuously for closeout opportunities.

        Our experience and expertise in buying merchandise has enabled us to develop relationships with many manufacturers that often offer some or all of their closeout merchandise to us prior to attempting to sell it through other channels. The key elements to these supplier relationships include our (i) ability to make immediate buying decisions; (ii) experienced buying staff; (iii) willingness to take on large volume purchases and take possession of merchandise immediately; (iv) ability to pay cash or accept abbreviated credit terms; (v) commitment to honor all issued purchase orders; and (vi) willingness to purchase goods close to a target season or out of season. We believe our relationships with our suppliers are further enhanced by our ability to minimize channel conflict for a manufacturer.

        Our strong relationships with many manufacturers and distributors, along with our ability to purchase in large volumes, also enable us to purchase re-orderable name-brand goods at discounted wholesale prices. We focus our purchases of re-orderable merchandise on a limited number of stock keeping units ("SKU's") per product category, which allows us to make purchases in large volumes.

        We utilize and develop private label consumer products to broaden the assortment of merchandise that is consistently available and to maintain attractive margins. We also import merchandise in product categories such as kitchen items, housewares, toys, seasonal products, party, pet-care and hardware which we believe are not brand sensitive to consumers.

Warehousing and Distribution

        An important aspect of our purchasing strategy involves our ability to warehouse and distribute merchandise quickly and with flexibility. Our distribution centers are strategically located to the Long Beach and Los Angeles port systems, the rail yards in the City of Commerce and the major interstate arteries and to enable quick turnaround of time-sensitive products as well as sized to provide long-term warehousing capabilities for one-time closeout purchases and seasonal or holiday items. We also can receive merchandise shipped by rail to our City of Commerce, California distribution center (the "Commerce Distribution Center") which, has a railroad spur on the property.

        We utilize both our private fleet and outside carriers for our store deliveries / backhauls and vendor pick-ups. We have primarily used common carriers or owner-operators to deliver to stores outside of Southern California including our stores in Northern and Central California, Texas, Arizona and Nevada. We believe that our current California and Texas distribution centers will be able to support our anticipated growth for the next several years with planned additions of dry deep reserve capacity in California and cold distribution capacity in California (which comprises less than 10% of our distribution capacity). We believe our Texas distribution center has the capacity to support at least 150 stores. However, there can be no assurance that our existing warehouses will provide adequate storage space for our long-term storage needs or to support sales levels at peak seasons for all

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products, that high levels of opportunistic or seasonal purchases may not temporarily exceed the warehouse capacity, or that we will not make changes, including capital expenditures, to expand or otherwise modify our warehousing and distribution operations.

        We arrange with vendors of certain merchandise to ship directly to our store locations. Our primary distribution practice, however, is to have merchandise delivered from our vendors to our warehouses and then shipped to our store locations.

        Additional information pertaining to warehouse and distribution facilities is described under "Business—Properties" in this prospectus.

Information Systems

        Over the last three fiscal years, we continued to make significant investments in a variety of infrastructure, data management, and process improvement projects. These infrastructure investments enabled us to achieve level one compliance with Payment Card Industry (PCI) standards, which were certified by a qualified third party IT security firm. Additionally, store network upgrades, including high speed wireless data backup lines, were installed to assure a high level of availability and speed for credit card processing and delivery of critical item information to the stores. We made wireless network upgrades and hardware capacity improvements in fiscal 2010, which improved availability and reliability for warehouse operations to support a successful migration to a perpetual inventory system in our warehouses.

        We currently operate financial, accounting, human resources, and payroll data processing using Lawson Software's Financial and Human Resource Suites on an SQL database running on a Windows operating system. We completed a major upgrade to our Lawson financial and human resources management systems during fiscal 2009, which addressed both security and performance concerns from the prior release and converted many customized features to a standard interface approach, laying a foundation to leverage additional Lawson functionality in the coming years. In fiscal 2010, a standard sales audit package from Epicor Software Corporation was implemented with an enhancement to support short-interval intra-day polling of store systems. In fiscal 2013, we plan to further upgrade our Lawson financial and human resources management systems.

        We also implemented system improvements to support the reengineering of the processes and information flow of the Commerce Distribution Center. Primary amongst these improvements were completion of racking systems, real time pallet movement tracking through wireless command and tracking systems, a perpetual warehouse inventory system that is now updated via periodic cycle counting, and improvements in truck utilization. Additionally, cycle counts and test counts replaced and eliminated the semi-annual physical inventory counts in our Commerce Distribution Center. Additionally a transportation management system was introduced to automate the routing of all cold and dry co-loaded store deliveries and to track and report on all private fleet activity. These changes have reduced transportation costs, improved Distribution Center labor productivity and throughput, and enhanced Distribution Center inventory accounting and expiration date control.

        We also operate several proprietary systems which accommodate our unique flexibility requirements in product sourcing and acquisition that are tightly coupled with HighJump warehouse solutions. These proprietary systems include an IBM UNIX-based purchase order and inventory control system, a store ordering system that utilizes radio frequency hand-held scanning devices in each store, and a back office personal computer system at each store that collects and transmits a variety of operational data to central processing systems. In fiscal 2012, we began the migration to a new voice-picking solution and we will continue to deploy as part of an overall plan to standardize all of our warehouse operations on the current version of HighJump.

        We are continuing to focus our efforts on business process improvement, preparation for future growth and scale, enhancement of data structures, and improvement of data integrity through

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modifications to our proprietary systems and upgrades of existing vendor systems. The first stage of these improvements was to centralize and normalize more of our critical data in standard, high speed database platforms. This data integrity and normalization has continued in fiscal 2012 and included completion of core retail master data system. Over the next two to three years, we intend to differentiate and isolate proprietary systems from those functions which can be managed more cost effectively on industry standard platforms. An example of a conversion from the proprietary core to an industry standard platform in fiscal 2010 was the conversion of the sales audit function to an industry leading Epicor package solution. In fiscal 2012, we completed the process of converting to an industry leading package for Master Data Management system. In fiscal 2012 we continued the process of converting to a new Point-of-Sale barcode scanning system to record and process retail sales and began its rollout to our stores, which we expect to complete in fiscal 2013. We are currently evaluating conversion of our purchasing, inventory and accounting systems to a leading enterprise resource planning ("ERP") system and defining the processes and systems that are essential to improving the flow of product from purchasing to the store shelf.

Competition

        We face competition in both the acquisition of inventory and the sale of merchandise from other discount stores, single-price-point merchandisers, mass merchandisers, food markets, drug chains, club stores, wholesalers, and other retailers. Industry competition for acquiring closeout merchandise also includes a large number of retail and wholesale companies and individuals. In some instances these competitors are also customers of our Bargain Wholesale division. There is increasing competition with other wholesalers and retailers, including other extreme value retailers, for the purchase of quality closeout and other special-situation merchandise. Some of these competitors have substantially greater financial resources and buying power than us. Our ability to compete will depend on many factors, including the success of our purchase and resale of such merchandise at lower prices than our competitors. In addition, we may face intense competition in the future from new entrants in the extreme value retail industry that could have an adverse effect on our business and results of operations.

        We believe that we are able to compete effectively against other dollar stores as a result of our differentiated retail format, the larger size and more convenient location of our stores, our economies of scale in our operations and nearly three decades of experience operating in the industry. For products where we compete with traditional grocery stores, such as fresh produce, deli, dairy and frozen food items, we believe that we have lower to significantly lower prices than our grocery competitors and our stores are often more convenient. For products where we compete with warehouse clubs and mass merchandisers, we believe we compete effectively on the basis of generally lower prices, no membership fees, more convenient store locations and smaller, easier to navigate stores.

Employees

        At March 31, 2012, we had approximately 12,800 employees including approximately 11,500 in our retail operations, 900 in our warehousing and distribution operations and 400 in our corporate offices. We consider relations with our employees to be good. We offer certain benefits to eligible employees, including life, health and disability insurance, paid time off (vacation, holidays, and sick leave), a 401(k) plan (which we match) and a deferred compensation plan for certain of our key management employees.

        None of our employees are party to a collective bargaining agreement and none are represented by a labor union.

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Trademarks and Service Marks

        "99¢ Only Stores," "Rinso," and "Halsa" are among our service marks and trademarks, and are listed on the United States Patent and Trademark Office Principal Register. "Bargain Wholesale" is among the fictitious business names we use. We believe that our trademarks, service marks, and fictitious business names are an important but not critical element of our merchandising strategy. We routinely undertake enforcement efforts against certain parties whom we believe are infringing upon our "99¢" family of marks and our other intellectual property rights, although we believe that simultaneous litigation against all persons everywhere whom we believe to be infringing upon these marks is not feasible.

Seasonality

        We have historically experienced and expect to continue to experience some seasonal fluctuations in our net sales, operating income, and net income. The highest sales periods for us are the Christmas, Halloween and Easter seasons. A proportionately greater amount of our net sales and operating and net income is generally realized during the quarter ended on or near December 31. Our quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including the timing of certain holidays such as Easter, the timing of new store openings and the merchandise mix.

Environmental Matters

        In the ordinary course of business, we handle or dispose of commonplace household products that are classified as hazardous materials under various environmental laws and regulations. Under various federal, state, and local environmental laws and regulations, current or previous owners or occupants of property may face liability associated with hazardous substances. These laws and regulations often impose liability without regard to fault. In the future we may be required to incur substantial costs for preventive or remedial measures associated with hazardous materials. We have several storage tanks at our warehouse facilities, including: an aboveground and an underground diesel storage tank at the City of Commerce, California warehouse; ammonia storage at the Southern California cold storage facility and the Texas warehouse; aboveground diesel and propane storage tanks at the Texas warehouse; an aboveground propane storage tank at the main Southern California warehouse; an aboveground propane storage tank at our leased Slauson distribution center in City of Commerce, California; and an aboveground propane tank located at the warehouse we owned in Eagan, Minnesota, which was sold in June 2012. Except as disclosed in "—Proceedings" in this prospectus, we have not been notified of, and are not aware of, any potentially material current environmental liability, claim or non-compliance, concerning our owned or leased real estate.

Properties

        As of March 31, 2012, we owned 70 stores and leased 228 of our 298 store locations. Additionally, as of March 31, 2012, we owned six parcels of land and three buildings for potential store sites.

        Our leases generally provide for a fixed minimum rental, and some leases require additional rental based on a percentage of sales once a minimum sales level has been reached. Management believes that our stable operating history, excellent credit record, and ability to generate substantial customer traffic give us leverage when negotiating lease terms. Certain leases include cash reimbursements from landlords for leasehold improvements and other cash payments received from landlords as lease incentives. A large majority of our store leases were entered into with multiple renewal periods, which are typically five to ten years and occasionally longer. Prior to the Merger, we leased 13 store locations and a parking lot associated with one of these stores from the Rollover Investors and their affiliates, of which 12 stores were leased on a month to month basis. In connection with the Merger, we entered into new lease agreements for these 13 stores and one parking lot. Nine of these proposed new store

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lease agreements have terms expiring on January 31, 2017 and four of these new store lease agreements and new parking lot lease have terms expiring on January 31, 2022.

        The large majority of our store leases were entered into with multiple renewal options of typically five years per option. Historically, we have exercised the large majority of the lease renewal options as they arise, and anticipate continuing to do so for the majority of leases for the foreseeable future.

        The following table sets forth, as of March 31, 2012, information relating to the calendar year expiration dates our current stores leases:

Fiscal Years	Number of Leases Expiring Assuming No Exercise of Renewal Options	Number of Leases Expiring Assuming Full Exercise of Renewal Options
2012	4	3
2013 - 2015	89	6
2016 - 2018	91	12
2019 - 2023	40	39
2024 - thereafter	4	168

        We own our main distribution center and executive office facility, located in the City of Commerce, California. We also own an additional warehouse nearly adjacent to our main distribution facility.

        We own a distribution center in the Houston area to service our Texas operations.

        We also own a cold storage distribution center and lease additional warehouse facilities located near the City of Commerce, California. As our needs change, we may relocate, expand, and/or otherwise increase or decrease the size and/or costs of our distribution or warehouse facilities.

        We also owned a warehouse in Eagan, Minnesota. We commenced marketing this warehouse for sale during the fourth quarter of fiscal 2008, and it is reflected in assets held for sale in our consolidated balance sheets as of March 31, 2012. We sold the Eagan, Minnesota warehouse in June 2012.

Legal Proceedings

        In connection with our March 2011 announcement of the receipt of a going private proposal and subsequent announcement of a merger agreement in October 2011, eight complaints were filed, all in the Superior Court of California, Los Angeles County. The Actions were captioned: Southeastern Pennsylvania Transportation Authority v. David Gold, et al. (filed March 14, 2011, amended March 23, 2011); John Chevedden v. 99¢ Only Stores, et al. (filed March 16, 2011); Rana Fong v. 99¢ Only Stores, et al. (filed March 17, 2011); Norfolk County Retirement Board v. Jeff Gold, et al. (filed March 22, 2011); Tammy Newman v. 99¢ Only Stores, et al. (filed March 25, 2011); Key West Police and Fire Pension Fund v. Eric G. Flamholtz, et al. (filed April 5, 2011); Allen Mitchell v. 99¢ Only Stores, et al. (filed April 11, 2011), and Harold Litwin v. 99¢ Only Stores, et al (filed October 11, 2011). The plaintiffs in the Actions claimed to be our shareholders and proposed to represent a class of all of our public shareholders in connection with claims for purported breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty, as well as alleged deficiencies in the preliminary proxy statement. The actions were consolidated by the Court. We and the lead plaintiffs in these actions reached a settlement in November 2011, which was finalized in January 2012, that provided for: (1) certain agreed-upon supplemental disclosures (which we incorporated into our definitive proxy statement filed December 12, 2011); (2) a release of all defendants, former defendants, and various of their affiliates from all claims asserted in the action and all claims that could have been asserted based upon the same circumstances; and (3) payment by us of lead plaintiffs' legal fees and costs in an amount to be approved by the Court not to exceed $275,000. At a hearing on June 25, 2012, the Court stated that it

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would grant final approval to the settlement and award plaintiffs' legal fees and costs in the amount of $60,000 and would issue an order to that effect shortly. The order in this matter has now been entered.

Luis Palencia v. 99¢ Only Stores, Superior Court of the State of California, County of Sacramento. Plaintiff, a former assistant manager, who we employed from June 12, 2009 through September 9, 2009, filed this action in June 2010, asserting claims on behalf of himself and all others allegedly similarly situated under the California Labor Code for alleged unpaid overtime due to "off the clock" work, failure to pay minimum wage, failure to provide meal and rest periods, failure to provide proper wage statements, failure to pay wages timely during employment and upon termination and failure to reimburse business expenses. Mr. Palencia also asserted a derivative claim for unfair competition under the California Business and Professions Code. Mr. Palencia sought to represent three sub-classes: (i) an "unpaid wages subclass" of all non-exempt or hourly paid employees who worked for us in California within four years prior to the filing of the complaint until the date of certification, (ii) a "non-compliant wage statement subclass" of all our non-exempt or hourly paid employees who worked in California and received a wage statement within one year prior to the filing of the complaint until the date of certification, and (iii) an "unreimbursed business expenses subclass" of all our employees who paid for business-related expenses, including expenses for travel, mileage or cell phones in California within four years prior to the filing of the complaint until the date of certification. Plaintiff sought to recover alleged unpaid wages, interest, attorney's fees and costs, declaratory relief, restitution, statutory penalties and liquidated damages. He also sought to recover civil penalties as an "aggrieved employee" under the Private Attorneys General Act of 2004. Following a mediation of this matter, the parties entered into a settlement agreement on November 2, 2011. The Court granted preliminary approval of the settlement on April 20, 2012, and a final fairness hearing has been set for September 14, 2012. We accrued $2.2 million in the period from April 3, 2011 to January 14, 2012 for expected payments in connection with the settlement. If the settlement agreement is not approved by the Court, we cannot predict the outcome of this lawsuit.

        We recently received Notices to Comply with hazardous waste and/or hazardous materials storage requirements for certain of our stores and our distribution centers in Southern California. The agencies that have delivered such notices to us include the Los Angeles County Fire Department, Health Hazardous Materials Division, the Ventura County Environmental Health Division, the Santa Barbara County Fire Department and the City of Oxnard. The Notices concern alleged non-compliance with a variety of hazardous waste and hazardous material regulatory requirements imposed under California law identified during recent compliance inspections and require corrective actions to be taken by certain dates set forth in the Notices. We are working to implement the required corrective actions. Although the agencies can also seek civil penalties for the alleged instances of past non-compliance, even after corrective action is taken, no penalties have been demanded for any of the alleged non-compliance. If penalties are demanded by these agencies in the future, we cannot predict the amount of penalties that may be sought.

        We cannot predict the outcome of these lawsuits or the amount of potential loss, if any, we could face as a result of such lawsuits.

        We are also subject to other private lawsuits, administrative proceedings and claims that arise in our ordinary course of business. A number of these lawsuits, proceedings and claims may exist at any given time. See "Note 9—Commitments and Contingencies—Legal Matters" to the consolidated financial statements included in this prospectus for further details regarding certain of these pending matters. While the resolution of such a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, and litigation is inherently unpredictable, in management's opinion, none of these matters arising in the ordinary course of business is expected to have a material adverse effect on our financial position, results of operations or overall liquidity.

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MANAGEMENT

Directors and Executive Officers of the Company

        Below is a list of the names, ages as of June 30, 2012 and positions, and a brief account of the business experience, of certain of the individuals who serve as our executive officers and members of Parent's Board of Directors (the "Parent Board"). The Parent Board consists of 11 members, eight of whom were designated by the Sponsors.

Name	Age		Position
Eric Schiffer		51	Chief Executive Officer and Director
Jeff Gold		44	President, Chief Operating Officer and Director
Howard Gold		52	Executive Vice President, Special Projects and Director
Frank Schools		54	Interim Chief Financial Officer
Richard Anicetti		54	Director
Norman Axelrod		59	Director
Shane Feeney		42	Director
Andrew Giancamilli		62	Director
Dennis Gies		33	Director
David Kaplan		44	Chairman of the Board of Directors
Scott Nishi		37	Director
Adam Stein		36	Director

Eric Schiffer joined the Company in 1991 and has served in various managerial roles and has served as a director of the Company since 1991. In March 2000, he was promoted to President and in January 2005 to Chief Executive Officer. Prior to joining the Company, he was a venture capitalist for Oxford Partners, a venture capital firm, and an electrical engineer for Texas Instruments. Mr. Schiffer is a graduate of the Harvard Business School. Mr. Schiffer brings to the Parent Board valuable executive retail management experience, as well as financial expertise, among other areas. As a Company director and officer for the past 20 years and President and then Chief Executive Officer for the past 11 years, Mr. Schiffer will bring to the Parent Board valuable executive retail management experience, as well as financial expertise, critical leadership skills and a deep understanding of our business.

Jeff Gold joined the Company in 1984 and has served in various managerial capacities. From January 2005 to present, he has served as President and Chief Operating Officer. Mr. Gold has 27 years of experience in the retail industry, including extensive experience in executive management, real estate, store operations, logistics and information technology, among other areas. Mr. Gold holds a BA in business administration from University of California, Berkeley. Mr. Gold has 27 years of experience in the retail industry, including extensive experience in executive management, real estate, store operations, logistics and information technology, among other areas. This background will serve as a strong foundation for offering valuable perspectives and expertise to the Parent Board.

Howard Gold joined the Company in 1982 and has served in various managerial capacities. In 1991, Mr. Gold was named Senior Vice President of Distribution, and in January 2005 he was named Executive Vice President of Special Projects. Additionally, he has responsibility for the Company's allocation function and Bargain Wholesale division. Mr. Gold holds a BA in mathematics from University of California, Los Angeles. As a Company officer for the past 20 years, Mr. Gold will bring to the Parent Board a deep understanding of several core areas of our business.

Frank Schools joined the Company in February 2012 as Interim Chief Financial Officer. He is responsible for overseeing finance, accounting and strategic planning. Since 2006, Mr. Schools has been a partner with Tatum, a national professional services firm. In addition to serving as the Company's Interim Vice President and Controller from 2007 to 2008, Mr. Schools has held a variety of key finance

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positions with various other public and private companies, including serving as Vice President of Finance for Pacific Sunwear from 1994 to 2006.

Richard Anicetti is currently the President and Founder of From One To Many Leadership Consulting LLC focusing on leadership, strategic planning, process redesign and organizational change management consulting. Mr. Anicetti served as an Executive Vice President of Delhaize Group from September 2002 to May 2010. Mr. Anicetti also served as the Chief Executive Officer of Delhaize America Shared Services from January 2010 to May 2010. He served as the President and COO of Food Lion, LLC, a subsidiary of Delhaize America Inc., from September 2001 to October 2002 and Chief Executive Officer of Food Lion from October 2002 to December 2010. Mr. Anicetti joined Food Lion in August 2000. He also serves on the Board of Directors of A&P Supermarkets and is a member of a US Advisory Board for Brambles Ltd, a logistics company based in Sydney, Australia. Mr. Anicetti is also a member of the Board of Trustees for Bennett College for Women and is a member of the National Advisory Board for Duke Children's Hospital. With his more than 30 years experience and strong record of performance in the food retail industry, Mr. Anicetti will bring to the Parent Board extensive knowledge and expertise in the industries in which the Company operates.

Norman Axelrod has served as the Chairman of the board of directors of GNC Holdings, Inc. since March 2007. Mr. Axelrod was Chief Executive Officer and Chairman of the board of directors of Linens 'n Things, Inc., a retailer of home textiles, housewares and decorative home accessories, until its acquisition in February 2006. Mr. Axelrod joined Linens 'n Things as Chief Executive Officer in 1988 and was elected to the additional position of Chairman of the board in 1997. From 1976 to 1988, Mr. Axelrod held various management positions at Bloomingdale's, ending with Senior Vice President, General Merchandise Manager. Mr. Axelrod is the Chairman of the boards of directors of National Bedding Company LLC, Simmons Company and Floor and Decor Outlets of America, Inc., and also serves on the boards of directors of Maidenform Brands, Inc. and Jaclyn, Inc. Since 2007, Mr. Axelrod, through his consulting entity, NAX 18, LLC, has provided consulting services to certain entities related to Ares Management. Mr. Axelrod earned a BS in Management and Marketing from Lehigh University and an MBA from New York University. With his experience on the board of directors of a variety of companies and as the Chief Executive Officer of Linens 'n Things, Inc., Mr. Axelrod will bring to the Parent Board leadership skills and extensive knowledge of complex operational and management issues.

Shane Feeney is a Senior Principal in the Principal Investing Group of CPPIB Equity Investments, Inc. ("CPPIB Equity"), a wholly owned subsidiary of CPPIB. In 2010, Mr. Feeney joined CPPIB Equity from Bridgepoint Capital Limited in London, UK. Prior to joining Bridgepoint Capital Limited, Mr. Feeney was a partner and founding member of Hermes Private Equity Limited's direct investing business where he was involved in several UK private equity investments between 2003 and 2009. From 1998 through 2003, Mr. Feeney was an Associate Director with Morgan Grenfell Private Equity Limited in London where he worked on numerous European private equity transactions from origination to exit across multiple industry sectors. Mr. Feeney currently serves on the board of directors of Tomkins Building Products, Inc. and The Gates Corporation. Mr. Feeney received a BA in Economics from Dartmouth College and an MBA from INSEAD. Mr. Feeney will bring to the Parent Board financial expertise, as well as experience as a private equity investor evaluating and managing investments in companies across various industries and as a member of the boards of directors of other private companies.

Andrew Giancamilli served as President and Chief Executive Officer of Katz Group Canada Ltd., the Canadian subsidiary of The Katz Group of Companies, from October 2003 to February 2012. Prior to joining Katz Group Canada, Mr. Giancamilli was with Canadian Tire Corporation Ltd. from 2001 to 2003. Mr. Giancamilli also held several positions, including President and Chief Operating Officer, at Kmart Corporation from 1995 to 2001 and served as President and Chief Operating Officer of Perry Drug Stores, Inc., a U.S.-based drug store chain, from 1993 to 1995. Mr. Giancamilli serves as a Director of the National Association of Chain Drugs Stores (NACDS), is on the GS1 Canada Board,

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and has served as a Director of the Canadian Association of Chain Drug Stores (CACDS). He also has served as a member of the Board of Directors of the Canadian Opera Company, Sacred Heart Rehabilitation Center and has served as a trustee of the Detroit Opera House. With his more than 30 years experience and strong record of performance in the retail industry, Mr. Giancamilli will bring to the Parent Board extensive knowledge and expertise in the industries in which the Company operates.

Dennis Gies is a Vice President in the Private Equity Group of Ares Management. Mr. Gies joined Ares Management in 2006 from UBS Investment Bank where he participated in the execution of a variety of transactions including leveraged buyouts, mergers and acquisitions, dividend recapitalizations and debt and equity financings. Mr. Gies graduated with a MS in Electrical Engineering from UCLA and magna cum laude with a BS in Electrical Engineering from Virginia Tech. Mr. Gies will bring to the Parent Board financial expertise, as well as experience as a private equity investor evaluating and managing investments in companies across various industries.

David Kaplan is a founding member and Senior Partner of Ares Management, where he sits on the firm's Executive Committee and co-heads the Ares Private Equity Group. Mr. Kaplan joined Ares Management from Shelter Capital Partners, LLC, where he was a Senior Principal from June 2000 to April 2003. From 1991 through 2000, Mr. Kaplan was affiliated with, and a Senior Partner of, Apollo Management, L.P. and its affiliates, during which time he completed multiple private equity investments from origination through exit. Prior to Apollo Management, L.P., Mr. Kaplan was a member of the Investment Banking Department at Donaldson, Lufkin & Jenrette Securities Corp. Mr. Kaplan currently serves as a member of the board of directors of Floor and Decor Outlets of America, Inc., and as a member of the boards of directors of GNC Holdings, Inc., Stream Global Services, Inc. and Orchard Supply Hardware Stores Corporation. Mr. Kaplan's previous public company board of directors experience includes Maidenform Brands, Inc., where he served as the company's Chairman, Dominick's Supermarkets, Inc. and Allied Waste Industries Inc. Mr. Kaplan also serves on the Board of Governors of Cedars-Sinai Medical Center, is a Trustee of the Center for Early Education, is a trustee of the Marlborough School and serves on the Los Angeles Advisory Council to the University of Michigan. Mr. Kaplan graduated with High Distinction, Beta Gamma Sigma, from the University of Michigan, School of Business Administration with a BBA concentrating in Finance. Mr. Kaplan will bring to the Parent Board over 20 years of experience managing investments in, and serving on the boards of directors of, companies operating in various industries, including in the retail and consumer products industries.

Scott Nishi is a Principal in the Principal Investing Group of CPPIB Equity. Mr. Nishi joined CPPIB Equity in 2007 from Oliver Wyman, a management consultancy where he advised consumer, healthcare and technology companies. Previously, Mr. Nishi was at Launchworks, a venture capital firm that invested in early stage technology companies. Mr. Nishi holds an MBA from the Richard Ivey School of Business at the University of Western Ontario and a B.Sc. from the University of British Columbia. Mr. Nishi will bring to the Parent Board financial expertise, as well as experience as a private equity investor evaluating and managing investments in companies across various industries.

Adam Stein is a Partner in the Private Equity Group of Ares Management. Prior to joining Ares Management in 2000, Mr. Stein was a member of the Global Leveraged Finance Group at Merrill Lynch & Co. where he participated in the execution of leveraged loan, high yield bond and mezzanine financing transactions across various industries. Mr. Stein serves on the boards of directors of Floor and Decor Outlets of America, Inc., and Marietta Corporation. Mr. Stein previously served on the board of directors of Maidenform Brands, Inc. Mr. Stein graduated with distinction from Emory University's Goizueta Business School, where he received a BA in Business Administration with a concentration in Finance. Mr. Stein will bring to the Parent Board financial expertise, as well as over 10 years of experience as a private equity investor evaluating and managing investments in companies

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across various industries and as a member of the boards of directors of other retail and consumer products companies.

Board Composition and Terms

        As of June 30, 2012, our board of directors (the "Board") and the Parent Board was composed of the same eleven directors. Each director serves for annual terms or until his or her successor is elected and qualified. Pursuant to the stockholders agreement of our Parent, one of our Parent's two principal stockholders has the right to designate four members of the Parent Board and two independent members of the Parent Board, which independent directors shall be approved by the other principal stockholder, and the other principal stockholder has the right to designate two members of the Parent Board, in each case for so long as they or their respective affiliates beneficially own at least 15% of the then outstanding shares of Class A Common Stock of our Parent. The stockholders agreement provides for the election of Eric Schiffer, Jeff Gold and Howard Gold to the Parent Board, for so long as they hold the position of Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President, respectively. For more details of the stockholders agreement of our Parent, see "Certain Relationships and Related Party Transactions—Stockholders' Agreement" in this prospectus.

Board Committees

        We do not have any committees of the Board. The Parent Board has established an audit committee (the "Audit Committee") and a compensation committee (the "Compensation Committee").

Audit Committee

        The Audit Committee has the authority to supervise the auditing of our Parent and the Company and to act as liaison between the Company and its accounting firm. The members of the Audit Committee are Adam Stein (Chair), Dennis Gies, Jeff Gold and Scott Nishi.

Compensation Committee

        The Compensation Committee has the authority to review and approve the compensation of the officers of our Parent and the Company and all other officers, employees and directors of the Company, as well as the compensation philosophy, strategy, program design, and administrative practices of the Company. The members of the Compensation Committee are David Kaplan, Norman Axelrod, Shane Feeney, Eric Schiffer and Adam Stein.

Code of Ethics

        The Board has adopted a Code of Business Conduct and Ethics applicable to all of our directors, officers and employees. A copy of the Code of Business Conduct and Ethics is available on our website at www.99only.com.

Executive Compensation Discussions and Analysis

Compensation of Directors

        The Board sets the compensation for each director who is not an officer of or otherwise employed by us (a "non-executive director") based on recommendations from the Compensation Committee. Prior to the Merger, our non-executive director compensation package consisted of an annual retainer and fees for attending meetings, payable in cash, and an annual grant of stock options. The annual retainer for non-executive directors was $36,000 and board meeting fees were $1,500 for each board meeting attended. Fees for committee members attending committee meetings were $1,000 for each committee meeting attended (provided that fees were reduced to $500 for telephonic committee

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meetings that last for less than an hour and for committee meetings held on the day of a Board meeting that last less than an hour). The Audit Committee Chairperson received an annual retainer of $10,000, and the Nominating and Governance Committee Chairperson and Strategy Committee Chairperson received an annual retainer of $5,000. The Compensation Committee Chairperson received an annual retainer of $7,500. In addition, each non-executive director received an annual stock option grant under our equity incentive plan of 9,000 shares, with a per share exercise price equal to the fair market value of our common stock (as determined pursuant to the equity incentive plan).

        In connection with the Merger, non-executive directors resigned their directorships. Messrs. Axelrod, Feeney, Gies, Kaplan, Nishi and Stein became or were appointed non-executive directors of the Company. Following the Merger, non-executive directors who are employed by Ares or CPPIB are not eligible to receive compensation for their services as directors. Of the post-merger, non-executive directors, only Mr. Axelrod is not employed by Ares or CPPIB, and accordingly, he is the only non-executive director who was eligible to earn compensation for services as a director for fiscal 2012, after the Merger. Mr. Axelrod earned $12,500 in cash fees and was granted 500 options to purchase the common stock of Parent as compensation for his services in fiscal 2012 after the Merger, pursuant to a negotiated arrangement. Commencing in 2013, the Company intends to implement a new compensation policy for non-executive directors who are appointed to the Company's Board of Directors or the Board of Directors of Parent (the "Parent Board").

Director Compensation for Fiscal 2012

        The following table provides information regarding the compensation earned by or awarded to our non-executive directors who were eligible to receive compensation during fiscal 2012:

Name	Fees Earned or Paid in Cash ($)		Option Awards ($)(a)(b)(c)		All Other Compensation ($)		Total ($)
Eric Flamholtz(d)	$	58,202	$	65,423	$	—	$	123,625
Lawrence Glascott(d)	$	162,913	$	65,423	$	—	$	228,336
Marvin Holen(d)	$	160,160	$	65,423	$	—	$	225,583
Peter Woo(d)	$	151,000	$	65,423	$	—	$	216,423
Norman Axelrod(e)	$	12,500	$	194,450	$	—	$	206,950

(a)

In accordance with SEC regulations, this column represents the aggregate grant date fair value of the options awards granted to each director in fiscal 2012, computed in accordance with the provisions of ASC 718. Amounts shown in this column may not correspond to the actual value that will be realized by the named non-executive directors. Option values are estimated using the Black-Scholes pricing model. With respect to the options granted to Messrs. Flamholtz, Glascott, Holen and Woo, see "Note 10—Stock-Based Compensation Plans" to the consolidated financial statements included in this prospectus for the assumptions used to calculate grant date fair value.

(b)

In connection with the Merger, all options held by non-executive directors at the time of the Merger were cancelled in exchange for cash payments equal to the spread between the exercise price and the per share Merger consideration.

(c)

Mr. Axelrod was granted 500 options to purchase the common stock of Parent on March 22, 2012. See "Note 10—Stock-Based Compensation Plans" to the consolidated financial statements included in this prospectus for the assumptions used to calculate grant date fair value of Mr. Axelrod's options.

(d)

Messrs. Flamholtz, Glascott, Holen and Woo resigned from the Board, effective as of January 13, 2012, the date of the Merger.

(e)

Mr. Axelrod was appointed to the Board on January 13, 2012, the date of the Merger.

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Compensation Committee Interlocks and Insider Participation

        For 2012, prior to the Merger the Compensation Committee consisted of Messrs. Flamholtz, Glascott, Holen and Woo. Following the Merger, the Parent Board established the Compensation Committee, which consisted of Messrs. Axelrod, Feeney, Kaplan, Schiffer and Stein. Mr. Schiffer is the Chief Executive Officer of the Company and serves as a member of the Board and on the Compensation Committee. None of the other individuals who served as members of the Board during fiscal 2012 has at any time been an officer or employee of the Company. Messrs. Axelrod, Feeney, Kaplan and Stein have reviewed Mr. Schiffer's compensation, as disclosed herein, and do not believe that these interlocks pose any risks that are likely to have a material adverse effect on us. To our knowledge, there were no other interrelationships involving members of the Compensation Committee or other directors requiring disclosure.

Executive Compensation

Compensation Objectives

        Our compensation program with respect to our named executive officers ("executives") is designed to:

•

attract, motivate and retain individuals of outstanding abilities and experience capable of achieving our strategic business goals,

•

align total compensation with the short and long-term performance of our Company,

•

recognize outstanding individual contributions, and

•

provide competitive compensation opportunities.

        We provide ongoing income and security in the form of salary and benefits to our executives that are intended to be both attractive and competitive. We also provide our executives with short term incentives in the form of an annual cash bonus to build accountability and reward the achievement of annual goals that support our business objectives. Executives also receive long-term incentive compensation, which promotes retention and provides a link between executive compensation and value creation for the Company's shareholders over a multi-year period. Our long-term incentive compensation consists of stock options. The stock options provide compensation tied to the fair market value of our common stock and provide no compensation if the fair market value our common stock decreases below the grant value.

        Certain elements of our compensation program have changed with respect to Eric Schiffer, our CEO, Jeff Gold, our President and COO, and Howard Gold, our Executive Vice President of Special Projects, in light of the Company going from being publicly held to privately held, and of such executives selling a substantial portion of their equity in the Company in the Merger. These changes are addressed as applicable throughout this Compensation Discussion and Analysis.

Assessment of Risk

        We have reviewed our compensation policies and practices for all employees and concluded that such policies and practices are not reasonably likely to have a material adverse effect on our Company.

Elements of Compensation

        Our executive compensation program consists of three main elements:

•

base salary;

•

annual cash bonus; and

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•

stock options.

        We have chosen these primary elements because each supports achievement of one or more of our compensation objectives, and each has an integral role in our total compensation program.

        Our Compensation Committee reviews the executive compensation program and specific individual compensation arrangements of executives at least annually.

        Our CEO evaluates each executive and makes recommendations about compensation to the Compensation Committee. The Compensation Committee considers these recommendations but is ultimately responsible, together with the Board, for the approval of all executive compensation arrangements. Our CEO is not present during the Compensation Committee's deliberations about his own compensation.

        Mr. Schools is a partner with Tatum, a national professional services firm. Mr. Schools was appointed Interim Chief Financial Officer on February 10, 2012. In connection with his appointment, we entered into an interim services agreement with Tatum on February 7, 2012, providing for the services of Mr. Schools. This agreement provides for fees in the amount of $35,000 per month, and is terminable at any time by either party. Mr. Schools receives no other compensation from us.

        Base Salary.    Prior to the Merger, the base salaries of Messrs. Schiffer, Jeff Gold and Howard Gold were relatively low, at their request, due to their significant ownership of the equity of the Company. Following the Merger, their base salaries were adjusted to reflect the position, duties and responsibilities of each executive, the cost of living in Southern California, and the market for base salaries of similarly situated executives at other companies or similar size and in similar industries. Accordingly, following the Merger, Mr. Schiffer, as Chief Executive Officer, receives an annual base salary of $500,000; Mr. Jeff Gold, as President and Chief Operating Officer, receives an annual base salary of $400,000; and Mr. Howard Gold, as Executive Vice President, Special Projects, receives an annual base salary of $200,000.

        Annual Cash Bonuses.    Prior to the Merger, Messrs. Schiffer, Jeff Gold and Howard Gold did not receive annual cash bonuses at their request. Following the Merger and in connection with their new employment agreements, Messrs. Schiffer, Jeff Gold and Howard Gold will be eligible to receive annual cash bonuses targeted at 200% of their respective base salaries with a maximum annual bonus opportunity of 237.5%, in all cases, based on the performance of the Company and the level of achievement of performance goals established in advance by the Compensation Committee for each fiscal year starting with fiscal 2013.

        Long-Term Incentives.    We historically provided our executives (other than, at their election, Eric Schiffer, Jeff Gold and Howard Gold) with long-term incentive compensation through stock option awards under our previous stock option plan. Under this plan, the Compensation Committee was authorized to grant any type of award which might involve the issuance of shares of common stock, an option, warrant, convertible security, stock appreciation right or similar right or any other security or benefit with a value derived from the value of our common stock. Prior to the Merger, the Compensation Committee retained Watson Wyatt Worldwide as an independent compensation consultant to provide advice and perspective to the Compensation Committee with respect to the Compensation Committee's review of our long-term compensation program, including peer data of public company retailers. The Compensation Committee considered this data in obtaining a general understanding of then current trends in such practices. Following the Merger, the Compensation Committee has not retained an independent compensation consultant.

        In January 2008, the Compensation Committee approved grants of stock options and performance stock units ("PSUs") as a long-term, stock-based pay for performance award designed to focus our management on achieving improved operating results and delivering value to shareholders. The stock

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options and PSUs were subject to continued employment through the end of March 31, 2012 and the PSUs were also subject to the attainment of performance goals throughout this same period. In connection with the Merger, the stock options and PSUs were cancelled in exchange for the cash value of the awards. For additional information see Treatment of Stock Options and Treatment of Performance Stock Units in the Definitive Proxy Statement of 99¢ Only Stores on Schedule 14A filed with the SEC on December 12, 2011.

        In connection with the Merger, the Parent Board instituted the 2012 Stock Incentive Plan and, in March 2012, granted options to purchase the common stock of Parent to the Company's executives under such plan. Subject to the continuing employment of the executives, each stock option will vest in equal annual installments over five years and has an exercise price equal to $1,000 per share, which was the fair market value per share of Parent's common stock immediately after the Merger, and on the grant date of the options. The executives received the following grants:

Name	Options
Eric Schiffer		11,842
Jeff Gold		10,361
Howard Gold		7,401

        Deferred Compensation Plan.    As discussed below under "Deferred Compensation," we have a voluntary compensation deferral plan for highly compensated employees. Under this plan, each executive (and other highly compensated employees) may defer up to 80% of his or her base salary each year.

        401(k) Plan.    All full-time employees are eligible to participate in our 401(k) plan after 30 days of service and are eligible to receive matching contributions from the Company after one year of service. The Company matches employee contributions in cash at a rate of 100% of the first 3% of base compensation that an employee contributes, and 50% of the next 2% of base compensation that an employee contributes, with immediate vesting. Our executives are also eligible for these Company matches, subject to regulatory limits on contributions to 401(k) plans.

        Impact of Accounting and Tax Considerations.    Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), places a limit for public companies of $1,000,000 on the amount of compensation that may be deducted by the Company in any year with respect to the Chief Executive Officer and each of the Company's three most highly paid executive officers other than the Chief Executive Officer and the Chief Financial Officer. An exception is available for performance-based compensation that meets certain criteria. The grant of the PSUs did not meet the specific criteria to be deductible under Section 162(m). Following the Merger, the Company is no longer a publicly-held corporation, and therefore Section 162(m) is no longer applicable.

        Post-Termination Arrangements.    Prior to the Merger, there were no active employment or severance agreements with our executives. In connection with the Merger, we entered into employment agreements with Messrs. Schiffer, Jeff Gold and Howard Gold. The terms of these employment agreements related to post-termination compensation and compensation in the event of a "change in control" are described in detail below under "—Compensation Tables—Potential Payments Upon a Termination or Change in Control."

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Compensation Tables

Summary Compensation Table for Fiscal 2012

        The following table sets forth, for the Company's Chief Executive Officer, each person who served as the Company's Chief Financial Officer during fiscal 2012, and the Company's two most highly-compensated executive officers other than the foregoing individuals (the "Named Executive Officers"), information concerning all compensation paid to such individuals for services to the Company in all capacities during the periods indicated:

Name and Principal Position(a)	Fiscal Year		Salary ($)(b)		Bonus ($)		Option Awards ($)(c)		All Other Compensation ($)(d)		Total ($)
Eric Schiffer		2012		193,077		—		4,605,354		8,265		4,806,696
Chief Executive Officer		2011		122,308		—		—		5,302		127,610
		2010		118,802		—		—		15,791		134,593
Frank Schools		2012		70,000		—		—		—		70,000
Interim Chief Financial Officer(e)
Jeff Gold		2012		173,846		—		4,029,393		7,216		4,210,455
President and Chief Operating Officer		2011		122,307		—		—		5,045		127,352
		2010		120,000		—		—		16,736		136,736
Howard Gold		2012		135,384		—		2,878,249		5,957		3,019,590
Executive Vice President of Special Projects		2011		122,307		—		—		5,455		127,762
		2010		118,764		—		—		15,680		134,444
Robert Kautz		2012		424,337		—		—		9,898		434,235
Former Chief Financial Officer(f)		2011		458,654		225,000		—		11,195		694,849
		2010		450,000		225,000		—		10,672		685,672

(a)

Messrs. Jeff Gold and Howard Gold are the Company's only "executive officers" other than the Company's Chief Executive Officer and Chief Financial Officer.

(b)

The salaries for 2012 reflect the total salary paid to each Named Executive Officer prior to and following the Merger. Prior to the Merger, the annual base salaries for Messrs. Schiffer, Jeff Gold and Howard Gold were approximately $120,000 each. Following the Merger their annual base salaries are $500,000 for Mr. Schiffer, $400,000 for Mr. Jeff Gold and $200,000 for Mr. Howard Gold.

(c)

In accordance with SEC regulations, this column sets forth the aggregate grant date fair value of stock options computed in accordance with the provisions ASC 718. Amounts shown in this column may not correspond to the actual value that will be realized by a Named Executive Officer. Options granted to Messrs. Schiffer, Jeff Gold and Howard Gold with respect to fiscal 2012 are options to purchase the common stock of Parent. See "Note 10—Stock-Based Compensation Plans" to the consolidated financial statements included in this prospectus for the assumptions used to calculate grant date fair value.

(d)

Other compensation for Mr. Schiffer, Mr. Kautz, Jeff Gold and Howard Gold includes matching contributions under the Company's 401(k) Plan and life insurance premiums paid by the Company. Additionally, in connection with the Merger, 51,333 unvested PSUs held by Mr. Kautz were accelerated and exchanged for the Merger Consideration of $22.00 per share. Mr. Kautz received $1,129,326 in exchange for his 51,333 PSUs.

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(e)

Mr. Schools was appointed Interim Chief Financial Officer of the Company on February 10, 2012. Mr. Schools is a partner with Tatum, a national professional services firm. The Company entered into an interim services agreement with Tatum for the services of Mr. Schools, which provides for fees of $35,000 per month comprising Mr. Schools' salary reported with respect to fiscal 2012.

(f)

Mr. Kautz served as Chief Financial Officer of the Company until his resignation on February 10, 2012.

Grants of Plan-Based Awards for Fiscal 2012

        The following table sets forth information concerning awards granted to the Named Executive Officers under Parent's 2012 Stock Incentive Plan during our fiscal year ended March 31, 2012:

Name	Grant Date		All Other Option Awards: Number of Securities Underlying Options (#)(a)		Exercise or Base Price of Option Awards ($/Sh)(b)		Grant Date Fair Value of Option Awards ($)(c)
Eric Schiffer		3/22/2012		11,842		1,000.00		4,605,354
Jeff Gold		3/22/2012		10,361		1,000.00		4,029,393
Howard Gold		3/22/2012		7,401		1,000.00		2,878,249

(a)

Awards of options to purchase the common stock of Parent, granted under Parent's 2012 Stock Incentive Plan. Options vest subject to continuing employment with the Company in five equal annual installments commencing on the first anniversary of the date of grant.

(b)

The per share exercise price was the fair market value per share of Parent's stock as of the grant date of the stock options as determined by the Compensation Committee based on the capitalization of Parent immediately following the Merger.

(c)

Reflects aggregate grant date fair value of the awards computed in accordance with FASB ASC Topic 718. See "Note 10—Stock-Based Compensation Plans" to the consolidated financial statements included in this prospectus for the assumptions used to calculate grant date fair value.

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Outstanding Equity Awards at Fiscal Year End 2012

        The following table sets forth information on stock options held by the Named Executive Officers as of March 31, 2012:

Name	Number of Securities Underlying Unexercised Options (#)(a)		Option Exercise Price ($)		Option Expiration Date
	Unexercisable
Eric Schiffer		11,842		1,000.00		3/22/2022
Jeff Gold		10,361		1,000.00		3/22/2022
Howard Gold		7,401		1,000.00		3/22/2022

(a)

Awards of options to purchase the common stock of Parent granted under Parent's 2012 Stock Incentive Plan, which vest subject to continuing employment with the Company in five equal annual installments commencing on the first anniversary of the date of grant. The term of the options is 10 years from the grant date.

Options Exercises and Stock Vested during Fiscal 2012

        The following table sets forth information regarding options and stock awards, exercised and vested by the Named Executive Officers during our fiscal year ended March 31, 2012:

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)
Robert Kautz(a)		260,678		3,575,655		102,667		2,183,510

(a)

In connection with the Merger, all of Mr. Kautz's stock options were cancelled in exchange for a cash payment equal to the difference between the per share exercise price of such stock options and the per share consideration paid in the Merger, multiplied by the number of shares of the Company's common stock subject to each stock option. In fiscal 2012, 51,334 of Mr. Kautz's PSUs vested in accordance with their terms, and an additional 51,333 of Mr. Kautz's PSUs were fully vested in connection with the Merger. The value realized on vesting for all of Mr. Kautz's PSUs was calculated by multiplying the number of shares that vested by the Merger Consideration of $22.00 per share.

Deferred Compensation

        We have a deferred compensation plan to provide certain key management employees the ability to defer up to 80% of their base compensation and bonuses. The plan is an unfunded nonqualified plan. The deferred amounts and earnings thereon are payable to participants, or designated beneficiaries, at specified future dates, upon retirement or death. We do not make contributions to this plan or guarantee earnings. Funds set aside to offset plan liabilities are held in a rabbi trust, and are not available for general corporate purposes. The rabbi trust is subject to creditor claims in the event of the Company's bankruptcy or insolvency.

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Nonqualified Deferred Compensation in Fiscal 2012

Name	Executive Contributions in Last Fiscal Year ($)(a)	Registrant Contributions in Last Fiscal Year ($)	Aggregate Earnings in Last Fiscal Year ($)		Aggregate Withdrawals/ Distributions ($)	Aggregate Balance at Last Fiscal Year- End ($)(b)
Eric Schiffer			$	35,710		$	1,142,076
Jeff Gold			$	38,323		$	1,118,440
Howard Gold			$	38,520		$	1,124,116

(a)

Reflects amounts reported as compensation earned by Named Executive Officers in the Summary Compensation Table.

(b)

Reflects amounts reported as compensation earned by Named Executives Officers in the Summary Compensation Table for prior years.

Potential Payments Upon Termination or Change in Control

        The following section describes the benefits that may become payable to our Named Executive Officers, in connection with certain terminations of their employment with the Company and/or a change in control of the Company.

        In connection with the Merger, we entered into employment agreements with Messrs. Schiffer, Jeff Gold and Howard Gold. Each employment agreement provides that if the executive is terminated without "cause" (as defined in the employment agreement) or he resigns for "good reason" (as defined in the employment agreement), he will be entitled to the following benefits, contingent upon the executive executing a general release in favor of the Company: (a) severance payments equal to (i) three times his base salary plus (ii) three times his target annual incentive bonus for the year of such termination, (b) full vesting of all outstanding and then-unvested stock options, (c) payment of any unpaid incentive bonus earned for a prior fiscal year, and (d) COBRA coverage for one year at the Company's sole expense or, if earlier, until the executive becomes eligible for comparable coverage under health plans of another employer. The payments will begin on the 60^th day following such termination, with 50% of the severance payments listed in (a) above to be paid in equal payments over the course of three years in accordance with the Company's regular payroll schedule and the other 50% to be paid in three, equal annual lump sum installments. In the event that a "change in control" (as defined in the employment agreement) occurs, 100% of the stock options shall vest and become exercisable.

        In addition, upon a termination of employment, each of Messrs. Schiffer, Jeff Gold and Howard Gold is entitled to a distribution of all deferred amounts and earnings thereon held on his behalf pursuant to our deferred compensation plan described above under "—Deferred Compensation."

        Messrs. Schiffer, Jeff Gold and Howard Gold each entered into a Non-Competition, Non-Solicitation and Confidentiality Agreement with the Company in connection with the Transactions. Each agreement prohibits the executive from competing with the Company, soliciting customers or clients of the Company, or soliciting or hiring away employees of the Company during the course of the executive's employment and for a period of three years following termination of employment with the Company.

        Mr. Schools serves as Interim Chief Financial Officer pursuant to an interim services agreement with Tatum. This agreement is terminable at any time by either party without termination fees or penalties. As a result, Mr. Schools receives no severance or acceleration of equity awards upon a termination or change in control.

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        The following table sets forth information on the potential payments to the Named Executive Officers (or, in the case of Mr. Kautz, the actual payments made to him in connection with his resignation and with a change in control) upon termination or change in control, assuming a termination or change in control occurred on March 31, 2012, at which time Parent's common stock was valued at $1,000.00 per share:

Name	Cash Payment ($)			Continuation of Group Health Plans ($)		Acceleration of Vesting of Options ($)
Eric Schiffer
Termination Without Cause or With Good Reason		5,719,739	(1)		18,193		0	(3)
Termination for Cause		1,219,739	(2)		—		—
Death/Total and Permanent Disability		1,219,739	(2)		—		0	(4)
Change in Control		—			—		0	(3)
Robert Kautz
Voluntary Resignation(5)		—			—		—
Change in Control		—			—		1,129,333
Jeff Gold
Termination Without Cause or With Good Reason		4,782,286	(1)		18,193		0	(3)
Termination for Cause		1,182,286	(2)		—		—
Death/Total and Permanent Disability		1,182,286	(2)		—		0	(4)
Change in Control		—			—		0	(3)
Howard Gold
Termination Without Cause or With Good Reason		2,957,193	(1)		5,322		0	(3)
Termination for Cause		1,157,193	(2)		—		—
Death/Total and Permanent Disability		1,157,193	(2)		—		0	(4)
Change in Control		—			—		0	(3)

(1)

Cash payments include the following:

•

Mr. Eric Schiffer—(i) three times his base salary ($1,500,000), (ii) three times his target annual bonus ($3,000,000), (iii) distribution of amounts held under deferred compensation plan ($1,142,076) and (iv) accrued vacation pay ($77,663).

•

Mr. Jeff Gold—(i) three times his base salary ($1,200,000), (ii) three times his target annual bonus ($2,400,000), (iii) distribution of amounts held under deferred compensation plan ($1,118,440) and (iv) accrued vacation pay ($63,846).

•

Mr. Howard Gold—(i) three times his base salary ($600,000), (ii) three times his target annual bonus ($1,200,000), (iii) distribution of amounts held under deferred compensation plan ($1,124,116) and (iv) accrued vacation pay ($33,077).

(2)

Cash payments include the following:

•

Mr. Eric Schiffer—(i) distribution of amounts held under deferred compensation plan ($1,142,076) and (ii) accrued vacation pay ($77,663).

•

Mr. Jeff Gold—(i) distribution of amounts held under deferred compensation plan ($1,118,440) and (ii) accrued vacation pay ($63,846).

•

Mr. Howard Gold—(i) distribution of amounts held under deferred compensation plan ($1,124,116) and (ii) accrued vacation pay ($33,077).

(3)

Upon termination by us without cause or by them for good reason, all our named executives officers' unvested options would become immediately vested. As of March 31, 2012, the number of

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options subject to acceleration of vesting were as follows: Mr. Eric Schiffer—11,842; Mr. Jeff Gold—10,361; and Mr. Howard Gold—7,401. Because the fair market value of the underlying shares was the same as the exercise price as of March 31, 2012, no value is attributable to the acceleration of these options.

(4)

Upon death or permanent disability, the portion of our named executive officers' unvested options that would have vested in the 12 months following such an event would become immediately vested. As of March 31, 2012, the number of options subject to acceleration of vesting were as follows: Mr. Eric Schiffer—2,368; Mr. Jeff Gold—2,072; and Mr. Howard Gold—1,480. Because the fair market value of the underlying shares was the same as the exercise price as of March 31, 2012, no value is attributable to the acceleration of these options.

(5)

Mr. Kautz did not receive any compensation in connection with his voluntary resignation on February 10, 2012.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

        The Company is a direct subsidiary of Parent. Parent is a Delaware corporation, all of the outstanding capital stock of which is owned by Ares, CPPIB and the Rollover Investors. Parent owns 100% of the Company's Class A Common Stock, which carry substantially all of the economic rights in the Company, and 90% of the Company's Class B Common Stock, which carry de minimis economic rights and the right to vote solely with respect to the election of directors. To assist CPPIB with its regulatory requirements under the Canada Pension Plan Investment Board Act 1997 (Canada), an affiliate of Ares holds the remaining 10% of the Company's Class B Common Stock, subject to a call right that will allow Parent to repurchase such stock without the consent of such affiliate of Ares at any time for de minimis consideration. For more details on the allocation of the Company's Class A and Class B Common Stock, see "Certain Relationships and Related Party Transactions—Voting Agreement" in this prospectus.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Stockholders' Agreement

        Upon completion of the Merger, our Parent entered into a stockholders' agreement with each of its stockholders, which includes certain of our directors, employees and members of the Company's management and our principal stockholders. The stockholders' agreement gives (i) Ares Corporate Opportunities Fund III, L.P. ("ACOF") the right to designate four members of the Parent Board, (ii) ACOF the right to designate two independent members of the Parent Board, which directors shall be approved by CPPIB, and (iii) CPPIB the right to designate two members of the Parent Board, in each case for so long as they or their respective affiliates beneficially own at least 15% of the then outstanding shares of Class A Common Stock of our Parent. The stockholders' agreement provides for the election of Eric Schiffer, Jeff Gold and Howard Gold (collectively, the "Management Directors") to the Parent Board, for so long as they hold the position of Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President, respectively. The stockholders agreement also provides for certain board observer rights. Under the terms of the stockholders agreement, certain significant corporate actions require the approval of a majority of directors on the board of directors, including at least one director designated by ACOF and one director designated by CPPIB, and certain other corporate actions require the approval of at least one Management Director.

        The stockholders agreement contains significant transfer restrictions and certain rights of first offer, tag-along, and drag-along rights. In addition, the stockholders agreement contains registration rights that, among other things, require our Parent to register common stock held by the stockholders who are parties to the stockholders agreement in the event our Parent registers for sale, either for its own account or for the account of others, shares of its common stock.

        Under the stockholders agreement, certain affiliate transactions require the approval of a majority of disinterested directors, and certain affiliate transactions between our Parent, on the one hand, and Ares, CPPIB or any of their respective affiliates, on the other hand, require the approval of a majority of disinterested directors, including at least one Management Director.

Voting Agreement

        The Canada Pension Plan Investment Board Act 1997 (Canada) imposes certain share ownership limitations on CPPIB. These limitations include restrictions on CPPIB's indirect ownership levels (through Parent) of our Class B Common Stock, which has de minimis economic rights and the right to vote solely with respect to the election of directors. In order to comply with these regulations, an affiliate of Ares holds 10% of our Class B Common Stock. We have entered into a voting agreement with Parent and the affiliate of Ares pursuant to which such Class B Common Stock held by the affiliate of Ares is subject to a call right that allows Parent to repurchase such stock at any time for de minimis consideration. The voting agreement also provides, among other things, for the affiliate of Ares to take certain actions requested by Parent to elect or remove our directors.

Management Services Agreements

        Upon completion of the Merger, we and Parent entered into management services agreements with affiliates of the Sponsors (the "Management Services Agreements"). Under each of the Management Services Agreements, we and Parent agreed to, among other things, retain and reimburse affiliates of the Sponsors for certain management and financial services and provide customary indemnification to the Sponsors and their affiliates. In addition, upon completion of the Merger, we and Parent reimbursed affiliates of the Sponsors for their expenses incurred in connection with the Merger in an aggregate amount of $4.2 million.

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Agreements Regarding Lease Arrangements

        On January 13, 2012, we entered into new lease agreements (the "Leases") with the Rollover Investors for 13 stores and one store parking lot, which replaced the existing month-to-month leases. The Leases have approximate initial terms of either five or ten years and the base rents may be adjusted to market value in an aggregate amount not to exceed $1 million per annum. Rental expense for these Leases was $0.7 million for the period of January 15, 2012 to March 31, 2012 and $1.7 million for the period of April 3, 2011 to January 14, 2012. Rental expense for these Leases was $2.1 million in each of fiscal years 2011 and 2010.

Stock Purchase Agreement

        In June 2012, Parent entered into a Stock Purchase Agreement with Norman Axelrod, a director of Parent and of the Company, and AS SKIP, LLC, a Delaware limited liability company of which Mr. Axelrod is the managing member (together with Norman Axelrod, the "Purchasers"). Pursuant to the terms of the Stock Purchase Agreement, the Purchasers purchased 750 shares of Parent's Class A Common Stock and 750 shares of Parent's Class B Common Stock for an aggregate purchase price of $750,000.

Director Independence

        As of June 30, 2012, our board of directors was comprised of Richard Anicetti, Norman Axelrod, Shane Feeney, Andrew Giancamilli, Dennis Gies, Howard Gold, Jeff Gold, David Kaplan, Scott Nishi, Eric Schiffer and Adam Stein. Pursuant to the stockholders agreement of Parent, Messrs. Axelrod, Gies, Kaplan and Stein were designated by ACOF and Messrs. Feeney and Nishi were designated by CPPIB. Messrs. Anicetti and Giancamilli were designated and approved by the Sponsors. Messrs. Schiffer, Howard Gold and Jeff Gold were elected to the board of directors pursuant to the stockholders agreement of Parent. We have no securities listed for trading on a national securities exchange or in an automated inter-dealer quotation system of a national securities association which has requirements that a majority of our board of directors be independent.

Review, Approval or Ratification of Transactions with Related Persons

        Although we have not adopted formal procedures for the review, approval or ratification of transactions with related persons, the Parent Board reviews potential transactions with those parties we have identified as related parties prior to the consummation of the transaction, and we adhere to the general policy that such transactions should only be entered into if they are approved by the Parent Board, in accordance with applicable law, and on terms that, on the whole, are no more or less favorable than those available from unaffiliated third parties.

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DESCRIPTION OF OUR CREDIT FACILITIES

        The following is a summary of the material terms that are contained in the Credit Facilities. This description does not purport to be complete and is qualified in its entirety by reference to the provisions of the documents entered into or to be entered into in connection with the Credit Facilities.

        Concurrently with the closing of the Merger (the "Closing Date"), we, together with Parent and certain of Parent's subsidiaries, entered into Credit Facilities provided by a syndicate of lenders arranged by co-lead arrangers RBC Capital Markets, BMO Capital Markets, and Deutsche Bank Securities Inc. The Credit Facilities include (a) $175 million in commitments under the ABL Facility, and (b) an aggregate principal amount under the First Lien Term Facility of $525 million.

        Effective April 4, 2012, we amended the terms of the First Lien Term Facility. The amendment decreased the interest rate applicable to the term loans from LIBOR plus 5.50% (or base rate plus 4.50%) to LIBOR plus 4.00% (or base rate plus 3.00%) and the LIBOR floor from 1.50% to 1.25%. The maximum capital expenditures covenant in each of our First Lien Term Facility and its ABL Facility was amended to permit an additional $5 million in capital expenditures per year.

        The ABL Facility permits us, in certain circumstances and upon certain agreed upon terms and conditions, to (a) increase revolving commitments thereunder in an aggregate amount of up to $50 million and/or (b) refinance loans or commitments under the ABL Facility and any incremental revolving facility with one or more new revolving facilities.

        The First Lien Term Facility permits us, in certain circumstances and upon certain agreed upon terms and conditions, to (a) add one or more incremental term facilities in an aggregate amount of up to $150 million and/or (b) refinance loans under the First Lien Term Facility and any incremental term facility with one or more new term facilities.

        The ABL Facility includes a $50 million sub-limit for the issuance of letters of credit and a $17.5 million sub-limit for swingline borrowings and is subject to borrowing base and certain other restrictions. The borrowing base is calculated using a formula based on eligible receivables and eligible inventory minus reserves. Availability under the ABL Facility is also subject to customary reserves that may be imposed by the administrative agent. At the closing of the Merger, $10 million of the ABL Facility was drawn on January 13, 2012 to finance a portion of the Merger consideration and transaction expenses, and in February 2012, we repaid the entire $10 million.

        Guarantees; security.    Our obligations under the Credit Facilities are guaranteed on a joint and several basis by the Credit Facilities Guarantors. In addition, the Credit Facilities are secured by pledges (subject to permitted liens and other agreed-upon exceptions and limitations) of certain of our equity interests and the equity interests of each existing and subsequently acquired or organized direct or indirect wholly owned restricted subsidiary of Parent (collectively, the "Pledged Equity").

        The ABL Facility is secured by a first priority perfected security interest (subject to permitted liens and other agreed-upon exceptions and limitations) in all of our and the Credit Facilities Guarantors' cash, cash equivalents, accounts receivable, inventory and related intellectual property rights (collectively, the "Revolver Collateral"). The First Lien Term Facility is secured by a first priority perfected security interest (subject to permitted liens and other agreed-upon exceptions and limitations) in the Pledged Equity and substantially all of our and the Credit Facilities Guarantors' other tangible and intangible personal property and certain owned real property (collectively, the "Remaining Collateral").

        The ABL Facility is secured by a second priority perfected security interest (subject to permitted liens and other agreed-upon exceptions and limitations) in the Remaining Collateral. The First Lien Term Facility is secured by a second priority perfected security interest (subject to permitted liens and other agreed-upon exceptions and limitations) in the Revolver Collateral.

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        Interest rate; fees.    Borrowings under the ABL Facility bear interest for an initial period of two fiscal quarters ending after the Closing Date at rate per annum based, at our option, on (a) LIBOR plus 2.0% or (b) base rate plus 1.0%. Thereafter, borrowings under the ABL Facility will have variable pricing and will be based, at our option, on LIBOR or the base rate, in each case, plus an applicable margin to be determined based on a pricing grid depending on average historical excess availability for the most recently ended quarter.

        Borrowings of loans under the First Lien Term Facility bear interest, at a rate per annum, based, at our option, on (a) LIBOR plus 4.00% or (b) base rate plus 3.00%.

        In addition to paying interest on outstanding principal under the Credit Facilities, we are required to pay a commitment fee to the lenders under the ABL Facility in respect of unutilized commitments thereunder, which fee is payable quarterly in arrears and determined based on a pricing grid depending on average historical excess availability.

        Maturity; amortization.    The ABL Facility matures on the date that is five years after the Closing Date. There is no scheduled amortization under the ABL Facility. The First Lien Term Facility matures on the date that is seven years after the Closing Date. The First Lien Term Facility amortizes in equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal amount of the First Lien Term Facility with the balance payable on the seventh anniversary of the Closing Date.

        Prepayment; reduction.    Except as set forth in the following sentence, the Credit Facilities permit all or any portion of the loans outstanding thereunder to be prepaid at any time at our option without premium or penalty (except LIBOR breakage costs, if applicable). The First Lien Term Facility requires payment of a prepayment premium in connection with (a) any prepayment of loans with the proceeds of, or any conversion of loans under the First Lien Term Facility into, any new or replacement tranche of term loans bearing interest at an "effective" interest rate less than the "effective" interest rate applicable to the loans under the Term Facility and (b) any amendment to the First Lien Term Facility that directly or indirectly reduces the "effective" interest rate applicable to the loans under the First Lien Term Facility, in each case, that is effected within the first year after the effective date of such amendment. No such prepayment premium is payable in connection with a change of control.

        Subject to certain exceptions, the ABL Facility requires us to make mandatory prepayments of loans (with no reduction in commitments) thereunder with (a) the net cash proceeds of non-ordinary course asset sales and (b) casualty and condemnation proceeds, in each case in respect of collateral included in the borrowing base and upon customary terms and conditions set forth therein.

        Subject to certain exceptions, the First Lien Term Facility requires us to make mandatory prepayments of loans thereunder with (a) certain percentages of excess cash flow, with voluntary prepayments of loans under the ABL Facility (to the extent commitments thereunder are permanently reduced by the amount of such prepayment) and the First Lien Term Facility being credited against the excess cash flow prepayment obligation on a dollar-for dollar basis, (b) the net cash proceeds (including insurance and condemnation proceeds) of certain non-ordinary course asset sales and (c) the net cash proceeds of issuances of certain debt obligations after the Closing Date, in each case upon customary terms and conditions (including reinvestment rights) set forth therein.

        Covenants.    The Credit Facilities contain customary affirmative and negative covenants applicable to us, Parent and our restricted subsidiaries, including, among other things, certain limitations on our ability to (i) incur additional debt, (ii) grant liens on assets, (iii) undergo certain fundamental changes, (iv) dispose of assets (including subsidiaries) and engage in sale leasebacks, (v) make investments, acquisitions, loans and advances, (vi) make prepayments, redemptions or repurchases of junior debt, and amend or modify material documents relating thereto in a manner materially adverse to the lenders, (vii) amend or modify organizational documents in a manner materially adverse to the lenders, (viii) pay dividends and other distributions on, or make redemptions of, our equity, (ix) restrict our

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subsidiaries' ability to pay dividends or make similar distributions, (x) create or modify negative pledge clauses, (xi) enter into transactions with affiliates, (xii) make capital expenditures and (xiii) change our fiscal year, in each case subject to materiality thresholds, baskets and other exceptions and qualifications set forth therein. The ABL Facility contains a springing minimum fixed charge coverage ratio applicable to us and our restricted subsidiaries, which applies in any period in which we fail to maintain excess availability of a specified amount. The First Lien Term Facility does not contain any financial maintenance covenants.

        Events of default.    The Credit Facilities include customary events of default applicable to us, Parent and our restricted subsidiaries. Upon the occurrence of any such event of default, our obligations under the Credit Facilities may be accelerated and the lending commitments terminated. Events of default are limited to the following: our failure to pay principal of the Loans when due, our failure to pay interest, fees or other amounts after a five business day grace period, default under any covenant or agreement in any Credit Facility Document (subject, in the case of certain covenants, to specified grace periods), inaccuracy of representations or warranties in any material respect, cross default and cross acceleration to other material indebtedness (including the exchange notes) in excess of $25 million, insolvency or bankruptcy of Parent, us or our material restricted subsidiaries (with a 60 day grace period for involuntary events), material monetary judgments in an amount in excess of $25 million (to the extent not covered by insurance), certain ERISA events that could reasonably be expected to result in a material adverse effect, the actual or asserted invalidity of any material provision of any Credit Facility Document, the actual or asserted invalidity of any material security interest, the failure of any junior financing in an aggregate principal amount in excess of $25 million to be subordinated in right of payment to the obligations under the Credit Facilities, and change of control.

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DESCRIPTION OF EXCHANGE NOTES

        In this description, the terms "Issuer," "we," "us" and "our" refer to 99¢ Only, and not to any of its Subsidiaries. We issued the outstanding notes, and will issue the exchange notes, under the indenture dated as of December 29, 2011, as supplemented by the supplemental indenture dated as of January 13, 2012 (the "Indenture") among the Issuer, the Guarantors party thereto and Wilmington Trust, National Association, as trustee (the "Trustee"), in a private transaction that was not subject to the registration requirements of the Securities Act. The form and terms of the exchange notes and the outstanding notes are identical in all material respects, except that transfer restrictions, interest rate increase provisions and related registration rights applicable to the outstanding notes do not apply to the exchange notes. As used in this section, "outstanding notes" means the notes issued on December 29, 2011 under the Indenture, "exchange notes" means the notes issued under the Indenture in connection with this exchange offer, and "notes" refers to the outstanding notes and the exchange notes, collectively. The terms of the notes include those expressly set forth in the Indenture and those specifically made part of the Indenture by reference to the TIA. The Indenture is unlimited in aggregate principal amount. Although the issuance of the outstanding notes was, and this issuance of these exchange notes is, limited to $250 million, we may issue an unlimited principal amount of additional notes under the Indenture (the "Additional Notes"). The Additional Notes and the notes will have identical terms and conditions other than with respect to Issue Date, issue price and the first interest payment date. We are only permitted to issue such Additional Notes if at the time of such issuance, we are in compliance with the covenants contained in the Indenture. Any Additional Notes will be part of the same issue as the exchange notes and will vote on all matters with the holders of the exchange notes.

        This following description is only a summary of the material provisions of the Indenture, it does not purport to be complete and is qualified in its entirety by reference to the provisions of the Indenture, including the definitions therein of certain terms used below. We urge you to read the Indenture, because it, and not this description, define your rights as holders of the notes. You may request copies of the Indenture at our address set forth under the heading "Where You Can Find Additional Information."

        You can find the definitions of certain terms used in this description under the subheading "—Certain Definitions.

Terms of the Notes

        The exchange notes:

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will be general unsecured unsubordinated obligations of the Issuer;

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will be senior in right of payment to all existing and future subordinated Indebtedness of the Issuer;

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will be pari passu in right of payment with all existing and any future senior Indebtedness of the Issuer;

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will be effectively junior in right of payment to all existing and future senior secured Indebtedness of the Issuer to the extent of the assets securing such Indebtedness;

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will be unconditionally guaranteed on a senior unsecured unsubordinated basis by the Guarantors; and

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will be effectively junior to any existing and future liabilities of Subsidiaries of the Issuer that are not Guarantors.

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Transfer and Exchange

        A holder may transfer or exchange the exchange notes in accordance with the Indenture. The registrar and the Trustee may require a holder to furnish appropriate endorsements and transfer documents in connection with a transfer of exchange notes. Holders will be required to pay all taxes due on transfer. The Issuer will not be required to transfer or exchange any exchange notes selected for redemption or tendered (and not withdrawn) for repurchase in connection with a Change of Control Offer or an Asset Sale Offer. Also, the Issuer will not be required to transfer or exchange any exchange note for a period of 15 days before the mailing of a notice of redemption of exchange notes to be redeemed. The registered holder of an exchange note will be treated as the owner of the exchange note for all purposes.

Principal, Maturity and Interest

        The outstanding notes were initially issued on December 29, 2011 in the principal amount of $250 million in connection with the Acquisition. In the future, the Issuer may, without the consent of the holders, increase the principal amount of the exchange notes through the issuance of Additional Notes on the same terms and conditions (other than issue date, issue price and first interest payment date). Any offering of Additional Notes is subject to the covenant described below under the caption "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and 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, certain amendments, redemptions and offers to purchase. Unless the context otherwise requires, for all purposes of the Indenture and this "Description of Exchange Notes," references to the exchange notes include any Additional Notes actually issued. The exchange notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

        The exchange notes will mature on December 15, 2019. Interest on the exchange notes will accrue at the rate of 11% per annum and will be payable semiannually in cash on each June 15 and December 15, commencing on June 15, 2012, to the Persons who are registered holders at the close of business on June 1 and December 1 immediately preceding the applicable interest payment date. Interest on the exchange notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including December 29, 2011. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Ranking

        The Indebtedness evidenced by the exchange notes will be unsecured obligations of the Issuer, ranking senior in right of payment to the future obligations of the Issuer that are by their terms expressly subordinated or junior in right of payment to the exchange notes and equally in right of payment with all existing and future unsubordinated obligations of the Issuer, but effectively junior to all secured obligations of the Issuer (including obligations under the Term Facility and the ABL Facility), to the extent of the value of assets securing such debt.

        The Indebtedness evidenced by the Guarantees will be unsecured obligations of the Guarantors, ranking senior in right of payment to the future obligations of the Guarantors that are by their terms expressly subordinated or junior in right of payment to the Guarantees and equally in right of payment with all existing and future unsubordinated obligations of the Guarantors, but effectively junior to all secured obligations of the Guarantors (including obligations under the Term Facility and the ABL Facility), to the extent of the value of assets securing such debt.

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        At March 31, 2012,

        (1)   the Issuer and its Subsidiaries had $250 million of senior unsecured Indebtedness outstanding consisting of the outstanding notes;

        (2)   the Issuer and its Subsidiaries had $513.6 million of Secured Indebtedness outstanding under the Term Facility; and

        (3)   the Issuer had (x) an additional $175 million of available borrowings under the ABL Facility, (y) the option, subject to certain conditions, to request additional incremental term loans under the Term Facility in an aggregate principal amount of up to $150 million and (z) the option, subject to certain conditions, to increase asset-based revolving credit facility commitments under the ABL Facility in an aggregate principal amount of up to $50 million, which, in each case if borrowed, would be Secured Indebtedness.

        Although the Indenture limits the Incurrence of Indebtedness and the issuance of Disqualified Stock by the Issuer and its Restricted Subsidiaries and the issuance of Preferred Stock by the Restricted Subsidiaries of the Issuer that are not Guarantors, such limitation is subject to a number of significant qualifications and exceptions. Under certain circumstances, the Issuer and its Subsidiaries may be able to Incur substantial amounts of Indebtedness. Such Indebtedness may be Secured Indebtedness. See "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock."

        A significant portion of the operations of the Issuer are conducted through its Subsidiaries. Unless a Subsidiary is a Guarantor, claims of creditors of such Subsidiary, including trade creditors, and claims of preferred stockholders (if any) of such Subsidiary generally will have priority with respect to the assets and earnings of such Subsidiary over the claims of creditors of the Issuer, including holders of the exchange notes. The exchange notes, therefore, will be effectively subordinated to claims of creditors (including trade creditors) and preferred stockholders (if any) of Subsidiaries of the Issuer that are not Guarantors.

        See "Risk Factors—Risks Related to the Exchange Notes" in this prospectus.

Guarantees

        The Guarantors will guarantee the exchange notes and, in the future, subject to exceptions set forth under the caption "Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries", direct and indirect Restricted Subsidiaries of the Issuer that guarantee certain Indebtedness of the Issuer or any Guarantor will guarantee the exchange notes, subject to release as provided below or elsewhere in this "Description of Exchange Notes." The Guarantors will jointly and severally irrevocably and unconditionally guarantee on a senior basis the performance and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Issuer under the Indenture and the exchange notes, whether for payment of principal of, premium, if any, or interest on the exchange notes, expenses, indemnification or otherwise (all such obligations guaranteed by such Guarantors being herein called the "Guaranteed Obligations").

        Each Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. See "Risk Factors—Risks Related to the Exchange Notes—Because each guarantor's liability under its guarantees may be reduced to zero, avoided or released under certain circumstances, you may not receive any payments from some or all of the guarantors" in this prospectus. The Issuer will cause each Subsidiary that is required to guarantee the exchange notes under the Indenture to execute and deliver to the Trustee a supplemental indenture pursuant to which such Restricted Subsidiary will guarantee payment of the exchange notes on the

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same basis. See "—Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries."

        Each Guarantee is a continuing guarantee and shall:

        (1)   remain in full force and effect until payment in full of all the Guaranteed Obligations;

        (2)   subject to the next succeeding paragraph, be binding upon each such Guarantor and its successors; and

        (3)   inure to the benefit of and be enforceable by the Trustee, the holders and their successors, transferees and assigns.

        A Guarantee of a Guarantor will be automatically released upon:

        (1)   the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the Capital Stock, or all or substantially all of the assets, of the applicable Guarantor if such sale, disposition, exchange or other transfer is made in a manner not in violation of the Indenture and following which the applicable Guarantor is no longer a Restricted Subsidiary;

        (2)   the Issuer's designation of such Guarantor as an Unrestricted Subsidiary in accordance with the covenant described under "—Certain Covenants—Limitation on Restricted Payments" and the definition of "Unrestricted Subsidiary";

        (3)   the release or discharge of the obligation of such Guarantor to guarantee the Indebtedness that resulted in its obligation to guarantee the exchange notes (other than a discharge or release by or as a result of payment made under such guarantee), (b) the repayment of any such Indebtedness or (c) the repurchase of the Disqualified Stock that resulted in its obligation to guarantee the exchange notes; and

        (4)   the Issuer's exercise of its legal defeasance option or covenant defeasance option as described under "—Defeasance" or if the Issuer's obligations under the Indenture are otherwise discharged in accordance with the terms of such Indenture.

        Each of 99¢ Only's currently existing Domestic Subsidiaries will be Guarantors.

Optional Redemption

        On or after December 15, 2014, the Issuer may redeem the exchange notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, 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), if redeemed during the 12-month period commencing on December 15 of the years set forth below:

Period	Redemption Price
2014		108.250	%
2015		105.500	%
2016		102.750	%
2017 and thereafter		100.000	%

        In addition, prior to December 15, 2014, the Issuer may redeem the exchange notes at its option, in whole at any time or in part from time to time, upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each holder's registered address, at a redemption price equal to 100% of the principal amount of the exchange notes redeemed plus the Applicable Premium as of, and

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accrued and unpaid interest, to, the applicable 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).

        Notwithstanding the foregoing, on or prior to December 15, 2014, the Issuer may redeem in the aggregate up to 35% of the original aggregate principal amount of the exchange notes (calculated after giving effect to any issuance of Additional Notes) with the net cash proceeds of one or more Equity Offerings (a) by the Issuer or (b) by any direct or indirect parent of the Issuer, in each case to the extent the net cash proceeds thereof are contributed to the common equity capital of the Issuer or used to purchase Capital Stock (other than Disqualified Stock) of the Issuer at a redemption price (expressed as a percentage of principal amount thereof) of 111.000%, 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); provided that (a) at least 65% of the original aggregate principal amount of the exchange notes (calculated after giving effect to any issuance of Additional Notes) shall remain outstanding after each such redemption; and (b) such redemption must occur within 90 days after the date on which any such Equity Offering is consummated, and upon not less than 30 days' nor more than 60 days' notice by the Issuer mailed to each holder of exchange notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture.

        At the Issuer's request, the Trustee shall give notice of redemption in the Issuer's name and at the Issuer's expense, provided that the Issuer shall provide the Trustee with the information required by the Indenture not less than 35 days before the redemption date.

        Notice of any redemption upon any Equity Offering may be given prior to the completion thereof, and any such redemption or notice may, at the Issuer's discretion, be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering.

Selection

        In the case of any partial redemption, selection of exchange notes for redemption will be made by the Trustee on a pro rata basis, by lot or such other method as the Trustee shall deem appropriate and if applicable, in accordance with the procedures of DTC. If any note is to be redeemed in part only, the notice of redemption relating to such note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original note. On and after the redemption date, interest will cease to accrue on exchange notes or portions thereof called for redemption so long as the Issuer has deposited with the paying agent funds sufficient to pay the principal of, plus accrued and unpaid interest, on, the exchange notes to be redeemed; provided that new notes will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

        The Issuer is not required to make any mandatory redemption or sinking fund payments with respect to the exchange notes. However, under certain circumstances, the Issuer may be required to offer to purchase exchange notes as described under the captions "—Change of Control" and "—Certain Covenants—Asset Sales." We may at any time and from time to time purchase exchange notes in the open market or otherwise.

Change of Control

        Upon the occurrence of a Change of Control, each holder will have the right to require the Issuer to repurchase all or any part of such holder's exchange notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of holders of record on the relevant record date to receive interest due on the

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relevant interest payment date), except to the extent the Issuer has previously or concurrently elected to redeem exchange notes as described under "—Optional Redemption."

        In the event that at the time of such Change of Control the terms of the Bank Indebtedness restrict or prohibit the repurchase of exchange notes pursuant to this covenant, then prior to the mailing or electronic transmission of the notice to holders provided for in the immediately following paragraph but in any event within 30 days following any Change of Control, the Issuer shall:

        (1)   repay in full all Bank Indebtedness or, if doing so will allow the purchase of exchange notes, offer to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each lender who has accepted such offer; or

        (2)   obtain the requisite consent under the agreements governing the Bank Indebtedness to permit the repurchase of the exchange notes as provided for in the immediately following paragraph.

See "Risk Factors—Risks Related to the Exchange Notes—We may not be able to repurchase the exchange notes upon a change of control" in this prospectus.

        Within 30 days following any Change of Control, except to the extent that the Issuer has exercised its option to redeem the exchange notes by delivery of a notice of redemption as described under "—Optional Redemption," the Issuer shall mail or send electronically a notice (a "Change of Control Offer") to each holder of record with a copy to the Trustee stating:

        (1)   that a Change of Control has occurred and that such holder has the right to require the Issuer to repurchase such holder's exchange notes at a repurchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase (subject to the right of holders of record on a record date to receive interest on the relevant interest payment date);

        (2)   the circumstances and relevant material facts and financial information regarding such Change of Control;

        (3)   the repurchase date (which shall be no less than 30 days nor more than 60 days from the date such notice is mailed or sent electronically); and

        (4)   the instructions that a holder must follow in order to have its exchange notes repurchased, which instructions shall have been determined by the Issuer consistent with this covenant.

        Notwithstanding the foregoing, the Issuer may make a Change of Control Offer in advance of, and conditioned upon, a Change of Control, if a definitive agreement is in place for the transaction or event underlying such Change of Control at the time the Change of Control Offer is made.

        The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of exchange notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof.

        This Change of Control repurchase provision is a result of negotiations between the Issuer and the initial purchasers of the outstanding notes. We have no present intention to engage in a transaction involving a Change of Control, although it is possible that we may decide to do so in the future. Subject to the limitations discussed below, we may, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of

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Control under the Indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect our capital structure or credit rating.

        The occurrence of events that constitute a Change of Control may constitute a default under the Term Facility and the ABL Facility, which, absent a valid waiver thereof, could result in such Indebtedness becoming immediately due and payable. Future Bank Indebtedness of the Issuer may contain prohibitions on certain events that would constitute a Change of Control or require such Bank Indebtedness to be repurchased or repaid upon a Change of Control. Moreover, the financial effect of the exercise by the holders of their right to require the Issuer to repurchase the exchange notes pursuant to this covenant could cause a default under such Bank Indebtedness, even if the Change of Control itself does not. Finally, the Issuer's ability to pay cash to the holders upon a repurchase may be limited by the Issuer's then existing financial resources. There can be no assurance that sufficient funds will be available to make any required repurchases. See "Risk Factors—Risks Related to the Exchange Notes—We may not be able to repurchase the exchange notes upon a change of control" in this prospectus.

        The definition of Change of Control includes a phrase relating to the sale, lease or transfer of "all or substantially all" the assets of the Issuer and its Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase "substantially all," under New York law, which governs the Indenture, there is no precise established definition of the phrase. Accordingly, the ability of a holder of exchange notes to require the Issuer to repurchase such exchange notes as a result of a sale, lease or transfer of less than all of the assets of the Issuer and its Subsidiaries taken as a whole to another Person or group may be uncertain.

        The provisions under the Indenture relating to the Issuer's obligation to make an offer to repurchase the exchange notes as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in principal amount of the notes of that series.

        In addition, the Issuer is not required to make a Change of Control Offer upon a Change of Control if 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 Issuer and purchases all exchange notes validly tendered and not withdrawn under such Change of Control Offer.

        Exchange notes repurchased by the Issuer pursuant to a Change of Control Offer will have the status of exchange notes issued but not outstanding or will be retired and cancelled at the option of the Issuer. Exchange notes purchased by a third party pursuant to the preceding paragraph will have the status of exchange notes issued and outstanding.

Certain Covenants

        Set forth below are summaries of certain covenants that are contained in the Indenture. During any period of time that (i) the exchange notes have Investment Grade Ratings from both Rating Agencies, and (ii) no Default has occurred and is continuing under the Indenture, then the Issuer and its Restricted Subsidiaries will not be subject to the covenants specifically listed under the following captions in this "Description of Exchange Notes" section of this prospectus (collectively, the "Suspended Covenants").

        (1)   "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

        (2)   "—Limitation on Restricted Payments";

        (3)   "—Dividend and Other Payment Restrictions Affecting Subsidiaries";

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        (4)   "—Asset Sales";

        (5)   "—Transactions with Affiliates";

        (6)   "—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries"; and

        (7)   clause (4) of the first paragraph of "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets."

        In the event that the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants under the Indenture for any period of time as a result of the foregoing, and on any subsequent date (the "Reversion Date") one or both of the Rating Agencies withdraw their Investment Grade Rating or downgrade the rating assigned to such series of exchange notes below an Investment Grade Rating, then the Issuer and its Restricted Subsidiaries will thereafter again be subject to the Suspended Covenants under the Indenture with respect to future events.

        On each Reversion Date, all Indebtedness Incurred, or Disqualified Stock or Preferred Stock issued, during the Suspension Period will be classified as having been Incurred or issued pursuant to the first paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" below or one of the clauses set forth in the second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" below (to the extent such Indebtedness or Disqualified Stock or Preferred Stock would be permitted to be Incurred or issued thereunder as of the Reversion Date and after giving effect to Indebtedness Incurred or issued prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness or Disqualified Stock or Preferred Stock would not be so permitted to be Incurred or issued pursuant to the first or second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," such Indebtedness or Disqualified Stock or Preferred Stock will be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under clause (c) of the second paragraph under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock." Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under "—Limitation on Restricted Payments" will be made as though the covenant described under "—Limitation on Restricted Payments" had been in effect since the Issue Date and throughout the Suspension Period. Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available to be made as Restricted Payments under the first paragraph of "—Limitation on Restricted Payments." In addition, for purposes of the "—Transaction with Affiliates" covenant, any contract, agreement, loan, advance or guaranty with, or for the benefit of, any Affiliate of the Issuer entered into during the Suspension Period will be deemed to have been in effect as of the Issue Date for purposes of clause (8) of the second paragraph under "—Transactions with Affiliates" and for purposes of the "—Dividend and Other Payment Restrictions Affecting Subsidiaries" covenant, on the Reversion Date, any contractual encumbrances or restrictions of the type specified in clauses (a), (b) or (c) of that covenant entered into during the Suspension Period, will be deemed to have been in effect on the Issue Date, so that they are permitted under clause (1) under "—Dividend and Other Payment Restrictions Affecting Subsidiaries." As described above, however, no Default or Event of Default with respect to the Suspended Covenants will be deemed to have occurred on the Reversion Date as a result of any actions taken by the Issuer or the Restricted Subsidiaries during the Suspension Period. On and after each Reversion Date, the Issuer and its Subsidiaries will be permitted to consummate the transactions contemplated by any contract entered into during the Suspension Period so long as such contract and such consummation would have been permitted during such Suspension Period.

        For purposes of the "—Asset Sales" covenant, on the Reversion Date, the unutilized Excess Proceeds will be reset to zero.

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        During a Suspension Period, the Issuer may not designate any of its Subsidiaries as Unrestricted Subsidiaries.

        There can be no assurance that the exchange notes will ever achieve or maintain Investment Grade Ratings. See "Risks Related to the Exchange Notes—During any period in which the exchange notes are rated investment grade, certain covenants contained in the Indenture will not be applicable" in this prospectus.

Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock

        The Indenture provides that:

        (1)   the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock; and

        (2)   the Issuer will not permit any of its Restricted Subsidiaries (other than a Guarantor) to issue any shares of Preferred Stock (other than Disqualified Stock of Restricted Subsidiaries held by the Issuer or a Restricted Subsidiary);

provided, that the Issuer and any Guarantor may Incur Indebtedness (including any Acquired Indebtedness) or issue shares of Disqualified Stock, and any Restricted Subsidiary of the Issuer that is not a Guarantor may Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock, in each case if the Fixed Charge Coverage Ratio of the Issuer for the 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 Preferred Stock is issued would have been at least 2.00 to 1.00 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 Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period; provided further that Restricted Subsidiaries that are not Guarantors shall not Incur Indebtedness (including Acquired Indebtedness), issue shares of Disqualified Stock or issue shares of Preferred Stock pursuant to the foregoing if, after giving pro forma effect to such Incurrence or issuance (including a pro forma application of the net proceeds therefrom), the aggregate principal amount or liquidation preference of Indebtedness, Disqualified Stock and Preferred Stock of Restricted Subsidiaries that are not Guarantors exceeds the greater of (i) $40 million and (ii) 2.0% of Total Assets at the time of Incurrence.

        The foregoing limitations do not apply to:

        (a)   the Incurrence by the Issuer or its Restricted Subsidiaries of Indebtedness under Credit Facilities and the issuance and creation of letters of credit and bankers' acceptances thereunder (with letters of credit and bankers' acceptances being deemed to have a principal amount equal to the face amount thereof) at any one time outstanding not to exceed the sum of (i) $675 million plus (ii) the greater of (x) (1) $225 million less (2) the aggregate amount of Indebtedness Incurred under clause (r) of this paragraph and (y) the amount of the Borrowing Base as of the date of such Incurrence;

        (b)   the Incurrence by the Issuer and the Guarantors of Indebtedness represented by the exchange notes (not including any Additional Notes) and the Guarantees;

        (c)   Indebtedness of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries existing on the Issue Date (other than Indebtedness described in clauses (a) and (b));

        (d)   (A) Capitalized Lease Obligations Incurred by the Issuer or any of its Restricted Subsidiaries, (B) mortgage financings and other purchase money obligations or Indebtedness

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Incurred by the Issuer or any of its Restricted Subsidiaries, (C) Disqualified Stock issued by the Issuer or any of its Restricted Subsidiaries and (D) Preferred Stock issued by any Restricted Subsidiary, in each case Incurred to finance the acquisition, lease, construction, repair, replacement or improvement of property (real or personal, and whether through the direct purchase of property or the Equity Interests of any Person owning such property), and which was Incurred prior to or within 270 days of such acquisition, lease, construction, repair, replacement or improvement; provided that the aggregate amount of such Indebtedness, Disqualified Stock and Preferred Stock, together with all refinancings and replacements thereof, shall not exceed the greater of (x) $50 million and (y) 2.75% of Total Assets at the time of Incurrence; and provided further that the aggregate principal amount of Indebtedness Incurred on behalf of, or representing Guarantees of Indebtedness of, Joint Ventures of the Issuer or any Restricted Subsidiary Incurred under this clause (d) shall not exceed $10 million at any one time outstanding;

        (e)   Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts or similar instruments, in each case issued in the ordinary course of business, including without limitation letters of credit in respect of workers' compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims;

        (f)    Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the Transactions or any other acquisition or disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of the Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided any such Indebtedness shall at no time exceed the gross proceeds, including the Fair Market Value of non-cash proceeds (measured at the time received and without giving effect to any subsequent changes in value), actually received by the Issuer and its Restricted Subsidiaries in connection with such disposition;

        (g)   Indebtedness of the Issuer to a Restricted Subsidiary; provided that any such Indebtedness owed to a Restricted Subsidiary that is not a Guarantor is subordinated in right of payment to the Obligations of the Issuer under the notes; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (g);

        (h)   shares of Preferred Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary that holds such shares of Preferred Stock of another Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an issuance of shares of Preferred Stock not permitted by this clause (h);

        (i)    Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary; provided that if a Guarantor Incurs such Indebtedness to a Restricted Subsidiary that is not a

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Guarantor, such Indebtedness is subordinated in right of payment to the Guarantee of such Guarantor; provided, further, that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary holding such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary or any pledge of such Indebtedness constituting a Permitted Lien) shall be deemed, in each case, to be an Incurrence of such Indebtedness not permitted by this clause (i);

        (j)    Hedging Obligations that are not Incurred for speculative purposes and are either (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding; (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges; or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases or sales;

        (k)   obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business or consistent with past practice or industry practice;

        (l)    Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preference, which when aggregated with the principal amount or liquidation preference of all other Indebtedness, Disqualified Stock and Preferred Stock then outstanding and Incurred under this clause (l) (and any refinancing or replacement thereof), does not exceed the greater of (x) $75 million and (y) 4.0% of Total Assets at the time of Incurrence (it being understood that any Indebtedness Incurred under this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed Incurred for purposes of the first paragraph of this covenant from and after the first date on which the Issuer, or the Restricted Subsidiary, as the case may be, could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));

        (m)  Indebtedness or Disqualified Stock of the Issuer or any Restricted Subsidiary of the Issuer and Preferred Stock of any Restricted Subsidiary of the Issuer not otherwise permitted hereunder in an aggregate principal amount or liquidation preference not greater than 100.0% of the Unapplied Proceeds;

        (n)   any guarantee by the Issuer or any Restricted Subsidiary of the Issuer of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of the Indenture; provided that (i) if such Indebtedness is by its express terms subordinated in right of payment to the exchange notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Person with respect to such Indebtedness shall be subordinated in right of payment to such Person's Guarantee or other obligations with respect to the exchange notes substantially to the same extent as such Indebtedness is subordinated to the exchange notes or the Guarantee of such Restricted Subsidiary, as applicable and (ii) if such guarantee is of Indebtedness of the Issuer or a Guarantor, such guarantee is Incurred in accordance with the covenant described under "—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries" solely to the extent such covenant is applicable;

        (o)   the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary of the Issuer which serves to refund, refinance or defease any Indebtedness Incurred or Disqualified Stock or Preferred Stock issued as permitted under the first paragraph of this covenant and clauses (b), (c), (m), (p) or this clause (o) of this paragraph or any Indebtedness, Disqualified Stock or Preferred Stock Incurred to

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so refund or refinance such Indebtedness, Disqualified Stock or Preferred Stock (subject to the following proviso, "Refinancing Indebtedness"); provided, that:

        (1)   the principal amount (or accreted value, if applicable) of such new Indebtedness, the amount of such new Preferred Stock or the liquidation preference of such new Disqualified Stock does not exceed the principal amount of (or accreted value, if applicable), plus any accrued and unpaid interest on, the Indebtedness, the amount of Preferred Stock or the liquidation preference of, plus any accrued and unpaid dividends on, the Disqualified Stock being so, refunded, refinanced or defeased, plus the amount of any tender premium or premium required to be paid under the terms of the instrument governing the Indebtedness, Preferred Stock or Disqualified Stock being so refunded, refinanced or defeased, defeasance costs and any reasonable fees and expenses (including original issue discount, upfront fees or similar fees) incurred in connection with the issuance of such new Indebtedness, Preferred Stock or Disqualified Stock;

        (2)   such Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded, refinanced or defeased;

        (3)   such Refinancing Indebtedness has a Stated Maturity which is not earlier than the earlier of (x) the Stated Maturity of the Indebtedness being refunded or refinanced or (y) 91 days following the maturity date of the exchange notes;

        (4)   to the extent such Refinancing Indebtedness refinances (a) Indebtedness subordinated to the exchange notes or the Guarantee of such Restricted Subsidiary, as applicable, such Refinancing Indebtedness is subordinated to the exchange notes or the Guarantee of such Restricted Subsidiary, as applicable, to at least the same extent as the Indebtedness being refinanced or (b) Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Disqualified Stock or Preferred Stock, respectively; and

        (5)   such Refinancing Indebtedness shall not include (x) Indebtedness of a Restricted Subsidiary of the Issuer that is not a Guarantor that refinances Indebtedness, Preferred Stock or Disqualified Stock of the Issuer or a Guarantor, or (y) Indebtedness, Preferred Stock or Disqualified Stock of the Issuer or a Restricted Subsidiary that refinances Indebtedness, Preferred Stock or Disqualified Stock of an Unrestricted Subsidiary;

        (p)   Indebtedness, Disqualified Stock or Preferred Stock of (x) the Issuer or any of its Restricted Subsidiaries Incurred to finance an acquisition or (y) Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged, consolidated or amalgamated with or into the Issuer or any of its Restricted Subsidiaries in accordance with the terms of the Indenture; provided that after giving effect to such acquisition or merger, consolidation or amalgamation and the Incurrence of such Indebtedness, Disqualified Stock or Preferred Stock, either:

        (1)   the Issuer would be 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 this covenant; or

        (2)   the Fixed Charge Coverage Ratio of the Issuer would be equal or greater than immediately prior to such acquisition or merger, consolidation or amalgamation;

        (q)   Indebtedness, Disqualified Stock or Preferred Stock of the Issuer or a Restricted Subsidiary of the Issuer Incurred to finance or assumed in connection with an acquisition, and any refinancing or replacement thereof, in a principal amount not to exceed $20 million in the

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aggregate at any one time outstanding together with all other Indebtedness, Disqualified Stock and/or Preferred Stock issued under this clause (q);

        (r)   Indebtedness Incurred by a Receivables Subsidiary in a Qualified Receivables Financing that is not recourse to the Issuer or any Restricted Subsidiary other than a Receivables Subsidiary (except for Standard Securitization Undertakings);

        (s)   Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of its Incurrence;

        (t)    Indebtedness of the Issuer or any Restricted Subsidiary supported by, and recourse only to, a letter of credit or bank guarantee issued pursuant to Credit Facilities permitted under this covenant, in a principal amount not in excess of the stated amount of such letter of credit; provided that any such Indebtedness shall only be permitted to be Incurred pursuant to this clause (t) and not reclassified;

        (u)   Indebtedness of Restricted Subsidiaries that are not Guarantors; provided, however, that the aggregate principal amount of Indebtedness Incurred under this clause (u), when aggregated with the principal amount of all other Indebtedness then outstanding and Incurred pursuant to this clause (u), does not exceed the greater of (x) $25 million and (y) 1.5% of Total Assets at the time of Incurrence, at any one time outstanding;

        (v)   Indebtedness of the Issuer or any Restricted Subsidiary consisting of the financing of insurance premiums or take-or-pay obligations contained in ordinary course supply arrangements;

        (w)  Indebtedness consisting of Indebtedness issued by the Issuer or a Restricted Subsidiary of the Issuer to current or former officers, directors and employees thereof or any direct or indirect parent thereof, their respective estates, spouses or former spouses, in each case to finance the purchase or redemption of Equity Interests of the Issuer or any of its direct or indirect parent companies to the extent described in clause (4) of the second paragraph of the covenant described under "—Limitation on Restricted Payments"; and

        (x)   Indebtedness due to any landlord in connection with the financing by such landlord of leasehold improvements.

        For purposes of determining compliance with this covenant:

        (1)   in the event that an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (x) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Issuer shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) (other than Indebtedness, Disqualified Stock or Preferred Stock Incurred pursuant to clause (t) above) in any manner and at any time that complies with this covenant; provided that all Indebtedness under the Term Facility and ABL Facility or any refinancing thereof that is secured by a Lien will, at all times, be treated as Incurred on the Issue Date under clause (a) of the second paragraph above; and

        (2)   at the time of Incurrence, the Issuer will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in the first and second paragraphs above.

        Accrual of interest, the accretion of accreted value, the payment of interest or dividends in the form of additional Indebtedness, Disqualified Stock or Preferred Stock, as applicable, accretion of

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original issue discount, the accretion of liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an Incurrence of Indebtedness, Disqualified Stock or Preferred Stock for purposes of this covenant. Guarantees of, or Obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included in the determination of such amount of Indebtedness; provided that the Incurrence of the Indebtedness represented by such guarantee or letter of credit, as the case may be, was in compliance with this covenant.

        For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term debt, or first committed or first Incurred (whichever yields the lower U.S. dollar equivalent), in the case of revolving credit debt; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

        The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

Liens

        The Indenture provides that the Issuer will not, and will not permit any of the Guarantors to, directly or indirectly, create, Incur, assume or suffer to exist any Lien (other than a Permitted Lien) on any asset or property of the Issuer or such Guarantor securing Indebtedness, unless:

        (1)   in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and

        (2)   in all other cases, the exchange notes or the Guarantees are equally and ratably secured,

except that the foregoing shall not apply to or restrict (a) Liens securing obligations in respect of the exchange notes and the related Guarantees and (b) Liens securing obligations in respect of Indebtedness that was permitted by the terms of the Indenture to be Incurred pursuant to clause (a) of the second paragraph under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock".

        Any Lien created for the benefit of the Holders of the exchange notes pursuant to this covenant shall be deemed automatically and unconditionally released and discharged upon the release and discharge of each of the Liens described in clauses (1) and (2) above.

        The expansion of Liens by virtue of accrual of interest, the accretion of accreted value, the payment of interests or dividends in the form of additional Indebtedness, amortization of original issue discount and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currency will not be deemed to be an Incurrence of Liens for the purpose of this covenant.

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Limitation on Restricted Payments

        The Indenture provides that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

        (1)   declare or pay any dividend or make any distribution on account of the Issuer's or any of its Restricted Subsidiaries' Equity Interests, including any payment made in connection with any merger, amalgamation or consolidation involving the Issuer (other than (A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer; or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

        (2)   purchase, redeem or defease or otherwise acquire or retire for value any Equity Interests of the Issuer or any direct or indirect parent of the Issuer, including in connection with any merger, amalgamation or consolidation;

        (3)   make any principal payment on, or redeem, repurchase, defease or otherwise acquire or retire for value, in each case prior to any scheduled repayment or scheduled maturity, any Subordinated Indebtedness of the Issuer or any of its Restricted Subsidiaries (other than the payment, redemption, repurchase, defeasance, acquisition or retirement of (A) Subordinated 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 such payment, redemption, repurchase, defeasance, acquisition or retirement) and (B) Indebtedness permitted under clauses (h) and (i) of the second paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or

        (4)   make any Restricted Investment

(all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment:

        (a)   no Default shall have occurred and be continuing or would occur as a consequence thereof;

        (b)   immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under the provisions of the first paragraph of the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and

        (c)   such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), 2(c), (7) and (18) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the amount equal to the sum of (without duplication):

        (1)   50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period, the "Reference Period") from the Issue Date to the end of the Issuer's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

        (2)   100% of the aggregate net cash proceeds, including cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash, received by

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the Issuer after the Issue Date from the issue or sale of Equity Interests of the Issuer (other than the Equity Contribution) or contributions to the capital of the Issuer (in each case excluding the Equity Contributions, Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions, Disqualified Stock and, to the extent utilized to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (m) of the second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock", Unapplied Proceeds), including Equity Interests issued upon exercise of warrants or options (other than an issuance or sale to a Restricted Subsidiary of the Issuer or to the extent the proceeds therefrom have been applied to Restricted Payments in accordance with clause (4) of the next succeeding paragraph), plus

        (3)   100% of the principal amount of any Indebtedness, or the liquidation preference or maximum fixed repurchase price, as the case may be, of any Disqualified Stock of the Issuer or any Restricted Subsidiary thereof issued after the Issue Date (other than Indebtedness or Disqualified Stock issued to the Issuer or a Restricted Subsidiary) which has been converted into or exchanged for Equity Interests in the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer (provided that such Indebtedness or Disqualified Stock is retired or extinguished), plus

        (4)   100% of the aggregate amount received by the Issuer or any Restricted Subsidiary in cash and the Fair Market Value (as determined in good faith by the Issuer) of property other than cash received by the Issuer or any Restricted Subsidiary from:

        (A)  the sale or other disposition (other than to the Issuer or a Restricted Subsidiary of the Issuer) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any of its Restricted Subsidiaries) and from repayments of loans or advances, and releases of guarantees, which constituted Restricted Investments, in each case after the Issue Date,

        (B)  the sale (other than to the Issuer or a Restricted Subsidiary of the Issuer) of the Capital Stock of an Unrestricted Subsidiary after the Issue Date, other than in each case to the extent that the Investment in such Unrestricted Subsidiary or designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment, or

        (C)  a distribution or dividend from an Unrestricted Subsidiary after the Issue Date, other than in each case to the extent that the Investment in such Unrestricted Subsidiary or designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment, plus

        (5)   in the event any Unrestricted Subsidiary of the Issuer has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Issuer) of the Investment of the Issuer or the Restricted Subsidiaries of the Issuer in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) (other than in each case to the extent that the Investment in such Unrestricted Subsidiary or designation of such Subsidiary as an Unrestricted Subsidiary constituted a Permitted Investment).

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        The foregoing provisions will not prohibit:

        (1)   the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of the Indenture;

        (2)   (a) the redemption, repurchase, retirement or other acquisition of any Equity Interests ("Retired Capital Stock") or Subordinated Indebtedness of the Issuer, any direct or indirect parent of the Issuer or any Guarantor in exchange for, or out of the proceeds of, the substantially concurrent sale of, Equity Interests of the Issuer or any direct or indirect parent of the Issuer or contributions to the equity capital of the Issuer (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer) (collectively, including any such contributions, "Refunding Capital Stock"),

        (b)   the declaration and payment of dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer or to an employee stock ownership plan or any trust established by the Issuer or any of its Subsidiaries) of Refunding Capital Stock, and

        (c)   if immediately prior to the retirement of Retired Capital Stock, the declaration and payment of dividends thereon was permitted under clause (6)(a) or (b) of this paragraph and not made pursuant to clause (2)(b), the declaration and payment of dividends on the Refunding Capital Stock (other than Refunding Capital Stock the proceeds of which were used to redeem, repurchase, retire or otherwise acquire any Equity Interests of the Issuer or of any direct or indirect parent of the Issuer) in an aggregate amount no greater than the aggregate amount of dividends permitted under clauses 6(a) or (b) of this paragraph;

        (3)   the redemption, repurchase, defeasance, or other acquisition or retirement of Subordinated Indebtedness of the Issuer or any Guarantor made by exchange for, or out of the proceeds of the substantially concurrent sale of, new Indebtedness of the Issuer or a Guarantor, which is Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" so long as

        (a)   the principal amount (or accreted value, if applicable) of such new Indebtedness does not exceed the principal amount (or accreted value, if applicable), plus any accrued and unpaid interest, of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired for value (plus the amount of any premium required to be paid under the terms of the instrument governing the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired, any tender premiums, plus any defeasance costs, and reasonable fees and expenses Incurred in connection therewith),

        (b)   such Indebtedness is subordinated to the exchange notes or the related Guarantee, as the case may be, at least to the same extent as such Subordinated Indebtedness so purchased, exchanged, redeemed, repurchased, defeased, acquired or retired for value,

        (c)   such Indebtedness has a final scheduled maturity date equal to or later than the earlier of (x) the final scheduled maturity date of the Subordinated Indebtedness being so redeemed, repurchased, acquired or retired and (y) 91 days following the maturity date of the exchange notes, and

        (d)   such Indebtedness has a Weighted Average Life to Maturity at the time Incurred which is not less than the remaining Weighted Average Life to Maturity of the Subordinated Indebtedness being so redeemed, repurchased, defeased, acquired or retired;

        (4)   the repurchase, retirement or other acquisition (or dividends or other Restricted Payments to any direct or indirect parent of the Issuer to finance any such repurchase, retirement

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or other acquisition) for value of Equity Interests of the Issuer or any direct or indirect parent of the Issuer held, directly or indirectly, by any future, present or former employee, director or consultant (or any spouses, former spouses, successors, executors, administrators, estate or tax planning entities, heirs, legatees or distributes of any of the foregoing) of the Issuer or any direct or indirect parent of the Issuer or any Subsidiary of the Issuer pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or other agreement or arrangement; provided, however, that the aggregate Restricted Payments made under this clause (4) do not exceed $10 million in any calendar year (with any unused amounts in any calendar year being carried over to the two immediately succeeding calendar years subject to a maximum (without giving effect to the following proviso) of $30 million in any calendar year); provided, further, however, that such amount in any calendar year may be increased by an amount not to exceed the sum of:

        (a)   the cash proceeds received by the Issuer or any of its Restricted Subsidiaries from the sale of Equity Interests (other than Disqualified Stock) of the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) to members of management, directors or consultants of the Issuer and its Restricted Subsidiaries or any direct or indirect parent of the Issuer that occurs after the Issue Date, other than in connection with, or pursuant to, the Equity Contribution (provided that the amount of such cash proceeds utilized for any such repurchase, retirement, other acquisition or dividend (x) will not increase the amount available for Restricted Payments under clause (c)(2) of the first paragraph under "—Limitation on Restricted Payments" and (y) have not been utilized to Incur Indebtedness, Disqualified Stock or Preferred Stock pursuant to clause (m) of the second paragraph of "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"), plus

        (b)   the amount of any cash bonuses otherwise payable to members of management, directors or consultants of the Issuer or any of its Restricted Subsidiaries or any of its direct or indirect parents in connection with the Transactions that are foregone in return for the receipt of Equity Interests of the Issuer or any of its direct or indirect parents; plus

        (c)   the cash proceeds of key man life insurance policies received by the Issuer or any direct or indirect parent of the Issuer (to the extent contributed to the Issuer) or the Issuer's Restricted Subsidiaries after the Issue Date; less

        (d)   the aggregate amount of Restricted Payments previously made with the cash proceeds described in clauses (a), (b) and (c) of this clause (4);

provided that the Issuer may elect to apply all or any portion of the aggregate increase contemplated by clauses (a), (b) and (c) above in any calendar year; and provided, further that cancellation of Indebtedness owing to the Issuer or any Restricted Subsidiary from members of management of the Issuer, any of its Restricted Subsidiaries or its direct or indirect parents in connection with a repurchase of Equity Interests of the Issuer or any of its direct or indirect parents, in an aggregate amount not to exceed $5 million, will not be deemed to constitute a Restricted Payment in respect of any loans extended in accordance with clause (7) of the definition of "Permitted Investment" for purposes of this covenant or any other provision of the Indenture;

        (5)   the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued or Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" to the extent such dividends are included in the definition of "Fixed Charges";

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        (6)   (a) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (6)(a) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date;

        (b)   a Restricted Payment to any direct or indirect parent of the Issuer, the proceeds of which will be used to fund the payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Stock) of any direct or indirect parent of the Issuer issued after the Issue Date; provided that the aggregate amount of dividends declared and paid pursuant to this clause (6)(b) does not exceed the net cash proceeds actually received by the Issuer from any such sale of Designated Preferred Stock (other than Disqualified Stock) issued after the Issue Date; and

        (c)   the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph;

provided, however, in the case of each of (a), (b) and (c) above of this clause (6), that for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or declaration or payment of dividends, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, the Issuer would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00;

        (7)   the payment of dividends on the Issuer's common stock (or a Restricted Payment to any direct or indirect parent of the Issuer to fund the payment by such direct or indirect parent of the Issuer of dividends on such entity's common stock) of up to 6.0% per annum of the net proceeds received by the Issuer from any public offering of common stock of the Issuer or any direct or indirect parent of the Issuer, other than public offerings with respect to the Issuer's common stock registered on Form S-4 or Form S-8 and other than any public sale constituting an Excluded Contribution;

        (8)   Restricted Payments that are made with Excluded Contributions;

        (9)   other Restricted Payments in an aggregate amount not to exceed, when taken together with all other Restricted Payments made pursuant to this clause (9), the greater of $40 million and 2.0% of Total Assets at the time made;

        (10) the distribution, as a dividend or otherwise, of shares of Capital Stock of, or Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer by, Unrestricted Subsidiaries;

        (11) the payment of dividends or other distributions to any direct or indirect parent of the Issuer in amounts required for such parent to pay foreign, federal, state or local income taxes (as the case may be) imposed directly on such parent (a) to the extent such income taxes are attributable to the income of the Issuer and its Restricted Subsidiaries (including, without limitation, by virtue of such parent being the common parent of a consolidated, unitary, combined or similar tax group of which the Issuer and/or its Restricted Subsidiaries are members) and (b) to the extent such income taxes are attributable to the income of the Issuer's Unrestricted Subsidiaries (and to the extent of the amount actually received from the Issuer's Unrestricted Subsidiaries);

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        (12) the payment of dividends, other distributions or other amounts or the making of loans or advances or any other Restricted Payment, if applicable, in amounts required for any direct or indirect parent of the Issuer to pay:

        (a)   fees and expenses (including franchise or similar taxes) required to maintain its corporate existence, customary salary, bonus and other benefits payable to, and indemnities provided on behalf of, officers and employees of any direct or indirect parent of the Issuer, if applicable, and general corporate operating and overhead expenses of any direct or indirect parent of the Issuer, if applicable, in each case to the extent such fees and expenses are attributable to the ownership or operation of the Issuer and its Subsidiaries;

        (b)   interest and/or principal on Indebtedness the proceeds of which have been contributed to the Issuer or any of its Restricted Subsidiaries and that has been guaranteed by, or is otherwise considered Indebtedness of, the Issuer Incurred in accordance with the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and any such interest in respect of such Indebtedness paid or required to be paid by the Issuer or any of its Restricted Subsidiaries is included in the calculation of "Fixed Charges";

        (c)   fees and expenses, other than to Affiliates of the Issuer, related to any unsuccessful equity or debt offering of such parent; and

        (d)   amounts payable pursuant to the Management Agreements and payments permitted under clauses (4), (5), (9), (10) and (11) of the covenant described under "—Transactions with Affiliates", in each case to the extent not paid directly by the Issuer or its Restricted Subsidiaries;

        (13) any Restricted Payment used to fund the Transactions and the payment of fees and expenses Incurred in connection with the Transactions or owed by the Issuer or any direct or indirect parent of the Issuer or Restricted Subsidiaries of the Issuer to Affiliates, and any other payments made, including any such payments made to any direct or indirect parent of the Issuer to enable it to make payments, in connection with the consummation of the Transactions or as contemplated by the Acquisition Documents, whether payable on the Issue Date or thereafter, in each case disclosed in this prospectus and to the extent permitted by the covenant described under "—Transactions with Affiliates";

        (14) Restricted Payments by the Issuer, including to a direct or indirect parent of the Issuer, for the purpose of funding the obligation to repurchase shares pursuant to the Rollover Investor Put in an aggregate amount not to exceed $37.5 million; provided that, with respect to such Restricted Payment pursuant to this clause (14), at the time of such Restricted Payment and after giving pro forma effect thereto, the Consolidated Leverage Ratio of the Issuer would not exceed 4.00 to 1.00;

        (15) repurchases of Equity Interests deemed to occur upon the non-cash exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants;

        (16) purchases of receivables pursuant to a Receivables Repurchase Obligation in connection with a Qualified Receivables Financing and the payment or distribution of Receivables Fees;

        (17) payments of cash, or dividends, distributions, advances or other Restricted Payments by the Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of any such Person or such Person's direct or indirect parent;

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        (18) the repurchase, redemption or other acquisition or retirement for value of any Subordinated Indebtedness pursuant to the provisions similar to those described under the captions "—Change of Control" and "—Asset Sales"; provided that all exchange notes of the applicable series tendered by holders of the exchange notes of the applicable series in connection with a Change of Control or Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for value;

        (19) payments or distributions to dissenting stockholders of the Issuer or its direct or indirect parent pursuant to applicable law, pursuant to or in connection with a consolidation, amalgamation or merger or transfer of all or substantially all of the assets of the Issuer and its Restricted Subsidiaries, taken as a whole, that complies with the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets"; provided that as a result of such consolidation, amalgamation, merger or transfer of assets, the Issuer shall have made a Change of Control Offer (if required by the Indenture) and that all exchange notes tendered by holders in connection with such Change of Control Offer shall have been repurchased, redeemed or acquired for value; provided, further that such payment or distribution shall not exceed the value of 10% of the Capital Stock of the Issuer issued and outstanding on the date of such payment or distribution; and

        (20) Restricted Payments by the Issuer to any direct or indirect parent of the Issuer to finance any Investment permitted to be made pursuant to this covenant; provided that (i) such Restricted Payment shall be made concurrently with the closing of such Investment (and no earlier than one (1) Business Day prior to the closing of such Investment), (ii) such parent shall, immediately following the closing thereof, cause (a) all property acquired (whether assets or Equity Interests) to be contributed to the Issuer or any of its Restricted Subsidiaries or (b) the merger, amalgamation, consolidation or sale of all or substantially all assets (to the extent permitted pursuant to the provisions of the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets") of the Person formed or acquired into the Issuer or any of its Restricted Subsidiaries in order to consummate such acquisition or Investment, (iii) such direct or indirect parent company and its Affiliates (other than the Issuer and a Restricted Subsidiary) receives no consideration or other payment in connection with such transaction, except to the extent the Issuer or a Restricted Subsidiary could have given such consideration or made such payment in compliance with the covenant described under "—Transactions with Affiliates," (iv) any property received by the Issuer shall not increase amounts available for Restricted Payments pursuant to clause (c)(2) of the preceding paragraph and (v) such Investment shall be deemed to be made by the Issuer or such Restricted Subsidiary pursuant to another provision of this covenant (other than pursuant to clause (8) hereof) or pursuant to the definition of "Permitted Investments" (other than clause (14) thereof);

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (6), (7), (9), (10), (12)(b) and (14), no Default shall have occurred and be continuing or would occur as a consequence thereof.

        As of the Issue Date, all of the Issuer's Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the definition of "Unrestricted Subsidiary." For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of "Investments." Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

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Dividend and Other Payment Restrictions Affecting Subsidiaries

        The Indenture provides that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

        (a)   (i) pay dividends or make any other distributions to the Issuer or any of its Restricted Subsidiaries (1) on its Capital Stock; or (2) with respect to any other interest or participation in, or measured by, its profits; or (ii) pay any Indebtedness owed to the Issuer or any of its Restricted Subsidiaries;

        (b)   make loans or advances to the Issuer or any of its Restricted Subsidiaries; or

        (c)   sell, lease or transfer any of its properties or assets to the Issuer or any of its Restricted Subsidiaries; except in each case for such encumbrances or restrictions existing under or by reason of:

        (1)   contractual encumbrances or restrictions of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries in effect on the Issue Date, including pursuant to the Term Facility and the ABL Facility and the other Credit Facility Documents and the Acquisition Documents;

        (2)   the Indenture, the exchange notes or the Guarantees;

        (3)   restrictions imposed by other Indebtedness (which may also be guaranteed by the Guarantors) of the Issuer ranking pari passu with the exchange notes or the Guarantees, as applicable, or otherwise permitted by the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; provided that such restrictions are no more restrictive in any material respect than those imposed by the Indenture, the Guarantees and the exchange notes;

        (4)   applicable law or any applicable rule, regulation or order;

        (5)   any agreement or other instrument of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person (other than the Person and its Subsidiaries, or the property or assets of the Person and its Subsidiaries, so acquired);

        (6)   contracts or agreements for the sale of assets, including any customary restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of the Capital Stock or assets of such Restricted Subsidiary;

        (7)   Secured Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Liens" that limit the right of the debtor to dispose of the assets securing such Indebtedness;

        (8)   restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

        (9)   customary provisions in joint venture agreements and similar agreements relating solely to such joint venture and other similar agreements entered into in the ordinary course of business;

        (10) purchase money obligations for property acquired and Capitalized Lease Obligations in each case in the ordinary course of business and to the extent such restrictions are of the nature described in clause (c) above on the property so acquired or leased;

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        (11) any encumbrance or restriction of a Receivables Subsidiary effected in connection with a Qualified Receivables Financing; provided, however, that such restrictions apply only to such Receivables Subsidiary;

        (12) customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business;

        (13) customary provisions restricting assignment of any agreement entered into in the ordinary course of business;

        (14) other Indebtedness, Disqualified Stock or Preferred Stock of (a) any Restricted Subsidiary of the Issuer that is a Guarantor or a Foreign Subsidiary or (b) any Restricted Subsidiary that is not a Guarantor or a Foreign Subsidiary so long as such encumbrances and restrictions contained in any agreement or instrument will not materially affect the Issuer's ability to make anticipated principal or interest payments on the exchange notes (as determined in good faith by the Issuer), in the case of each of clauses (a) and (b) to the extent that such Indebtedness, Disqualified Stock or Preferred Stock is permitted to be Incurred subsequent to the Issue Date by the covenant described under "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

        (15) customary restrictions and conditions contained in any agreement relating to the sale, transfer, lease or other disposition of any asset permitted by the covenant described under "—Assets Sales" pending the consummation of such sale, transfer, lease or other disposition;

        (16) customary restrictions and conditions contained in the document relating to any Permitted Lien, so long as (i) such restrictions or conditions relate only to the specific asset subject to such Lien and (ii) such restrictions and conditions are not created for the purpose of avoiding the restrictions imposed by this clause (16); and

        (17) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) in the first paragraph of this covenant imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (16) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Issuer, no more restrictive in any material respect with respect to such dividend and other restrictions than those contained in the dividend or other restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

        For purposes of determining compliance with this covenant, (1) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock shall not be deemed a restriction on the ability to make distributions on Capital Stock and (2) the subordination of loans or advances made to the Issuer or a Restricted Subsidiary of the Issuer to other Indebtedness Incurred by the Issuer or any such Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances.

Asset Sales

        The Indenture provides that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Issuer or any of its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Issuer) of the assets sold or otherwise disposed of,

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and (y) at least 75% of the consideration therefor received by the Issuer or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

        (a)   any liabilities (as shown on the Issuer's or such Restricted Subsidiary's most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary of the Issuer (other than liabilities that are by their terms contractually subordinated to the exchange notes or any Guarantee) that are assumed by the transferee of any such assets (and for which the Issuer and all of its Restricted Subsidiaries have been validly released by all applicable creditors in writing) or that are otherwise cancelled or terminated in connection with the transaction with such transferee,

        (b)   any exchange notes or other obligations or other securities or assets received by the Issuer or such Restricted Subsidiary of the Issuer from such transferee that are converted by the Issuer or such Restricted Subsidiary of the Issuer into cash within 180 days of the closing of such Asset Sale (to the extent of the cash received), and

        (c)   any Designated Non-cash Consideration received by the Issuer or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed the greater of (x) $25 million and (y) 1.5% of Total Assets at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be Cash Equivalents for the purposes of this provision.

        Within 450 days after the Issuer's or any Restricted Subsidiary of the Issuer's receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary of the Issuer may apply the Net Proceeds from such Asset Sale, at its option to:

        (1)   repay (a) Indebtedness constituting Bank Indebtedness and other Pari Passu Indebtedness that is secured by a Lien permitted under the Indenture (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto), (b) Indebtedness of a Restricted Subsidiary that is not a Guarantor, (c) Obligations under the exchange notes or (d) other Pari Passu Indebtedness (provided that if the Issuer or any Guarantor shall so reduce Obligations under unsecured Pari Passu Indebtedness, the Issuer will equally and ratably reduce Obligations under the exchange notes as provided under "Optional Redemption," through open-market purchases (provided that such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, the pro rata principal amount of exchange notes), in each case other than Indebtedness owed to the Issuer or an Affiliate of the Issuer; or

        (2)   (a) make capital expenditures or (b) make Investments in any one or more businesses (provided that if such Investment is in the form of the acquisition of Capital Stock of a Person, such acquisition results in such Person becoming a Restricted Subsidiary of the Issuer), or acquire assets or property, in the case of this clause (b), (i) used or useful in a Similar Business or (ii) that replace the properties and assets that are the subject of such Asset Sale.

        Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary of the Issuer may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in any manner not prohibited by the Indenture. Any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the second paragraph of this covenant (it being understood that any portion of such Net Proceeds used to make an

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offer to purchase exchange notes, as described in clause (1) above, shall be deemed to have been invested whether or not such offer is accepted) will be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $25 million, the Issuer shall make an offer to all holders of exchange notes (and, at the option of the Issuer, to holders of any Pari Passu Indebtedness) (an "Asset Sale Offer") to purchase the maximum principal amount of exchange notes (and such Pari Passu Indebtedness), that is at least $2,000 and an integral multiple of $1,000 that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof (or, in the event such Pari Passu Indebtedness was issued with significant original issue discount, 100% of the accreted value thereof), plus accrued and unpaid note interest and Additional Interest, if any (or, in respect of such Pari Passu Indebtedness, such lesser price, if any, as may be provided for by the terms of such Pari Passu Indebtedness), to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within 10 Business Days after the date that Excess Proceeds exceeds $25 million by mailing the notice required pursuant to the terms of the Indenture, with a simultaneous copy to the Trustee. To the extent that the aggregate amount of exchange notes (and such Pari Passu Indebtedness) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose that is not prohibited by the Indenture. If the aggregate principal amount of exchange notes (and such Pari Passu Indebtedness) surrendered by holders thereof exceeds the amount of Excess Proceeds, subject to DTC procedures, the Trustee shall select the exchange notes (in an aggregate principal amount determined by the Issuer) to be purchased in the manner described below. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

        The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the exchange notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof.

        If more exchange notes (and such Pari Passu Indebtedness) are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, selection of such exchange notes for purchase will be made by DTC pursuant to its procedures or if the exchange notes are certificated by the Trustee on a pro rata basis or by lot, or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements); provided that no exchange notes of $2,000 or less shall be purchased in part. Selection of such Pari Passu Indebtedness will be made pursuant to the terms of such Pari Passu Indebtedness.

        Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each holder of exchange notes at such holder's registered address. If any note is to be purchased in part only, any notice of purchase that relates to such note shall state the portion of the principal amount thereof that has been or is to be purchased.

Transactions with Affiliates

        The Indenture provides that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, 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 or series of transactions, contract, agreement, understanding, loan, advance or

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guarantee with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an "Affiliate Transaction") involving aggregate consideration in excess of $10 million, unless:

        (a)   such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person on an arm's length basis; and

        (b)   with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25 million, the Issuer delivers to the Trustee a resolution adopted in good faith by the majority of the Board of Directors of the Issuer, approving such Affiliate Transaction and set forth in an Officer's Certificate certifying that such Affiliate Transaction complies with clause (a) above.

        The foregoing provisions will not apply to the following:

        (1)   transactions between or among the Issuer and/or any of its Restricted Subsidiaries (or an entity that becomes a Restricted Subsidiary as a result of such transaction) and any merger, consolidation or amalgamation of the Issuer and any direct parent of the Issuer; provided that such parent shall have no material liabilities and no material assets other than cash, Cash Equivalents and the Capital Stock of the Issuer and such merger, consolidation or amalgamation is otherwise in compliance with the terms of the Indenture and effected for a bona fide business purpose;

        (2)   Restricted Payments permitted by the provisions of the Indenture described above under the covenant "—Limitation on Restricted Payments" and Permitted Investments;

        (3)   (x) the entering into of the Management Agreements and any agreement (and any amendment or modification of any such agreement) to pay, and the payment of, management, consulting, monitoring and advisory fees to the Sponsors in an aggregate amount in any fiscal year not to exceed $5 million, plus reasonable and customary out-of-pocket expense reimbursement; provided, however, that any payment not made in any fiscal year may be carried forward and paid in any succeeding fiscal year and (y) the payment of the present value of all amounts payable pursuant to any agreement described in clause 3(x) in connection with the termination of such agreement;

        (4)   the payment of reasonable and customary fees and reimbursement of expenses paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary or any direct or indirect parent of the Issuer;

        (5)   payments by the Issuer or any of its Restricted Subsidiaries to the Sponsors made for any financial advisory, financing, underwriting or placement services or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures, which payments are (x) made pursuant to the agreements with the Sponsors disclosed in the Offering Memorandum or (y) approved by a majority of the Board of Directors of the Issuer in good faith;

        (6)   transactions in which the Issuer or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;

        (7)   payments or loans (or cancellation of loans) to officers, directors, employees or consultants of the Issuer that are approved by a majority of the Board of Directors of the Issuer in good faith;

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        (8)   any agreement of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries as in effect as of the Issue Date (other than the Management Agreements) or any amendment thereto (so long as any such agreement together with all amendments thereto, taken as a whole, is not more disadvantageous to the holders of the exchange notes in any material respect than the original agreement of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries as in effect on the Issue Date) or any transaction contemplated thereby as determined in good faith by the Issuer;

        (9)   the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, the Acquisition Documents, any stockholders or similar agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Acquisition Date (other than the Management Agreements) and any amendment thereto or similar transactions, arrangements or agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under, any future amendment to any such existing transaction, arrangement or agreement or under any similar transaction, arrangement or agreement entered into after the Acquisition Date shall only be permitted by this clause (9) to the extent that the terms of any such existing transaction, arrangement or agreement together with all amendments thereto, taken as a whole, or new agreement are not otherwise more disadvantageous to the holders of the exchange notes in any material respect than the original transaction, arrangement or agreement as in effect on the Acquisition Date in the reasonable determination of an Officer;

        (10) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, the Lease Letter Agreement;

        (11) the execution of the Transactions and the payment of all fees and expenses related to the Transactions, including fees to the Sponsors, which are disclosed in the Offering Memorandum or contemplated by the Acquisition Documents (other than the Management Agreements and the Lease Letter Agreement);

        (12) (a) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, or transactions otherwise relating to the purchase or sale of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture, which are fair to the Issuer and its Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party or (b) payments to or from, and transactions with, Joint Ventures (other than Joint Ventures in which any Affiliate of the Issuer (other than the Issuer and its Restricted Subsidiaries) has an ownership or control interest) in the ordinary course of business to the extent otherwise permitted under the covenant described under "—Limitations on Restricted Payments";

        (13) any transaction effected as part of a Qualified Receivables Financing;

        (14) the issuance of Equity Interests (other than Disqualified Stock) of the Issuer to any Permitted Holder or member of the Management Group;

        (15) the issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock option and stock ownership plans or similar employee benefit plans approved by the Board of Directors of the Issuer or any direct or indirect parent of the Issuer or of a Restricted Subsidiary of the Issuer, as appropriate, in good faith;

        (16) the entering into of any tax sharing agreement or arrangement and payments made with respect thereto, in each case between or among the Issuer (and/or any direct or indirect parent company thereof) and its Subsidiaries; provided that, in each case the amount of such payments in

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any taxable year does not exceed the amount that the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of amounts actually received from the Unrestricted Subsidiaries) would be required to pay in respect of foreign, federal, state and local taxes for such taxable year were the Issuer, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of amounts actually received from the Unrestricted Subsidiaries) to pay such taxes separately from any such parent entity;

        (17) any contribution to the capital of the Issuer;

        (18) transactions between the Issuer or any of its Restricted Subsidiaries and any Person (other than an Unrestricted Subsidiary) which would constitute an Affiliate Transaction solely because a director of such Person is also a director of the Issuer or any direct or indirect parent of the Issuer; provided, however, that such director abstains from voting as a director of the Issuer or such direct or indirect parent, as the case may be, on any matter involving such other Person;

        (19) pledges of Equity Interests of Unrestricted Subsidiaries; and

        (20) any employment agreements entered into by the Issuer or any of its Restricted Subsidiaries in the ordinary course of business, including for the avoidance of doubt such agreements with members of the Management Group.

Reports and Other Information

        The Indenture provides that notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the SEC, the Issuer will file with the SEC (and provide the Trustee and holders with copies thereof, without cost to any holder, within 15 days after the time by which the Issuer would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act as a non-accelerated filer),

        (1)   within the time period specified in the SEC's rules and regulations for non-accelerated filers, annual reports on Form 10-K (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

        (2)   within the time period specified in the SEC's rules and regulations for non-accelerated filers, reports on Form 10-Q (or any successor or comparable form) containing the information required to be contained therein (or required in such successor or comparable form),

        (3)   promptly from time to time after the occurrence of an event required to be therein reported (and in any event within the time period specified in the SEC's rules and regulations), such other reports on Form 8-K (or any successor or comparable form), and

        (4)   any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act;

provided, however, that the Issuer shall not be so obligated to file such reports with the SEC if the SEC does not permit such filing, in which event the Issuer will make available such information to prospective purchasers of exchange notes in addition to providing such information to the Trustee and the holders, in each case within 15 days after the time the Issuer would be required to file such information with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act as a non-accelerated filer.

        In the event that:

        (a)   the rules and regulations of the SEC permit the Issuer and any direct or indirect parent of the Issuer to report at such parent entity's level on a consolidated basis and such parent entity

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is not engaged in any business in any material respect other than incidental to its ownership, directly or indirectly, of the Capital Stock of the Issuer, or

        (b)   any direct or indirect parent of the Issuer (of which the Issuer is a Subsidiary) is or becomes a Guarantor of the exchange notes, consolidating reporting at the parent entity's level in a manner consistent with that described in this covenant for the Issuer will satisfy this covenant, and the Indenture permits the Issuer to satisfy its obligations in this covenant with respect to financial information relating to the Issuer by furnishing financial information relating to such direct or indirect parent; provided that such financial information is accompanied by consolidating information that explains in reasonable detail the differences between the information relating to such direct or indirect parent and any of its Subsidiaries other than the Issuer and its Restricted Subsidiaries, on the one hand, and the information relating to the Issuer, the Guarantors and the other Restricted Subsidiaries of the Issuer on a standalone basis, on the other hand.

        In addition, the Issuer will make such information available to prospective investors upon request. In addition, the Issuer has agreed that, for so long as any exchange notes remain outstanding during any period when it is not subject to Section 13 or 15(d) of the Exchange Act, or otherwise permitted to furnish the SEC with certain information pursuant to Rule 12g3-2(b) of the Exchange Act, it will furnish to the holders of the exchange notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

        Notwithstanding the foregoing, the Issuer will be deemed to have furnished such reports referred to above to the Trustee and the holders if the Issuer has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available.

Limitation on Guarantees of Indebtedness by Restricted Subsidiaries

        The Issuer will not permit any of its Restricted Subsidiaries that guarantee the payment of any Indebtedness of the Issuer or any Guarantor Incurred under the first paragraph under, or clauses (a), (m) or (p) of the second paragraph under, "—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" to guarantee the payment of any Indebtedness of the Issuer or any other Guarantor, unless:

        (a)   such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to the Indenture providing for a Guarantee by such Restricted Subsidiary; provided that, if such Indebtedness is by its express terms subordinated in right of payment to the exchange notes or such Guarantor's Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Restricted Subsidiary's Guarantee with respect to the exchange notes substantially to the same extent as such Indebtedness is subordinated to the exchange notes; and

        (b)   such Restricted Subsidiary waives and will not in any manner whatsoever claim or take the benefit or advantage of, any rights of reimbursement, indemnity or subrogation or any other rights against the Issuer or any other Restricted Subsidiary as a result of any payment by such Restricted Subsidiary under its Guarantee;

provided that this covenant shall not be applicable to any guarantee of any Restricted Subsidiary that existed at the time such Person became a Restricted Subsidiary and was not Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary.

        Each Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

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        Each Guarantee shall be released in accordance with the provisions of this prospectus described under "—Guarantees."

Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets

        The Indenture provides that the Issuer may not, directly or indirectly, consolidate, amalgamate or merge with or into or wind up or convert into (whether or not the Issuer is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless:

        (1)   the Issuer is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation, merger, winding up or conversion (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made, and is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the "Successor Issuer"); provided that in the case where the surviving Person is not a corporation, a co-obligor of the exchange notes is a corporation;

        (2)   the Successor Issuer (if other than the Issuer) expressly assumes all the obligations of the Issuer under the Indenture and the exchange notes pursuant to supplemental indentures;

        (3)   immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction) no Default shall have occurred and be continuing;

        (4)   immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction), either

        (a)   the Successor Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; or

        (b)   the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted Subsidiaries would be equal or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction;

        (5)   if the Issuer is not the Successor Issuer, each Guarantor, unless it is the other party to the transactions described above, shall have by supplemental indenture confirmed that its Guarantee shall apply to such Person's obligations under the Indenture and the exchange notes; and

        (6)   the Issuer shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, amalgamation or transfer and such supplemental indenture (if any), comply with the Indenture.

        The Successor Issuer (if other than the Issuer) will succeed to, and be substituted for, the Issuer under the Indenture and the exchange notes and in such event the Issuer will automatically be released and discharged from its obligations under the Indenture and the exchange notes. Notwithstanding clauses (3) and (4) of the preceding paragraph, (a) any Restricted Subsidiary may merge, consolidate or amalgamate with or transfer all or part of its properties and assets to the Issuer or to another

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Restricted Subsidiary, and (b) the Issuer may merge, consolidate or amalgamate with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States, the District of Columbia or any territory of the United States or may convert into a limited liability company, so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

        The Indenture further provides that, subject to certain limitations in the Indenture governing release of a Guarantee upon the sale or disposition of a Restricted Subsidiary of the Issuer that is a Guarantor, no Guarantor will, and the Issuer will not permit any Guarantor to, consolidate, amalgamate or merge with or into or wind up into (whether or not such Guarantor is the surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person (other than any such sale, assignment, transfer, lease, conveyance or disposition in connection with the Transactions described in the Offering Memorandum or in connection with the Transactions) unless:

        (1)   either (a) such Guarantor is the surviving Person or the Person formed by or surviving any such consolidation, amalgamation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the "Successor Guarantor") and the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under the Indenture, such Guarantors' Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably necessary to effect and evidence such consolidation, amalgamation, merger or transfer, or (b) such sale or disposition or consolidation, amalgamation or merger is not in violation of the covenant described above under the caption "—Certain Covenants—Asset Sales";

        (2)   the Successor Guarantor (if other than such Guarantor) shall have delivered or caused to be delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or transfer and such supplemental indenture (if any) is authorized and permitted by the Indenture; and

        (3)   immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Restricted Subsidiaries 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.

        Subject to certain limitations described in the Indenture, the Successor Guarantor (if other than such Guarantor) will succeed to, and be substituted for, such Guarantor under the Indenture and such Guarantor's Guarantee, and such Guarantor will automatically be released and discharged from its obligations under the Indenture and such Guarantor's Guarantee. Notwithstanding the foregoing, (1) a Guarantor may merge, amalgamate or consolidate with an Affiliate incorporated solely for the purpose of reincorporating such Guarantor in another state of the United States, the District of Columbia or any territory of the United States so long as the amount of Indebtedness of the Guarantor is not increased thereby and (2) any Guarantor may consolidate, amalgamate or merge with or into or wind up into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets to the Issuer or any Guarantor.

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Defaults

        An Event of Default is defined in the Indenture as:

        (1)   a default in any payment of interest on any exchange note when due, continued for 30 days,

        (2)   a default in the payment of principal or premium, if any, of any exchange note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise,

        (3)   the failure by the Issuer or any of its Restricted Subsidiaries to comply for 60 days after notice with its other agreements contained in the Indenture,

        (4)   the failure by the Issuer or any Restricted Subsidiary to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default, in each case, if the total amount of such Indebtedness unpaid or accelerated exceeds $25 million or its foreign currency equivalent (the "cross-acceleration provision"),

        (5)   certain events of bankruptcy, insolvency or reorganization of the Issuer or a Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary) (the "bankruptcy provisions"),

        (6)   failure by the Issuer or any Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $25 million or its foreign currency equivalent (net of any amounts which are covered by enforceable insurance policies issued by solvent carriers), which judgments are not discharged, waived or stayed within 60 days thereof (the "judgment default provision"), or

        (7)   any Guarantee of a Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary) ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor that qualifies as a Significant Subsidiary (or any group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements of the Issuer) would constitute a Significant Subsidiary) denies or disaffirms its obligations under such Indenture or its Guarantee and such Default continues for 10 days.

        The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

        However, a default under clause (3) of the first paragraph above will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of outstanding exchange notes of such series notify the Issuer of the default and the Issuer does not cure such default within the time specified in clause (3) of the first paragraph above after receipt of such notice.

        If an Event of Default (other than a Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs with respect to a series of notes and is continuing, the Trustee or the holders of at least 25% in principal amount of outstanding exchange notes of such series by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest on all the notes of such series to be due and payable. Upon such a declaration, such principal and interest will be due and payable immediately. If an Event of Default relating to certain events of bankruptcy,

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insolvency or reorganization of the Issuer occurs, the principal of, premium, if any, and interest on all the exchange notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any holders. Under certain circumstances, the holders of a majority in principal amount of outstanding exchange notes may rescind any such acceleration with respect to the notes of such series and its consequences.

        In the event of any Event of Default specified in clause (4) of the first paragraph above, such Event of Default and all consequences thereof (excluding, however, any resulting payment default) will be annulled, waived and rescinded, automatically and without any action by the Trustee or the holders of the notes of such series, if within 20 days after such Event of Default arose the Issuer delivers an Officer's Certificate to the Trustee stating that (x) the Indebtedness or guarantee that is the basis for such Event of Default has been discharged or (y) the holders thereof have rescinded or waived the acceleration, notice or action (as the case may be) giving rise to such Event of Default or (z) the default that is the basis for such Event of Default has been cured, it being understood that in no event shall an acceleration of the principal amount of a series of notes as described above be annulled, waived or rescinded upon the happening of any such events.

        In case an Event of Default occurs and is continuing, the Trustee is not under any obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders unless such holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder may pursue any remedy with respect to the Indenture or the exchange notes unless:

        (1)   such holder has previously given the Trustee written notice that an Event of Default is continuing,

        (2)   holders of at least 25% in principal amount of the outstanding exchange notes of the applicable series have requested the Trustee in writing to pursue the remedy,

        (3)   such holders have offered the Trustee security or indemnity satisfactory to the Trustee 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)   the holders of a majority in principal amount of the outstanding exchange notes of the applicable series have not given the Trustee a written direction inconsistent with such request within such 60-day period.

        Subject to certain restrictions, the holders of a majority in principal amount of outstanding exchange notes of a series are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee is entitled to indemnification satisfactory to it in its sole discretion against all losses, liabilities and expenses caused by taking or not taking such action.

        The Issuer is required to deliver to the Trustee annually a certificate indicating whether the signer thereof knows of any Default that occurred during the previous year. The Issuer also is required to deliver to the Trustee, within 10 Business Days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Issuer is taking or proposes to take in respect thereof.

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Amendments and Waivers

        Subject to certain exceptions, the Indenture or the Guarantees may be amended with the consent of the holders of record of a majority in principal amount of the exchange notes then outstanding and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in principal amount of the exchange notes then outstanding. However, without the consent of each holder of record of an outstanding exchange note affected, no amendment may, among other things:

        (1)   reduce the amount of exchange notes whose holders must consent to an amendment,

        (2)   reduce the rate of or extend the time for payment of interest on any exchange note,

        (3)   reduce the principal of or change the Stated Maturity of any exchange note,

        (4)   reduce the premium payable upon the redemption of any exchange note or change the time at which any exchange note may be redeemed as described under "—Optional Redemption" above,

        (5)   waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the exchange notes issued under the Indenture, except a rescission of acceleration of the exchange notes by the holders of at least a majority in aggregate principal amount of the exchange notes and a waiver of the payment default that resulted from such acceleration, or in respect of a covenant or provision contained in the Indenture or any Guarantee which cannot be amended or modified without the consent of all holders of the exchange notes,

        (6)   make any exchange note payable in money other than that stated in such exchange note,

        (7)   expressly subordinate the exchange notes or any Guarantee to any other Indebtedness of the Issuer or any Guarantor,

        (8)   impair the right of any holder to receive payment of principal of, premium, if any, and interest on such holder's exchange notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's exchange notes,

        (9)   make any change in the amendment or waiver provisions that require each holder's consent, or

        (10) modify any Guarantee in any manner adverse to the holders.

        Without the consent of any holder, the Issuer, the Guarantors and Trustee may amend the Indenture:

        (1)   to cure any ambiguity, omission, mistake, defect or inconsistency;

        (2)   to provide for the assumption by a Successor Issuer of the obligations of the Issuer under the Indenture and the exchange notes;

        (3)   to provide for the assumption by a Successor Guarantor of the obligations of a Guarantor under the Indenture and its Guarantee;

        (4)   to provide for uncertificated exchange notes in addition to or in place of certificated exchange notes (provided that the uncertificated exchange notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated exchange notes are described in Section 163(f)(2)(B) of the Code);

        (5)   to add a Guarantee with respect to the exchange notes;

        (6)   to secure the exchange notes;

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        (7)   to evidence and provide for the acceptance of appointment by a successor trustee;

        (8)   to add to the covenants of the Issuer for the benefit of the holders or to surrender any right or power conferred upon the Issuer;

        (9)   to make any change that does not adversely affect the rights of any holder;

        (10) to conform the text of the Indenture, Guarantees or the exchange notes to any provision of this "Description of Exchange Notes" to the extent that such provision in this "Description of Exchange Notes" was intended by the Issuer to be a verbatim recitation of a provision of the Indenture, Guarantees or the exchange notes (as certified in an Officer's Certificate to the Trustee);

        (11) to comply with any requirement of the SEC in connection with the qualification of the Indenture under the TIA to effect any provision of the Indenture;

        (12) to amend the provisions of the Indenture relating to the transfer and legending of exchange notes as permitted by the Indenture, including, without limitation, to facilitate the issuance and administration of the exchange notes; provided that (i) compliance with the Indenture as so amended would not result in exchange notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not materially and adversely affect the rights of holders to transfer exchange notes, each as determined by the Issuer; or

        (13) to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture.

        The consent of the holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

        The Issuer shall deliver to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such amendment and such supplemental indenture (if any), are permitted under and comply with the Indenture.

        After an amendment under the Indenture becomes effective, the Issuer is required to mail to the respective holders of record a notice briefly describing such amendment. However, the failure to give such notice to all holders entitled to receive such notice, or any defect therein, will not impair or affect the validity of the amendment.

No Personal Liability of Directors, Officers, Employees, Managers and Stockholders

        No director, officer, employee, manager, incorporator or holder of any Equity Interests in the Issuer, any Subsidiary or any direct or indirect parent company (other than the Issuer or any Guarantor), as such, will have any liability for any obligations of the Issuer under the exchange notes, the Indenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of exchange notes by accepting an exchange note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the exchange notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Transfer and Exchange

        A holder may transfer or exchange the exchange notes in accordance with the Indenture. Upon any transfer or exchange, the registrar and the Trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuer may require a holder to pay any taxes required by law or permitted by the Indenture. The Issuer is not required to transfer or exchange any note selected for redemption or to transfer or exchange any note for a period of 15 days

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prior to a selection of notes to be redeemed. The exchange notes will be issued in registered form and the registered holder of an exchange note will be treated as the owner of such exchange note for all purposes.

Satisfaction and Discharge

        The Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration or transfer or exchange of exchange notes, as expressly provided for in the Indenture) as to all outstanding exchange notes of a series when:

        (1)   either (a) all the exchange notes theretofore authenticated and delivered (except lost, stolen or destroyed exchange notes that have been replaced or paid and exchange notes for whose payment money has theretofore been deposited in trust or segregated and held in trust) have been delivered to the Trustee for cancellation or (b) all of the exchange notes (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) if redeemable at the option of the Issuer, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness as of and to the date of deposit on those exchange notes that have not theretofore been delivered to the Trustee for cancellation (including for principal of, premium, if any, and interest on such exchange notes) together with irrevocable instructions from the Issuer directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

        (2)   the Issuer and/or the Guarantors have paid all other sums payable under the Indenture;

        (3)   no Default or Event of Default (other than that resulting from borrowing funds to be applied to make such deposit and any similar and simultaneous deposit relating to other Indebtedness and, in each case, the granting of Liens in connection therewith) with respect to the Indenture or the exchange notes issued thereunder shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not constitute a default under the Credit Facilities; and

        (4)   the Issuer has delivered to the Trustee an Officer's Certificate and an Opinion of Counsel stating that all conditions precedent under the Indenture relating to the satisfaction and discharge of such Indenture have been satisfied.

Defeasance

        The Issuer at any time may terminate all its obligations under the exchange notes and the Indenture ("legal defeasance"), except for certain obligations, including those with respect to the defeasance trust (as defined below) and obligations to register the transfer or exchange of such exchange notes, to replace mutilated, destroyed, lost or stolen exchange notes and to maintain a registrar and paying agent in respect of such exchange notes.

        The Issuer at any time may terminate its obligations under the covenants described under "—Certain Covenants," the operation of the cross-acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision described under "—Defaults" and the undertakings and covenants contained under "—Change of Control" and "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" ("covenant defeasance"). If the Issuer exercises its legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations with respect to its applicable Guarantee.

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        The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the exchange notes of such series may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the exchange notes of such series may not be accelerated because of an Event of Default specified in clause (3), (4), (5) (with respect only to Significant Subsidiaries), (6) or (7) under "—Defaults" or because of the failure of the Issuer to comply with clause (4) of the first paragraph under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets."

        In order to exercise its defeasance option, the Issuer must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the exchange notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel stating that holders of the exchange notes will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and defeasance and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or change in applicable Federal income tax law since the issuance of the exchange notes).

Concerning the Trustee

        Wilmington Trust, National Association is the Trustee under the Indenture and has been appointed by the Issuer as registrar and a paying agent with regard to the exchange notes.

Governing Law

        The Indenture provides that it and the exchange notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

"99¢ Only" means 99¢ Only Stores, a California corporation.

"ABL Credit Agreement" means that certain credit agreement, to be dated on or about the closing of the Transactions, by and among the Issuer, Parent and certain of Parent's Subsidiaries, Royal Bank of Canada, as the administrative agent, and the lenders party thereto.

"ABL Facility" means the asset-based revolving credit facility under the ABL Credit Agreement, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (provided that such increase in borrowings is permitted under "Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" above).

"Acquired Indebtedness" means, with respect to any specified Person:

        (1)   Indebtedness of any other Person existing at the time such other Person is merged, consolidated or amalgamated with or into or became a Restricted Subsidiary of such specified Person, and

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        (2)   Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

        "Acquisition Date" means January 13, 2012.

        "Acquisition Documents" means the Merger Agreement and any other document entered into in connection therewith, in each case as amended, supplemented or modified from time to time prior to the Issue Date or thereafter.

"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" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), 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.

"Applicable Premium" means, with respect to any exchange note on any applicable redemption date, as determined by the Issuer in good faith, the greater of:

        (1)   1.0% of the then outstanding principal amount of the exchange note; and

        (2)   the excess of:

        (a)   the present value at such redemption date of (i) the redemption price of such exchange note, at December 15, 2014 (such redemption price being set forth in the applicable table appearing above under "—Optional Redemption") plus (ii) all required interest payments due on such exchange note through December 15, 2014 (excluding accrued but unpaid interest), computed using a discount rate equal to the Treasury Rate for such redemption date plus 50 basis points; over

        (b)   the then outstanding principal amount of such exchange note.

        "Asset Sale" means:

        (1)   the sale, conveyance, transfer or other disposition (whether in a single transaction or a series of related transactions) of property or assets (including by way of a Sale/Leaseback Transaction) outside the ordinary course of business of the Issuer or any Restricted Subsidiary of the Issuer (each referred to in this definition as a "disposition") or

        (2)   the issuance or sale of Equity Interests (other than directors' qualifying shares and shares issued to foreign nationals or other third parties to the extent required by applicable law) of any Restricted Subsidiary (other than to the Issuer or another Restricted Subsidiary of the Issuer) whether in a single transaction or a series of related transactions,

        in each case other than:

        (a)   a disposition of Cash Equivalents or Investment Grade Securities or obsolete, damaged or worn out property or equipment in the ordinary course of business;

        (b)   the disposition of all or substantially all of the assets of the Issuer in a manner permitted pursuant to the provisions described above under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" or any disposition that constitutes a Change of Control;

        (c)   any Restricted Payment or Permitted Investment that is permitted to be made, and is made, under the covenant described above under "—Certain Covenants—Limitation on Restricted Payments";

        (d)   any disposition of assets of the Issuer or any Restricted Subsidiary or issuance or sale of Equity Interests of any Restricted Subsidiary, which assets or Equity Interests so disposed

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or issued have an aggregate Fair Market Value (as determined in good faith by the Issuer) of less than $15 million;

        (e)   any disposition of property or assets, or the issuance of securities, by a Restricted Subsidiary of the Issuer to the Issuer or by the Issuer or a Restricted Subsidiary of the Issuer to a Restricted Subsidiary of the Issuer;

        (f)    any exchange of assets (including a combination of assets and Cash Equivalents) for assets related to a Similar Business of comparable or greater market value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;

        (g)   foreclosure or any similar action on property or assets of the Issuer or any of its Restricted Subsidiaries;

        (h)   any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;

        (i)    the lease, assignment or sublease of any real or personal property in the ordinary course of business;

        (j)    any sale of inventory or other assets in the ordinary course of business;

        (k)   any grant in the ordinary course of business of any license of patents, trademarks, know-how or any other intellectual property;

        (l)    a transfer of accounts receivable and related assets of the type specified in the definition of "Receivables Financing" (or a fractional undivided interest therein) by a Receivables Subsidiary in a Qualified Receivables Financing;

        (m)  in the ordinary course of business, any swap of assets, or lease, assignment or sublease of any real or personal property, in exchange for services (including in connection with any outsourcing arrangements) of comparable or greater value or usefulness to the business of the Issuer and its Restricted Subsidiaries as a whole, as determined in good faith by the Issuer;

        (n)   any financing transaction with respect to property built or acquired by the Issuer or any Restricted Subsidiary after the Issue Date pursuant to any Sale/Leaseback Transaction permitted by the Indenture;

        (o)   dispositions in connection with Permitted Liens;

        (p)   any disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement or other obligation with or to a Person (other than the Issuer or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition; and

        (q)   any surrender or waiver of contract rights or the settlement, release, recovery on or surrender of contract, tort or other claims of any kind.

"Bank Indebtedness" means any and all amounts payable under or in respect of the Term Facility and the ABL Facility and the other Credit Facility Documents as amended, restated, supplemented, waived, replaced, restructured, repaid, refunded, refinanced or otherwise modified from time to time (including after termination of the Term Facility and the ABL Facility), including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer whether or not a claim for post-filing interest is allowed in such

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proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof.

"Board of Directors" means, as to any Person, the board of directors or managers, as applicable, of such Person (or, if such Person is a partnership, the board of directors or other governing body of the general partner of such Person) or any duly authorized committee thereof.

"Borrowing Base" means, as of any date, an amount equal to the sum of (a) 90% of the book value of all accounts receivable; plus (b) 75% of the book value of all inventory, in each case of the Issuer and its Restricted Subsidiaries.

"Business Day" means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City or in the city designated for payment of the exchange notes.

"Capital Stock" means:

        (1)   in the case of a corporation, corporate stock or shares;

        (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 or membership interests (whether general or limited); and

        (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.

"Capitalized Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized and reflected as a liability on a balance sheet (excluding the footnotes thereto) in accordance with GAAP.

"Cash Equivalents" means:

        (1)   U.S. dollars, pounds sterling, euros or, in the case of any Foreign Subsidiary that is a Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

        (2)   securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof in each case maturing not more than two years from the date of acquisition;

        (3)   certificates of deposit, time deposits and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances, in each case with maturities not exceeding one year and overnight bank deposits, in each case with any commercial bank having capital and surplus in excess of $250.0 million and whose long-term debt is rated "A-2" or the equivalent thereof by Moody's or "A" or the equivalent thereof by S&P (or reasonably equivalent ratings of another internationally recognized ratings agency);

        (4)   repurchase obligations 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 issued by a corporation (other than an Affiliate of the Issuer) rated at least "P-1" or the equivalent thereof by Moody's or "A-1" or the equivalent thereof by S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) and in each case maturing within one year after the date of acquisition;

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        (6)   readily marketable direct obligations issued by any state of the United States of America or any political subdivision thereof having one of the two highest rating categories obtainable from either Moody's or S&P (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

        (7)   Indebtedness issued by Persons (other than the Sponsors or any of their Affiliates) with a rating of "A" or higher from S&P or "A-2" or higher from Moody's (or reasonably equivalent ratings of another internationally recognized ratings agency) in each case with maturities not exceeding two years from the date of acquisition;

        (8)   investment funds investing at least 95% of their assets in securities of the types described in clauses (1) through (7) above; and

        (9)   auction rate securities held by the Issuer on the Issue Date in an aggregate amount not to exceed $10 million.

"Change of Control" means the occurrence of either of the following:

        (1)   the sale, lease or transfer, in one or a series of related transactions, of all or substantially all the assets of the Issuer and its Subsidiaries, taken as a whole, to a Person other than any of the Permitted Holders; or

        (2)   the Issuer becomes aware (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) of the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted Holders, in a single transaction or in a related series of transactions, by way of merger, consolidation, amalgamation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), directly or indirectly, of more than 50% of the total voting power of the Voting Stock of the Issuer; provided that, notwithstanding the foregoing, it shall not be a Change of Control if the Management Group holds, directly or indirectly, not less than 65% of the total voting power of the Voting Stock of the Issuer.

"Code" means the Internal Revenue Code of 1986, as amended.

"Consolidated Depreciation and Amortization Expense" means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including the amortization of key money and other intangible assets and deferred financing fees and amortization of unrecognized prior service costs and actuarial gains and losses related to pensions and other post-employment benefits, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to any Person for any period, the sum, without duplication, of:

        (1)   consolidated interest expense of such Person and its Restricted Subsidiaries for such period, to the extent such expense was deducted (and not added back) in computing Consolidated Net Income (including amortization of original issue discount, the interest component of Capitalized Lease Obligations, and net payments and receipts (if any) pursuant to interest rate Hedging Obligations and excluding Additional Interest in respect of the exchange notes, amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses and expensing of any bridge, commitment or other financing fees); plus

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        (2)   consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued plus any amounts paid or payable pursuant to clause 12(b) of the second paragraph of the covenant described under "—Certain Covenants—Limitations on Restricted Payments"; plus

        (3)   commissions, discounts, yield and other fees and charges Incurred in connection with any Receivables Financing which are payable to Persons other than the Issuer and its Restricted Subsidiaries; minus

        (4)   interest income for such period.

        For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

"Consolidated Leverage Ratio" means, with respect to any Person at any date, the ratio of the Consolidated Total Net Indebtedness of such Person as of such date of calculation to the EBITDA of such Person for such period, in each case with such pro forma adjustments to Consolidated Total Net Indebtedness and EBITDA as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

"Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, and otherwise determined in accordance with GAAP; provided that, without duplication,

        (1)   the cumulative effect of a change in accounting principles shall be excluded,

        (2)   the net after-tax effect of extraordinary, non-recurring, unusual and exceptional gains, losses, charges and expenses shall be excluded,

        (3)   the net after-tax effect of any losses, charges and expenses related to the Transactions; business optimization (including consolidation initiatives), relocation or integration; consolidation or closing of stores, distribution centers or other facilities or exiting lines of business; acquisitions after the Issue Date; initiatives aimed at profitability improvement; strategic initiatives; personnel relocation, restructuring, redundancy, severance, termination, settlement or judgment; one-time compensation charges; and the amount of any signing, retention and completion bonuses; shall in each case be excluded,

        (4)   the net after-tax effect of gains, losses, charges and expenses attributable to disposed or discontinued operations and any net after-tax gains, losses, charges and expenses related to the disposal of disposed, abandoned or discontinued operations shall be excluded,

        (5)   the net after-tax effect of gains, losses, charges and expenses attributable to asset dispositions or the sale or other disposition of any Equity Interests of any Person other than in the ordinary course of business, as determined in good faith by an Officer or the board of directors of the Issuer, shall be excluded,

        (6)   the net after-tax effect of gains, losses, charges and expenses attributable to the early extinguishment or conversion of Indebtedness, Hedging Obligations or other derivative instruments (including deferred financing expenses written off and premiums paid) shall be excluded,

        (7)   the Net Income for such period of any Person that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting, shall be excluded; provided that Consolidated Net Income of the Issuer shall be increased by the amount of dividends or distributions or other payments that (a) are actually paid to the referent Person or a Restricted Subsidiary thereof in respect of such period in cash, or (b) as reasonably determined in

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good faith by an Officer or the board of directors of the Issuer could have been so paid to the referent Person or a Restricted Subsidiary thereof in respect of such period,

        (8)   solely for the purpose of determining the amount available for Restricted Payments under clause (c)(1) of the first paragraph of the covenant described under "—Certain Covenants—Limitation on Restricted Payments", the Net Income for such period of any Restricted Subsidiary (other than any Guarantor) shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of its Net Income is not at the date of determination permitted without any prior governmental approval (which has not been obtained) or, directly or indirectly, by the operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule, or governmental regulation applicable to that Restricted Subsidiary, unless such restriction with respect to the payment of dividends or similar distributions has been legally waived; provided that Consolidated Net Income of the Issuer will be increased by the amount of dividends or other distributions or other payments actually paid in cash to the Issuer or a Restricted Subsidiary in respect of such period, to the extent not already included therein,

        (9)   the effects of adjustments (including the effects of such adjustments pushed down to the Issuer and its Restricted Subsidiaries) in any line item in such Person's consolidated financial statements pursuant to GAAP resulting from the application of recapitalization accounting or purchase accounting, as the case may be, in connection with the Transactions, any acquisition or any joint venture investments or the amortization or write off of any amounts thereof, net of taxes, shall be excluded,

        (10) impairment charges, asset write offs and write downs, including impairment charges, asset write offs and write downs related to goodwill, intangible assets, long-lived assets, Investments in debt and equity securities or as a result of a change in law or regulation, in each case pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP shall be excluded,

        (11) (a) non-cash compensation charges and expenses, including any such charges and expenses arising from grants of stock appreciation or similar rights, phantom equity, stock options, restricted stock or other rights or equity incentive programs and (b) non-cash deemed finance charges in respect of any pension liabilities or other provisions shall be excluded,

        (12) (a) charges and expenses pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement, any stock subscription or shareholder agreement or any distributor equity plan or agreement and (b) charges, expenses, accruals and reserves in connection with the rollover, acceleration or payout of Equity Interests held by management of the Issuer or any of its Restricted Subsidiaries, in each case of (a) and (b), to the extent that (in the case of any cash charges and expenses) such charges, expenses, accruals and reserves are funded with cash proceeds contributed to the capital of the Issuer or any direct or indirect parent of the Issuer or Net Proceeds of an issuance of Equity Interests (other than Disqualified Stock and except to the extent that such proceeds do not increase the amounts available for Restricted Payments pursuant to clause (2) of the first paragraph under "Certain Covenants "—Limitation on Restricted Payments") of the Issuer or any direct or indirect parent of the Issuer shall be excluded,

        (13) charges, expenses and fees incurred, or any amortization thereof, in connection with any Equity Offering, acquisition, Investment, recapitalization, asset disposition, incurrence or repayment of Indebtedness, issuance of Equity Interests, refinancing transaction or amendment or modification of any debt instrument (in each case, including any such transaction consummated prior to the Issue Date and any such transaction undertaken but not completed) and any non-recurring charges and expenses (including non-recurring merger expenses) incurred as a result of any such transaction shall be excluded,

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        (14) accruals and reserves that are established or adjusted, in each case within 12 months of the subject transaction, as a result of the Transactions or any acquisition, Investment, asset disposition, write down or write off (including the related tax benefit) in accordance with GAAP (including any adjustment of estimated payouts on earn-outs) or charges as a result of the adoption or modification of accounting policies shall be excluded,

        (15) to the extent covered by insurance and actually reimbursed, or, so long as the Issuer has made a good faith determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that (x) such coverage is not denied by the applicable carrier or indemnifying party in writing within 180 days and (y) such amount is in fact reimbursed within 365 days of the date of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so reimbursed within 365 days), losses, charges, expenses, accruals and reserves with respect to liability or casualty events or business interruption shall be excluded,

        (16) losses, charges and expenses that are covered by indemnification or other reimbursement provisions in connection with any acquisition, Investment or asset disposition, to the extent actually reimbursed, or, so long as the Issuer has made a determination that a reasonable basis exists for indemnification or reimbursement and only to the extent that such amount is in fact indemnified or reimbursed within 365 days of such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 days), shall be excluded,

        (17) (a) non-cash or unrealized gains or losses in respect of obligations under Swap Contracts or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of obligations under Swap Contracts, and (b) gains or losses resulting from currency translation gains or losses related to currency remeasurements of Indebtedness (including gains or losses resulting from (i) Swap Contracts for currency exchange risk and (ii) intercompany Indebtedness) and all other foreign currency translation gains or losses to the extent such gains or losses are non-cash items shall be excluded, and

        (18) deferred tax expenses associated with tax deductions or net operating losses arising as a result of the Transactions, or the release of any valuation allowance related to such item, shall be excluded.

        Notwithstanding the foregoing, for the purpose of the covenant described under "Certain Covenants—Limitation on Restricted Payments" only (other than clauses (c)(4) or (c)(5) of the first paragraph thereof), there shall be excluded from Consolidated Net Income any income arising from any sale or other disposition of Restricted Investments made by the Issuer and the Restricted Subsidiaries, any repurchases and redemptions of Restricted Investments from the Issuer and the Restricted Subsidiaries, any repayments of loans and advances which constitute Restricted Investments by the Issuer or any Restricted Subsidiary, any sale of the stock of an Unrestricted Subsidiary or any distribution or dividend from an Unrestricted Subsidiary, in each case only to the extent such amounts increase the amount of Restricted Payments permitted under such covenant pursuant to clauses (c)(4) or (c)(5) of the first paragraph thereof.

"Contingent Obligations" means, with respect to any Person, any obligation of such Person guaranteeing any leases, dividends or other obligations that do not constitute Indebtedness ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent:

        (1)   to purchase any such primary obligation or any property constituting direct or indirect security therefor,

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        (2)   to advance or supply funds:

        (a)   for the purchase or payment of any such primary obligation; or

        (b)   to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

        (3)   to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation against loss in respect thereof.

"Consolidated Total Net Indebtedness" means, as of any date of determination, consolidated Indebtedness of the Issuer and its Restricted Subsidiaries reflected on the Issuer's consolidated balance sheet less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the Issuer's balance sheet as of such date of determination, in an aggregate amount not to exceed $50 million.

"Credit Facility" means (i) each of the ABL Facility and Term Facility and (ii) whether or not either of the credit facilities referred to in clause (i) remain outstanding, if designated by the Issuer to be included in the definition of "Credit Facility," one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans, Receivables Financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including convertible or exchangeable debt instruments or bank guarantees or bankers' acceptances), or (C) instruments or agreements evidencing any other Indebtedness, in each case, with the same or different borrowers or issuers and, in each case, as amended, supplemented, modified, extended, restructured, renewed, refinanced, restated, replaced or refunded in whole or in part from time to time, including any such replacement, refunding or refinancing facility or indenture that increases the amount permitted to be borrowed thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under "Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock") or adds Restricted Subsidiaries as additional borrowers or guarantors thereunder and whether by the same or any other agent, lender or group of lenders.

"Credit Facility Documents" means the collective reference to any Credit Facility, any exchange notes issued pursuant thereto and the guarantees thereof, and the collateral documents relating thereto, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified, in whole or in part, from time to time.

"Default" means any event which is, or after notice or passage of time or both would be, an Event of Default.

"Designated Non-cash Consideration" means the Fair Market Value (as determined in good faith by the Issuer) of non-cash consideration received by the Issuer or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-cash Consideration pursuant to an Officer's Certificate, setting forth the basis of such valuation, less the amount of Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

"Designated Preferred Stock" means Preferred Stock of the Issuer or any direct or indirect parent of the Issuer (other than Disqualified Stock), that is issued for cash (other than to the Issuer or any of its Subsidiaries or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an Officer's Certificate, on the issuance date thereof.

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"Disqualified Stock" means, with respect to any Person, any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of any event:

        (1)   matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise (other than as a result of a change of control or asset sale; provided that the relevant asset sale or change of control provisions, taken as a whole, are no more favorable in any material respect to holders of such Capital Stock than the asset sale and change of control provisions applicable to the exchange notes and any purchase requirement triggered thereby may not become operative until compliance with the asset sale and change of control provisions applicable to the exchange notes (including the purchase of any exchange notes tendered pursuant thereto)),

        (2)   is convertible or exchangeable for Indebtedness or Disqualified Stock of such Person, or

        (3)   is redeemable at the option of the holder thereof, in whole or in part (other than solely as a result of a change of control or asset sale), in each case prior to 91 days after the earlier of the maturity date of the exchange notes or the date the exchange notes are no longer outstanding; provided, however, that only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock; provided, further, however, that if such Capital Stock is issued to any employee or to any plan for the benefit of employees of the Issuer or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by such Person in order to satisfy applicable statutory or regulatory obligations or as a result of such employee's termination, death or disability; provided, further, that any class of Capital Stock of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of Capital Stock that is not Disqualified Stock shall not be deemed to be Disqualified Stock.

"EBITDA" means with respect to any Person for any period, the Consolidated Net Income of such Person for such period:

        (1)   increased, in each case to the extent deducted (and not added back) or, in the case of clause (l) not already included, in Consolidated Net Income, and in each case, without duplication, by:

        (a)   provision for taxes based on income or profits or capital, including state, franchise, excise and similar taxes and foreign withholding taxes of such Person paid or accrued, including any penalties and interest relating to any tax examinations; plus

        (b)   Fixed Charges of such Person for such period (including (a) net losses on Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk and (b) expenses of surety bonds in connection with financing activities, in each case, to the extent included in Fixed Charges), together with items excluded from the definition of "Consolidated Interest Expense" pursuant to clauses 1 through 4 thereof; plus

        (c)   Consolidated Depreciation and Amortization Expense of such Person for such period; plus

        (d)   extraordinary, non-recurring, unusual and exceptional losses, charges and expenses; plus

        (e)   losses, charges and expenses relating to the Transactions; business optimization (including consolidation initiatives), relocation or integration; consolidation or closing of stores, distribution centers or other facilities or exiting lines of business; acquisitions after the Issue Date; initiatives aimed at profitability improvement; strategic initiatives; personnel relocation, restructuring, redundancy, severance, termination, settlement or judgment;

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one-time compensation charges; and the amount of any signing, retention and completion bonuses; plus

        (f)    losses, charges and expenses attributable to disposed or discontinued operations and losses, charges and expenses related to the disposal of disposed, abandoned or discontinued operations; plus

        (g)   losses, charges and expenses attributable to asset dispositions or the sale or other disposition of any Equity Interests of any Person other than in the ordinary course of business, as determined in good faith by an Officer or the board of directors of the Issuer; plus

        (h)   losses, charges and expenses attributable to the early extinguishment or conversion of Indebtedness, Hedging Obligations or other derivative instruments (including deferred financing expenses written off and premiums paid); plus

        (i)    the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-Wholly Owned Subsidiary; plus

        (j)    the amount of management, monitoring, consulting and advisory fees (including termination fees) and related indemnities, charges and expenses paid or accrued to or on behalf of any direct or indirect parent of the Issuer or any of the Permitted Holders, in each case to the extent permitted under "Certain Covenants—Transactions with Affiliates"; plus

        (k)   losses, charges and expenses related to internal software development that are expensed but could have been capitalized under alternative accounting policies in accordance with GAAP; plus

        (l)    the amount of net cost savings and synergies projected by the Issuer in good faith to be realized as a result of specified actions taken or expected to be taken prior to or during such period (which cost savings or synergies shall be subject only to certification by management of the Issuer and shall be calculated on a pro forma basis as though such cost savings or synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that (A) such cost savings or synergies are reasonably identifiable and factually supportable, and (B) such actions have been taken or are to be taken within 12 months after the date of determination to take such action; and provided, further that the aggregate amount added back to pursuant to this clause (l) in any four-quarter period shall not exceed the greater of (x) $25 million and (y) 15% of EBITDA for such period (calculated after giving effect to all adjustments pursuant to this definition, including this clause (l)); plus

        (m)  losses, charges and expenses related to the pre-opening and opening of stores, distribution centers or other facilities; plus

        (n)   losses, charges, expenses or the amount of any discounts, in each case, related to the sale of receivables and related assets to any Receivables Subsidiary in connection with a Receivables Financing; plus

        (o)   losses, charges and expenses related to payments made to option holders of the Issuer or any of its direct or indirect parents in connection with, or as a result of, any distribution being made to equityholders of such Person or any of its direct or indirect parents, which payments are being made to compensate such option holders as though they were equityholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted under the Indenture; plus

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        (p)   with respect to any Joint Venture that is not a Restricted Subsidiary, an amount equal to the proportion of those items described in clauses (a), (b) and (c) above relating to such Joint Venture corresponding to the Issuer's and the Restricted Subsidiaries' proportionate share of such Joint Venture's Consolidated Net Income (determined as if such Joint Venture were a Restricted Subsidiary); plus

        (q)   cash receipts (or any netting arrangements resulting in reduced cash expenditures) not included in EBITDA or Consolidated Net Income in any period to the extent non-cash gains relating to such cash receipts or netting arrangement were deducted in the calculation of EBITDA pursuant to clause (2) below for any prior period and not added back; plus

        (r)   any other non-cash losses, charges and expenses, including any write offs or write downs, reducing Consolidated Net Income for such period, excluding any such loss, charge or expense that represents an accrual or reserve for a cash expenditure for a future period; and

        (2)   decreased by (without duplication) non-cash gains increasing Consolidated Net Income of such Person for such period, excluding any non-cash gains that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that were deducted (and not added back) in the calculation of EBITDA for any prior period.

"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 after the Issue Date of common stock or Preferred Stock of the Issuer or any direct or indirect parent of the Issuer, as applicable (other than Disqualified Stock), other than:

        (1)   public offerings with respect to the Issuer's or such direct or indirect parent's common stock registered on Form S-8;

        (2)   issuances to any Subsidiary of the Issuer; and

        (3)   any such public or private sale that constitutes an Excluded Contribution.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Excluded Contributions" means the Cash Equivalents or other assets (valued at their Fair Market Value as determined in good faith by senior management or the Board of Directors of the Issuer) received by the Issuer after the Issue Date from:

        (1)   contributions to its common equity capital, and

        (2)   the sale (other than to a Subsidiary of the Issuer or to any Subsidiary management equity plan or stock option plan or any other management or employee benefit plan or agreement) of Capital Stock (other than Disqualified Stock and Designated Preferred Stock) of the Issuer,

in each case designated as Excluded Contributions pursuant to an Officer's Certificate executed on or promptly after the date such capital contributions are made or the date such Capital Stock is sold, as the case may be.

"Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction.

"Fixed Charge Coverage Ratio" means, with respect to any Person for any period, the ratio of EBITDA of such Person for such period to the Fixed Charges of such Person for such period. In the event that the Issuer or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any

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Indebtedness (other than in the case of revolving credit borrowings or revolving advances under any Qualified Receivables Financing, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

        For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers (including the Transactions), amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business that the Issuer or any Restricted Subsidiary has made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers (including the Transactions), amalgamations, consolidations and discontinued operations (and the change of any associated fixed charge obligations and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation or discontinued operation, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation or consolidation had occurred at the beginning of the applicable four-quarter period.

        If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall 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 Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

        For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officer's Certificate, to reflect, without duplication, (i) operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event (including, to the extent applicable, the Transactions) based on actions already taken and for which the full run-rate effect of such actions is expected to be realized within 18 months of such action and (ii) all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (m) to the "Summary—Summary Consolidated Historical and Pro Forma Financial Data" included in the Offering

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Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

        For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

"Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of:

        (1)   Consolidated Interest Expense of such Person for such period, and

        (2)   all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

"Foreign Subsidiary" means a Subsidiary not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia and any direct or indirect subsidiary of such Subsidiary.

"GAAP" means generally accepted accounting principles in the United States 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 from time to time; provided, that for all purposes under the Indenture, GAAP as applied therein with respect to accounting for leases (including Capitalized Lease Obligations and Sale/Leaseback Transactions) shall be GAAP as in effect on the Issue Date. For the purposes of the Indenture, the term "consolidated" with respect to any Person shall mean such Person consolidated with its Restricted Subsidiaries, and shall not include any Unrestricted Subsidiary, but the interest of such Person in an Unrestricted Subsidiary will be accounted for as an Investment.

"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, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness or other obligations.

"Guarantee" means any guarantee of the Obligations of the Issuer under the Indenture and the exchange notes by any Guarantor in accordance with the provisions of the Indenture.

"Guarantor" means any Person that Incurs a Guarantee; provided that upon the release or discharge of such Person from its Guarantee in accordance with the Indenture, such Person ceases to be a Guarantor.

"Hedging Obligations" means, with respect to any Person, the obligations of such Person under:

        (1)   currency exchange, interest rate or commodity swap agreements, currency exchange, interest rate or commodity cap agreements and currency exchange, interest rate or commodity collar agreements; and

        (2)   other agreements or arrangements designed to protect such Person against fluctuations in currency exchange, interest rates or commodity prices.

"holder" or "noteholder" means the Person in whose name an exchange note is registered on the registrar's books.

"Incur" means issue, assume, guarantee, incur or otherwise become, directly or indirectly, liable, contingently or otherwise, for any Indebtedness, Capital Stock or a Lien; provided, however, that any Indebtedness or Capital Stock or Lien of a Person existing at the time such Person becomes a

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Subsidiary (whether by merger, amalgamation, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Person at the time it becomes a Subsidiary.

"Indebtedness" means, with respect to any Person:

        (1)   the principal and premium (if any) of any indebtedness of such Person, whether or not contingent, (a) in respect of borrowed money, (b) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers' acceptances (or, without duplication, reimbursement agreements in respect thereof), (c) representing the deferred and unpaid purchase price of any property (except any such balance that (i) constitutes a trade payable or similar obligation to a trade creditor Incurred in the ordinary course of business and (ii) any earn-out obligations until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP), which purchase price is due more than six months after the date of placing the property in service or taking delivery and title thereto, (d) in respect of Capitalized Lease Obligations, or (e) representing any Hedging Obligations, if and to the extent that any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP;

        (2)   to the extent not otherwise included, any obligation of such Person to be liable for, or to pay, as obligor, guarantor or otherwise, the obligations referred to in clause (1) of another Person (other than by endorsement of negotiable instruments for collection in the ordinary course of business); and

        (3)   to the extent not otherwise included, indebtedness of another Person secured by a Lien on any asset owned by such Person (whether or not such indebtedness is assumed by such Person); provided, however, that the amount of such indebtedness will be the lesser of: (a) the Fair Market Value (as determined in good faith by the Issuer) of such asset at such date of determination, and (b) the amount of such indebtedness of such other Person;

provided, however, that notwithstanding the foregoing, Indebtedness shall be deemed not to include (1) Contingent Obligations Incurred in the ordinary course of business and not in respect of borrowed money; (2) deferred or prepaid revenues; (3) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the respective seller; (4) obligations under or in respect of Qualified Receivables Financing or (5) obligations under the Acquisition Documents.

        Notwithstanding anything in the Indenture to the contrary, Indebtedness shall not include, and shall be calculated without giving effect to, the effects of Statement of Financial Accounting Standards No. 133 and related interpretations to the extent such effects would otherwise increase or decrease an amount of Indebtedness for any purpose under the Indenture as a result of accounting for any embedded derivatives created by the terms of such Indebtedness; and any such amounts that would have constituted Indebtedness under the Indenture but for the application of this sentence shall not be deemed an Incurrence of Indebtedness under the Indenture.

"Independent Financial Advisor" means an accounting, appraisal or investment banking firm or consultant, in each case of nationally recognized standing, that is, in the good faith determination of the Issuer, qualified to perform the task for which it has been engaged.

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"Investment Grade Rating" means a rating equal to or higher than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P, or an equivalent rating by any other Rating Agency.

"Investment Grade Securities" means:

        (1)   securities issued or directly and fully guaranteed or insured by the U.S. government or any agency or instrumentality thereof (other than Cash Equivalents),

        (2)   debt securities with an Investment Grade Rating, but excluding any debt securities or loans or advances between and among the Issuer and its Subsidiaries,

        (3)   investments in any fund that invests exclusively in investments of the type described in clauses (1) and (2) which fund may also hold immaterial amounts of cash pending investment and/or distribution, and

        (4)   corresponding instruments in countries other than the United States customarily utilized for high quality investments and in each case with maturities not exceeding two years from the date of acquisition.

"Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of loans (including guarantees), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers and commission, travel and similar advances to officers, employees, directors and consultants made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by any other Person and investments that are required by GAAP to be classified on the balance sheet of the Issuer in the same manner as the other investments included in this definition to the extent such transactions involve the transfer of cash or other property. For purposes of the definition of "Unrestricted Subsidiary" and the covenant described under "—Certain Covenants—Limitation on Restricted Payments":

        (1)   "Investments" shall include the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value of the net assets of a Subsidiary of the Issuer at the time that such Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Issuer shall be deemed to continue to have a permanent "Investment" in an Unrestricted Subsidiary equal to an amount (if positive) equal to:

        (a)   the Issuer's "Investment" in such Subsidiary at the time of such redesignation less

        (b)   the portion (proportionate to the Issuer's equity interest in such Subsidiary) of the Fair Market Value (as determined in good faith by the Issuer) of the net assets of such Subsidiary at the time of such redesignation; and

        (2)   any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value (as determined in good faith by the Issuer) at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Issuer.

"Issue Date" means the date on which the notes are originally issued.

"Joint Venture" means a business enterprise comprised of the Issuer or any of its Restricted Subsidiaries and one or more Persons, whether in the form of a partnership, corporation, limited liability company or other entity or joint ownership or operating arrangement, in which 50% or less of the partnership interests, outstanding voting stock or other equity interests is owned, directly or indirectly, by the Issuer and/or any of its Restricted Subsidiaries.

"Lease Letter Agreement" means the Letter Agreement, dated October 11, 2011, among Parent, Merger Sub and each landlord party thereto, as amended, modified or supplemented in a manner that

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is not more disadvantageous to the holders of the exchange notes in any material respect as determined by the Issuer in good faith, together with all transactions effected pursuant thereto.

"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or similar 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); provided that in no event shall an operating lease be deemed to constitute a Lien.

"Management Agreements" means the management services agreements between each of the Sponsors or certain of the management companies associated with either of them or their advisors, if applicable, Issuer and Parent.

"Management Group" means the group consisting of the directors, executive officers and other management personnel of 99¢ Only or any direct or indirect parent thereof, as the case may be, on the Issue Date (including The Gold Revocable Trust dated October 26, 2005) together with (1) any new directors whose election by such boards of directors or whose nomination for election by the shareholders of 99¢ Only or any direct or indirect parent of 99¢ Only, as applicable, was approved by a vote of a majority of the directors of 99¢ Only or any direct or indirect parent of 99¢ Only, as applicable, then still in office who were either directors on the Issue Date or whose election or nomination was previously so approved and (2) executive officers and other management personnel of 99¢ Only or any direct or indirect parent of 99¢ Only, as applicable, hired at a time when the directors on the Issue Date together with the directors so approved constituted a majority of the directors of the Issuer or any direct or indirect parent of 99¢ Only, as applicable.

"Merger Agreement" means the Agreement and Plan of Merger, dated as of October 11, 2011, among Issuer and Parent, as amended, supplemented or modified from time to time prior to the Issue Date or thereafter.

"Merger Sub" means Number Merger Sub, Inc., a California corporation.

"Moody's" means Moody's Investors Service, Inc. or any successor to the rating agency business thereof.

"Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of Preferred Stock dividends.

"Net Proceeds" means the aggregate cash proceeds received by the Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received in respect of or upon the sale or other disposition of any Designated Non-cash Consideration received in any Asset Sale and any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise, but only as and when received, but excluding the assumption by the acquiring Person of Indebtedness relating to the disposed assets or other consideration received in any other non-cash form), net of the direct costs relating to such Asset Sale and the sale or disposition of such Designated Non-cash Consideration (including, without limitation, legal, accounting and investment banking fees, and brokerage and sales commissions), and any relocation expenses Incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements related thereto), amounts required to be applied to the repayment of principal, premium (if any) and interest on Indebtedness required (other than pursuant to the second paragraph of the covenant described under "—Certain Covenants—Asset Sales") to be paid as a result of such transaction, and any deduction of appropriate amounts to be provided by the Issuer as a reserve in accordance with GAAP against any liabilities associated with the asset disposed of in such transaction and retained by the Issuer after such sale or other disposition

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thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.

"Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers' acceptances), damages and other liabilities payable under the documentation governing any Indebtedness; provided that Obligations with respect to the exchange notes shall not include fees or indemnifications in favor of the Trustee and other third parties other than the holders of the exchange notes.

"Offering Memorandum" means the private offering memorandum, dated December 14, 2011, relating to the sale of the outstanding notes.

"Officer" means the Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Issuer.

"Officer's Certificate" means a certificate signed on behalf of the Issuer by an Officer, who must be the principal executive officer, the principal financial officer or the principal accounting officer of the Issuer, which meets the requirements set forth in the Indenture.

"Opinion of Counsel" means a written opinion subject to customary assumptions and exclusions from legal counsel who, may be an employee of or counsel to the Issuer, or other counsel, in each case who is acceptable to the Trustee.

"Parent" means Number Holdings, Inc., a Delaware corporation.

"Pari Passu Indebtedness" means:

        (1)   with respect to the Issuer, the notes and any Indebtedness which ranks pari passu in right of payment to the notes; and

        (2)   with respect to any Guarantor, it's Guarantee and any Indebtedness which ranks pari passu in right of payment to such Guarantor's Guarantee.

"Permitted Holders" means, at any time, the Sponsors. Any Person or group whose acquisition of beneficial ownership constitutes a Change of Control in respect of which a Change of Control Offer is made in accordance with the requirements of the Indenture will thereafter, together with its Affiliates, constitute an additional Permitted Holder.

"Permitted Investments" means:

        (1)   any Investment in the Issuer or any Restricted Subsidiary;

        (2)   any Investment in Cash Equivalents or Investment Grade Securities;

        (3)   any Investment by the Issuer or any Restricted Subsidiary of the Issuer in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Issuer, or (b) such Person, in one transaction or a series of related transactions, is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary of the Issuer;

        (4)   any Investment consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and any Investment received in satisfaction or partial satisfaction thereof from financially troubled account debtors and other credits to suppliers in the ordinary course of business;

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        (5)   any Investment in securities or other assets not constituting Cash Equivalents and received in connection with an Asset Sale made pursuant to the provisions of "—Certain Covenants—Asset Sales" or any other disposition of assets not constituting an Asset Sale;

        (6)   any Investment of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries existing on, or made pursuant to binding commitments existing on, the Issue Date or an Investment consisting of any extension, modification or renewal of any Investment of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries existing on the Issue Date; provided that the amount of any such Investment may be increased (x) as required by the terms of such Investment as in existence on the Issue Date or (y) as otherwise permitted under the Indenture;

        (7)   loans and advances to officers, directors, employees or consultants of the Issuer, any of its Subsidiaries or any direct or indirect parent of the Issuer, taken together with all other advances made pursuant to this clause (7), not to exceed $5 million at any one time outstanding;

        (8)   Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Investments made pursuant to this clause (8) that are at that time outstanding, not to exceed $15 million at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

        (9)   any Investment acquired by the Issuer or any of its Restricted Subsidiaries (a) in exchange for any other Investment or accounts receivable held by the Issuer or any such Restricted Subsidiary in connection with or as a result of a bankruptcy, workout, reorganization or recapitalization of, and settlement of delinquent accounts and disputes with or judgments against, the issuer of such other Investment or accounts receivable, or (b) as a result of a foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

        (10) Hedging Obligations permitted under clause (j) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

        (11) any Investment by the Issuer or any of its Restricted Subsidiaries in a Similar Business having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Investments made pursuant to this clause (11) that are at that time outstanding, not to exceed $20 million at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (11) is made in any Person that is not a Restricted Subsidiary of the Issuer at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (11) for so long as such Person continues to be a Restricted Subsidiary;

        (12) additional Investments by the Issuer or any of its Restricted Subsidiaries having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Investments made pursuant to this clause (12) that are at that time outstanding, not to exceed the greater of (x) $40 million and (y) 2.0% of Total Assets at the time of such Investment (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value); provided, however, that if any Investment pursuant to this clause (12) is made in any Person that is not a Restricted Subsidiary of the Issuer at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to

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clause (1) above and shall cease to have been made pursuant to this clause (12) for so long as such Person continues to be a Restricted Subsidiary;

        (13) loans and advances to officers, directors or employees for business-related travel expenses, moving expenses and other similar expenses, in each case Incurred in the ordinary course of business or consistent with past practice or to fund such Person's purchase of Equity Interests of the Issuer or any direct or indirect parent of the Issuer;

        (14) Investments the payment for which consists of Equity Interests of the Issuer (other than Disqualified Stock) or any direct or indirect parent of the Issuer, as applicable; provided, however, that such Equity Interests will not increase the amount available for Restricted Payments under clause (c)(2) of the first paragraph of the covenant described under "—Certain Covenants—Limitation on Restricted Payments";

        (15) any transaction to the extent it constitutes an Investment that is permitted by and made in accordance with the provisions of the second paragraph of the covenant described under "—Certain Covenants—Transactions with Affiliates" (except transactions described in clauses (2), (6), (7) and (12)(b) of such paragraph);

        (16) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

        (17) guarantees of Indebtedness of the Issuer and its Restricted Subsidiaries issued in accordance with the covenants described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" and "—Certain Covenants—Limitation on Guarantees of Indebtedness by Restricted Subsidiaries";

        (18) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;

        (19) any Investment in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person in connection with a Qualified Receivables Financing, including Investments of funds held in accounts permitted or required by the arrangements governing such Qualified Receivables Financing or any related Indebtedness;

        (20) additional Investments in Joint Ventures in an aggregate amount outstanding at any time under this clause (20) not to exceed $15 million; provided, however, that if any Investment pursuant to this clause (20) is made in any Person that is not a Restricted Subsidiary of the Issuer at the date of the making of such Investment and such Person becomes a Restricted Subsidiary of the Issuer after such date, such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (20) for so long as such Person continues to be a Restricted Subsidiary; and

        (21) Investments of a Restricted Subsidiary of the Issuer acquired after the Issue Date or of an entity merged into, amalgamated with, or consolidated with the Issuer or a Restricted Subsidiary of the Issuer in a transaction that is not prohibited by the covenant described under "—Merger, Amalgamation, Consolidation or Sale of All or Substantially All Assets" after the Issue Date to the extent that such Investments were not made in contemplation of such acquisition, merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger, amalgamation or consolidation.

"Permitted Liens" means, with respect to any Person:

        (1)   pledges or deposits by such Person under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders,

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contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory obligations of such Person or deposits of cash or U.S. government bonds to secure surety or appeal bonds to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case Incurred in the ordinary course of business;

        (2)   Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens, in each case for sums not yet due or being contested in good faith by appropriate proceedings or other Liens arising out of judgments or awards against such Person with respect to which such Person shall then be proceeding with an appeal or other proceedings for review, in each case if reserves in accordance with GAAP are required to be maintained on the books of such Person, adequate reserves are maintained on the books of such Person;

        (3)   Liens for taxes, assessments or other governmental charges not yet due or payable or subject to penalties for nonpayment or which are being contested in good faith by appropriate proceedings, in each case if reserves in accordance with GAAP are required to be maintained on the books of such Person, adequate reserves are maintained on the books of such Person;

        (4)   Liens in favor of issuers of performance and surety bonds or bid bonds or with respect to other regulatory requirements or letters of credit issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

        (5)   minor survey exceptions, minor encumbrances, 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 properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties in each case which were not Incurred in connection with Indebtedness and which 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;

        (6)   (A) Liens securing Obligations in respect of any Indebtedness permitted to be Incurred pursuant to clauses (l) and (q) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; (B) Liens securing Indebtedness permitted to be Incurred pursuant to clause (d) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; provided that such Liens do not extend to any property or assets (other than replacements thereof, improvements, additions and accessions thereto and the proceeds and products thereof and customary security deposits) that are not being purchased, leased, constructed or improved with the proceeds of such Indebtedness being Incurred pursuant to clause (d) of the second paragraph of the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock"; and (C) other Liens securing Indebtedness permitted to be Incurred pursuant to the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock,"; provided that, with respect to Liens securing Indebtedness pursuant to this clause (6)(C), at the time of Incurrence and after giving pro forma effect thereto (which calculation shall, for the avoidance of doubt, include without limitation, all Indebtedness secured by Liens pursuant to the foregoing clauses (6)(A) and (B)), and the application of the net proceeds therefrom, the Secured Indebtedness Leverage Ratio of the Issuer would not exceed 3.50 to 1.00;

        (7)   Liens of Merger Sub, 99¢ Only or any of its Restricted Subsidiaries existing on the Issue Date;

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        (8)   Liens on assets, property or shares of stock of a Person at the time such Person becomes a Subsidiary; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such other Person becoming such a Subsidiary; provided, further, however, that such Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of the Issuer (other than the proceeds or products thereof and other than after-acquired property of such acquired Subsidiary to the extent that such property is of a type covered by such Lien at such time of acquisition);

        (9)   Liens on assets or property at the time the Issuer or a Restricted Subsidiary of the Issuer acquired the assets or property, including any acquisition by means of a merger, amalgamation or consolidation with or into the Issuer or any Restricted Subsidiary of the Issuer; provided, however, that such Liens are not created or Incurred in connection with, or in contemplation of, such acquisition; provided, further, however, that the Liens may not extend to any other property owned by the Issuer or any Restricted Subsidiary of the Issuer (other than the proceeds or products thereof and other than after-acquired property of such acquired Restricted Subsidiary to the extent that such property is of a type covered by such Lien at such time of acquisition);

        (10) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to a Person for so long as such Person is the Issuer or a Restricted Subsidiary of the Issuer, in each case to the extent that such Indebtedness is permitted to be Incurred in accordance with the covenant described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock";

        (11) Liens securing Hedging Obligations not Incurred in violation of the Indenture; provided that with respect to Hedging Obligations relating to Indebtedness, such Lien extends only to the property securing such Indebtedness;

        (12) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

        (13) leases and subleases of real property incurred in the ordinary course of business which do not materially interfere with the ordinary conduct of the business of the Issuer or any of its Restricted Subsidiaries and which do not secure Indebtedness;

        (14) Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Issuer and its Restricted Subsidiaries in the ordinary course of business;

        (15) Liens in favor of the Issuer or any Guarantor;

        (16) deposits made in the ordinary course of business to secure liability to insurance carriers;

        (17) Liens on accounts receivable and related assets of the type specified in the definition of "Receivables Financing" Incurred in connection with a Qualified Receivables Financing;

        (18) Liens on the Equity Interests of Unrestricted Subsidiaries or Joint Ventures, provided that any such Lien is in favor of a creditor of or partner in such Unrestricted Subsidiary or Joint Venture, as applicable;

        (19) licenses or sublicenses to others (including grants of software and other technology licenses) in the ordinary course of business and which do not secure Indebtedness;

        (20) Liens to secure any refinancing, refunding, extension, renewal or replacement (or successive refinancings, refundings, extensions, renewals or replacements) as a whole, or in part, of any Indebtedness secured by any Lien referred to in clauses (7), (8), (9) and (27) hereof; provided, however, that (x) such new Lien shall be limited to all or part of the same property that secured

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the original Lien (plus improvements on such property), and (y) the Indebtedness secured by such Lien at such time is not increased to any amount greater than the sum of (A) the outstanding principal amount or, if greater, committed amount of the Indebtedness described under clauses (7), (8), (9) and (27) at the time the original Lien became a Permitted Lien under the Indenture, and (B) an amount necessary to pay any fees and expenses, including premiums, related to such refinancing, refunding, extension, renewal or replacement;

        (21) Liens (i) on, or consisting of, cash advances in favor of the seller of any property to be acquired in a Permitted Investment to be applied against the purchase price for such Investment or (ii) consisting of an agreement to dispose of any property in an Asset Sale, in each case, solely to the extent such Investment or Asset Sale, as the case may be, would have been permitted on the date of the creation of such Lien;

        (22) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

        (23) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

        (24) Liens Incurred to secure cash management services in the ordinary course of business;

        (25) other Liens securing obligations that do not exceed $25 million at any one time outstanding;

        (26) Liens arising by virtue of any statutory or common law provisions relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depository or financial institution;

        (27) Liens securing the exchange notes and the related Guarantees;

        (28) Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; and

        (29) Liens on proceeds of insurance policies securing insurance premiums financing arrangements.

"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

"Preferred Stock" means any Equity Interest with preferential right of payment of dividends or upon liquidation, dissolution, or winding up.

"Qualified Receivables Financing" means any Receivables Financing of a Receivables Subsidiary that meets the following conditions:

        (1)   the Board of Directors of the Issuer shall have determined in good faith that such Qualified Receivables Financing (including financing terms, covenants, termination events and other provisions) is in the aggregate economically fair and reasonable to the Issuer and the Receivables Subsidiary;

        (2)   all sales of accounts receivable and related assets to the Receivables Subsidiary are made at Fair Market Value (as determined in good faith by the Issuer); and

        (3)   the financing terms, covenants, termination events and other provisions thereof shall be market terms (as determined in good faith by the Issuer) and may include Standard Securitization Undertakings.

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        The grant of a security interest in any accounts receivable of the Issuer or any of its Restricted Subsidiaries (other than a Receivables Subsidiary) to secure Bank Indebtedness shall not be deemed a Qualified Receivables Financing.

"Rating Agency" means (1) each of Moody's and S&P and (2) if Moody's or S&P ceases to publicly rate the exchange notes, a "nationally recognized statistical rating organization" within the meaning of Section 3 under the Exchange Act selected by the Issuer or any direct or indirect parent of the Issuer as a replacement agency for Moody's or S&P, as the case may be.

"Receivables Fees" means distributions or payments made directly or by means of discounts with respect to any participation interests issued or sold in connection with, and all other fees paid to a Person that is not a Restricted Subsidiary in connection with, any Receivables Financing.

"Receivables Financing" means any transaction or series of transactions that may be entered into by the Issuer or any of its Subsidiaries pursuant to which the Issuer or any of its Subsidiaries may sell, convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a transfer by the Issuer or any of its Subsidiaries); and (b) any other Person (in the case of a transfer by a Receivables Subsidiary), or may grant a security interest in, any accounts receivable (whether now existing or arising in the future) of the Issuer or any of its Subsidiaries, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and any Hedging Obligations entered into by the Issuer or any such Subsidiary in connection with such accounts receivable.

"Receivables Repurchase Obligation" means any obligation of a seller of receivables in a Qualified Receivables Financing to repurchase receivables arising as a result of a breach of a representation, warranty or covenant or otherwise, including as a result of a receivable or portion thereof becoming subject to any asserted defense, dispute, off-set or counterclaim of any kind as a result of any action taken by, any failure to take action by or any other event relating to the seller.

"Receivables Subsidiary" means a Wholly Owned Restricted Subsidiary of the Issuer (or another Person formed for the purposes of engaging in Qualified Receivables Financing with the Issuer in which the Issuer or any Subsidiary of the Issuer makes an Investment and to which the Issuer or any Subsidiary of the Issuer transfers accounts receivable and related assets) which engages in no activities other than in connection with the financing of accounts receivable of the Issuer and its Subsidiaries, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business, and which is designated by the Board of Directors of the Issuer (as provided below) as a Receivables Subsidiary and:

        (a)   no portion of the Indebtedness or any other Obligations (contingent or otherwise) of which (i) is guaranteed by the Issuer or any other Subsidiary of the Issuer (excluding guarantees of obligations (other than the principal of and interest on, Indebtedness) pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any other Subsidiary of the Issuer in any way other than pursuant to Standard Securitization Undertakings, or (iii) subjects any property or asset of the Issuer or any other Subsidiary of the Issuer, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings;

        (b)   with which neither the Issuer nor any other Subsidiary of the Issuer has any material contract, agreement, arrangement or understanding other than on terms which the Issuer reasonably believes to be no less favorable to the Issuer or such Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Issuer; and

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        (c)   to which neither the Issuer nor any other Subsidiary of the Issuer has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results.

        Any such designation by the Board of Directors of the Issuer shall be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Board of Directors of the Issuer giving effect to such designation and an Officer's Certificate certifying that such designation complied with the foregoing conditions.

"Representative" means the trustee, agent or representative (if any) for an issue of Indebtedness; provided that if, and for so long as, such Indebtedness lacks such a Representative, then the Representative for such Indebtedness shall at all times constitute the holder or holders of a majority in outstanding principal amount of Obligations under such Indebtedness.

"Restricted Cash" means cash and Cash Equivalents that (a) would be listed as "restricted" on the consolidated balance sheet of the Issuer and its Restricted Subsidiaries or (b) are subject to any Liens, except for Liens securing Indebtedness permitted under the Indenture that is secured by such cash or Cash Equivalents.

"Restricted Investment" means an Investment other than a Permitted Investment.

"Restricted Subsidiary" means, with respect to any Person, any Subsidiary of such Person other than an Unrestricted Subsidiary of such Person. Unless otherwise indicated in this "Description of Exchange Notes," all references to Restricted Subsidiaries shall mean Restricted Subsidiaries of the Issuer.

"Rollover Investor Put" means the put right held by certain members of the Management Group pursuant to each such member's employment agreement with 99¢ Only to be entered into in connection with the consummation of the Acquisition.

"Sale/Leaseback Transaction" means an arrangement relating to property now owned or hereafter acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a Restricted Subsidiary transfers such property to a Person and the Issuer or such Restricted Subsidiary leases it from such Person, other than leases between the Issuer and a Restricted Subsidiary of the Issuer or between Restricted Subsidiaries of the Issuer.

"S&P" means Standard & Poor's Ratings Group or any successor to the rating agency business thereof.

"SEC" means the Securities and Exchange Commission.

"Secured Indebtedness" means consolidated Indebtedness of the Issuer and its Restricted Subsidiaries reflected on the Issuer's consolidated balance sheet that is secured by a Lien.

"Secured Indebtedness Leverage Ratio" means, with respect to any Person, at any date the ratio of (i) Secured Indebtedness of such Person and its Restricted Subsidiaries as of such date of calculation (determined on a consolidated basis in accordance with GAAP) less the amount of cash and Cash Equivalents in excess of any Restricted Cash that would be stated on the balance sheet of such Person and its Restricted Subsidiaries and held by such Person and its Restricted Subsidiaries as of such date of determination, in an aggregate amount for such excess Restricted Cash not to exceed $50 million, to (ii) EBITDA of such Person for the four full fiscal quarters for which internal financial statements are available immediately preceding such date on which such additional Indebtedness is Incurred. In the event that the Issuer or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness subsequent to the commencement of the period for which the Secured Indebtedness Leverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Secured Indebtedness Leverage Ratio is made (the "Secured Leverage Calculation Date"), then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect to

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such Incurrence, repayment, repurchase or redemption of Indebtedness as if the same had occurred at the beginning of the applicable four-quarter period; provided that the Issuer may elect pursuant to an Officer's Certificate delivered to the Trustee to treat all or any portion of the commitment under any Indebtedness as being Incurred at such time, in which case any subsequent Incurrence of Indebtedness under such commitment shall not be deemed, for purposes of this calculation, to be an Incurrence at such subsequent time.

        For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations, consolidations and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business that the Issuer or any Restricted Subsidiary has made, during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Secured Leverage Calculation Date (each, for purposes of this calculation, a pro forma event) shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, amalgamations, consolidations (including the Transactions) and discontinued operations (and the change of any associated Indebtedness and the change in EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation, amalgamation or discontinued operation, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Secured Indebtedness Leverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, discontinued operation, merger, amalgamation or consolidation had occurred at the beginning of the applicable four-quarter period.

        If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall 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 Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Issuer to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Issuer may designate.

        For purposes of this definition, whenever pro forma effect is to be given to any pro forma event, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Issuer. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Issuer as set forth in an Officer's Certificate, to reflect to reflect, without duplication, (i) operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event (including, to the extent applicable, the Transactions) based on actions already taken and for which the full run-rate effect of such actions is expected to be realized within 18 months of such action and (ii) all adjustments of the nature used in connection with the calculation of "Adjusted EBITDA" as set forth in footnote (m) to the "Summary—Summary Consolidated Historical and Pro Forma Financial Data" included in the Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such four-quarter period.

        For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month

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period immediately prior to the date of determination in a manner consistent with that used in calculating EBITDA for the applicable period.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

"Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC (or any successor provision).

"Similar Business" means a business, the majority of whose revenues are derived from the activities of the Issuer and its Subsidiaries as of the Issue Date or any business or activity that is reasonably similar or complementary thereto or a reasonable extension, development or expansion thereof or ancillary thereto.

"Sponsor" means any of (i) Ares Corporate Opportunities Fund III, L.P., the Canada Pension Plan Investment Board, and any of their respective Affiliates and funds or partnerships managed or advised by any of them or any of their respective Affiliates, but not including any portfolio company of any of the foregoing and (ii) any Person that forms a group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision) with Ares Corporate Opportunities Fund III, L.P., Canada Pension Plan Investment Board any of their respective Affiliates and funds or partnerships managed or advised by any of them or any of their respective Affiliates, but not including any portfolio company of any of the foregoing.

"Standard Securitization Undertakings" means representations, warranties, covenants, indemnities and guarantees of performance entered into by the Issuer or any Subsidiary of the Issuer which the Issuer has determined in good faith to be customary in a Receivables Financing including, without limitation, those relating to the servicing of the assets of a Receivables Subsidiary, it being understood that any Receivables Repurchase Obligation shall be deemed to be a Standard Securitization Undertaking.

"Stated Maturity" means, with respect to any security or Indebtedness, the date specified in such security or Indebtedness as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

"Subordinated Indebtedness" means (a) with respect to the Issuer, any Indebtedness of the Issuer which is by its terms subordinated in right of payment to the exchange notes, and (b) with respect to any Guarantor, any Indebtedness of such Guarantor which is by its terms subordinated in right of payment to its Guarantee.

"Subsidiary" means, with respect to any Person, (1) any corporation, association or other business entity (other than a partnership, joint venture or limited liability company) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, and (2) any partnership, joint venture or limited liability company of which (x) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (y) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

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"Suspension Period" means any period during which the Issuer and its Restricted Subsidiaries are not subject to the Suspended Covenants pursuant to the second paragraph of "Certain Covenants."

"Swap Contracts" means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement.

"Term Loan Credit Agreement" means that certain credit agreement, to be dated on about the closing of the Transactions, by and among the Issuer, Parent and certain of Parent's subsidiaries, Royal Bank of Canada, as the administrative agent, and the lenders party thereto.

"Term Facility" means the senior secured term loan facility under the Term Loan Credit Agreement, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, as amended, restated, supplemented, waived, replaced (whether or not upon termination, and whether with the original lenders or otherwise), restructured, repaid, refunded, refinanced or otherwise modified from time to time, including any agreement or indenture extending the maturity thereof, refinancing, replacing or otherwise restructuring all or any portion of the Indebtedness under such agreement or agreements or indenture or indentures or any successor or replacement agreement or agreements or indenture or indentures or increasing the amount loaned or issued thereunder or altering the maturity thereof (provided that such increase in borrowings is permitted under "Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock" above).

"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture.

"Total Assets" means the total consolidated assets of the Issuer and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Issuer.

"Transactions" has the meaning set forth in "Summary—The Transactions" in the Offering Memorandum.

"Treasury Rate" means, as of the applicable redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to such redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to December 15, 2014; provided, however, that if the period from such redemption date to December 15, 2014 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

"Unapplied Proceeds" means net cash proceeds received by the Issuer and its Restricted Subsidiaries since immediately after the Issue Date from the issue or sale of Equity Interests of the Issuer or any direct or indirect parent entity of the Issuer (which proceeds are contributed to the Issuer

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or its Restricted Subsidiary) or cash contributed to the capital of the Issuer (in each case other than (x) proceeds of Disqualified Stock or sales of Equity Interests to, or contributions received from, the Issuer or any of its Subsidiaries and (y) the Equity Contribution) as determined in accordance with clause (c)(2) of the first paragraph of "—Certain Covenants—Limitation on Restricted Payments" and to the extent that such net cash proceeds or cash have not been applied pursuant to such clause to make Restricted Payments or to make other Investments, payments or exchanges pursuant to the second paragraph of "—Certain Covenants—Limitation on Restricted Payments" or to make Permitted Investments (other than Permitted Investments specified in clauses (1) and (3) of the definition thereof).

"Unrestricted Subsidiary" means:

        (1)   any Subsidiary of the Issuer that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and

        (2)   any Subsidiary of an Unrestricted Subsidiary.

        The Issuer may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or Indebtedness of, or owns or holds any Lien on any property of, the Issuer or any other Subsidiary of the Issuer that is not a Subsidiary of the Subsidiary to be so designated; provided, however, that the Subsidiary to be so designated and its Subsidiaries do not at the time of designation have and do not thereafter Incur any Indebtedness pursuant to which the lender has recourse to any of the assets of the Issuer or any of its Restricted Subsidiaries; provided, further, however, that either:

        (a)   the Subsidiary to be so designated has total consolidated assets of $1,000 or less; or

        (b)   if such Subsidiary has consolidated assets greater than $1,000, then such designation would be permitted under the covenant described under "—Certain Covenants—Limitation on Restricted Payments."

        The Issuer may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that immediately after giving effect to such designation:

        (x)   (1) the Issuer could Incur $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under "—Certain Covenants—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock," or (2) the Fixed Charge Coverage Ratio for the Issuer and its Restricted Subsidiaries would be equal to or greater than such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such designation, in each case on a pro forma basis taking into account such designation, and

        (y)   no Event of Default shall have occurred and be continuing.

        Any such designation by Issuer shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the resolution of the Board of Directors or any committee thereof of the Issuer giving effect to such designation and an Officer's Certificate certifying that such designation complied with the foregoing provisions.

"U.S. Government Obligations" means securities that are:

        (1)   direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged, or

        (2)   obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally

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guaranteed as a full faith and credit obligation by the United States of America, which, in each case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depository receipt.

"Voting Stock" of any 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 or Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing (1) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by (2) the sum of all such payments.

"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that is a Restricted Subsidiary.

"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person 100% of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares or shares required to be held by Foreign Subsidiaries) shall at the time be owned by such Person or by one or more Wholly Owned Subsidiaries of such Person.

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MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

        The following general discussion summarizes the material U.S. federal income tax consequences that apply to beneficial owners of the outstanding notes who:

(1)

acquired the outstanding notes at their original issue price for cash,



(2)

exchange the outstanding notes for exchange notes in this exchange offer, and



(3)

hold the outstanding notes and will hold the exchange notes as "capital assets" (generally, for investment) as defined in the Code.

        This summary, however, does not consider state, local or foreign tax laws. In addition, it does not include all of the rules which may affect the U.S. tax treatment of your investment in the notes. For example, special rules not discussed here may apply to:

•

dealers or traders in securities or currencies or notional principal contracts;

•

S corporations;

•

financial institutions;

•

insurance companies;

•

tax-exempt entities;

•

the alternative minimum tax provisions of the Code;

•

persons holding the outstanding notes or the exchange notes as part of a "hedging" or "conversion" transaction or as a position in a "straddle" or as part of a "synthetic security" or other integrated transaction for U.S. federal income tax purposes;

•

regulated investment companies;

•

real estate investment trusts;

•

persons that own (or are deemed to own) 10% or more of our shares;

•

U.S. Holders (as defined below) that have a "functional currency" other than the U.S. dollar; or

•

persons that are subject to special expatriation rules.

        In addition, if a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of the outstanding notes or the exchange notes, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. A beneficial owner of the outstanding notes or the exchange notes that is a partnership, and partners in such partnership, should consult their own tax advisors regarding the tax consequences of owning and disposing of the outstanding notes or the exchange notes.

        This summary is based on the Code and applicable Treasury Regulations, rulings, administrative pronouncements and decisions as of the date hereof, all of which are subject to change or differing interpretations at any time with possible retroactive effect. We have not sought and will not seek any rulings from the Internal Revenue Service, or the IRS, with respect to the statements made and the conclusions reached in this summary, and there can be no assurance that the IRS will agree with such statements and conclusions.

        Each holder is urged to consult his tax advisor regarding the specific federal, state, local, and foreign income and other tax considerations of participating in this exchange offer and holding and disposing of the exchange notes.

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Exchange of Outstanding Notes for Exchange Notes

        The exchange of the outstanding notes for the exchange notes pursuant to this exchange offer will not be a taxable event for U.S. federal income tax purposes. Accordingly, holders participating in this exchange offer will not recognize any income, gain or loss in connection with the exchange for U.S. federal income tax purposes. In addition, immediately after the exchange, any such holder will have the same adjusted tax basis and holding period in the exchange notes as it had in the outstanding notes immediately before the exchange.

Consequences of Holding the Exchange Notes

U.S. Holders

        If you are a "U.S. Holder," as defined below, this section applies to you. Otherwise, please consult the section titled "Non-U.S. Holders," below.

Definition of U.S. Holder

        You are a "U.S. Holder" if you are the beneficial owner of an exchange note and you are, for U.S. federal income tax purposes:

•

an individual who is a citizen or resident of the United States;

•

a corporation or an entity, treated as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States or any political subdivision thereof;

•

an estate, the income of which is subject to U.S. federal income tax regardless of its sources; or

•

a trust (i) if a court within the United States can exercise primary supervision over the administration of the trust and one or more U.S. persons has authority to control all substantial decisions of the trust, or (ii) if the trust was in existence on August 20, 1996, and treated as a domestic trust on August 19, 1996, and it has elected to continue to be treated as a U.S. person.

Taxation of Interest

        Generally you must include the interest on the exchange notes in your gross income as ordinary income:

•

when it accrues, if you use the accrual method of accounting for U.S. federal income tax purposes; or

•

when you receive it, if you use the cash method of accounting for U.S. federal income tax purposes.

Sale of other Taxable Disposition of the Exchange Notes

        You will generally recognize taxable gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of an exchange note. The amount of your gain or loss will equal the difference between the amount you receive for the exchange note (in cash or other property, valued at fair market value), except to the extent amounts received are attributable to accrued interest on the note, and your adjusted tax basis in the exchange note. As described above, your tax basis in the exchange note generally will equal the price you paid for the outstanding note that was exchanged for the exchange note. Your gain or loss will generally be long-term capital gain or loss if your holding period for the exchange note is more than one year at the time of the sale, exchange, redemption, retirement or other taxable disposition, and such holding period will generally include your holding period in the outstanding notes. Otherwise, it will be short-term capital gain or loss. For a non-corporate U.S. Holder, the current maximum U.S. federal income tax rate applicable to long-term capital gains is

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generally 15%; however, the statute providing for this 15% rate is scheduled to expire on December 31, 2012, after which time, the rate applicable to long-term capital gains will increase to 20% unless legislation providing for the lower 15% rate to be extended or otherwise providing for a lower rate is enacted. There can be no assurance that the existing statute will be extended or other legislation enacted, and as a result long-term capital gain attributable to the sale of the exchange notes recognized after December 31, 2012 may be taxed at a rate greater than 15%. The ability to deduct capital losses is subject to limitations. Payments attributable to accrued interest which you have not yet included in income will be taxed as ordinary interest income.

New Legislation

        Newly-enacted legislation requires certain U.S. Holders who are individuals, estates or trusts to pay an additional 3.8% tax on, among other things, interest on and capital gains from the sale or other disposition of notes for taxable years beginning after December 31, 2012. You should consult your own tax advisor regarding the effect, if any, of this legislation on your ownership and disposition of the exchange notes.

Information Reporting and Backup Withholding

        We will report to certain holders of the exchange notes and to the IRS on a Form 1099-INT or other applicable form the amount of any interest paid on the exchange notes in each calendar year and the amounts of tax withheld, if any, with respect to such payments.

        You may be subject to a backup withholding tax when you receive interest payments on an exchange note or proceeds upon the sale or other disposition of the exchange note. Certain holders (including, among others, corporations, financial institutions and certain tax-exempt organizations) are generally not subject to information reporting or backup withholding. In addition, the backup withholding tax will not apply to you if you provide to us or our paying agent your correct social security or other taxpayer identification number, or TIN, in the prescribed manner unless:

•

the IRS notifies us or our paying agent that the TIN you provided is incorrect;

•

you underreport interest and dividend payment that you receive on your tax return and the IRS notifies us or our paying agent that withholding is required; or

•

you fail, under certain circumstances, to certify under penalties of perjury that you are not subject to backup withholding.

        The backup withholding tax rate is currently 28%, which rate currently is scheduled to increase to 31% for taxable years beginning on or after January 1, 2013. Any amounts withheld from a payment to you under the backup withholding rules may be credited against your U.S. federal income tax liability, and may entitle you to a refund, provided the required information is properly furnished to the IRS on a timely basis.

        You should consult your tax advisor as to your qualification for exemption from backup withholding and the procedures for obtaining such exemption.

Non-U.S. Holders

        The following general discussion is limited to the U.S. federal income tax consequences relevant to a "Non-U.S. Holder." A "Non-U.S. Holder" is a beneficial owner of outstanding notes or exchange notes that is not a U.S. person for U.S. federal income tax purposes. If you are a U.S Holder, this section does not apply to you.

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Interest

        Portfolio Interest Exemption.    You will generally not be subject to U.S. federal income tax or withholding tax on interest paid or accrued on the exchange notes if:

•

you do not own, actually or constructively, 10% or more of our shares;

•

you are not a controlled foreign corporation with respect to which we are a "related person" within the meaning of Section 864(d)(4) of the Code;

•

you are not a bank receiving interest described in Section 881(c)(3)(A) of the Code;

•

such interest is not effectively connected with the conduct by you of a trade or business in the United States; and

•

either (i) you represent that you are not a United States person for U.S. federal income tax purposes and you provide your name and address to us or our paying agent on a properly executed IRS Form W-8BEN (or a suitable substitute form) signed under penalties of perjury, or (ii) a securities clearing organization, bank, or other financial institution that holds customers' securities in the ordinary course of its business holds the exchange note on your behalf, certifies to us or our paying agent under penalties of perjury that it has received IRS Form W-8BEN (or a suitable substitute form) from you or from another qualifying financial institution intermediary, and provides a copy of the Form W-8BEN (or a suitable substitute form) to us or our paying agent.

        U.S. Federal Income or Withholding Tax If Interest Is Not Portfolio Interest.    If you do not claim, or do not qualify for, the benefit of the portfolio interest exemption described above, you may be subject to a 30% withholding tax on the gross amount of interest payments, unless reduced or eliminated by an applicable income tax treaty.

        However, income from payments or accruals of interest that is effectively connected with the conduct by you of a trade or business in the United States will be subject to U.S. federal income tax on a net basis at a rate applicable to United States persons generally (and, if paid to corporate holders, may also be subject to a branch profits tax at a rate of 30% or lower applicable treaty rate). If payments are subject to U.S. federal income tax on a net basis in accordance with the rules described in the preceding sentence, such payments will not be subject to United States withholding tax so long as you provide us or our paying agent with a properly executed IRS Form W-8ECI (or suitable substitute form).

        Non-U.S. Holders should consult any applicable income tax treaties, which may provide for a lower rate of withholding tax, exemption from or reduction of the branch profits tax, or other rules different from those described above. Generally, in order to claim any treaty benefits you must submit a properly executed IRS Form W-8BEN (or suitable substitute form).

        Reporting.    We may report annually to the IRS and to you the amount of interest paid to you, and the tax withheld, if any, with respect to you.

Sale or Other Disposition of Exchange Notes

        You will generally not be subject to U.S. federal income tax or withholding tax on gain recognized on a sale, exchange, redemption, retirement, or other disposition of an exchange note unless (i) such gain is effectively connected with the conduct by you of a trade or business within the United States or (ii) you are an individual present in the United States for 183 days or more in the year of such sale, exchange, redemption, retirement or other disposition and specific other conditions are met. Any gain that is effectively connected with the conduct by you of a trade or business within the United States will be subject to U.S. federal income tax on a net basis at the rates generally applicable to U.S.

174

persons as described above. If you are a Non-U.S. Holder described in clause (ii) above, you will be subject to a 30% U.S. federal income tax (unless a lower treaty rate applies) on the gain derived, which may be offset by U.S. source capital losses. To the extent you receive cash representing accrued and unpaid interest on the exchange notes, such amount will be treated as interest and will generally be subject to the rules described above under "Non-U.S. Holders—Interest."

Backup Withholding and Information Reporting

        Payments From U.S. Office.    If you receive payment of interest or principal directly from us or through the U.S. office of a custodian, nominee, agent or broker, you may be subject to both backup withholding and information reporting.

        With respect to interest payments made on the exchange notes, however, backup withholding and information reporting will not apply if you certify, generally on a Form W-8BEN (or Form W-8ECI) or suitable substitute form, that you are not a U.S. person in the manner described above under the heading "Non-U.S. Holders—Interest," or you otherwise establish an exemption.

        Moreover, with respect to proceeds received on the sale, exchange, redemption, or other disposition of an exchange note, backup withholding or information reporting generally will not apply if you properly provide, generally on Form W-8BEN (or Form W-8ECI) or a suitable substitute form, a statement that you are an "exempt foreign person" for purposes of the broker reporting rules, and other required information. If you are not subject to United States federal income or withholding tax on the sale or other disposition of an exchange note, as described above under the heading "Non-U.S. Holders—Interest—Sale or Other Disposition of Exchange Notes," you will generally qualify as an "exempt foreign person" for purposes of the broker reporting rules.

        Payments From Foreign Office.    If payments of principal and interest are made to you outside the United States by or through the foreign office of your foreign custodian, nominee or other agent, or if you receive the proceeds of the sale of an exchange note through a foreign office of a "broker," as defined in the pertinent Treasury Regulations, you will generally not be subject to backup withholding or information reporting. You will however, be subject to backup withholding and information reporting if the foreign custodian, nominee, agent or broker has actual knowledge or reason to know that you are a U.S. person. You will also be subject to information reporting, but not backup withholding, if the payment is made by a foreign office of a custodian, nominee, agent or broker that has certain relationships to the United States unless the broker has in its records documentary evidence that you are a Non-U.S. Holder and certain other conditions are met.

        Refunds.    Any amounts withheld from a payment to you under the backup withholding rules may be credited against your U.S. federal income tax liability and may entitle you to a refund, provided the required information is properly furnished to the IRS on a timely basis.

        The information reporting requirements may apply regardless of whether withholding is required. Copies of the information returns reporting interest and withholding also may be made available to the tax authorities in the country in which a Non-U.S. Holder is a resident under the provisions of an applicable income tax treaty or other agreement.

        The preceding summary is for general information only and is not tax advice. Please consult your own tax advisor to determine the tax consequences of participating in this exchange offer and holding and disposing of the notes under your particular circumstances.

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PLAN OF DISTRIBUTION

        Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of exchange notes received in exchange for outstanding notes where the outstanding notes were acquired as a result of market-making activities or other trading activities. We have agreed that we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale for such period of time as such persons must comply with such requirements in order to resell exchange notes, provided that such period will not exceed the period specified in the registration rights agreement.

        We will not receive any proceeds from any sale of exchange notes by any broker-dealer. Exchange notes received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of the methods of resale, at market prices prevailing at the time of resale, at prices related to the 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 the broker-dealer that resells exchange notes that were received by it for its own account in the exchange offer and any broker or dealer that participates in a distribution of the exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commissions or concessions received by those persons may be deemed to be underwriting compensation under the Securities Act. 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 outstanding notes directly from us:

•

cannot rely on the position of the staff of the SEC enunciated in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988) and Morgan, Stanley & Co. Inc., SEC no-action letter (June 5, 1991), as interpreted in the SEC's letter in Shearman & Sterling, SEC no-action letter (July 2, 1983); and

•

in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes.

        For a period of up to 180 days after the effective date of the registration statement, of which this prospectus is a part, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests the documents in the letter of transmittal. We have agreed to pay all expenses incident to our performance of, or compliance with, the registration rights agreement and all expenses incident to the exchange offer (including the expenses of one counsel for the holders of the outstanding notes), but excluding commissions or concessions of any brokers or dealers, and will indemnify all holders of notes, including any broker-dealers, and certain parties related to the holders against certain liabilities, including liabilities under the Securities Act.

        We have not entered into any arrangements or understanding with any person to distribute the exchange notes to be received in the exchange offer.

LEGAL MATTERS

        Certain legal matters as to the validity and enforceability of the notes will be passed upon for us by Proskauer Rose LLP, Los Angeles, California.

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EXPERTS

        The financial statements and schedules as of March 31, 2012 (Successor) and April 2, 2011 (Predecessor) and for each of the periods January 15, 2012 to March 31, 2012 (Successor) and April 3, 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor) and management's assessment of the effectiveness of internal control over financial reporting as of March 31, 2012 have been included in this prospectus in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, appearing elsewhere in this prospectus, and upon authority of said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

        We and the guarantors have filed with the SEC a registration statement on Form S-4 under the Securities Act with respect to the exchange notes being offered hereby. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration statement. For further information with respect to us and the guarantors and the exchange notes, reference is made to the registration statement. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete. We and the guarantors are not currently subject to the informational requirements of the Exchange Act. As a result of the offering of the exchange notes, we and the guarantors will become subject to the informational requirements of the Exchange Act, and, in accordance therewith, will file reports and other information with the SEC. The registration statement, such reports and other information can be inspected and copied at the Public Reference Room of the SEC located at Room 1580, 100 F Street, N.E., Washington D.C. 20549. Copies of such materials, including copies of all or any portion of the registration statement, can be obtained from the Public Reference Room of the SEC at prescribed rates. You can call the SEC at 1-800-SEC-0330 to obtain information on the operation of the Public Reference Room. Such materials may also be accessed electronically by means of the SEC's home page on the Internet (http://www.sec.gov).

        Pursuant to the indenture, we will, subject to certain exceptions, to make available to the holders of the notes (a) all quarterly and annual financial information that would be required to be filed with the SEC on Forms 10-Q and 10-K if we were required to file such reports and (b) all information that would be required to be filed with the SEC on Form 8-K if we were required to file such reports. In addition, for so long as any notes remain outstanding, during such times as we are not required to file such reports with the SEC we will make available 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. For a detailed description of our continuing reporting obligations, including the time periods for providing such reports, see "Description of Exchange Notes—Certain Covenants—Reports and Other Information" in this prospectus.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

99¢ Only Stores

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of March 31, 2012 (Successor) and April 2, 2011 (Predecessor)	F-3
Consolidated Statements of Comprehensive (Loss) Income for periods January 15, 2012 to March 31, 2012 (Successor), April 3 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)	F-4
Consolidated Statements of Shareholders' Equity for the periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012 (Predecessor) and the years ended April 2, 2011 (Predecessor) and March 27, 2010	F-5
Consolidated Statements of Cash Flows for the periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders
99¢ Only Stores
City of Commerce, California

        We have audited the accompanying consolidated balance sheets of the 99¢ Only Stores and consolidated entities (the "Company") as of March 31, 2012 (Successor) and April 2, 2011 (Predecessor) and the related consolidated statements of income, shareholders' equity, and cash flows for the periods January 15, 2012 to March 31, 2012 (Successor) and April 3, 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor). In connection with our audits of the financial statements, we have also audited the financial statement schedule listed in the accompanying index under Item 15(b). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and schedule. 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 the Company at March 31, 2012 (Successor) and April 2, 2011 (Predecessor) and the results of its operations and its cash flows for the periods January 15, 2012 to March 31, 2012 (Successor) and April 3, 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor) in conformity with accounting principles generally accepted in the United States of America.

        Also, in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein for the periods January 15, 2012 to March 31, 2012 (Successor) and April 3, 2011 to January 14, 2012 (Predecessor) and for the years ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor).

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company's internal control over financial reporting as of March 31, 2012 (Successor), based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated July 9, 2012 expressed an unqualified opinion thereon.

/s/ BDO USA, LLP
Los Angeles, California
July 9, 2012

F-2

99¢ Only Stores

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share data)

	March 31, 2012			April 2, 2011
	(Successor)			(Predecessor)
ASSETS
Current Assets:
Cash	$	27,766		$	16,723
Short-term investments		3,631			184,929
Accounts receivable, net of allowance for doubtful accounts of $280 and $258 as of March 31, 2012 and April 2, 2011, respectively		2,999			1,655
Income taxes receivable		6,868			15,901
Deferred income taxes		25,843			30,049
Inventories, net		214,318			191,535
Assets held for sale		6,849			—
Other		11,297			11,213
Total current assets		299,571			452,005
Property and equipment, net		476,525			313,852
Deferred financing costs, net		30,400			—
Long-term deferred income taxes		—			24,608
Long-term investments in marketable securities		—			11,232
Assets held for sale		—			7,356
Intangible assets, net		477,434			—
Goodwill		471,513			—
Deposits and other assets		12,598			15,162
Total assets	$	1,768,041		$	824,215
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	41,407		$	45,163
Payroll and payroll-related		15,580			15,598
Sales tax		6,128			6,544
Other accrued expenses		30,569			18,881
Workers' compensation		39,024			42,430
Current portion of long-term debt		5,250			—
Current portion of capital lease obligation		77			75
Total current liabilities		138,035			128,691
Long-term debt, net of current portion		758,351			—
Unfavorable lease commitments, net		18,959			—
Deferred rent		798			8,678
Deferred compensation liability		5,136			4,924
Capital lease obligation, net of current portion		354			373
Long-term deferred income taxes		214,874			—
Other liabilities		767			—
Total liabilities		1,137,274			142,666
Commitments and contingencies (Notes 8 and 9)
Shareholders' Equity:
Preferred stock (Predecessor), no par value—authorized, 1,000,000 shares; no shares issued or outstanding		—			—
Preferred stock (Successor), no par value—authorized, 1,000 shares; no shares issued or outstanding		—			—
Common stock (Predecessor), no par value—authorized, 200,000,000 shares; issued and outstanding, 70,327,068 shares at April 2, 2011		—			253,039
Common stock (Successor) $0.01 par value—Class A authorized, 1,000 shares; issued and outstanding, 100 shares and Class B authorized, 1,000 shares; issued and outstanding, 100 shares at March 31, 2012		—			—
Additional paid-in capital		636,037			—
Retained (deficit) earnings		(5,293	)		428,836
Other comprehensive income (loss)		23			(326	)
Total shareholders' equity		630,767			681,549
Total liabilities and shareholders' equity	$	1,768,041		$	824,215

The accompanying notes are an integral part of these financial statements.

F-3

99¢ Only Stores

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Amounts in thousands)

	For the Periods						Years Ended
	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012			April 2, 2011			March 27, 2010
	(Successor)			(Predecessor)			(Predecessor)			(Predecessor)
	(11 Weeks)			(41 Weeks)			(53 Weeks)			(52 Weeks)
Net Sales:
99¢ Only Stores	$	329,361		$	1,158,733		$	1,380,357		$	1,314,214
Bargain Wholesale		9,555			34,047			43,521			40,956
Total sales		338,916			1,192,780			1,423,878			1,355,170
Cost of sales (excluding depreciation and amortization expense shown separately below)		203,775			711,002			842,756			797,748
Gross profit		135,141			481,778			581,122			557,422
Selling, general and administrative expenses:
Operating expenses (includes asset impairment of $431 for the year ended March 27, 2010)		110,477			376,122			436,034			436,608
Depreciation		11,361			21,855			27,587			27,381
Amortization of intangible assets		374			14			18			17
Total selling, general and administrative expenses		122,212			397,991			463,639			464,006
Operating income		12,929			83,787			117,483			93,416
Other (income) expense:
Interest income		(29	)		(291	)		(865	)		(1,117	)
Interest expense		16,223			381			77			174
Other-than-temporary investment impairment due to credit loss		—			357			129			843
Other		(75	)		(107	)		(82	)		(35	)
Total other expense (income), net		16,119			340			(741	)		(135	)
(Loss) income before provision for income taxes		(3,190	)		83,447			118,224			93,551
Provision for income taxes		2,103			33,699			43,916			33,104
Net (loss) income		(5,293	)		49,748			74,308			60,447
Other comprehensive income, net of tax:
Unrealized holding gains on securities arising during period		68			46			105			1,136
Less: reclassification adjustment included in the net income		(45	)		150			28			496
Other comprehensive income, net of tax		23			196			133			1,632
Comprehensive (loss) income	$	(5,270	)	$	49,944		$	74,441		$	62,079

The accompanying notes are an integral part of these financial statements.

F-4

99¢ Only Stores

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Amounts in thousands)

	Common Stock							Accumulated Other Comprehensive Income (Loss)
						Additional Paid-In Capital					Retained Earnings			Shareholders' Equity
	Shares		Amount
(Predecessor)
BALANCE, March 28, 2009		68,407	$	231,867		$	—	$	(2,091	)	$	294,081		$	523,857
Net income		—		—			—		—			60,447			60,447
Net unrealized investment gains		—		—			—		1,632			—			1,632
Total comprehensive income		—		—			—		1,632			60,447			62,079
Tax benefit from exercise of stock options and Performance Stock Units		—		1,885			—		—			—			1,885
Exercise of stock options and issuance of Performance Stock Units, net		1,149		5,123			—		—			—			5,123
Stock-based compensation expense		—		7,739			—		—			—			7,739
Acquisition of noncontrolling interest of a partnership		—		(261	)		—		—			—			(261	)
BALANCE, March 27, 2010		69,556		246,353			—		(459	)		354,528			600,422
Net income		—		—			—		—			74,308			74,308
Net unrealized investment gains		—		—			—		133			—			133
Total comprehensive income		—		—			—		133			74,308			74,441
Tax benefit from exercise of stock options and Performance Stock Units		—		1,020			—		—			—			1,020
Exercise of stock options and issuance of Performance Stock Units, net		771		2,779			—		—			—			2,779
Stock-based compensation expense		—		2,887			—		—			—			2,887
BALANCE, April 2, 2011		70,327		253,039			—		(326	)		428,836			681,549
Net income		—		—			—		—			49,748			49,748
Net unrealized investment gains		—		—			—		196			—			196
Total comprehensive income		—		—			—		196			49,748			49,944
Tax benefit from exercise of stock options and Performance Stock Units		—		5,401			—		—			—			5,401
Exercise of stock options and issuance of Performance Stock Units, net		404		1,615			—		—			—			1,615
Stock-based compensation expense		—		2,745			—		—			—			2,745
BALANCE, January 14, 2012		70,731	$	262,800		$	—	$	(130	)	$	478,584		$	741,254
(Successor)
Issuance of common stock—Class A and B		—	$	—		$	635,900	$	—		$	—		$	635,900
Comprehensive loss:
Net loss		—		—			—		—			(5,293	)		(5,293	)
Net unrealized investment gains		—		—			—		23			—			23
Total comprehensive income (loss)		—		—			—		23			(5,293	)		(5,270	)
Stock-based compensation expense		—		—			137		—			—			137
BALANCE, March 31, 2012		—	$	—		$	636,037	$	23		$	(5,293	)	$	630,767

The accompanying notes are an integral part of these financial statements.

F-5

99¢ Only Stores

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	For the Periods						Years Ended
	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012			April 2, 2011			March 27, 2010
	(Successor)			(Predecessor)			(Predecessor)			(Predecessor)
	(11 Weeks)			(41 Weeks)			(53 Weeks)			(52 Weeks)
Cash flows from operating activities:
Net (loss) income	$	(5,293	)	$	49,748		$	74,308		$	60,447
Adjustments to reconcile net (loss)income to net cash provided by operating activities:
Depreciation		11,361			21,855			27,587			27,383
Amortization of deferred financing costs and accretion of OID		1,425			—			—			—
Amortization of intangible assets		374			14			18			17
Amortization of favorable/unfavorable leases, net		38			—			—			—
Long-lived assets impairment		—			—			—			431
Loss on disposal of fixed assets		130			8			101			149
Investments impairment		—			357			129			843
Excess tax benefit from share-based payment arrangements		—			(5,401	)		(1,020	)		(1,885	)
Deferred income taxes		(1,411	)		(10,492	)		13,321			(5,190	)
Stock-based compensation expense		137			2,745			2,887			7,739
Changes in assets and liabilities associated with operating activities:
Accounts receivable		(182	)		(1,162	)		952			(117	)
Inventories		17,850			(42,538	)		(20,026	)		(19,270	)
Deposits and other assets		(210	)		(920	)		(6,222	)		272
Accounts payable		(8,761	)		5,533			844			5,482
Accrued expenses		8,025			15,599			2,749			3,368
Accrued workers' compensation		(356	)		(3,050	)		(4,593	)		2,659
Income taxes		(1,736	)		10,769			(10,916	)		(3,824	)
Deferred rent		714			1,191			(166	)		(1,474	)
Other long-term liabilities		(70	)		—			(181	)		(2,158	)
Net cash provided by operating activities		22,035			44,256			79,772			74,872
Cash flows from investing activities:
Acquisition of 99¢ Only Stores		(1,477,563	)		—			—			—
Deposit—Merger consideration		177,322			(177,322	)		—			—
Purchases of property and equipment		(13,170	)		(33,570	)		(61,121	)		(34,842	)
Proceeds from sale of fixed assets		1,910			98			164			806
Purchases of investments		(6,277	)		(52,623	)		(69,317	)		(81,104	)
Proceeds from sale of investments		24,519			226,805			43,621			31,547
Net cash used in investing activities		(1,293,259	)		(36,612	)		(86,653	)		(83,593	)
Cash flows from financing activities:
Proceeds from debt		774,500			—			—			—
Payments of debt		(11,313	)		—			—			—
Payments of debt issuance costs		(31,411	)		—			—			—
Payments of capital lease obligation		(13	)		(56	)		(72	)		(65	)
Proceeds from equity contribution		535,900			—			—			—
Repurchases of common stock related to issuance of Performance Stock Units		—			(1,744	)		(2,260	)		(2,667	)
Acquisition of non-controlling interest of a partnership		—			—			—			(275	)
Proceeds from exercise of stock options		—			3,359			5,039			7,790
Excess tax benefit from share-based payment arrangements		—			5,401			1,020			1,885
Net cash provided by financing activities		1,267,663			6,960			3,727			6,668
Net (decrease) increase in cash		(3,561	)		14,604			(3,154	)		(2,053	)
Cash—beginning of period		31,327			16,723			19,877			21,930
Cash—end of period	$	27,766		$	31,327		$	16,723		$	19,877
Supplemental cash flow information:
Income taxes paid	$	5,250		$	22,059		$	37,657		$	40,753
Interest paid	$	7,372		$	287		$	39		$	138
Non-cash investing activities for purchases of property and equipment	$	(958	)	$	(431	)	$	1,726		$	(1,102	)
Non-cash equity contribution from Rollover Investors	$	100,000		$	—		$	—		$	—

The accompanying notes are an integral part of these financial statements.

F-6

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies

Nature of Business

        On January 13, 2012, pursuant to the Agreement and Plan of Merger ("the Merger"), dated as of October 11, 2011 (the "Merger Agreement"), by and among 99¢ Only Stores ("the Company"), Number Holdings, Inc., a Delaware corporation ("Parent"), and Number Merger Sub, Inc. ("Merger Sub") a subsidiary of Parent, the Merger was consummated. Merger Sub merged with and into 99¢ Only Stores, with 99¢ Only Stores being the surviving corporation. As a result of the Merger, the Company became a subsidiary of Parent. Parent is controlled by affiliates of Ares Management LLC, Canada Pension Plan Investment Board ("CPPIB") (together, the "Sponsors") and the Rollover Investors (as defined below).

        Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of the Company's common stock, no par value ("Company common stock"), was converted into the right to receive $22.00 in cash, without interest and less any applicable withholding taxes (the "Merger Consideration"), excluding (1) shares held by any shareholders who were entitled to and who have properly exercised dissenters' rights under California law, and (2) shares held by Parent, Merger Sub or any other wholly-owned subsidiary of Parent, which included the shares contributed to Parent prior to the completion of the Merger by Eric Schiffer, the Company's Chief Executive Officer, Jeff Gold, the Company's President and Chief Operating Officer, Howard Gold, the Company's Executive Vice President, Karen Schiffer and The Gold Revocable Trust dated October 26, 2005 (collectively, the "Rollover Investors"). In addition, each outstanding stock option was cancelled and converted into the right to receive an amount in cash equal to the excess, if any, of the Merger Consideration over the exercise price for each share subject to the applicable option. Each restricted stock unit ("RSU") was cancelled and converted into the right to receive an amount in cash equal to the number of unforfeited shares of Company common stock then subject to the RSU multiplied by the Merger Consideration. Each performance stock unit ("PSU") was cancelled and converted into the right to receive an amount in cash equal to the number of unforfeited shares of Company common stock then subject to the PSU multiplied by the Merger Consideration.

        At the effective time of the Merger, each share of Company common stock was converted into the right to receive the Merger Consideration. As a result of the Merger, the Company's common stock was delisted from the New York Stock Exchange and the Company ceased to be a publicly held and traded corporation. See Note 2 "The Merger."

        The Company is incorporated in the State of California. The Company is an extreme value retailer of primarily consumable and general merchandise with an emphasis on name-brand products. As of March 31, 2012, the Company operated 298 retail stores with 219 in California, 37 in Texas, 29 in Arizona, and 13 in Nevada. The Company is also a wholesale distributor of various consumer products.

Principles of Consolidation

        The consolidated financial statements include the accounts of the Company and its subsidiaries required to be consolidated in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Intercompany accounts and transactions between the consolidated companies have been eliminated in consolidation.

F-7

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Fiscal Periods

        The Company follows a fiscal calendar consisting of four quarters with 91 days, each ending on the Saturday closest to the calendar quarter-end, and a 52-week fiscal year with 364 days, with a 53-week year every five to six years. Unless otherwise stated, references to years in this prospectus relate to fiscal years rather than calendar years. On January 13, 2012, the Company completed the Merger. The accompanying audited consolidated financial statements are presented for the "Predecessor" and "Successor" relating to the periods preceding and succeeding the Merger, respectively. The Successor period from January 15, 2012 to March 31, 2012 consisted of 11 weeks and the Predecessor period from April 3, 2011 to January 14, 2012 consisted of 41 weeks, for a total of 52 weeks. The Company's fiscal year 2011 ("fiscal 2011") (Predecessor) began on March 28, 2010 and ended on April 2, 2011, consisting of 53 weeks with one additional week included in the fourth quarter and its fiscal year 2010 ("fiscal 2010") (Predecessor) began on March 29, 2009 and ended March 27, 2010, consisting of 52 weeks.

Use of Estimates

        The preparation of financial statements in conformity with GAAP 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 of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

        Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash

        For purposes of reporting cash flows, cash includes cash on hand and at the stores and cash in financial institutions. Cash balances held at financial institutions are generally in excess of federally insured limits. The Company has not experienced any losses in such accounts. These accounts are only insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company's cash balances held at financial institutions and exceeding FDIC insurance totaled $42.6 million and $32.4 million, respectively as of March 31, 2012 and April 2, 2011. The Company places its temporary cash investments with what it believes to be high credit, quality financial institutions.

Allowance for Doubtful Accounts

        In connection with its wholesale business, the Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer's ability to meet its financial obligations subsequent to the original sale, the Company will record an allowance against amounts due and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers and tenants, the Company recognizes allowances for doubtful accounts based on the length of time the

F-8

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

receivables are past due, industry and geographic concentrations, the current business environment and the Company's historical experiences.

Investments

        The Company's investments in debt and equity securities are classified as available-for-sale and are comprised primarily of money market funds and auction rate securities. The Company previously included its auction rate securities in non-current assets on the Company's consolidated balance sheets as of April 2, 2011. See Note 4, "Investments."

        Investment securities are recorded as required by Accounting Standard Codification ("ASC") 320, "Investments—Debt and Equity Securities" ("ASC 320"). These investments are carried at fair value, based on quoted market prices or other readily available market information. Investments are adjusted for the amortization of premiums or discounts to maturity and such amortization is included in interest income. Unrealized gains and losses, net of taxes, are included in accumulated other comprehensive income, which is reflected as a separate component of shareholders' equity in the Company's Consolidated Balance Sheets. Gains and losses are recognized when realized in the Company's Consolidated Statements of Comprehensive (Loss) Income. When it is determined that an other-than-temporary decline in fair value has occurred, the amount of the decline that is related to a credit loss is recognized in earnings.

Inventories

        Inventories are valued at the lower of cost (first in, first out) or market. Valuation allowances for shrinkage as well as excess and obsolete inventory are also recorded. Shrinkage is estimated as a percentage of sales for the period from the last physical inventory date to the end of the applicable period. Such estimates are based on experience and the most recent physical inventory results. Physical inventories are taken at each of the Company's retail stores at least once a year by an independent inventory service company. Additional store-level physical inventories are taken by the service companies from time to time based on a particular store's performance and/or book inventory balance. The Company also performs inventory reviews and analysis on a quarterly basis for both warehouse and store inventory to determine inventory valuation allowances for excess and obsolete inventory. The Company's policy is to analyze all items held in inventory that would not be sold through at current sales rates over a twenty-four month period to determine what merchandise should be reserved for as excess and obsolete. The valuation allowances for excess and obsolete inventory in many locations (including various warehouses, store backrooms, and sales floors of its stores), require management judgment and estimates that may impact the ending inventory valuation and valuation allowances that may affect the reported gross margin for the period.

        In order to obtain inventory at attractive prices, the Company takes advantage of large volume purchases, closeouts and other similar purchase opportunities. Consequently, the Company's inventory fluctuates from period to period and the inventory balances vary based on the timing and availability of such opportunities. The Company's inventory was $214.3 million for the period ended March 31, 2012 and $191.5 million for the fiscal year ended April 2, 2011.

F-9

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        At times, the Company also makes large block purchases of inventory that it plans to sell over a period of longer than twelve months. As of March 31, 2012 and April 2, 2011, the Company held inventory of specific products identified that it expected to sell over a period that exceeds twelve months of $6.4 million and $4.5 million, respectively, which is included in deposits and other assets in the consolidated financial statements.

Property and Equipment

        Property and equipment are carried at cost and are depreciated or amortized on a straight-line basis over the following useful lives:

Owned buildings and improvements	Lesser of 30 years or the estimated useful life of the improvement
Leasehold improvements	Lesser of the estimated useful life of the improvement or remaining lease term
Fixtures and equipment	5 years
Transportation equipment	3 - 5 years
Information technology systems	For major corporate systems, estimated useful life up to 7 years; for functional stand alone systems, estimated useful life up to 5 years

        The Company's policy is to capitalize expenditures that materially increase asset lives and expense ordinary repairs and maintenance as incurred.

Long-Lived Assets

        In accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), the Company assesses the impairment of long-lived assets quarterly or when events or changes in circumstances indicate that the carrying value may not be recoverable. Recoverability is measured by comparing the carrying amount of an asset to expected future net cash flows generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, the carrying amount is compared to its fair value and an impairment charge is recognized to the extent of the difference. Factors that the Company considers important which could individually or in combination trigger an impairment review include the following: (1) significant underperformance relative to expected historical or projected future operating results; (2) significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business; and (3) significant changes in the Company's business strategies and/or negative industry or economic trends. On a quarterly basis, the Company assesses whether events or changes in circumstances occur that potentially indicate that the carrying value of long-lived assets may not be recoverable. Considerable management judgment is necessary to estimate projected future operating cash flows. Accordingly, if actual results fall short of such estimates, significant future impairments could result. During the period from January 15, 2012 to March 31, 2012, the period from April 3, 2011 to January 14, 2012, and fiscal 2011, the Company did not record any long-lived asset impairment charges. During fiscal 2010, due to the underperformance of one store in California, the Company concluded that the carrying value of its

F-10

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

long-lived assets was not recoverable and accordingly recorded an asset impairment charge of $0.4 million. See Note 11 to consolidated financial statements for further information regarding the charges related to Company's Texas operations. The Company has not made any material changes to its long-lived asset impairment methodology during the period from January 15, 2012 to March 31, 2012 and the period from April 3, 2011 to January 14, 2012.

Goodwill and Other Intangible assets

        In connection with the Merger purchase price allocation, the fair values of long-lived and intangible assets have been determined based upon assumptions related to the future cash flows, discount rates and asset lives utilizing currently available information, and in some cases were obtained from independent professional valuation experts. Under ASC 350, "Intangibles—Goodwill and Other" the Company amortizes intangible assets over their estimated useful lives unless such lives are deemed indefinite.

        Goodwill and indefinite-lived intangible assets are not amortized but instead tested annually for impairment or more frequently when events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment by comparing the carrying amount of the reporting unit to the fair value of the reporting unit to which the goodwill is assigned. Under Accounting Standards Update ("ASU") 2011-8 (effective December 15, 2011), which amends the guidance in ASC 350-202 on testing goodwill for impairment, entities testing goodwill for impairment have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e., step one of the goodwill impairment test). If entities determine, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, the two-step impairment test would be required. The ASU does not change how goodwill is calculated or assigned to reporting units, nor does it revise the requirement to test goodwill annually for impairment. In addition, the ASU does not amend the requirement to test goodwill for impairment between annual tests if events or circumstances warrant; however, it does revise the examples of events and circumstances that an entity should consider.

        In the event that the qualitative assessment indicates that goodwill has been impaired, then the two-step test is used to identify the potential impairment and to measure the amount of impairment, if any. The first step is to compare the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is considered not impaired; otherwise, goodwill is impaired and the loss is measured by performing step two. Under step two, the impairment loss is measured by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of goodwill. Management has determined that the Company's has two reporting units operating under one operating segment, the wholesale reporting unit and the retail reporting unit. The Company will perform the qualitative assessment for impairment in January 2013, during the fourth quarter of fiscal 2013, and annually thereafter, and will determine fair value based on a combination of the income approach and the market approach. The income approach is based on discounted cash flows to determine fair value. The market approach uses a selection of comparable companies and transactions in determining fair value.

F-11

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        Amortizable intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable based on undiscounted cash flows, and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Significant judgment is required in determining whether a potential indicator of impairment of long-lived assets exists and in estimating future cash flows used in the impairment tests.

Purchase Accounting

        Under ASC 805, "Business Combinations," the Company's assets and liabilities have been accounted for at their estimated fair values as of the date of the Merger. The aggregate purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed, based upon an assessment of their relative fair value as of the Merger date. These estimates of fair values, the allocation of the purchase price and other factors related to the accounting for the Merger are subject to significant judgments and the use of estimates.

Lease Acquisition Costs

        The Company follows the policy of capitalizing allowable expenditures that relate to the acquisition and signing of its retail store leases. These costs are amortized on a straight-line basis over the applicable lease term.

Income Taxes

        The Company utilizes the liability method of accounting for income taxes as set forth in ASC 740, "Income Taxes" ("ASC 740"). Under the liability method, deferred tax assets and liabilities are recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. The Company's ability to realize deferred tax assets is assessed throughout the year and a valuation allowance is established accordingly. ASC 740 requires the Company to recognize in the consolidated financial statements the impact of a tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense. Refer to Note 5 "Income Tax Provision" for further discussion of income taxes.

Stock-Based Compensation

        The Company accounts for stock-based compensation expense under the fair value recognition provisions of ASC 718, "Compensation—Stock Compensation" ("ASC 718"). ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense ratably over the requisite service periods. The Company estimates the fair value for each option award as of the date of grant using the Black-Scholes option pricing model. The Black-Scholes model considers, among other factors, the expected life of the award and the expected

F-12

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

volatility of the stock price. Stock options are granted to employees at exercise prices equal to the fair market value of the stock at the dates of grant.

Cost of Sales

        Cost of sales includes the cost of inventory, freight in, inter-state warehouse transportation costs, obsolescence, spoilage, scrap and inventory shrinkage, and is net of discounts and allowances. Cash discounts for satisfying early payment terms are recognized when payment is made, and allowances and rebates based upon milestone achievements such as reaching a certain volume of purchases of a vendor's products are included as a reduction of cost of sales when such contractual milestones are reached in accordance with ASC 605-50-25, "Revenue Recognition—Customer Payments and Incentives—Recognition." In addition, the Company analyses its inventory levels and related cash discounts received to arrive at a value for cash discounts to be included in the inventory balance. The Company does not include purchasing, receiving, and distribution warehouse costs in its cost of sales. Due to this classification, the Company's gross profit rates may not be comparable to those of other retailers that include costs related to their distribution network in cost of sales.

Operating Expenses

        Selling, general and administrative expenses include purchasing, receiving, inspection and warehouse costs, the costs of selling merchandise in stores (payroll and associated costs, occupancy and other store-level costs), distribution costs (payroll and associated costs, occupancy, transportation to and from stores and other distribution-related costs) and corporate costs (payroll and associated costs, occupancy, advertising, professional fees, and other corporate administrative costs).

Leases

        The Company recognizes rent expense for operating leases on a straight-line basis (including the effect of reduced or free rent and rent escalations) over the applicable lease term. The difference between the cash paid to the landlord and the amount recognized as rent expense on a straight-line basis is included in deferred rent. Cash reimbursements received from landlords for leasehold improvements and other cash payments received from landlords as lease incentives are recorded as deferred rent. Deferred rent related to landlord incentives is amortized as an offset to rent expense using the straight-line method over the applicable lease term.

        For store closures where a lease obligation still exists, the Company records the estimated future liability associated with the rental obligation on the cease use date (when the store is closed) in accordance with ASC 420, "Exit or Disposal Cost Obligations" ("ASC 420"). Liabilities are established at the cease use date for the present value of any remaining operating lease obligations, net of estimated sublease income, and at the communication date for severance and other exit costs, as prescribed by ASC 420. Key assumptions in calculating the liability include the timeframe expected to terminate lease agreements, estimates related to the sublease potential of closed locations, and estimation of other related exit costs. If actual timing and potential termination costs or realization of sublease income differ from the Company's estimates, the resulting liabilities could vary from recorded amounts. These liabilities are reviewed periodically and adjusted when necessary.

F-13

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        During January 15, 2012 to March 31, 2012, the Company accrued an additional $0.1 million in lease termination costs associated with the closing of Texas stores in prior periods. During April 2, 2011 to January 14, 2012, the Company accrued an additional $0.3 million in lease termination costs associated with the closing of Texas stores in prior periods. During fiscal 2011, the Company increased its estimated lease termination costs accrual by $0.4 million for Texas stores closed in previous periods. During fiscal 2010, the Company closed 12 of its Texas stores and accrued $3.0 million in lease termination costs associated with closing seven out of the 12 Texas stores. Of the $3.0 million lease termination costs accrual, the Company recognized a net expense of $2.5 million as these costs were partially offset by a reduction in expenses of $0.5 million due to the reversal of deferred rent and tenant improvements related to these stores during fiscal 2010. See Note 11 to consolidated financial statements for further information regarding the lease termination charges related to Company's Texas operations.

        In March 2012, the Company sold and leased back a store and the resulting lease qualifies and is accounted for as an operating lease. The net proceeds from the sale-leaseback transaction amounted to $1.9 million. The gain of $0.8 million was deferred and is being amortized over the term of lease (13 years).

Revenue Recognition

        The Company recognizes sales in its stores at the time the customer takes possession of merchandise. All sales are net of discounts and returns and exclude sales tax. Wholesale sales are recognized in accordance with the shipping terms agreed upon on the purchase order. Wholesale sales are typically recognized free on board ("FOB") origin where title and risk of loss pass to the buyer when the merchandise leaves the Company's distribution facility.

        The Company has a gift card program. The Company records the sale of gift cards as a current liability and recognizes a sale when a customer redeems a gift card. The liability for outstanding gift cards is recorded in accrued expenses. The Company has not recorded any breakage income related to its gift card program.

Self-insured Workers' Compensation

        The Company self-insures for workers' compensation claims in California and Texas. The Company establishes a liability for losses of both estimated known and incurred but not reported insurance claims based on reported claims and actuarial valuations of estimated future costs of reported and incurred but not yet reported claims. Should an amount of claims greater than anticipated occur, the liability recorded may not be sufficient and additional workers' compensation costs, which may be significant, could be incurred. The Company has not discounted the projected future cash outlays for the time value of money for claims and claim-related costs when establishing its workers' compensation liability in its financial reports for March 31, 2012 and April 2, 2011.

F-14

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

Self-Insured Health Insurance Liability

        During the second quarter of fiscal 2012, the Company began self-insuring for a portion of its employee medical benefit claims. The liability for the self-funded portion of the Company health insurance program is determined actuarially, based on claims filed and an estimate of claims incurred but not yet reported. The Company maintains stop loss insurance coverage to limit its exposure for the self-funded portion of its health insurance program.

Pre-Opening Costs

        The Company expenses, all pre-opening costs related to the opening of new retail stores as incurred.

Advertising

        The Company expenses advertising costs as incurred, except the costs associated with television advertising, which are expensed the first time the advertising takes place. Advertising expenses were $1.2 million and $4.3 million for the periods of January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012, respectively. Advertising expenses were $5.5 million and $4.1 million for the fiscal years ended April 2, 2011 and March 27, 2010, respectively.

Fair Value of Financial Instruments

        The Company's financial instruments consist principally of cash, short-term marketable securities, accounts receivable, accounts payable, accruals, debt, and other liabilities. Cash, short-term marketable securities are measured and recorded at fair value. Accounts receivable and other receivables are financial assets with carrying values that approximate fair value. Accounts payable and other accrued expenses are financial liabilities with carrying values that approximate fair value. Refer to Note 7 "Fair Value of Financial Instruments" for further discussion of the fair value of debt.

        The Company complies with the provisions of ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements required under other accounting pronouncements. ASC 820-10-35, "Subsequent Measurement" ("ASC 820-10-35"), clarifies that fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. ASC 820-10-35 also requires that a fair value measurement reflect the assumptions market participants would use in pricing an asset or liability based on the best information available. Assumptions include the risks inherent in a particular valuation technique (such as a pricing model) and/or the risks inherent in the inputs to the model. The Company also follows ASC 825, "Financial Instruments," to expand required disclosures.

Comprehensive Income

        ASC 220, "Reporting Comprehensive Income," establishes standards for reporting and displaying comprehensive income and its components in the consolidated financial statements. The following table

F-15

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

sets forth the calculation of comprehensive income, net of tax effects for the periods indicated (in thousands):

	For the Periods					Years Ended
	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012		April 2, 2011		March 27, 2010
	(Successor)			(Predecessor)		(Predecessor)		(Predecessor)
	(Amounts in thousands)
Net (loss) income	$	(5,293	)	$	49,748	$	74,308	$	60,447
Unrealized holding gains on marketable securities, net of tax effects of $45 for January 15, 2012 to March 31, 2012, $30 for April 3, 2011 to January 14, 2012, $70 in fiscal 2011 and $758 in fiscal 2010	$	68		$	46	$	105	$	1,136
Reclassification adjustment, net of tax effects of $(30) for January 15, 2012 to March 31, 2012, $100 for April 3, 2011 to January 14, 2012, $19 in fiscal 2011 and $330 in fiscal 2010		(45	)		150		28		496
Total unrealized holding gains, net		23			196		133		1,632
Total comprehensive (loss) income	$	(5,270	)	$	49,944	$	74,441	$	62,079

New Authoritative Standards

        In April 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-04, "Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards ("IFRSs") ("ASU 2011-04"). ASU 2011-04 amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. The new guidance is effective for fiscal year and interim periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have any impact on the Company's consolidated financial position or results of operations.

        In June 2011, FASB issued ASU 2011-05, "Presentation of Comprehensive Income," (ASU 2011-05). ASU 2011-05 allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While ASU 2011-05 changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. The new guidance is effective for fiscal year and interim periods beginning after December 15, 2011. The adoption of ASU 2011-05 did not have any impact on the Company's consolidated financial position or results of operations, other than presentation.

F-16

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

1. Basis of Presentation and Summary of Significant Accounting Policies (Continued)

        On September 15, 2011, the FASB issued ASU No. 2011-08 concerning the testing of goodwill for impairment. This guidance modifies goodwill impairment testing by allowing the inclusion of qualitative factors in the assessment of whether a two-step goodwill impairment test is necessary. Thus, entities are no longer required to calculate the fair value of a reporting unit unless they conclude through an assessment of qualitative factors that it is more likely than not that the unit's carrying value is greater than its fair value. When an entity's qualitative assessment reveals that goodwill impairment is more likely than not, the entity must perform the two-step goodwill impairment test. The adoption of ASU 2011-08 did not have any impact on the Company's consolidated financial position or results of operations.

        On December 23, 2011, the FASB issued ASU 2011-12, which indefinitely defers the provision of ASU 2011-5 related to the requirement that entities present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. The adoption of ASU 2011-12 did have any impact on the Company's consolidated financial position or results of operations, other than presentation.

2. The Merger

        As discussed in Note 1, the Merger was completed on January 13, 2012 and was financed by:

•

Borrowings consisting of (i) a $175 million, 5-year asset-based revolving credit facility (the "ABL Facility"), which was drawn for $10 million at closing of the Acquisition and (ii) a $525 million, 7-year term loan credit facility (the "First Lien Term Loan Facility" and, together with the ABL Facility, the "Credit Facilities");

•

Issuance of $250 million principal amount of 11% senior unsecured notes due 2019 (the "Senior Notes"); and

•

Equity investments of $635.9 million from the Sponsors and the Rollover Investors.

        The Merger was accounted for as a business combination in accordance with ASC 805, "Business Combinations," whereby the purchase price paid to effect the Merger was allocated to recognize the acquired assets and liabilities at fair value. The Merger and the preliminary allocation of the purchase

F-17

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

2. The Merger (Continued)

price of $1.6 billion have been recorded as of January 14, 2012. The sources and uses of funds in connection with the Merger are summarized in the following table.

	(in thousands)
Sources:
Proceeds from First Lien Term Loan	$	525,000
Proceeds from Senior Notes		250,000
Proceeds from ABL Facility		10,000
Proceeds from equity contributions		535,900
Rollover equity from Rollover Investors		100,000
Cash on hand		212,575
Total sources	$	1,633,475
Uses:
Equity purchase price	$	1,577,563
Original issue discount and other debt issuance costs		41,911
Cash to balance sheet		14,001
Total uses	$	1,633,475

Acquisition Accounting

        In connection with the preliminary purchase price allocation, estimates of the fair values of long-lived and intangible assets have been determined based upon assumptions related to the future cash flows, discount rates and asset lives utilizing currently available information, and in some cases, preliminary valuation results from independent valuation specialists. As of March 31, 2012, preliminary purchase accounting adjustments have been recorded to: (i) increase the carrying value of property and equipment, (ii) establish intangible assets for trade names, vendor relations and favorable lease commitments, and (iii) revalue lease-related liabilities. This allocation of the purchase price is preliminary and future revisions to the purchase price allocation may be made as additional information becomes available and such revisions could be material.

F-18

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

2. The Merger (Continued)

        The preliminary allocation of purchase price is as follows:

	(in thousands)
Purchase price	$	1,577,563
Less: net assets acquired		741,254
Preliminary excess of purchase price over book value of net assets acquired	$	836,309
Write up (down) of tangible assets:
Property and equipment	$	87,863
Land and buildings		63,549
Assets held for sale		(933	)
Deferred rent		(425	)
Leasing commission		(5,224	)
Acquisition-related intangible assets:
Trade name (indefinite life)	$	410,000
Trademarks (20 year life)		1,822
Bargain Wholesale customer relationships		20,000
Fair market value of favorable leases		46,723
Acquisition-related intangibles		478,545
Write down/(up) of liabilities:
Deferred rent and lease incentive revaluation		10,742
Fair market value of unfavorable leases		(19,836	)

Deferred income taxes:
Long-term deferred tax asset	$	(249,485	)
Residual goodwill(1)	$	471,513
Total allocated excess purchase price	$	836,309

(1)

The Company does not expect any of the residual goodwill to be tax deductible. Goodwill is considered to have an indefinite life and is not amortized, but rather reviewed annually for impairment or more frequently if indicators of impairment exist.

As a result of the Merger, the Company recognized, in the Consolidated Statements of Comprehensive (Loss) Income, one-time legal, financial advisory, accounting, and other merger related costs of $10.6 million for the period January 15, 2012 to March 31, 2011 and $15.2 million for the period April 3, 2011 to January 14, 2012.

Pro forma financial information

        The following unaudited pro forma results of operations give effect to the Merger as if it had occurred on March 28, 2010. The pro forma results of operations reflect adjustments (i) to record

F-19

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

2. The Merger (Continued)

amortization and depreciation resulting from purchase accounting, (ii) to record interest expense, including amortization of deferred financing fees and original issue discount ("OID"), and (iii) to eliminate non-recurring charges that were incurred in connection with the Merger, including acquisition-related share-based compensation, legal and advisory fees, and other miscellaneous transaction related costs. This unaudited pro forma financial information should not be relied upon as necessarily being indicative of the historical results that would have been obtained if the Merger had actually occurred on that date, nor the results of operations in the future.

	January 15, 2012 to March 31, 2012						April 3, 2011 to January 14, 2012				For the Fiscal Year Ended April 2, 2011
	(Successor)						(Predecessor)
(in thousands)	Historical			Pro Forma			Historical		Pro Forma		Historical		Pro Forma
Net sales	$	338,916		$	338,916		$	1,192,780	$	1,192,780	$	1,423,878	$	1,423,878
Net income	$	(5,293	)	$	(29,739	)	$	49,748	$	51,768	$	74,308	$	17,987

Goodwill and other intangible assets and liabilities

        As a result of the Merger, the Company recognized goodwill, and other intangible assets and liabilities. The following table sets forth the value of the goodwill and other intangible assets and liabilities, and the amortization of finite lived intangible assets and liabilities recognized by the "Successor" as of March 31, 2012 (in thousands):

	As of March 31, 2012
	(Successor)
	Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite lived intangible assets:
Goodwill		$	471,513	$	—		$	471,513
Trade name			410,000		—			410,000
Total indefinite lived intangible assets		$	881,513	$	—		$	881,513
Finite lived intangible assets:
Trademarks	20	$	2,000	$	(21	)	$	1,979
Bargain Wholesale customer relationships	12		20,000		(353	)		19,647
Favorable leases	2 to 17		46,723		(915	)		45,808
Total finite lived intangible assets			68,723		(1,289	)		67,434
Total goodwill and other intangible assets		$	950,236	$	(1,289	)	$	948,947
Intangible assets:
Trade name		$	410,000	$	—		$	410,000
Trademarks			2,000		(21	)		1,979
Bargain Wholesale customer relationships			20,000		(353	)		19,647
Favorable leases			46,723		(915	)		45,808
Total intangible assets		$	478,723	$	(1,289	)	$	477,434

F-20

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

2. The Merger (Continued)

	Trademarks		Bargain Wholesale Customer Relationships		Favorable Leases
Estimated amortization of finite lived intangible assets(a)(b):
FY 2013	$	100	$	1,667	$	4,308
FY 2014		100		1,667		4,279
FY 2015		100		1,667		4,250
FY 2016		100		1,667		4,231
FY 2017		100		1,667		4,186
Thereafter		1,479		11,312		24,554
	$	1,979	$	19,647	$	45,808

	As of March 31, 2012
	(Successor)
	Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Unfavorable leases	2 to 18	$	19,835	$	(876	)	$	18,959
Estimated amortization of unfavorable leases(b):
FY 2013		$	4,126
FY 2014			4,011
FY 2015			3,507
FY 2016			2,511
FY 2017			1,729
Thereafter			3,075
		$	18,959

(a)

Amortization of trademarks and Bargain Wholesale customer relationships is recognized in amortization expense on the Consolidated Statement of Comprehensive (Loss) Income.

(b)

Amortization of favorable and unfavorable leases is recognized in rent expense, as a component of operating expenses on the Consolidated Statement of Comprehensive (Loss) Income.

F-21

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

3. Property and Equipment, net

        The following table provides details of property and equipment (in thousands):

	March 31, 2012			April 2, 2011
	(Successor)			(Predecessor)
Property and equipment
Land	$	156,137		$	93,637
Buildings		89,110			110,681
Buildings improvements		59,375			80,366
Leasehold improvements		92,909			121,136
Fixtures and equipment		54,659			128,383
Transportation equipment		6,489			7,258
Construction in progress		29,271			24,873
Total property and equipment		487,950			566,334
Less: accumulated depreciation and amortization		(11,425	)		(252,482	)
Property and equipment, net	$	476,525		$	313,852

4. Investments

        The following tables summarize the investments in marketable securities (in thousands):

	March 31, 2012
	(Successor)
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale:
Money market funds	$	1,627	$	—	$	—	$	1,627
Auction rate securities		1,965		39		—		2,004
Total	$	3,592	$	39	$	—	$	3,631
Reported as:
Short-term investments							$	3,631
Long-term investments in marketable securities								—
Total							$	3,631

F-22

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

4. Investments (Continued)

	April 2, 2011
	(Predecessor)
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale:
Commercial paper and money market	$	152,962	$	—	$	—		$	152,962
Auction rate securities		9,001		—		(592	)		8,409
Municipal bonds		31,208		—		—			31,208
Asset-backed securities		1,637		24		(1	)		1,660
Corporate securities		1,896		76		(50	)		1,922
Total	$	196,704	$	100	$	(643	)	$	196,161
Reported as:
Short-term investments								$	184,929
Long-term investments in marketable securities									11,232
Total								$	196,161

        The auction rate securities the Company holds generally are short-term debt instruments that provide liquidity through a Dutch auction process in which interest rates reset every 7 to 35 days. Beginning in February 2008, auctions of the Company's auction rate securities failed to sell all securities offered for sale. Consequently, the principal associated with these failed auctions will not be accessible until a successful auction occurs, a buyer is found outside of the auction process, the issuers redeem the securities, the issuers establish a different form of financing to replace these securities or final payments come due to long-term contractual maturities. For each unsuccessful auction, the interest rate moves to a rate defined for each security. Currently, the Company intends to liquidate its remaining auction rate securities within one year. Accordingly, the Company has included $2.0 million of its auction rate securities in current assets on the Company's balance sheet as of March 31, 2012. The Company had previously included $8.4 million of its auction rate securities in non-current assets on the Company's balance sheet as of April 2, 2011.

        The following table summarizes maturities of marketable fixed-income securities classified as available-for-sale (in thousands):

	March 31, 2012
	(Successor)
	Amortized Cost		Fair Value
Due within one year	$	1,965	$	2,004
	$	1,965	$	2,004

        Realized gains from the sale of marketable securities were less than $0.1 million, $0.1 million, less than $0.1 million and less than $0.1 million for the periods from January 15, 2012 to March 31, 2012

F-23

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

4. Investments (Continued)

and April 3, 2011 to January 14, 2012, and fiscal years ended April 2, 2011 and March 27, 2010, respectively. There was no investment impairment during the period January 15, 2012 to March 31, 2012. The Company recognized an investment impairment charge related to credit losses of $0.4 million on its auction rate securities for the period from April 3, 2011 to January 14, 2012. The Company recognized an investment impairment charge related to credit losses of $0.1 million on its auction rate securities for fiscal 2011. The Company recognized an impairment charge related to credit losses of $0.6 million on its auction rate securities and $0.3 million on a Bank of America perpetual preferred stock in fiscal 2010.

        Non-tax effected net unrealized gains relating to securities that were recorded as available-for-sale securities were less than $0.1 million for period from January 15, 2012 to March 31, 2012. Non-tax effected net unrealized losses relating to securities that were recorded as available-for-sale securities were $0.2 million, $0.5 million and $0.8 million, for the period from April 3, 2011 to January 14, 2012, fiscal 2011 and fiscal 2010, respectively.

        The Company does not have any available-for-sale securities with unrealized losses as of March 31, 2012.

        The following table presents the length of time securities were in continuous unrealized loss positions, but were not deemed to be other-than-temporarily impaired (in thousands):

	Less than 12 Months					12 Months or Greater
	(Predecessor)
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
April 2, 2011
Asset-backed securities	$	—	$	—			451		(1	)
Corporate securities		1,069		(8	)		687		(42	)
Auction rate securities		394		(4	)		8,015		(588	)
	$	1,463	$	(12	)	$	9,153	$	(631	)

        As of April 2, 2011, there were less than $0.1 million of unrealized losses for less than twelve months, and $0.6 million of losses for twelve months or greater for 20 securities that primarily were caused by interest rate fluctuations and changes in current market conditions.

        During fiscal 2011, the Company recorded $0.1 million other-than-temporary impairment charges related to credit losses on its auction rate securities. During this period, the Company did not have any non-credit related other-than-temporary losses on any of its securities. Accordingly, the Company's other comprehensive income does not include any charges related to the other-than-temporary non-credit portion of its securities.

F-24

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

4. Investments (Continued)

        The following table sets forth a reconciliation of the changes in credit losses recognized in earnings during the period from January 15, 2012 to March 31, 2012 and period from April 3, 2011 to January 14, 2012 and fiscal 2011 (in thousands):

					For the Year Ended
	For the Periods
	January 15, 2012 to March 31, 2012		April 3, 2011 to January 14, 2012		April 2, 2011
	(Successor)		(Predecessor)		(Predecessor)
Total gross unrealized losses on other-than-temporary impaired securities	$	—	$	357	$	129
Portion of losses recognized in comprehensive income (before taxes)		—		—		—
Net other-than-temporary impairment losses recognized in net earnings	$	—	$	357	$	129

5. Income Tax Provision

        The provision for income taxes consists of the following:

	For the Periods						For the Years Ended
	(Amounts in thousands)
	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012			April 2, 2011		March 27, 2010
	(Successor)			(Predecessor)			(Predecessor)		(Predecessor)
Current:
Federal	$	2,727		$	32,843		$	22,379	$	31,349
State		772			5,388			6,237		6,217
		3,499			38,231			28,616		37,566
Deferred—federal and state		(1,396	)		(4,532	)		15,300		(4,462	)
Provision for income taxes	$	2,103		$	33,699		$	43,916	$	33,104

F-25

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

5. Income Tax Provision (Continued)

        Differences between the provision for income taxes and income taxes at the statutory federal income tax rate are as follows:

	For the Periods												For the Years Ended
	(Amounts in thousands)
	January 15, 2012 to March 31, 2012						April 3, 2011 to January 14, 2012						April 2, 2011						March 27, 2010
	(Successor)						(Predecessor)						(Predecessor)						(Predecessor)
	Amount			Percent			Amount			Percent			Amount			Percent			Amount			Percent
Income taxes at statutory federal rate	$	(1,116	)		35.0	%	$	29,206			35.0	%	$	41,378			35.0	%	$	32,743			35.0	%
State income taxes, net of federal income tax effect		96			(3.0	)		3,138			3.7			4,225			3.5			3,532			3.8
Effect of permanent differences		3,137			(98.4	)		2,165			2.6			3			0.0			(47	)		(0.1	)
Texas NOL tax credits expense/(benefit)		—			0.0			—			0.0			—			0.0			(109	)		(0.1	)
Welfare to work, and other job credits		—			0.0			(1,027	)		(1.2	)		(1,473	)		(1.2	)		(1,022	)		(1.1	)
Other		(14	)		0.5			217			0.3			(217	)		(0.2	)		(1,993	)		(2.1	)
	$	2,103			(65.9	)%	$	33,699			40.4	%	$	43,916			37.1	%	$	33,104			35.4	%

        The difference between the statutory rate of 35% and the effective tax rate for the Successor period was driven primarily by the non-deductibility of certain Merger related expenses.

F-26

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

5. Income Tax Provision (Continued)

        The components of deferred tax assets and liabilities were as follows:

	Years Ended
	(Amounts in thousands)
	March 31, 2012			April 2, 2011
	(Successor)			(Predecessor)
DEFERRED TAX ASSETS
Workers' compensation	$	16,701		$	18,159
Uniform inventory capitalization		7,448			6,416
Leases		10,200			—
Share-based compensation		59			4,231
Depreciation		—			14,408
Net operating loss carry-forwards		169			4,102
Inventory		1,712			1,733
Accrued liabilities		7,836			6,280
Credits		10,560			9,943
Other		14,676			2,388
Total Gross Deferred Tax Assets		69,361			67,660
Less: Valuation Allowances		10,346			5,798
Total Net Deferred Tax Assets		59,015			61,862
DEFERRED TAX LIABILITIES
Depreciation		(41,376	)		—
Amortization		(204,281	)		(16	)
Prepaid expenses		(2,389	)		(2,471	)
Other		—			(4,718	)
Total Deferred Tax Liabilities		(248,046	)		(7,205	)
Net Deferred Tax Assets (Liabilities)	$	(189,031	)	$	54,657

        The Company maintains a valuation allowance to reduce certain deferred tax assets to amounts that are, in management's estimation, more likely than not to be realized. The valuation allowance as of March 31, 2012 relates to the deferred tax assets for the California Enterprise Zone Credit carry-forward and Texas net operating loss ("NOL") credits. As of March 31, 2012, the Company had approximately $8.4 million of California Enterprise Zone credits that can be carried forward indefinitely. Utilization of these credits is limited to the taxable income ascribed to the enterprise zones in a given tax year. The Company has engaged a third party provider to compute the credit each year for the last several years and each of the last few years, the credit carry-forward has grown. Prospectively, the Company will incur significant interest expense which should further reduce its taxable income and ability to use the credits. Due to the aforementioned negative evidence, it is more likely than not that the California Enterprise Zone Credits will not be realizable. In addition, pursuant to the Company's decision in August 2009 to continue operations in Texas, the Company has recorded a deferred tax asset of $2.2 million related to Texas NOL credits in fiscal 2010. Based on the current

F-27

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

5. Income Tax Provision (Continued)

estimate of future utilization of these credits, the Company has recorded a related valuation allowance of $1.9 million.

        The Company recorded significant deferred taxes in connection with its Merger on January 13, 2012. See Note 2 "The Merger" for more information regarding allocation of the purchase price.

        The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefit (in thousands):

(Predecessor)
Balance at March 28, 2009	$	1,416
Additions based on tax positions related to the current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		—
Settlements		—
Lapse of statutes of limitation		(1,416	)
Balance at March 27, 2010	$	—
Additions based on tax positions related to the current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		—
Settlements		—
Lapse of statutes of limitation		—
Balance at April 2, 2011	$	—
Additions based on tax positions related to the current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		—
Settlements		—
Lapse of statutes of limitation		—
Balance at January 14, 2012	$	—
(Successor)
Additions based on tax positions related to the current year		—
Additions for tax positions of prior years		—
Reductions for tax positions of prior years		—
Settlements		—
Balance at March 31, 2012	$	—

        The Company files income tax returns in the U.S. federal jurisdiction and in various states. The Company is subject to examinations by the major tax jurisdictions in which it files for the tax years 2007 through 2010. The tax return for the period ended March 27, 2010 is currently under examination. Any additional liabilities are not determinable at this time.

F-28

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

6. Debt

        Short and long-term debt consists of the following:

(in thousands)	March 31, 2012		April 2, 2011
	(Successor)		(Predecessor)
ABL Facility agreement, maturing January 13, 2017, with available borrowing up to $175,000, interest due quarterly, with unpaid principal and accrued interest due January 13, 2017	$	—	$	—
First Lien Term Loan Facility agreement, maturing on January 13, 2019, payable in quarterly installments of $1,313, plus interest, commencing March 31, 2012 through December 31, 2019, with unpaid principal and accrued interest due January 13, 2019, net of unamortized OID of $10,086		513,601		—
11% Senior Notes (Unsecured) maturing December 15, 2019, unpaid principal and accrued interest due on December 15, 2019		250,000		—
Total long-term debt		763,601		—
Less: current portion of long-term debt		5,250		—
Long-term debt, net of current portion	$	758,351	$	—

        As of March 31, 2012 the scheduled maturities of debt for each of the five succeeding fiscal years (FY) are as follows:

Future maturities (in thousands)	Maturities of Long-term Debt
FY 2013	$	5,250
FY 2014		5,250
FY 2015		5,250
FY 2016		5,250
FY 2017		5,250
Thereafter		737,351
Long-term debt, current and non-current	$	763,601

F-29

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

6. Debt (Continued)

        As of March 31, 2012, the deferred financing costs are as follows:

	March 31, 2012
	(Successor)
Deferred financing costs (in thousands)	Gross Carrying Amount		Accumulated Amortization			Maturities of Long-term Debt
ABL facility	$	3,078	$	(130	)	$	2,948
First lien term loan facility		16,572		(653	)		15,919
11% Senior notes		11,761		(228	)		11,533
Total deferred financing costs	$	31,411	$	(1,011	)	$	30,400
Estimated interest expense from deferred financing fees:
FY 2013	$	3,467
FY 2014		3,746
FY 2015		4,024
FY 2016		4,341
FY 2017		4,540
Thereafter		10,282
	$	30,400

        On January 13, 2012, in connection with the Merger, the Company obtained Credit Facilities provided by a syndicate of lenders arranged by Royal Bank of Canada as administrative agent, as well as other agents and lenders that are parties to these Credit Facilities. The Credit Facilities include (a) $175 million in commitments under the ABL Facility, and (b) an aggregate principal amount under the First Lien Term Loan Facility amounting to $525 million. At the closing, $10 million of the ABL Facility was drawn on January 13, 2012 (the "Closing Date") to finance a portion of the Merger Consideration and transaction expenses, and in February 2012, the Company repaid the entire $10 million.

First Lien Term Loan Facility

        The First Lien Term Loan Facility provides for $525 million of borrowings (which may be increased by up to $150.0 million in certain circumstances). All obligations under the First Lien Term Loan Facility are guaranteed by Parent and each of the Company's direct or indirect wholly owned subsidiaries (collectively, the "Credit Facilities Guarantors"). In addition, the First Lien Term Loan Facility is secured by pledges of certain of the Company's equity interests and the equity interests of each Credit Facilities Guarantor.

        The Company is required to make scheduled quarterly payments each equal to 0.25% of the original principal amount of the term loan (approximately $1.3 million), with the balance due on the maturity date, January 13, 2019. Borrowings under the First Lien Term Loan Facility bear interest at an annual rate equal to an applicable margin plus, at the Company's option, (A) a Base Rate determined

F-30

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

6. Debt (Continued)

by reference to the highest of (a) the prime rate of Royal Bank of Canada (3.25% as of March 31, 2012), (b) the federal funds effective rate plus 0.50% and (c) an adjusted Eurocurrency rate for one month (determined by reference to the greater of the Eurocurrency rate for the interest period multiplied by the Statutory Reserve Rate or 1.50% per annum) plus 1.00%, or (B) an Adjusted Eurocurrency Rate. The applicable margin used is 5.50% for Eurocurrency loans and 4.50% for base rate loans. As of March 31, 2012, subject to certain exceptions, the interest rate charged on the First Lien Term Loan Facility was 7.00% (1.50% Eurocurrency rate, plus the Eurocurrency loan margin of 5.50%). As of March 31, 2012, the principal amount outstanding under the First Lien Term Loan Facility was $513.6 million.

        The First Lien Term Loan Facility includes restrictions on the Company's ability and the ability of the Parent and certain of the Company's subsidiaries to, incur or guarantee additional indebtedness, pay dividends on, or redeem or repurchase, the Company's capital stock, make certain acquisitions or investments, materially change its business, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, make capital expenditures or merge or consolidate with or into, another company.

        On April 4, 2012, the Company amended the terms of its existing seven-year $525 million First Lien Term Facility (the "Amended First Lien Term Facility"), net of refinancing costs of $11.2 million. The amendment decreased the Applicable Margin per the London Interbank Offered Rate ("LIBOR") plus 5.50% (or base rate plus 4.50%) to LIBOR plus 4.00% (or base rate plus 3.00%) and the LIBOR floor from 1.50% to 1.25%. The maximum capital expenditures covenant in the First Lien Term Facility was amended to permit an additional $5 million in capital expenditures each year throughout the term of the Amended First Lien Term Facility. See Note 17 for more information regarding certain amendments to, and agreements entered into in connection with, the First Lien Term Loan Facility.

ABL Facility

        The ABL Facility provides for up to $175.0 million of borrowings (which may be increased by up to $50.0 million in certain circumstances), subject to certain borrowing base limitations. All obligations under the ABL Facility are guaranteed by the Company, its immediate Parent, 99 Cents Only Stores (Nevada) and 99 Cents Only Stores, Texas Inc. (collectively, the "ABL Guarantors"). The ABL Facility is secured by substantially all of the Company's assets and the assets of the ABL Guarantors.

        Borrowings under the ABL Facility bear interest for an initial period until June 30, 2012 at an applicable margin plus, at the Company's option, a fluctuating rate equal to (A) the highest of (a) Federal Funds Rate plus 0.50%, (b) rate of interest determined by agent as "Prime Rate" (3.25% at the date of the Merger), and (c) Adjusted Eurocurrency Rate (determined to be the LIBOR rate multiplied by the Statutory Reserve Rate) on day for an Interest Period of one (1) month plus 1.00% or (B) the Adjusted Eurocurrency Rate. Thereafter, borrowings under the ABL Facility will have variable pricing and will be based, at the Company's option, on (a) LIBOR plus an applicable margin to be determined or (b) the determined base rate plus an applicable margin to be determined, in each case based on a pricing grid depending on average daily excess availability for the most recently ended quarter. The interest rate charged on borrowings under the ABL Facility from the date of the Merger

F-31

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

6. Debt (Continued)

until March 31, 2012 was 4.25% (the base rate (prime rate at 3.25%) plus the applicable margin of 1.00%).

        In addition to paying interest on outstanding principal under the Credit Facilities, the Company is required to pay a commitment fee to the lenders under the ABL Facility on unutilized commitments at a rate of 0.375% for the period from the date of the Merger until June 30, 2012. Thereafter, the commitment fee will be adjusted at the beginning of each quarter based upon the average historical excess availability of the prior quarter. The Company must also pay customary letter of credit fees and agency fees.

        As of March 31, 2012, the Company had no outstanding borrowings under the ABL Facility.

        The ABL Facility includes restrictions on the Company's ability, and the ability of the Parent and certain of our subsidiaries to, incur or guarantee additional indebtedness, pay dividends on, or redeem or repurchase, our capital stock, make certain acquisitions or investments, materially change our business, incur or permit to exist certain liens, enter into transactions with affiliates or sell our assets to, make capital expenditures or merge or consolidate with or into, another company. The ABL Facility was amended on April 4, 2012 to permit an additional $5 million in capital expenditures for each year during the term of the ABL Facility. See Note 17 for more information regarding certain amendments to the ABL Facility.

11% Senior Notes due 2019

        On December 29, 2011, the Company issued $250 million aggregate principal amount of 11% Senior Notes that mature on December 15, 2019 (the "Senior Notes"). The Senior Notes are guaranteed by each of the Company's subsidiaries, 99 Cents Only Stores Texas, Inc. and 99 Cents Only Stores (Nevada) (the "Senior Notes Guarantors").

        In connection with the issuance of the Senior Notes, the Company entered into a registration rights agreement, that requires us to file an exchange offer registration statement (the "Exchange Offer"), enabling holders to exchange the Senior Notes for registered notes with terms identical in all material respects to the terms of the Senior Notes, except the registered notes would be freely tradable.

        Pursuant to the terms of the indenture governing the Senior Notes (the "Indenture"), the Company may redeem all or a part of the Senior Notes at certain redemption prices applicable based on the date of redemption.

        The Senior Notes are (i) junior in right of payment to all of the Company's existing and future indebtedness and that of the Senior Notes Guarantors; (ii) unconditionally guaranteed on a senior unsecured unsubordinated basis by the Senior Notes Guarantors; and (iii) junior to the liabilities of its subsidiaries that are not guarantors. The Company is not required to make any mandatory redemptions or sinking fund payments, and may at any time or from time to time purchase notes in the open market.

        The Indenture contains covenants that, among other things, limit the Company's ability and the ability of certain of its subsidiaries to incur or guarantee additional indebtedness, create or incur certain liens, pay dividends or make other restricted payments, incur restrictions on the payment of

F-32

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

6. Debt (Continued)

dividends or other distributions from its restricted subsidiaries, make certain investments, transfer or sell assets, engage in transactions with affiliates, or merge or consolidate with other companies or transfer all or substantially all of its assets.

        As of March 31, 2012, the Company was in material compliance with the terms of the Indenture.

        Interest paid for the periods December 29, 2011 to March 31, 2012 and April 3, 2011 to January 14, 2012, was $7.4 million and $0.3 million, respectively. Interest paid for the fiscal years ended April 2, 2011, and March 27, 2010, was less than $0.1 million and $0.1 million, respectively.

        The significant components of interest expense are as follows:

	January 15, 2012 to March 31, 2012		April 3, 2011 to January 14, 2012		April 3, 2011		March 27, 2010
	(Successor)		(Predecessor)		(Predecessor)		(Predecessor)
First lien term loan facility	$	7,475	$	—	$	—	$	—
ABL facility		44		—		—		—
Senior notes		7,104		—		—		—
Amortization of deferred financing costs and OID		1,567		—		—		—
Other interest expense		33		381		77		174
Interest expense	$	16,223	$	381	$	77	$	174

7. Fair Value of Financial Instruments

        The Company complies with ASC 820-10-35, "Fair Value Measurement and Disclosures" which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820-10-35 are described below:

        Level 1:    Defined as observable inputs such as quoted prices in active markets for identical assets or liabilities.

        Level 2:    Defined as observable inputs other than Level 1 prices. These include quoted prices for similar assets or liabilities in an active market, quoted prices for identical assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

        Level 3:    Defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

7. Fair Value of Financial Instruments (Continued)

        The Company utilizes the best available information in measuring fair value. The following table summarizes, by level within the fair value hierarchy, the financial assets and liabilities recorded at fair value on a recurring basis (in thousands):

	March 31, 2012
	(Successor)
	Total		Level 1		Level 2		Level 3
ASSETS
Money market funds	$	1,627	$	1,627	$	—	$	—
Auction rate securities		2,004		—		—		2,004
Total available-for-sale securities	$	3,631	$	1,627	$	—	$	2,004
Other assets—assets that fund deferred compensation	$	5,136	$	5,136	$	—	$	—
LIABILITES
Other long-term liabilities—deferred compensation	$	5,136	$	5,136	$	—	$	—

        Level 1 investments include money market funds of $1.6 million. The fair value of money market funds is based on quoted market prices in an active market and there are no restrictions on the redemption of money market funds. Level 1 also includes $5.1 million of deferred compensation assets that fund the liabilities related to the Company's deferred compensation, including investments in trust funds. The fair values of these funds are based on quoted market prices in an active market.

        There were no Level 2 investments as of March 31, 2012.

        Level 3 investments include auction rate securities of $2.0 million. The fair value of auction rate securities is based on the valuation from an independent securities valuation firm by using applicable methods and techniques for this class of security.

        The Company did not have any transfers of investments in and out of Levels 1 and 2 during the periods of January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

7. Fair Value of Financial Instruments (Continued)

        The following table summarizes, by level within the fair value hierarchy, the financial assets and liabilities recorded at fair value on a recurring basis (in thousands):

	April 2, 2011
	(Predecessor)
	Total		Level 1		Level 2		Level 3
ASSETS
Money market funds	$	152,962	$	152,962	$	—	$	—
Auction rate securities		8,409		—		—		8,409
Municipal bonds		31,208		—		31,208		—
Asset-backed securities		1,660		—		1,660		—
Corporate securities		1,922		687		1,235		—
Total available-for-sale securities	$	196,161	$	153,649	$	34,103	$	8,409
Other assets—assets that fund deferred compensation	$	4,924	$	4,924		—		—
LIABILITES
Other long-term liabilities—deferred compensation	$	4,924	$	4,924		—		—

        Level 1 investments include money market funds and perpetual preferred stocks of $153.0 million and $0.7 million, respectively. The fair value of money market funds and perpetual preferred stocks are based on quoted market prices in an active market and there are no restrictions on the redemption of money market funds or perpetual preferred stocks. Level 1 also includes $4.9 million of deferred compensation assets that fund the liabilities related to the Company's deferred compensation, including investments in trust funds. The fair values of these funds are based on quoted market prices in an active market.

        Level 2 investments include municipal bonds, asset-backed securities and corporate bonds of $31.2 million, $1.7 million and $1.2 million, respectively. The fair value of municipal bonds, asset-backed securities and corporate bonds are based on quoted prices for similar assets or liabilities in an active market.

        Level 3 investments include auction rate securities of $8.4 million. The fair value of auction rate securities is based on the valuation from an independent securities valuation firm by using applicable methods and techniques for this class of security.

        The Company did not have any transfers of investments in and out of Levels 1 and 2 during fiscal 2011.

        The valuation of the auction rate securities is based on Level 3 unobservable inputs which consist of recommended fair values provided by Houlihan Capital Advisors, LLC, an independent securities valuation firm. These securities are held as "available-for-sale" in the Company's consolidated balance sheet.

F-35

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

7. Fair Value of Financial Instruments (Continued)

        The following table summarizes the activity for the period of changes in fair value of the Company's Level 3 investments (in thousands):

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Auction Rate Securities	January 15, 2012 to March 31, 2012			April 3, 2011 to January 14, 2012			Year Ended April 2, 2011
	(Successor)			(Predecessor)			(Predecessor)
Description
Beginning balance	$	7,669		$	8,409		$	10,019
Transfers into Level 3		—			—			—
Total realized (loss)/unrealized gains:
Included in earnings		(1	)		(312	)		(32	)
Included in other comprehensive income		40			494			30
Purchases, redemptions and settlements:
Purchases		—			—			—
Redemptions		(5,704	)		(922	)		(1,608	)
Ending balance	$	2,004		$	7,669		$	8,409
Total amount of unrealized gains for the period included in other comprehensive income attributable to the change in fair market value relating to assets still held at the reporting date	$	40		$	494		$	30

        In connection with the Merger, the Company entered into a credit facility including an ABL facility of $175 million and a First Lien Term Loan Facility of $525 million, and sold $250 million of Senior Notes with a coupon rate of 11% in a private placement. The outstanding debt under the credit facility and senior notes are recorded in the financial statements at historical cost, net of applicable unamortized discounts.

        The Company's Credit Facilities are tied directly to market rates and fluctuate as market rates change; as a result, the carrying value of the Credit Facilities approximates fair value as of March 31, 2012.

        The Company's Senior Notes are not tied to market rates and were sold in a private placement. Since there are no quoted prices in active markets, the fair value of the notes was estimated using a discounted cash flow analysis with Level 3 inputs. The fair value of the Company's Senior Notes was estimated at $259.3 million, or $9.3 million greater than the carrying value as of March 31, 2012.

        See Note 6 for more information on the Company's debt.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

8. Related-Party Transactions

Stockholders' Agreement

        Upon completion of the Merger, the Parent entered into a stockholders' agreement with each of its stockholders, which includes certain of the Company's directors, employees and members of the Company's management and the Company's principal stockholders. The stockholders' agreement gives (i) Ares Corporate Opportunities Fund III, L.P., an affiliate of Ares ("ACOF"), the right to designate four members of the Company's Parent board of directors, (ii) ACOF the right to designate two independent members of the Company's Parent board of directors, which directors shall be approved by CPPIB, and (iii) CPPIB the right to designate two members of the Company's Parent board of directors, in each case for so long as they or their respective affiliates beneficially own at least 15% of the then outstanding shares of Class A Common Stock of the Company's Parent. The stockholders agreement provides for the election of Eric Schiffer, Jeff Gold and Howard Gold (collectively, the "Management Directors") to the Parent's board of directors, for so long as they hold the position of Chief Executive Officer, President and Chief Operating Officer, and Executive Vice President, respectively. The stockholders agreement also provides for certain board observer rights. Under the terms of the stockholders agreement, certain significant corporate actions require the approval of a majority of directors on the board of directors, including at least one director designated by ACOF and one director designated by CPPIB, and certain other corporate actions require the approval of at least one Management Director.

        The stockholders agreement contains significant transfer restrictions and certain rights of first offer, tag-along, and drag-along rights. In addition, the stockholders agreement contains registration rights that, among other things, require the Company's Parent to register common stock held by the stockholders who are parties to the stockholders agreement in the event the Company's Parent registers for sale, either for its own account or for the account of others, shares of its common stock.

        Under the stockholders agreement, certain affiliate transactions require the approval of a majority of disinterested directors, and certain affiliate transactions between the Parent, on the one hand, and Ares, CPPIB or any of their respective affiliates, on the other hand, require the approval of a majority of disinterested directors, including at least one Management Director.

Voting Agreement

        The Canada Pension Plan Investment Board Act 1997 (Canada) imposes certain share ownership limitations on CPPIB. These limitations include restrictions on CPPIB's indirect ownership levels (through Parent) of the Company's Class B Common Stock, which has de minimis economic rights and the right to vote solely with respect to the election of directors. In order to comply with these regulations, an affiliate of Ares holds 10% of the Company's Class B Common Stock. The Company has entered into a voting agreement with Parent and the affiliate of Ares pursuant to which such Class B Common Stock held by the affiliate of Ares is subject to a call right that allows Parent to repurchase such stock at any time for de minimis consideration. The voting agreement also provides, among other things, for the affiliate of Ares to take certain actions requested by Parent to elect or remove the Company's directors.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

8. Related-Party Transactions (Continued)

Management Services Agreements

        Upon completion of the Merger, the Company and Parent entered into management services agreements with affiliates of the Sponsors (the "Management Services Agreements"). Under each of the Management Services Agreements, the Company and Parent agreed to, among other things, retain and reimburse affiliates of the Sponsors for certain management and financial services and provide customary indemnification to the Sponsors and their affiliates. In addition, upon completion of the Merger, the Company and Parent reimbursed affiliates of the Sponsors for their expenses incurred in connection with the Merger in an aggregate amount of $4.2 million.

Agreements Regarding Lease Arrangements

        On January 13, 2012, the Company entered into new lease agreements (the "Leases") with the Rollover Investors for 13 stores and one store parking lot, which replaced the existing month-to-month leases. The Leases have approximate initial terms of either five or ten years and the base rents may be adjusted to market value in an aggregate amount not to exceed $1 million per annum. Rental expense for these Leases was $0.7 million for the period of January 15, 2012 to March 31, 2012 and $1.7 million for the period of April 3, 2011 to January 14, 2012. Rental expense for these Leases was $2.1 million in each of fiscal years 2011 and 2010.

Stock Purchase Agreement

        In June 2012, Parent entered into a Stock Purchase Agreement with Norman Axelrod, a director of Parent and of the Company, and AS SKIP, LLC, a Delaware limited liability company of which Mr. Axelrod is the managing member (together with Norman Axelrod, the "Purchasers"). Pursuant to the terms of the Stock Purchase Agreement, the Purchasers purchased 750 shares of Parent's Class A Common Stock and 750 shares of Parent's Class B Common Stock for an aggregate purchase price of $750,000.

9. Commitments and Contingencies

Credit Facilities

        On the closing date of the Merger (the "Closing Date"), January 13, 2012, the Company, entered into Credit Facilities provided by a syndicate of lenders. The Credit Facilities include (a) $175 million in commitments under the ABL Facility, and (b) an aggregate principal amount under the First Lien Term Loan Facility amounting to $525 million. The Company's credit facilities and commitments are discussed in detail in Note 6.

        As of March 31, 2012, the Company also had a standby letter of credit for $0.4 million, related to one of its leased properties, where the lessor is a named beneficiary in the event of a default by the Company, and potentially is entitled to draw on the letter of credit in the event of a specified default. The letter of credit will expire in October 2012. The Company is in compliance with its lease terms and scheduled payments.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

Lease Commitments

        The Company leases various facilities under operating leases (except for one location which is classified as a capital lease) expiring at various dates through fiscal year 2031. Most of the lease agreements contain renewal options and/or provide for fixed rent escalations or increases based on the Consumer Price Index. Total minimum lease payments under each of these lease agreements, including scheduled increases, are charged to operating expenses on a straight-line basis over the term of each respective lease. Certain leases require the payment of property taxes, maintenance and insurance. Rental expense charged to operating expenses for the periods of January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012 was $13.1 million and $44.0 million respectively, of which less than $0.1 million and $0.2 million were paid as percentage rent, based on sales volume for each of the periods then ended, respectively. Rental expense charged to operating expenses in fiscal 2011 and 2010 was $56.7 million and $60.7 million, respectively, of which $0.3 million was paid as percentage rent, based on sales volume for each of the years then ended, respectively. Sub-lease income earned for the periods January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012 was $0.1 million and $0.6 million, respectively. Sub-lease income earned in fiscal 2011 and 2010 was $0.9 million and $0.7 million, respectively.

        As of March 31, 2012, the minimum annual rentals payable and future minimum sub-lease income under all non-cancelable operating leases was as follows (amounts in thousands):

Fiscal Year:	Operating leases		Capital leases			Future Minimum Sub-lease Income
2013	$	46,683	$	106		$	406
2014		44,269		106			401
2015		36,848		107			305
2016		28,736		107			256
2017		20,952		89			74
Thereafter		55,991		—			—
Future minimum lease payments	$	233,479	$	515		$	1,442
Less amount representing interest				(84	)
Present value of future lease payments			$	431

        The capital lease relates to a building for one of the Company's stores. The gross asset amount recorded under the capital lease was $0.3 million as of March 31, 2012. The gross asset amount recorded under the capital lease was $1.0 million as of April 2, 2011. Accumulated depreciation was less than $0.1 million and $0.7 million as of March 31, 2012 and April 2, 2011, respectively.

Workers' Compensation

        The Company self-insures its workers' compensation claims in California and Texas and provides for losses of estimated known and incurred but not reported insurance claims. The Company does not

F-39

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

discount the projected future cash outlays for the time value of money for claims and claim related costs when establishing its workers' compensation liability.

        At March 31, 2012 and April 2, 2011, the Company had recorded a liability $39.0 million and $42.4 million respectively, for estimated workers' compensation claims in California. The Company has limited self-insurance exposure in Texas and had recorded a liability of less than $0.1 million as of March 31, 2012 and less than $0.1 million as of April 2, 2011 for workers' compensation claims in Texas. The Company purchases workers' compensation insurance coverage in Arizona and Nevada.

Self-Insured Health Insurance Liability

        During the second quarter of fiscal 2012, the Company began self-insuring for a portion of its employee medical benefit claims. At March 31, 2012, the Company had recorded a liability of $0.9 million for estimated health insurance claims. The Company maintains stop loss insurance coverage to limit its exposure for the self-funded portion of its health insurance program.

Legal Matters

Going Private Transaction

        In connection with March 2011 announcement by the Company of the receipt of a going private proposal and subsequent announcement of a merger agreement in October 2011, eight complaints were filed, all in the Superior Court of California, Los Angeles County. The Actions were captioned: Southeastern Pennsylvania Transportation Authority v. David Gold, et al. (filed March 14, 2011, amended March 23, 2011); John Chevedden v. 99¢ Only Stores, et al. (filed March 16, 2011); Rana Fong v. 99¢ Only Stores, et al. (filed March 17, 2011); Norfolk County Retirement Board v. Jeff Gold, et al. (filed March 22, 2011); Tammy Newman v. 99¢ Only Stores, et al. (filed March 25, 2011); Key West Police and Fire Pension Fund v. Eric G. Flamholtz, et al. (filed April 5, 2011); Allen Mitchell v. 99¢ Only Stores, et al. (filed April 11, 2011), and Harold Litwin v. 99¢ Only Stores, et al (filed October 11, 2011). The plaintiffs in the Actions claimed to be shareholders of the Company and proposed to represent a class of all of the Company's public shareholders in connection with claims for purported breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty, as well as alleged deficiencies in the preliminary proxy statement. The actions were consolidated by the Court. The Company and the lead plaintiffs in these actions reached a settlement in November 2011, which was finalized in January 2012, that provided for: (1) certain agreed-upon supplemental disclosures (which the Company incorporated into its definitive proxy statement filed December 12, 2011); (2) a release of all defendants, former defendants, and various of their affiliates from all claims asserted in the action and all claims that could have been asserted based upon the same circumstances; and (3) payment by the Company of lead plaintiffs' legal fees and costs in an amount to be approved by the Court not to exceed $275,000. At a hearing on June 25, 2012, the Court stated that it would grant final approval to the settlement and award plaintiffs' legal fees and costs in the amount of $60,000 and would issue an order to that effect shortly. The order in this matter has now been entered.

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

Pricing Policy Matters

        In July 2010, two actions captioned Phillip Kavis v. 99¢ Only Stores, et al. and Leonard Morales v. 99¢ Only Stores were filed in the Superior Court of California, Los Angeles County. In these now consolidated actions, Plaintiffs filed putative class action complaints against the Company claiming violations of California's Unfair Competition Law (California Business & Professions Code Section 17200), False Advertising Law (California Business & Professions Code Section 17500), and Consumer Legal Remedies Act (California Civil Code Section 1770), as well as alleged intentional misrepresentation, negligent misrepresentation, breach of the implied covenant of good faith and fair dealing, and unjust enrichment, arising out of the Company's September 2008 change in pricing policy. Plaintiffs sought actual damages, restitution, including disgorgement of all profits and unjust enrichment allegedly obtained by the Company, statutory damages and civil penalties, equitable and injunctive relief, exemplary damages, prejudgment and post-judgment interest, and their attorney's fees and costs.

        On May 11, 2012, the Court granted final approval of a settlement between the plaintiffs in these actions and the Company and entered judgment in accordance with the terms of the settlement. The settlement requires the Company to make certain postings in its stores and pay a total of $100,000 in attorneys' fees, costs and plaintiff enhancements in exchange for a judgment extinguishing the claims relating to the revised pricing structure by all its customers in all states of operation from September 8, 2008 through the date of judgment. Under the terms of the parties' settlement, the agreement becomes effective on July 11, 2012.

Wage and Hour Matters

        Luis Palencia v. 99¢ Only Stores, Superior Court of the State of California, County of Sacramento.    Plaintiff, a former assistant manager, who the Company employed from June 12, 2009 through September 9, 2009, filed this action in June 2010, asserting claims on behalf of himself and all others allegedly similarly situated under the California Labor Code for alleged unpaid overtime due to "off the clock" work, failure to pay minimum wage, failure to provide meal and rest periods, failure to provide proper wage statements, failure to pay wages timely during employment and upon termination and failure to reimburse business expenses. Mr. Palencia also asserted a derivative claim for unfair competition under the California Business and Professions Code. Mr. Palencia sought to represent three sub-classes: (i) an "unpaid wages subclass" of all non-exempt or hourly paid employees who worked for the Company in California within four years prior to the filing of the complaint until the date of certification, (ii) a "non-compliant wage statement subclass" of all non-exempt or hourly paid employees of the Company who worked in California and received a wage statement within one year prior to the filing of the complaint until the date of certification, and (iii) an "unreimbursed business expenses subclass" of all employees of the Company who paid for business-related expenses, including expenses for travel, mileage or cell phones in California within four years prior to the filing of the complaint until the date of certification. Plaintiff sought to recover alleged unpaid wages, interest, attorney's fees and costs, declaratory relief, restitution, statutory penalties and liquidated damages. He also sought to recover civil penalties as an "aggrieved employee" under the Private Attorneys General Act of 2004. Following a mediation of this matter, the parties entered into a settlement agreement on November 2, 2011. The Court granted preliminary approval of the settlement on April 20, 2012, and a

F-41

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

final fairness hearing has been set for September 14, 2012. The Company accrued $2.2 million in the period from April 3, 2012 to January 14, 2012 for expected payments in connection with the settlement. If the settlement agreement is not approved by the court, the Company cannot predict the outcome of this lawsuit.

        Sheridan Reed v. 99¢ Only Stores, Superior Court of the State of California, County of Los Angeles.    Plaintiff, a former store manager for the Company, filed this action in April 2010. He originally asserted claims on behalf of himself and all others allegedly similarly situated under the California Labor Code for alleged failure to pay overtime at the proper rate, failure to pay vested vacation wages, failure to pay wages timely upon termination of employment and failure to provide accurate wage statements. Mr. Reed also asserted a derivative claim for unfair competition under the California Business and Professions Code. In September 2010, Mr. Reed amended his complaint to seek civil penalties under the Private Attorneys General Act of 2004. Mr. Reed sought to represent four sub-classes: (i) all non-exempt or hourly current or former employees who worked for the Company in California within four years prior to the filing of the complaint until the date of certification who were paid bonuses, commissions or incentive wages, who worked overtime, and for whom the bonuses, commissions or incentive wages were not included as part of the regular rate of pay for overtime purposes, (ii) all non-exempt or hourly current or former employees who worked for the Company in California within four years prior to the filing of the complaint until the date of certification who earned vacation wages and were not paid their vested vacation wages at the time of termination; (iii) all non-exempt or hourly current or former employees who worked for the Company in California within four years prior to the filing of the complaint until the date of certification who were not furnished a proper itemized wage statement; and (iv) all non-exempt or hourly current or former employees who worked for the Company in California within four years prior to the filing of the complaint until the date of certification who were not paid all wages due upon termination. Plaintiff sought to recover alleged unpaid wages, statutory penalties, interest, attorney's fees and costs, declaratory relief, injunctive relief and restitution. He also sought to recover civil penalties as an "aggrieved employee" under the Private Attorneys General Act of 2004. The parties executed a formal settlement agreement on April 5, 2012, which, if approved by the Court, will resolve the remainder of the lawsuit by settling the class-wide claims for failure to pay overtime at the proper rate, failure to pay wages timely upon termination of employment and failure to provide accurate wage statements. In addition, the settlement will resolve Plaintiff's individual claim for failure to pay vested vacation wages and includes a general release by Plaintiff in the Company's favor. The Company has accrued approximately $0.6 million for expected payments in connection with this settlement. The settlement agreement has been submitted to the Court for preliminary approval, and a hearing has been set for July 2, 2012. If the settlement agreement is not approved by the court, the Company cannot predict the outcome of this lawsuit.

        Thomas Allen v. 99¢ Only Stores, Superior Court of the State of California, County of Los Angeles.    Plaintiff, a former store manager for the Company, filed this action on March 18, 2011. He asserted claims on behalf of himself and all others allegedly similarly situated under the California Labor Code for alleged failure to pay overtime, failure to provide meal and rest periods, failure to pay wages timely upon termination, and failure to provide accurate wage statements. Mr. Allen also asserted a derivative

F-42

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

claim for unfair competition under the California Business and Professions Code. Mr. Allen seeks to represent a class of all employees who were employed by the Company as salaried managers in 99¢ Only retail stores from March 18, 2007 through the date of trial or settlement. Plaintiff seeks to recover alleged unpaid wages, statutory penalties, interest, attorney's fees and costs, declaratory relief, injunctive relief and restitution. On October 17, 2011, the Court heard the Company's motion to compel Plaintiff Allen to arbitrate his claims on an individual basis, and following the hearing, the Court ordered the parties to submit further briefing and argument. Following this supplemental briefing and while the motion was under advisement, Mr. Allen sought leave to amend his complaint to add a cause of action pursuant to the Private Attorneys General Act of 2004 ("PAGA"). The Company did not oppose this motion and on January 5, 2012, the Court granted Mr. Allen's motion and his First Amended Complaint was filed. On February 27, 2012, the Court denied the Company's motion to compel arbitration. The Company filed a notice of its intention to appeal that ruling on April 12, 2012. The Company cannot predict the outcome of this lawsuit or the amount of potential loss, if any, the Company could face as a result of such lawsuit.

        Shelley Pickett v. 99¢ Only Stores, Superior Court of the State of California, County of Los Angeles.    Plaintiff Shelley Pickett filed a representative action complaint against the Company on November 4, 2011, alleging a PAGA claim virtually identical that of another matter which was dismissed with prejudice in December 2011, Bright v. 99¢ Only Stores. Like the plaintiff in the Bright case, Plaintiff Pickett asserts that the Company violated section 14 of Wage Order 7-2001 by failing to provide seats for its cashiers behind checkout counters. She seeks civil penalties of $100 to $200 per violation, per each pay period for each affected employee, and attorney's fees. On November 8, 2011, Plaintiff Pickett filed a Notice of Related Case, stating that her case and the Bright case assert "identical claims." After hearing arguments from the parties on December 1, 2011, the Court determined that the cases were related and assigned Pickett's case to Judge William Fahey, the judge who presided over the Bright case. Plaintiff Pickett then attempted to exercise a 170.6 challenge to Judge Fahey, which the Company opposed. The Court struck Plaintiff Pickett's 170.6 challenge on December 16, 2011. Plaintiff Pickett appealed this ruling, filing a petition for writ of mandate on December 30, 2011. The Company filed an opposition to Plaintiff Pickett's petition and oral argument took place on February 1, 2012. On February 22, 2012, the Court of Appeal ruled in Plaintiff Pickett's favor and issued the writ of mandate. On April 2, 2012, the Company filed a petition for review of that ruling with the California Supreme Court, which Pickett answered on April 23, 2012. The California Supreme Court denied the Company's petition for review on May 9, 2012 and the Court of Appeals has remanded the case to Los Angeles Superior Court. The Company cannot predict the outcome of this lawsuit or the amount of potential loss, if any, the Company could face as a result of such lawsuit.

        Regulatory Matters.    The Company recently received Notices to Comply with hazardous waste and/or hazardous materials storage requirements for certain of its stores and its distribution centers in Southern California. The agencies that have delivered such notices to the Company include the Los Angeles County Fire Department, Health Hazardous Materials Division, the Ventura County Environmental Health Division, the Santa Barbara County Fire Department and the City of Oxnard. The Notices concern alleged non-compliance with a variety of hazardous waste and hazardous material regulatory requirements imposed under California law identified during recent compliance inspections

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99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

9. Commitments and Contingencies (Continued)

and require corrective actions to be taken by certain dates set forth in the Notices. The Company is working to implement the required corrective actions. Although the agencies can also seek civil penalties for the alleged instances of past non-compliance, even after corrective action is taken, no penalties have been demanded for any of the alleged non-compliance. If penalties are demanded by these agencies in the future, the Company cannot predict the amount of penalties that may be sought.

        Other Matters.    The Company is also subject to other private lawsuits, administrative proceedings and claims that arise in its ordinary course of business. A number of these lawsuits, proceedings and claims may exist at any given time. While the resolution of such a lawsuit, proceeding or claim may have an impact on the Company's financial results for the period in which it is resolved, and litigation is inherently unpredictable, in management's opinion, none of these matters arising in the ordinary course of business is expected to have a material adverse effect on the Company's financial position, results of operations or overall liquidity.

10. Stock-Based Compensation Plans

Successor stock-based compensation

Number Holdings, Inc. 2012 Equity Incentive Plan

        On February 27, 2012, the board of directors of Parent (the "Parent Board") adopted the Number Holdings, Inc. 2012 Stock Incentive Plan (the "2012 Plan"), which authorizes equity awards to be granted for up to 74,603 shares of Class A common stock and 74,603 shares of Class B common stock of Number Holdings, Inc. of which options for 50,906 shares of each Class were issued to certain members of management with an aggregate exercise price of $1,000 for one share of Class A common stock and for one share of Class B common stock, together. Options become exercisable over the five year service period and have terms of ten years from date of the grant. Options upon vesting may be exercised only for units consisting of an equal number of Class A common stock and Class B common stock. Class B common stock has de minimis economic rights and the right to vote solely for election of directors.

Accounting for stock-based compensation

        The fair value of the option awards is recognized as compensation expense on a straight line basis over the requisite service period of the award, and is included in operating expenses. Determining the fair value of options at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise and the associated volatility. At the grant date, the Company estimates an amount of forfeitures that will occur prior to vesting. During the period from January 15, 2012 to March 31, 2012, the Company incurred stock-based compensation expense of $0.1 million.

F-44

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

10. Stock-Based Compensation Plans (Continued)

        The fair value of stock options was estimated at the date of grant using the Black-Scholes pricing model with the following assumptions:

	For the Period January 15, 2012 to March 31, 2012
	(Successor)
Weighted-average fair value of options granted	$	387.20
Risk free interest rate		0.98	%
Expected life (in years)		6.32
Expected stock price volatility		37.9	%
Expected dividend yield		None

        The risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant with an equivalent remaining term. Expected life represents the estimated period of time until exercise and is calculated by using "simplified method." Expected stock price volatility is based on average volatility of stock prices of companies in a peer group analysis. The Company currently does not anticipate the payment of any cash dividends. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated based on the Company's historical experience and future expectations.

        As of March 31, 2012, there was $15.6 million of total unrecognized compensation cost related to non-vested options that is expected to be recognized over the remaining weighted-average vesting period of 4.8 years. The weighted-average grant-date fair value of options granted was $387.20. No options were vested or exercised during the Successor period.

        The following summarizes stock option activity for the Successor period:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Year)
Options outstanding at the beginning of the period		—	$	—
Granted		50,906	$	1,000
Exercised		—	$	—
Cancelled		—	$	—
Outstanding at the end of the period		50,906	$	1,000		9.75

        The following table summarizes the stock awards available for grant under the 2012 Plan:

	Number of Shares
Available for grant as of January 15, 2012		—
Authorized		74,603
Granted		(50,906	)
Cancelled		—
Available for grant at March 31, 2012		23,697

F-45

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

10. Stock-Based Compensation Plans (Continued)

Predecessor Stock-Based Compensation

        Prior to the Merger, the Company maintained the 99¢ Only Stores 2010 Equity Incentive Plan (the "2010 Plan") and the 1996 Equity Incentive Plan, as amended (the "1996 Plan") which provided for the grant of options, PSU's and other stock-based awards. In connection with the Merger, on January 13, 2012, all of the Company stock-based awards became fully vested. Restricted stock units and performance stock units were converted to a right to receive $22.00 per share, and stock option awards were converted to a right to receive $22.00 less the share price of the awards. The Predecessor recognized $1.0 million of stock-based compensation expense due to the vesting and payout of all stock-based awards. In total, the Company paid cash of $21.5 million to settle all of the Predecessor's stock based awards outstanding on January 13, 2012. As of March 31, 2012, the equity incentive plans of the Predecessor no longer exist.

        The Company recognized compensation expense on a straight-line basis over the requisite service period of the award, taking into consideration the applicable estimated forfeiture rates. Compensation expense associated with PSUs was subject to adjustments for changes in estimates relating to whether the performance objectives were achieved (see Performance Stock Units below). Total pre-tax compensation expense recorded as operating expense, was $2.7 million, $2.9 million and $7.7 million for the period from April 3, 2011 through January 14, 2012, the fiscal 2011 and fiscal 2010, respectively. The income tax benefit was $1.1 million, $1.2 million and $3.1 million for the period from April 3, 2011 through January 14, 2012, fiscal 2011 and fiscal 2010, respectively.

Stock Options

        Under the Predecessor's 2010 Plan, stock options typically vested over a three-year period, one-third one year from the date of grant and one-third per year thereafter. Stock options typically expired ten years from the date of grant.

        The weighted average fair values per share of stock options granted was estimated using the Black-Scholes pricing model with the following assumptions:

	For the Period			Years Ended
	April 3, 2012 to January 14, 2012			April 2, 2011			March 27, 2010
Weighted-average fair value of options granted	$	7.27		$	6.70		$	5.93
Risk free interest rate		0.92	%		1.42	%		2.44	%
Expected life (in years)		5.0			5.0			5.0
Expected stock price volatility		43.3	%		40.8	%		47.2	%
Expected dividend yield		None			None			None

F-46

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

10. Stock-Based Compensation Plans (Continued)

        The risk-free interest rate was based on the U.S. treasury yield curve in effect at the time of grant with an equivalent remaining term. Expected life represents the estimated period of time until exercise and is based on historical experience of similar options, giving consideration to the contractual terms and expectations of future employee behavior. Expected stock price volatility was based on a combination of the historical volatility of the Company's stock and the implied volatility of actively traded options of the Company's stock. The Company did not pay dividends in the past and did not anticipate the payment of any future cash dividends. Compensation expense was recognized only for those options expected to vest, with forfeitures estimated based on the Company's historical experience and future expectations.

        During the Predecessor period from April 3, 2011 through January 14, 2012, stock option activity under the Company's 2010 Plan is set forth below:

	Number of Shares			Weighted Average Exercise Price
Options outstanding at the beginning of the period		3,146,000		$	18.42
Granted		36,000		$	18.82
Exercised		(1,847,000	)	$	12.48
Cancelled		(1,335,000	)	$	26.66
Outstanding at the end of the period		—		$	—

        Due to the Merger and termination of the equity incentive plans, there were no stock options outstanding as of January 14, 2012. The aggregate pre-tax intrinsic value of options exercised was $17.2 million, $3.5 million and $4.2 million for the period from April 3, 2011 to January 14, 2012, and fiscal 2011 and fiscal 2010, respectively. The aggregate pre-tax intrinsic value of options exercised represents the difference between the fair market value of the Company's common stock on the date of exercise and the exercise price of each option. The total fair value of shares vested during the period from April 3, 2011 to January 14, 2012, fiscal 2011 and fiscal 2010 was $0.9 million, $1.0 million and $2.4 million, respectively.

Performance Stock Units

        During the fourth quarter of fiscal 2008, the Compensation Committee of the Company's Board of Directors granted PSUs to certain officers and other key personnel of the Company as a long-term, stock-based performance incentive award. Pursuant to the term of the PSUs, they were eligible for conversion, on a one-for-one basis, to shares of the Company's common stock based on (1) attainment of one or more of eight specific performance goals during the performance period (consisting of fiscal 2008 through 2012), (2) continuous employment with the Company, and (3) certain vesting requirements. Due to the Merger on January 13, 2012, the Company accelerated the vesting of 249,193

F-47

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

10. Stock-Based Compensation Plans (Continued)

outstanding PSU shares. The following table summarizes the PSU activity for the period from April 3, 2011 to January 14, 2012:

	Number of Shares			Weighted Average Exercise Price
PSUs outstanding at the beginning of the period		500,000		$	6.93
Granted		—		$	—
Forfeited		(4,000	)	$	8.76
Converted to common shares		(496,000	)	$	6.91
Outstanding at the end of the period		—		$	—

        The fair value of the PSUs was based on the stock price on the grant date. The compensation expense related to PSUs was recognized only when it was probable that the performance criteria will be met. Based on the Company's financial results, the Company started to recognize compensation expense related to PSUs during the first quarter of fiscal 2010, as this was the first quarter that it appeared probable that certain performance conditions would be met. The Company incurred non-cash stock-based compensation expense related to PSUs of $1.8 million (including $0.3 million resulting from the Merger) and $2.1 million for period from April 3, 2011 through January 14, 2012 and for fiscal 2011, respectively, which was recorded as operating expenses. As a result of the Merger on January 13, 2012, all outstanding PSU's fully vested and were converted to a right to receive $22.00 per share. There were no outstanding PSU's as of January 13, 2012. The Company incurred non-cash stock-based compensation expense related to PSUs of $2.1 million and $6.5 million for fiscal 2011 and fiscal 2010, respectively, which was recorded as operating expense. There were 0.4 million PSUs vested and issued during fiscal 2011. There were 0.6 million PSUs vested during fiscal 2010 of which 0.5 million PSUs were issued during fiscal 2010.

Restricted Stock Units

        According to the Company's 2010 Plan, the Compensation Committee of the Company's Board of Directors granted time-based restricted stock units in fiscal 2011 to certain non-officer employees of the Company as a long-term, incentive award. RSUs cliff vest three years after being granted if the employees are still employed by the Company at such time.

        The following table summarizes the RSUs activity for the period from April 3, 2011 through January 14, 2012:

	Number of Shares		Weighted Average Exercise Price
RSUs outstanding at the beginning of the period		18,000	$	17.88
Granted		—	$	—
Forfeited		—	$	—
Converted to common shares		18,000	$	17.88
Outstanding at the end of the period		—	$	—

F-48

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

10. Stock-Based Compensation Plans (Continued)

        The stock based compensation expense for RSUs was measured at fair value on the date of grant based on the number of shares expected to vest and the quoted market price of the Company's common stock. The Company started to recognize compensation expense related to RSUs during the third quarter of fiscal 2011. For the period from April 3, 2011 through January 13, 2012 and for fiscal 2011, the Company incurred non-cash stock-based compensation expense related to RSUs of $0.3 million (including $0.2 million resulted from the Merger) and less than $0.1 million, respectively, which was recorded as operating expense. As result of the Merger on January 13, 2012 all outstanding RSU's fully vested and were converted to a right to receive $22.00 per share. There were no outstanding RSU's as of January 14, 2012.

11. Texas Market

        As a result of the Company's decision in September 2008 to close its Texas operations, which was later suspended and, in August 2009, reversed, the Company closed 16 of its Texas stores starting from the fourth quarter of fiscal 2009 through the second quarter of fiscal 2010. As described in prior Company filings, the Company had recorded impairment charges as well as lease terminations costs related to closing some of these stores. As March 27, 2010, the Company had an estimated lease termination costs accrual of $2.9 million. During fiscal 2011, the Company increased the estimated lease termination costs accrual by $0.4 million and paid $1.8 million related to these costs. During the periods of January 15, 2012 to March 31, 2012, the Company increased the estimated lease termination costs accrual by $0.1 million and paid $0.1 million related to these costs. During the periods of April 3, 2011 to January 14, 2012, the Company increased the estimated lease termination costs accrual by $0.7 million and paid $0.3 million related to these costs. The initial impairment charges, severance pay accrual, lease termination cost and the additional accretion expenses recorded in fiscal 2011 were included within selling, general and administrative expenses in the consolidated statement of operations. As of March 31, 2012, the remaining balance of the Company's estimated lease termination costs accrual was $1.1 million and is expected to be paid by the end of fiscal 2013. As of March 31, 2012, the Company operated 37 stores in Texas.

F-49

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

11. Texas Market (Continued)

        The following table summarizes the Texas store closures remaining obligations as of March 31, 2012:

(in thousands)	Lease Termination Costs
(Predecessor)
Balance as of 3/28/09	$	1,320
Accretion Expenses		2,961
Cash Payments		(1,338	)
Remaining Obligations as of 03/27/10	$	2,943
Accretion Expenses		437
Cash Payments		(1,889	)
Remaining Obligations as of 04/02/11	$	1,491
Accretion Expenses		321
Cash Payments		(718	)
Remaining Obligations as of 01/14/12	$	1,094
(Successor)
Accretion Expenses		105
Cash Payments		(120	)
Remaining Obligations as of 03/31/12	$	1,079

12. Operating Segments

        The Company manages its business on the basis of one reportable segment. The Company's sales through Bargain Wholesale are not material to the Company's consolidated financial statements; therefore, in accordance with ASC 280, "Segment Reporting" Bargain Wholesale is not presented as a separate operating segment.

        The Company had no customers representing more than 10 percent of net sales. Substantially all of the Company's net sales were to customers located in the United States.

13. Employee Benefit Plans

401(k) Plan

        In 1998, the Company adopted a 401(k) Plan (the "Plan"). All full-time employees are eligible to participate in the Plan after 30 days of service and are eligible to receive matching contributions from the Company after one year of service. The Company contributed $0.4 million and $1.4 million during the periods of January 15, 2012 to March 31, 2012 and April 3, 2011 to January 14, 2012, respectively. The Company contributed $1.6 million in each of fiscal years 2011 and 2010, in matching cash contributions to the Plan. The Company matches 100% of the first 3% of compensation that an

F-50

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

13. Employee Benefit Plans (Continued)

employee contributes and 50% of the next 2% of compensation that the employee contributes with immediate vesting.

Deferred Compensation Plan

        The Company has a deferred compensation plan to provide certain key management employees the ability to defer a portion of their base compensation and/or bonuses. The plan is an unfunded nonqualified plan. The deferred amounts and earnings thereon are payable to participants, or designated beneficiaries, at specified future dates, upon retirement or death. The Company does not make contributions to this plan or guarantee earnings. Funds in the plan are held in a rabbi trust. In accordance with ASC 710-05-8, "Compensation—Deferred Compensation—Rabbi Trusts," the assets and liabilities of a rabbi trust must be accounted for as if they are assets and liabilities of the Company. The assets held in the rabbi trust are not available for general corporate purposes. The rabbi trust is subject to creditor claims in the event of insolvency. The deferred compensation liability and related long-term assets were $5.1 million and $4.9 million as of March 31, 2012 and April 2, 2011, respectively.

14. Assets Held for Sale

        Assets held for sale consist of the Company's warehouse in Eagan, Minnesota and vacant land in La Quinta, California. The carrying value of the warehouse at March 31, 2012 was $6.4 million and the vacant land was $0.4 million. During March 2012, the Company entered into an agreement to sell the Eagan, Minnesota warehouse. The sale agreement contains typical representations, covenants, and conditions for transaction of this type. The Company completed the sale of the real property in June 2012 (See Note 17, "Subsequent Events").

15. Other Current Liabilities

        Other current liabilities as of March 31, 2012 and April 2, 2011 are as follows:

	March 31, 2012		April 2, 2011
	(Amount in thousands)
	(Successor)		(Predecessor)
Accrued legal reserves and fees	$	4,866	$	1,611
Accrued property taxes		2,974		2,823
Accrued utilities		2,709		2,669
Accrued rent and related expenses		2,830		3,995
Accrued accounting fees		1,220		716
Accrued advertising		577		690
Accrued outside services		945		960
Accrued interest		7,898		—
Other		6,550		5,417
Total other current liabilities	$	30,569	$	18,881

F-51

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information

        On December 29, 2011, the Company (the "Issuer") issued $250 million in Senior Notes due December 2019. These Notes are irrevocably and unconditionally guaranteed, jointly and severally, by 99 Cents Only Stores Texas, Inc. and 99 Cents Only Stores (Nevada) ("Subsidiary Guarantors"). Each of the Subsidiary Guarantors is a direct wholly-owned subsidiary of the Company.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

        The tables in the following pages present the condensed consolidating financial information for the Issuer, the Subsidiary Guarantors together with consolidating entries, as of and for the periods indicated. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuer, and Subsidiary Guarantors operated as independent entities.

F-52

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS
Year Ended March 31, 2012
(Successor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
ASSETS
Current Assets:
Cash	$	23,793		$	3,973		$	—		$	27,766
Short-term investments		3,631			—			—			3,631
Accounts receivable, net		2,592			407			—			2,999
Income taxes receivable		6,634			234			—			6,868
Deferred income taxes		25,843			—			—			25,843
Inventories, net		187,234			27,084			—			214,318
Assets held for sale		6,849			—			—			6,849
Other		10,515			782			—			11,297
Total current assets		267,091			32,480			—			299,571
Property and equipment, net		408,456			68,069			—			476,525
Deferred financial costs, net		30,400			—			—			30,400
Long-term deferred income taxes		—			—			—			—
Long-term investments in marketable securities		—			—			—			—
Equity investments and advances to subsidiaries		472,360			373,224			(845,584	)		—
Intangible assets, net		477,492			(58	)		—			477,434
Goodwill		471,513			—			—			471,513
Deposits and other assets		9,689			2,909			—			12,598
Total assets	$	2,137,001		$	476,624		$	(845,584	)	$	1,768,041
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	38,271		$	3,136		$	—		$	41,407
Intercompany payable		377,766			453,952			(831,718	)		—
Payroll and payroll-related		13,986			1,594			—			15,580
Sales tax		5,630			498			—			6,128
Other accrued expenses		27,207			3,362			—			30,569
Workers' compensation		38,949			75			—			39,024
Current portion of long-term debt		5,250			—			—			5,250
Current portion of capital lease obligation		77			—			—			77
Total current liabilities		507,136			462,617			(831,718	)		138,035
Long-term debt		758,351			—			—			758,351
Unfavorable lease commitments and deferred credits, net		19,035			(76	)		—			18,959
Deferred rent		581			217			—			798
Deferred compensation liability		5,136			—			—			5,136
Capital lease obligation, net of current portion		354			—			—			354
Long-term deferred income taxes		214,874			—			—			214,874
Other liabilities		767			—			—			767
Total liabilities		1,506,234			462,758			(831,718	)		1,137,274
Shareholders' Equity:
Preferred stock		—			—			—			—
Common stock		—			1			(1	)		—
Additional paid-in capital		636,037			15,000			(15,000	)		636,037
Retained (deficit) earnings		(5,293	)		(1,135	)		1,135			(5,293	)
Other comprehensive income		23			—			—			23
Total shareholders' equity		630,767			13,866			(13,866	)		630,767
Total liabilities and shareholders' equity	$	2,137,001		$	476,624		$	(845,584	)	$	1,768,041

F-53

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

CONDENSED CONSOLIDATING BALANCE SHEETS
Year Ended April 2, 2011
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
ASSETS
Current Assets:
Cash	$	15,505		$	1,218		$	—		$	16,723
Short-term investments		184,929			—			—			184,929
Accounts receivable,		1,380			275			—			1,655
Income taxes receivable		15,901			—			—			15,901
Deferred income taxes		30,049			—			—			30,049
Inventories, net		167,042			24,493			—			191,535
Other		10,347			866			—			11,213
Total current assets		425,153			26,852			—			452,005
Property and equipment, net		269,258			44,594			—			313,852
Long-term deferred income taxes		24,608			—			—			24,608
Long-term investments in marketable securities		11,232			—			—			11,232
Assets held for sale		7,356			—			—			7,356
Equity investments and advances to subsidiary		284,916			217,758			(502,674	)		—
Deposits and other assets		13,152			2,010			—			15,162
Total assets	$	1,035,675		$	291,214		$	(502,674	)	$	824,215
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable		41,663			3,500			—			45,163
Intercompany payable		222,304			406,113			(628,417	)		—
Payroll and payroll-related		14,280			1,318			—			15,598
Sales tax		5,876			668			—			6,544
Other accrued expenses		14,835			4,046			—			18,881
Workers' compensation		42,355			75			—			42,430
Current portion of capital lease obligation		75			—			—			75
Total current liabilities		341,388			415,720			(628,417	)		128,691
Deferred rent		7,441			1,237			—			8,678
Deferred compensation liability		4,924			—			—			4,924
Capital lease obligation, net of current portion		373			—			—			373
Total liabilities	$	354,126		$	416,957		$	(628,417	)	$	142,666
Shareholders' Equity:
Preferred stock		—			—			—			—
Common stock		253,039			1			(1	)		253,039
Additional paid-in capital		—			15,000			(15,000	)		—
Retained earnings		428,836			(140,744	)		140,744			428,836
Other comprehensive income (loss)		(326	)		—			—			(326	)
Total shareholders' equity		681,549			(125,743	)		125,743			681,549
Total liabilities and shareholders' equity	$	1,035,675		$	291,214		$	(502,674	)	$	824,215

F-54

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Period January 15, 2012 to March 31, 2012
(Successor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
Net Sales:
Total sales	$	309,437		$	29,479		$	—		$	338,916
Cost of sales (excluding depreciation and amortization expense shown separately below)		185,215			18,560			—			203,775
Gross profit		124,222			10,919			—			135,141
Selling, general and administrative expenses:
Operating expenses		100,694			9,783			—			110,477
Depreciation and amortization		9,468			2,267			—			11,735
Total selling, general and administrative expenses		110,162			12,050			—			122,212
Operating income (loss)		14,060			(1,131	)		—			12,929
Other (income) expense:
Interest income		(29	)		—			—			(29	)
Interest expense		16,219			4			—			16,223
Equity in (earnings) loss of subsidiaries		1,135			—			(1,135	)		—
Other		(75	)		—			—			(75	)
Total other expense, net		17,250			4			(1,135	)		16,119
Loss before provision for income taxes		(3,190	)		(1,135	)		1,135			(3,190	)
Provision for income taxes		2,103			—			—			2,103
Net (loss) income	$	(5,293	)	$	(1,135	)	$	1,135		$	(5,293	)

F-55

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Period April 3, 2011 to January 14, 2012
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors		Consolidating Adjustments			Consolidated
Net Sales:
Total sales	$	1,087,684		$	105,096	$	—		$	1,192,780
Cost of sales (excluding depreciation and amortization expense shown separately below)		645,864			65,138		—			711,002
Gross profit		441,820			39,958		—			481,778
Selling, general and administrative expenses:
Operating expenses		340,764			35,358		—			376,122
Depreciation and amortization		19,386			2,483		—			21,869
Total selling, general and administrative expenses		360,150			37,841		—			397,991
Operating income		81,670			2,117		—			83,787
Other (income) expense:
Interest income		(291	)		—		—			(291	)
Interest expense		368			13		—			381
Other-than-temporary investment impairment due to credit loss		357			—		—			357
Equity in (earnings) loss of subsidiaries		(2,104	)		—		2,104			—
Other		(107	)		—		—			(107	)
Total other (income) expense, net		(1,777	)		13		2,104			340
Income before provision for income taxes		83,447			2,104		(2,104	)		83,447
Provision for income taxes		33,699			—		—			33,699
Net income	$	49,748		$	2,104	$	(2,104	)	$	49,748

F-56

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended April 2, 2011
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
Net Sales:
Total sales	$	1,302,745		$	121,133		$	—		$	1,423,878
Cost of sales (excluding depreciation and amortization expense shown separately below)		767,218			75,538			—			842,756
Gross profit		535,527			45,595			—			581,122
Selling, general and administrative expenses:
Operating expenses		392,687			43,347			—			436,034
Depreciation and amortization		24,263			3,342			—			27,605
Total selling, general and administrative expenses		416,950			46,689			—			463,639
Operating income (loss)		118,577			(1,094	)		—			117,483
Other (income) expense:
Interest income		(865	)		—			—			(865	)
Interest expense		71			6			—			77
Other-than-temporary investment impairment due to credit loss		129			—			—			129
Equity in loss of subsidiaries		1,100			—			(1,100	)		—
Other		(82	)		—			—			(82	)
Total other expense (income), net		353			6			(1,100	)		(741	)
Income before provision for income taxes		118,224			(1,100	)		1,100			118,224
Provision for income taxes		43,916			—			—			43,916
Net income (loss)	$	74,308		$	(1,100	)	$	1,100		$	74,308

F-57

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended March 27, 2010
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
Net Sales:
Total sales	$	1,239,167		$	116,003		$	—		$	1,355,170
Cost of sales (excluding depreciation and amortization expense shown separately below)		727,921			69,827			—			797,748
Gross profit		511,246			46,176			—			557,422
Selling, general and administrative expenses:
Operating expenses		390,722			45,886			—			436,608
Depreciation and amortization		24,758			2,640			—			27,398
Total selling, general and administrative expenses		415,480			48,526			—			464,006
Operating income (loss)		95,766			(2,350	)		—			93,416
Other (income) expense:
Interest income		(1,115	)		(2	)		—			(1,117	)
Interest expense		77			97			—			174
Other-than-temporary investment impairment due to credit loss		843			—			—			843
Equity in loss of subsidiaries		2,445			—			(2,445	)		—
Other		(35	)		—			—			(35	)
Total other expense (income), net		2,215			95			(2,445	)		(135	)
Income before provision for income taxes		93,551			(2,445	)		2,445			93,551
Provision for income taxes		33,104			—			—			33,104
Net income (loss)	$	60,447		$	(2,445	)	$	2,445		$	60,447

F-58

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Period January 15, 2012 to March 31, 2012
(Successor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	20,482		$	1,553		$	—	$	22,035
Cash flows from investing activities:
Acquisition of 99¢ Only Stores		(1,477,563	)		—			—		(1,477,563	)
Deposit—Merger consideration		177,322			—			—		177,322
Purchases of property and equipment		(12,252	)		(918	)		—		(13,170	)
Proceeds from sale of fixed assets		1,910			—			—		1,910
Purchases of investments		(6,277	)		—			—		(6,277	)
Proceeds from sale of investments		24,519			—			—		24,519
Net cash used in investing activities		(1,292,341	)		(918	)		—		(1,293,259	)
Cash flows from financing activities:
Proceeds from debt		774,500			—			—		774,500
Payments of debt		(11,313	)		—			—		(11,313	)
Payments of debt issuance costs		(31,411	)		—			—		(31,411	)
Payments of capital lease obligation		(13	)		—			—		(13	)
Proceeds from equity contribution		535,900			—			—		535,900
Net cash provided by financing activities		1,267,663			—			—		1,267,663
Net (decrease) increase in cash		(4,196	)		635			—		(3,561	)
Cash—beginning of period		27,989			3,338			—		31,327
Cash—end of period	$	23,793		$	3,973		$	—	$	27,766

F-59

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Period April 3, 2011 to January 14, 2012
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	40,263		$	3,993			—	$	44,256
Cash flows from investing activities:
Deposit—Merger consideration		(177,322	)		—			—		(177,322	)
Purchases of property and equipment		(31,606	)		(1,964	)		—		(33,570	)
Proceeds from sale of fixed assets		7			91			—		98
Purchases of investments		(52,623	)		—			—		(52,623	)
Proceeds from sale of investments		226,805			—			—		226,805
Net cash used in investing activities		(34,739	)		(1,873	)		—		(36,612	)
Cash flows from financing activities:
Payments of capital lease obligation		(56	)		—			—		(56	)
Repurchases of common stock related to issuance of Performance Stock Units		(1,744	)		—			—		(1,744	)
Proceeds from exercise of stock options		3,359			—			—		3,359
Excess tax benefit from share-based payment arrangements		5,401			—			—		5,401
Net cash provided by financing activities		6,960			—			—		6,960
Net increase in cash		12,484			2,120			—		14,604
Cash—beginning of period		15,505			1,218			—		16,723
Cash—end of period	$	27,989		$	3,338		$	—	$	31,327

F-60

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended April 2, 2011
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	76,977		$	2,795		$	—	$	79,772
Cash flows from investing activities:
Purchases of property and equipment		(57,977	)		(3,144	)		—		(61,121	)
Proceeds from sale of fixed assets		145			19			—		164
Purchases of investments		(69,317	)		—			—		(69,317	)
Proceeds from sale of investments		43,621			—			—		43,621
Net cash used in investing activities		(83,528	)		(3,125	)		—		(86,653	)
Cash flows from financing activities:
Payments of capital lease obligation		(72	)		—			—		(72	)
Repurchases of common stock related to issuance of Performance Stock Units		(2,260	)		—			—		(2,260	)
Acquisition of non-controlling interest of a partnership		—			—			—		—
Proceeds from exercise of stock options		5,039			—			—		5,039
Excess tax benefit from share-based payment arrangements		1,020			—			—		1,020
Net cash provided by financing activities		3,727			—			—		3,727
Net decrease in cash		(2,824	)		(330	)		—		(3,154	)
Cash—beginning of period		18,329			1,548			—		19,877
Cash—end of period	$	15,505		$	1,218		$	—	$	16,723

F-61

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

16. Supplemental Financial Information (Continued)

99¢ Only Stores
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 27, 2010
(Predecessor)
(Amounts in thousands)

	Issuer			Subsidiary Guarantors			Consolidating Adjustments			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	78,268		$	(3,343	)	$	(53	)	$	74,872
Cash flows from investing activities:
Purchases of property and equipment		(34,229	)		(613	)		—			(34,842	)
Proceeds from sale of fixed assets		372			434			—			806
Purchases of investments		(81,104	)		—			—			(81,104	)
Proceeds from sale of investments		31,547			—			—			31,547
Net cash used in investing activities		(83,414	)		(179	)		—			(83,593	)
Cash flows from financing activities:
Payments of capital lease obligation		(65	)		—			—			(65	)
Repurchases of common stock related to issuance of Performance Stock Units		(2,667	)		—			—			(2,667	)
Acquisition of non-controlling interest of a partnership		(275	)		—			—			(275	)
Proceeds from exercise of stock options		7,790			—			—			7,790
Excess tax benefit from share-based payment arrangements		1,885			—			—			1,885
Net cash provided by financing activities		6,668			—			—			6,668
Net increase (decrease) in cash		1,522			(3,522	)		(53	)		(2,053	)
Cash—beginning of period		16,807			5,070			53			21,930
Cash—end of period	$	18,329		$	1,548		$	—		$	19,877

F-62

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

17. Subsequent Events

        The Company evaluated subsequent events through July 9, 2012, the date the consolidated financial statements were issued.

        On April 4, 2012, the Company amended the terms of its existing seven-year $525 million First Lien Term Facility (the "Amended First Lien Term Facility"), net of refinancing costs of $11.2 million. The amendment decreased the interest rate applicable to the term loans from LIBOR plus 5.50% (or base rate plus 4.50%) to LIBOR plus 4.00% (or base rate plus 3.00%) and the LIBOR floor from 1.50% to 1.25%. The maximum capital expenditures covenant in each of the Company's First Lien Term Facility and its ABL Facility was amended to permit an additional $5 million in capital expenditures per year. The principal payments and maturity date of January 13, 2019 for the First Lien Term Facility were not affected by the amendment.

        On June 12, 2012, the Company completed the sale of its warehouse in Eagan, Minnesota for $6.6 million. The warehouse had a carrying value of $6.4 million in the consolidated financial statements, and the difference between the purchase price and carrying value, net of transaction costs, will be recorded during the three months ended June 30, 2012.

        During the first quarter of fiscal 2013, the Company entered into an interest rate swap agreement to limit the variability of cash flows associated with interest payments on its Amended First Lien Term Facility that result from fluctuations in the LIBOR rate. The swap limits the Company's interest exposure on a notional value of $261.8 million to 1.36% plus an applicable margin of 4.00%. The term of the swap is from November 29, 2013 through May 31, 2016. The fair value of the swap on the trade date was zero as the Company neither paid nor received any value to enter into the swap, which was entered into at market rates.

        In addition, during the first quarter of fiscal 2013, the Company entered into an interest rate cap agreement for its Amended First Lien Term Facility. The interest rate cap agreement limits the Company's interest exposure on a notional value of $261.8 million to 3.00% plus an applicable margin of 4.00%. The term of the interest rate cap is from May 29, 2012 to November 29, 2013. The Company paid $0.05 million to enter into the interest rate cap agreement.

18. Quarterly Financial Information (Unaudited)

        The following table sets forth certain unaudited results of operations for each quarter during periods from April 3, 2012 to January 14, 2012, January 15, 2012 to March 31, 2012 and fiscal 2011. The unaudited information has been prepared on the same basis as the audited financial statements and includes all adjustments which management considers necessary for a fair presentation of the

F-63

99¢ Only Stores

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the Periods January 15, 2012 to March 31, 2012 (Successor), April 3, 2011 to January 14, 2012
(Predecessor) and Fiscal Years Ended April 2, 2011 (Predecessor) and March 27, 2010 (Predecessor)

18. Quarterly Financial Information (Unaudited) (Continued)

financial data shown. The operating results for any quarter are not necessarily indicative of the results to be attained for any future period.

	Fiscal Year 2012 (April 3, 2011 to March 31, 2012)
	(Amounts in thousands)
	(Unaudited)
	First Quarter		Second Quarter		Third Quarter		January 1, 2012 to January 14, 2012 Fourth Quarter			January 15, 2012 to March 31, 2012 Fourth Quarter
	(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)			(Successor)
	(13 Weeks)		(13 Weeks)		(13 Weeks)		(2 Weeks)			(11 Weeks)
Net sales:
99¢ Only Stores	$	357,544	$	352,220	$	393,263	$	55,706		$	329,361
Bargain Wholesale		10,796		10,818		10,657		1,776			9,555
Total		368,340		363,038		403,920		57,482			338,916
Gross profit		148,820		145,774		165,215		21,969			135,141
Operating income/(loss)		28,541		24,417		37,542		(6,713	)		12,929
Net income (loss)	$	17,683	$	15,114	$	22,175	$	(5,224	)	$	(5,293	)

	Fiscal Year 2011 (March 28, 2010 to April 2, 2011)
	(Amounts in thousands)
	(Unaudited)
	(Predecessor)
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(13 Weeks)		(13 Weeks)		(13 Weeks)		(14 Weeks)
Net sales:
99¢ Only Stores	$	336,554	$	323,248	$	354,121	$	366,434
Bargain Wholesale		9,921		10,311		11,238		12,051
Total		346,475		333,559		365,359		378,485
Gross profit		140,262		136,071		153,906		150,883
Operating income		26,820		20,708		42,069		27,886
Net income	$	16,814	$	12,936	$	26,639	$	17,919

F-64

Offer to Exchange

Up to $250 million aggregate principal amount of its 11% Senior Notes due 2019 which have been registered under the Securities Act of 1933, as amended for any and all of its outstanding 11% Senior Notes due 2019

PROSPECTUS

                    , 2012

Until the date that is 90 days from the date of this prospectus, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.    Indemnification of Directors and Officers.

99¢ Only Stores

        99¢ Only Stores (the "Company") is a California Corporation and is subject to the California Corporations Code (the "California Code"). The Company's Articles of Incorporation include a provision that eliminates the personal liability of its directors to the Company and its shareholders for monetary damages for breach of the directors' fiduciary duties in certain circumstances. This limitation has no effect on a director's liability (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the Company or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director's duty to the Company or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the Company or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the Company or its shareholders, (vi) under Section 310 of the California Code (concerning contracts or transactions between the Company and a director) or (vii) under Section 316 of the California Code (concerning directors' liability for improper dividends, loans and guarantees). The provision does not extend to acts or omissions of a director in his capacity as an officer. Further, the provision will not affect the availability of injunctions and other equitable remedies available to the Company's shareholders for any violation of a director's fiduciary duty to the Company or its shareholders.

        The Company's Articles of Incorporation also include an authorization for the Company to indemnify its agents (as defined in Section 317 of the California Code), through bylaw provisions, by agreement or otherwise, to the fullest extent permitted by law. Pursuant to this latter provision, the Company's Bylaws provide for indemnification of the Company's directors, officers and employees. In addition, the Company, at its discretion, may provide indemnification to persons whom the Company is not obligated to indemnify. The Bylaws also allow the Company to enter into indemnity agreements with individual directors, officers, employees and other agents.

        These indemnity agreements have been entered into with all directors and provide the maximum indemnification permitted by law. These agreements, together with the Company's Bylaws and Articles of Incorporation, may require the Company, among other things, to indemnify such directors against certain liabilities that may arise by reason of their status or service as directors (other than liabilities resulting from willful misconduct of a culpable nature), to advance expenses to them as they are incurred, provided that they undertake to repay the amount advanced if it is ultimately determined by a court that they are not entitled to indemnification, and to obtain directors' and officers' insurance if available on reasonable terms.

        Section 317 of the California Code and the Company's Bylaws make provision for the indemnification of officers, directors and other corporate agents in terms sufficiently broad to indemnify such persons, under certain circumstances, for liabilities (including reimbursement of expenses incurred) arising under the Securities Act.

        The Company maintains director and officer liability insurance.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange

II-1

Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Co-Registrants

        Certain of our directors and officers serve at our request as directors or officers of the co-registrants and thus may be entitled to indemnification and advancement of expenses under the provisions set forth above. In addition to potential indemnification and advancement by the Company, the directors and officers of the co-registrants may also be entitled to indemnification and advancement to the extent provided in the applicable co-registrant's organizational documents or under the laws under which the co-registrants are organized, as described below.

99 Cents Only Stores of Texas, Inc.

        The co-registrant, 99 Cents Only Stores of Texas, Inc. is a Delaware corporation and is subject to the Delaware General Corporation Law ("DGCL") and the exculpation from liability and indemnification provisions contained therein.

        Section 145 of the DGCL provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened, pending or completed actions, suits or proceedings in which such person is made a party by reason of such person being or having been a director, officer, employee or agent to the corporation. The DGCL provides that Section 145 is not exclusive of other rights to which those seeking indemnification may be entitled under any bylaw, agreement, and vote of stockholders or disinterested directors or otherwise.

        Section 102(b)(7) of the DGCL permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for any breach of the director's duty of loyalty to the corporation or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, for unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions, or for any transaction from which the director derived an improper personal benefit.

        Article Eighth of the certificate of incorporation of 99 Cents Only Stores Texas, Inc. provides that no director of the corporation shall be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such liability or limitation thereof is not permitted under the DGCL. The bylaws of 99 Cents Only Stores Texas, Inc. do not contain provisions under which controlling persons, directors or officers of the registrant are insured or indemnified in any manner against liability which such persons may incur in such persons' capacity as such.

99 Cents Only Stores

        A Co-Registrant, 99 Cents Only Stores is a Nevada corporation and is subject to the Nevada Revised Statutes 78.7502 to 78.752 (the "NRS"). Pursuant to the provisions of the NRS, a corporation must indemnify directors and officers for any expenses, including attorneys' fees, actually and reasonably incurred by any director or officer in connection with any actions or proceedings, whether civil, criminal, administrative, or investigative, brought against such director or officer because of his or her status as a director or officer, to the extent that the director or officer has been successful on the merits or otherwise in defense of the action or proceeding. The NRS permits a corporation to indemnify a director or officer, even in the absence of an agreement to do so, for expenses actually and reasonably incurred in connection with any action or proceeding (i) if such officer or director (a) acted

II-2

in good faith and in a manner in which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, (b) is not liable pursuant to Section 78.138 of the NRS (fiduciary duties), and (c) with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, or (ii) with respect to an action by or in the right of the corporation, if such director or officer (a) acted in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, and (b) is not liable pursuant to Section 78.138 of the NRS (fiduciary duties), except that indemnification may not be made for any claim, issue or matter as to which a person has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines upon application that the person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper.

        The NRS also prohibits indemnification of a director or officer if a final adjudication establishes that the director's or officer's acts or omissions involved intentional misconduct, fraud, or a knowing violation of the law and were material to the cause of action. Despite the foregoing limitations on indemnification, the NRS may permit a director or officer to apply to the court for approval of indemnification even if the director or officer is adjudged to have committed intentional misconduct, fraud, or a knowing violation of the law. The NRS further provides that a corporation may purchase and maintain insurance for directors and officers against liabilities incurred while acting in such capacities regardless of whether the corporation has the authority to indemnify such persons under the NRS. Any discretionary indemnification under the NRS must be authorized upon a determination that such indemnification is proper: (i) by the stockholders, (ii) by a majority of a quorum of disinterested directors, or (iii) by independent legal counsel in a written opinion authorized by a majority vote of a quorum of directors consisting of disinterested directors or by independent legal counsel in a written opinion if a quorum of disinterested directors cannot be obtained.

        The articles of incorporation and bylaws of 99 Cents Only Stores are silent with respect to indemnification.

Item 21.    Exhibits and Financial Statement Schedules.

        (a)   The exhibits listed below in the "Index to Exhibits" are part of this Registration Statement on Form S-4 and are numbered in accordance with Item 601 of Regulation S-K.

        (b)   Financial Statement Schedules

II-3

99¢ Only Stores
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(Amounts in thousands)

	Beginning of Period		Addition		Reduction		End of Period
(Successor)
For the period ended January 15, 2012 to March 31, 2012
Allowance for doubtful accounts	$	267		38		25	$	280
Inventory reserve	$	4,026		125		151	$	4,000
Tax valuation allowance	$	5,745		8,501		3,900	$	10,346
(Predecessor)
For the period ended April 3, 2011 to January 14, 2012
Allowance for doubtful accounts	$	258		19		10	$	267
Inventory reserve	$	4,051		244		269	$	4,026
Tax valuation allowance	$	5,800		—		55	$	5,745
For the year ended April 2, 2011
Allowance for doubtful accounts	$	501		198		441	$	258
Inventory reserve	$	3,726		924		599	$	4,051
Tax valuation allowance	$	5,800		—		—	$	5,800
For the year ended March 27, 2010
Allowance for doubtful accounts	$	44		541		84	$	501
Inventory reserve	$	2,666		1,525		465	$	3,726
Tax valuation allowance	$	3,900		1,900		—	$	5,800

Item 22.    Undertakings.

        The undersigned registrants hereby undertake as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) under the Securities Act of 1933, as amended (the "Securities Act"), the undersigned registrants undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.

        The undersigned registrants hereby undertake that every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415 under the Securities Act, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes 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.

        The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of the Company's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement 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.

II-4

        The undersigned registrants hereby undertake to respond to requests for information that is incorporated by reference into this prospectus pursuant to Item 4, 10(b), 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 effective date of the Registration Statement through the date of responding to the request.

        The undersigned registrants hereby undertake 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.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the undersigned registrants pursuant to the foregoing provisions, or otherwise, the undersigned registrants have been advised that in the opinion of the Securities and Exchange Commission (the "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 undersigned registrants of expenses incurred or paid by a director, officer or controlling person of the undersigned registrants 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 undersigned registrants will, unless in the opinion of their 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.

        The undersigned registrants hereby undertake:

(1)

To file, during any period in which offers or sales are being made, a post-effective amendment to the Registration Statement:



(a)

to include any prospectus required by Section 10(a)(3) of the Securities Act;



(b)

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) that, 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 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 a prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and



(c)

to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change of such information in the Registration Statement.



(2)

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.



(3)

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of this offering.



(4)

For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed part of the Registration Statement as of the time it was declared effective.

II-5

SIGNATURES

        Pursuant to the requirements of the Securities Act, the undersigned registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of City of Commerce, State of California, on the 9th day of July, 2012.

99¢ Only Stores
By:	/s/ ERIC SCHIFFER
	Name:	Eric Schiffer
	Title:	Chief Executive Officer

SIGNATURES AND POWERS OF ATTORNEY

        Each person whose signature appears below authorizes Eric Schiffer and Frank Schools or either of them, as his or her attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his or her name and on his or her behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments including post-effective amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)), and to file the same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which either such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities set forth opposite their names and on the date indicated above.

Signature		Title
By:	/s/ ERIC SCHIFFER Eric Schiffer	Director and Chief Executive Officer (Principal Executive Officer)
By:	/s/ JEFF GOLD Jeff Gold	President, Chief Operating Officer and Director
By:	/s/ HOWARD GOLD Howard Gold	Executive Vice President, Special Projects and Director

II-6

Signature		Title
By:	/s/ FRANK SCHOOLS Frank Schools	Interim Chief Financial Officer (Principal Financial and Accounting Officer)
By:	/s/ RICHARD ANICETTI Richard Anicetti	Director
By:	/s/ NORMAN AXELROD Norman Axelrod	Director
By:	/s/ SHANE FEENEY Shane Feeney	Director
By:	/s/ ANDREW GIANCAMILLI Andrew Giancamilli	Director
By:	/s/ DENNIS GIES Dennis Gies	Director
By:	/s/ DAVID KAPLAN David Kaplan	Chairman of the Board of Directors
By:	/s/ SCOTT NISHI Scott Nishi	Director
By:	/s/ ADAM STEIN Adam Stein	Director

II-7

SIGNATURES

        Pursuant to the requirements of the Securities Act, the undersigned registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of City of Commerce, State of California, on the 9th day of July, 2012.

99 CENTS ONLY STORES TEXAS, INC.
By:	/s/ ERIC SCHIFFER
	Name:	Eric Schiffer
	Title:	Executive Vice President and Secretary

SIGNATURES AND POWERS OF ATTORNEY

        Each person whose signature appears below authorizes Eric Schiffer and Jeff Gold or either of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments including post-effective amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)), and to file the same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which either such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities set forth opposite their names and on the date indicated above.

Signature		Title
By:	/s/ JEFF GOLD Jeff Gold	President and Director (Principal Executive Officer)
By:	/s/ ERIC SCHIFFER Eric Schiffer	Senior Vice President, Secretary and Director
By:	/s/ HOWARD GOLD Howard Gold	Senior Vice President and Director

II-8

SIGNATURES

        Pursuant to the requirements of the Securities Act, the undersigned registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of City of Commerce, State of California, on the 9th day of July, 2012.

99 CENT ONLY STORES
By:	/s/ ERIC SCHIFFER
	Name:	Eric Schiffer
	Title:	Secretary and Treasurer

SIGNATURES AND POWERS OF ATTORNEY

        Each person whose signature appears below authorizes Eric Schiffer and Jeff Gold or either of them, as his attorney in fact and agent, with full power of substitution and resubstitution, to execute, in his name and on his behalf, in any and all capacities, this Registration Statement on Form S-4 and any amendments including post-effective amendments thereto (and any additional registration statement related thereto permitted by Rule 462(b) promulgated under the Securities Act of 1933 (and all further amendments including post-effective amendments thereto)), and to file the same, with all the exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, necessary or advisable to enable the registrant to comply with the Securities Act of 1933, and any rules, regulations and requirements of the Securities and Exchange Commission, in respect thereof, in connection with the registration of the securities which are the subject of such registration statement, which amendments may make such changes in such registration statement as such attorney may deem appropriate, and with full power and authority to perform and do any and all acts and things, whatsoever which either such attorney or substitute may deem necessary or advisable to be performed or done in connection with any or all of the above-described matters, as fully as each of the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney or substitute.

        Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities set forth opposite their names and on the date indicated above.

Signature		Title
By:	/s/ JEFF GOLD Jeff Gold	President and Director (Principal Executive Officer)
By:	/s/ ERIC SCHIFFER Eric Schiffer	Secretary, Treasurer and Director (Principal Financial and Accounting Officer)
By:	/s/ DAVE GOLD Dave Gold	Director
By:	/s/ HOWARD GOLD Howard Gold	Director

II-9

INDEX TO EXHIBITS

2.1	Agreement and Plan of Merger among Number Holdings, Inc., Number Merger Sub, Inc. and Registrant, dated October 11, 2011(1)
3.1	Amended and Restated Articles of Incorporation of the Registrant(2)
3.2	Amended and Restated Bylaws of the Registrant(2)
3.3	Articles of Incorporation of 99 Cents Only Stores (Nevada)*
3.4	By-Laws of 99 Cents Only Stores (Nevada)*
3.5	Certificate of Incorporation of 99 Cents Only Stores Texas, Inc.*
3.6	Bylaws of 99 Cents Only Stores Texas, Inc.*
4.1	Stockholders Agreement, dated as of January 13, 2012, among Number Holdings, Inc., Ares Corporate Opportunities Fund III, L.P., Canada Pension Plan Investment Board and the Other Stockholders party thereto*
4.2	Indenture, dated as of December 29, 2011, between Number Merger Sub, Inc. and Wilmington Trust, National Association, as trustee(3)
4.3	Supplemental Indenture, dated as of January 13, 2012, among 99¢ Only Stores, 99 Cents Only Stores Texas, Inc., 99 Cents Only Stores and Wilmington Trust, National Association, as trustee(3)
4.4	Registration Rights Agreement, dated as of December 29, 2011, between Number Merger Sub, Inc. and RBC Capital Markets, LLC, as representative of the Initial Purchasers (as defined therein)(3)
5.1	Opinion of Proskauer Rose LLP (including the consent of such firm) regarding legality of securities being offered*
10.1	Form of Amended and Restated Indemnification Agreement and Schedule of Indemnified Parties(4)
10.2	Indemnification Agreement with David Gold(5)
10.3	Form of Tax Indemnification Agreement, between and among the Registrant and the Existing Shareholders(6)
10.4	Lease for 13023 Hawthorne Boulevard, Hawthorne, California, dated January 13, 2012, by and between the Registrant as Tenant and HKJ Gold, Inc. as Landlord*
10.5	Lease for 6161 Atlantic Boulevard, Maywood, California, dated January 13, 2012, by and between the Registrant as Tenant and 6135-6161 Atlantic Boulevard Partnership as Landlord*
10.6	Lease for 14139 Paramount Boulevard, Paramount, California, dated January 13, 2012, by and between the Registrant as Tenant and David Gold and Sherry Gold, Trustees of the Gold Revocable Trust Dated 10/26/2005 as Landlord*
10.7	Lease for 6122-6130 Pacific Boulevard, Huntington Park, California, dated January 13, 2012, by and between the Registrant as Tenant and Au Zone Investment #2, L.P. as Landlord*
10.8	Lease for 14901 Hawthorne Boulevard, Lawndale, California, dated January 13, 2012, by and between Au Zone Investment #2, L.P. as Landlord and the Registrant as Tenant*
10.9	Lease for 5599 Atlantic Avenue, North Long Beach, California, dated January 13, 2012, by and between the Registrant as Tenant and HKJ Gold, Inc. as Landlord*

II-10

10.10	Lease for 1514 North Main Street, Santa Ana, California, dated as of January 13, 2012, by and between the Registrant as Tenant and Howard Gold, Jeff Gold, Eric J. Schiffer and Karen R. Schiffer as Landlord*
10.11	Lease for 6121 Wilshire Boulevard, Los Angeles, California, dated as of January 13, 2012, by and between the Registrant as Tenant and HKJ Gold, Inc. as Landlord*
10.12	Lease for 6101 Wilshire Boulevard, Los Angeles, California, dated as of January 13, 2012, by and between the Registrant as Tenant and Au Zone Investment #2, L.P. as Landlord*
10.13	Lease for 8625 Woodman Avenue, Arleta, California, dated as of January 13, 2012, by and between the Registrant as Tenant and Au Zone Investment #2, L.P. as Landlord*
10.14	Lease for 2566 East Florence Avenue, Walnut Park, California, dated as of January 13, 2012, by and between HKJ Gold, Inc. as Landlord and the Registrant as Tenant*
10.15	Lease for 3420 West Lincoln Avenue, Anaheim, California, dated as of January 13, 2012, by and between the Registrant as Tenant and HKJ Gold, Inc. as Landlord*
10.16	Lease for 12123-12125 Carson Street, Hawaiian Gardens, California, dated as of January 13, 2012, by and between the Registrant as Tenant and Au Zone Investment #2, L.P., as Landlord*
10.17	North Broadway Indemnity Agreement, dated as of May 1, 1996, by and between HKJ Gold, Inc. and the Registrant(7)
10.18	Lease for 2606 North Broadway, Los Angeles, California, dated as of January 13, 2012, by and between HKJ Gold, Inc. as Landlord and the Registrant as Tenant*
10.19	Grant Deed concerning 8625 Woodman Avenue, Arleta, California, dated May 2, 1996, made by David Gold and Sherry Gold in favor of Au Zone Investments #2, L.P., a California limited partnership(6)
10.20	Grant Deed concerning 6101 Wilshire Boulevard, Los Angeles, California, dated May 2, 1996, made by David Gold and Sherry Gold in favor of Au Zone Investments #2, L.P., a California limited partnership(6)
10.21	Grant Deed concerning 6124 Pacific Boulevard, Huntington Park, California, dated May 2, 1996, made by David Gold and Sherry Gold in favor of Au Zone Investments #2, L.P., a California limited partnership(6)
10.22	Grant Deed concerning 14901 Hawthorne Boulevard, Lawndale, California, dated May 2, 1996, made by Howard Gold, Karen Schiffer and Jeff Gold in favor of Au Zone Investments #2, L.P., a California limited partnership(6)
10.23	Reserved
10.24	$175,000,000 Credit Agreement, dated as of January 13, 2012, among Registrant, Number Holdings, Inc., the lenders party thereto, Royal Bank of Canada, as administrative agent and Issuer (as defined therein), BMO Harris Bank N.A. and Deutsche Bank Securities Inc., as co-syndication agents, and the other agents named therein(3)
10.25	$525,000,000 Credit Agreement, dated as of January 13, 2012, among Registrant, Number Holdings, Inc., the lenders party thereto, Royal Bank of Canada, as administrative agent, BMO Capital Markets and Deutsche Bank Securities Inc., as co-syndication agents, and the other agents named therein(3)
10.26	Security Agreement, dated as of January 13, 2012, among Number Holdings, Inc., Registrant, the Subsidiary Guarantors (as defined therein), and Royal Bank of Canada, as collateral agent for the Secured Parties (as defined therein)(3)

II-11

10.27	Security Agreement, dated as of January 13, 2012, among Number Holdings, Inc., Registrant, the Subsidiary Guarantors (as defined therein), and Royal Bank of Canada, as collateral agent for the Secured Parties (as defined therein)(3)
10.28	Guaranty, dated as of January 13, 2012, among Number Holdings, Inc, the other Guarantors (as defined therein) and the Royal Bank of Canada, as administrative agent and collateral agent(3)
10.29	Guaranty, dated as of January 13, 2012, among Number Holdings, Inc, the other Guarantors (as defined therein) and the Royal Bank of Canada, as administrative agent and collateral agent(3)
10.30	Intercreditor Agreement, dated as of January 13, 2012, between the Royal Bank of Canada, as administrative agent under the ABL Facility (as defined herein), and the Royal Bank of Canada, as administrative agent under the Term Loan Facility (as defined herein)(3)
10.31	Employment Agreement, dated as of January 13, 2012, among 99 Cents Only Stores, Number Holdings, Inc. and Eric Schiffer*
10.32	Employment Agreement, dated as of January 13, 2012, among 99 Cents Only Stores, Number Holdings, Inc. and Jeff Gold*
10.33	Employment Agreement, dated as of January 13, 2012, among 99 Cents Only Stores, Number Holdings, Inc. and Howard Gold*
10.34	2012 Stock Incentive Plan of Number Holdings, Inc.*
10.35	Form of Non-Qualified Stock Option Agreement pursuant to the 2012 Stock Incentive Plan*
12.1	Statement re: Computation of Ratio of Earnings to Fixed Charges*
21.0	Subsidiaries*
23.1	Consent of Proskauer Rose LLP (included as part of its opinion filed as Exhibit 5 hereto)
23.2	Consent of BDO USA LLP, independent certified accounts for the Company*
24.1	Powers of Attorney (included on signature pages)
25.1	Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of Wilmington Trust, National Association with respect to the Indenture governing the 11% Senior due 2019.*
99.1	Form of Letter of Transmittal*
99.2	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees*
99.3	Form of Letter to Clients*
99.4	Form of Notice of Guaranteed Delivery*

*

Filed herewith.

(1)

Incorporated by reference from the Company's Current Report on Form 8-K as filed with Securities and Exchange Commission on October 11, 2011.

(2)

Incorporated by reference from the Company's Current Report on Form 8-K as filed with Securities and Exchange Commission on January 13, 2012.

(3)

Incorporated by reference from the Company's Current Report on Form 8-K as filed with Securities and Exchange Commission on January 13, 2012.

II-12

(4)

Incorporated by reference from the Company's 2008 Annual Report on Form 10-K as filed with Securities and Exchange Commission on June 11, 2008.

(5)

Incorporated by reference from the Company's 2004 Annual Report on Form 10-K as filed with the Securities and Exchange Commission on September 9, 2005.

(6)

Incorporated by reference from the Company's Amendment No. 2 to Registration Statement on Form S-1/A as filed with the Securities and Exchange Commission on May 21, 1996.

(7)

Incorporated by reference from the Company's Amendment No. 1 to Registration Statement on Form S-1/A as filed with the Securities and Exchange Commission on May 3, 1996

II-13

EX-3.3

Exhibit 3.3

DEAN HELLER

Secretary of State

101 North Carson Street, Suite 3

Articles of

Carson City, Nevada 89701-4786

Incorporation

FILED # C27732-99

(775) 684 5708

(PURSUANT TO NRS 78)

Important: Read attached instructions before completing form.

1. Name of Corporation:

99 Cent Only Stores

2. Resident Agent Name and Street Address:

THE CORPORATION TRUST COMPANY OF NEVADA   Name

One East First Street

Reno,

NEVADA

89501

Street Address

City

Zip Code

3. Shares:

(number of shares corporation authorized to issue)

Number of shares with par value: 1,000

Par value: $.01

Number of shares without par value:

4. Governing Board: (Check one)

Shall be styled as x Directors or o Trustees

Names, Addresses, Number of Board of Directors/Trustees:

The First Board of Directors/Trustees shall consist of 3 members whose names and addresses are as follows:

See attached

Name

Name

Address

City, State, Zip

Address

City, State, Zip

5. Purpose: (optional-see instructions)

The purpose of this Corporation shall be: Own and operate retail stores

6. Other Matters: (see instructions)

Number of additional pages attached: 1

7. Names, Addresses and Signatures of Incorporators:

William B. Mandel

Name

Name

2029 Century Park East, Los Angeles, CA 90067

Address

City, State, Zip

Address

City, State, Zip

/s/ William B. Mandel

Signature

11/4/99

Signature

Notary:

This instrument was acknowledged before me on

This instrument was acknowledged before me on

,

by

,

by

William B. Mandel

Name of person

Name of person

As incorporator

As incorporator

of

99 Cent Only Stores

of

(Name of party on behalf of whom instrument executed)

(Name of party on behalf of whom instrument executed)

Notary Public Signature

Notary Public Signature

(affix notary stamp or seal)

(affix notary stamp or seal)

8. Certificate of Acceptance of Appointment of Resident Agent:

I THE CORPORATION TRUST COMPANY OF NEVADA hereby accept appointment as Resident Agent for the above named corporation.

/s/ [ILLEGIBLE]

11-4-99

Signature of Resident Agent

Date

This form must be accompanied by appropriate fees. See attached fee schedule.

Attachment to Articles of Incorporation

99 Cent Only Stores

Directors:

David Gold

4000 East Union Pacific Avenue, City of Commerce, California 90023

Eric Schiffer

4000 East Union Pacific Avenue, City of Commerce, California 90023

Jeff Gold

4000 East Union Pacific Avenue, City of Commerce, California 90023

CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION

(Before Payment of Capital of Issuance of Stock)       Filed By:

William B. Mandel certifies that:

1.He is the sole original incorporator of 99 Cent Only Stores, a Nevada corporation.

2.The original Articles were filed in the Office of the Secretary of State on November 8, 1999.

3.As of the date of this Certificate, no stock of the Corporation has been issued.

4.He hereby adopts the following amendment to the Articles of Incorporation of this corporation:

Article 1 is amended to read as follows:

“The name of the Corporation is 99 Cents Only Stores”

/s/ William B. Mandel

William B. Mandel

EX-3.4

Exhibit 3.4

99 CENTS ONLY STORES

* * * * *

BY-LAWS

* * * * *

ARTICLE I

OFFICES

Section 1.The registered office shall be in Reno, Nevada.

Section 2.The corporation may also have offices at such other places both within and without the State of Nevada as the board of directors may from time to time determine or the business of the corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1.All annual meetings of the stockholders shall be held in the State of Nevada. Special meetings of the stockholders may be held at such time and place within or without the State of Nevada as shall be stated in the notice of the meeting, or in a duly executed waiver of notice thereof.

Section 2.Annual meetings of stockholders, commencing with the year 2000, shall be held on a date chosen by the Board of Directors within 15 months of the date of incorporation or the last annual meeting, at which they shall elect by a plurality vote a board of directors, and transact such other business as may properly be brought before the meeting.

Section 3.Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the articles of incorporation, maybe called by the president and shall be called by the president or secretary at the request in writing of a majority of the board of directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting.

Section 4.Notices of meetings shall be in writing and signed by the president or a vice president, or the secretary, or an assistant secretary, or by such other person or persons as the directors shall designate. Such notice shall state the purpose or purposes for which the meeting is called and the time when and the place where it is to be held. A copy of such notice shall be

either delivered personally to or shall be mailed, postage prepaid, to each stockholder of record entitled to vote at such meeting not less than ten nor more than sixty days before such meeting. If mailed, it shall be directed to a stockholder at his address as it appears upon the records of the corporation and upon such mailing of any such notice, the service thereof shall be complete, and the time of the notice shall begin to run from the date upon which such notice is deposited in the mail for transmission to such stockholder. Personal delivery of any such notice to any officer of a corporation or association, or to any member of a partnership shall constitute delivery of such notice to such corporation, association or partnership. In the event of the transfer of stock after delivery or mailing of the notice of and prior to the holding of the meeting it shall not be necessary to deliver or mail notice of the meeting to the transferee.

Section 5.Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 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 constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the articles of incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, 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 maybe transacted which might have been transacted at the meeting as originally notified.

Section 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 articles of incorporation a different vote is required in which case such express provision shall govern and control the decision of such question.

Section 8.Except as hereinafter provided, every stockholder of record of the corporation shall be entitled at each meeting of stockholders to one vote for each share of stock standing in his name on the books of the corporation. At all elections of directors each holder of stock possessing voting power shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and he may cast all of such votes for a single director or may distribute them among the number to be voted for or any two or more of them, as he may see fit.

Section 9.At any meeting of the stockholders, any stockholder maybe represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all of the persons so

designated unless the instrument shall otherwise provide. No such proxy shall be valid after the expiration of six months from the date of its execution, unless coupled with an interest, or unless the person executing it specifies therein the length of time for which it is to continue in force, which in no case shall exceed seven years from the date of its execution. Subject to the above, any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it or a duly executed proxy bearing a later date is filed with the secretary of the corporation.

Section 10.Any action, which maybe taken by the vote of the stockholders at a meeting, maybe taken without a meeting if authorized by the written consent of stockholders holding at least a majority of the voting power, unless the provisions of the statutes or of the articles of incorporation require a greater proportion of voting power to authorize such action in which case such greater proportion of written consents shall be required.

ARTICLE III

DIRECTORS

Section 1.The number of directors shall be four (4). The number of directors is to be fixed by vote of the shareholders. The directors shall be elected at the annual meeting of the stockholders, and except as provided in Section 2 of this article, each director elected shall hold office until his successor is elected and qualified. Directors need not be stockholders.

Section 2.Vacancies, including those caused by an increase in the number of directors, maybe filled by a majority of the remaining directors though less than a quorum. When one or more directors shall give notice of his or their resignation to the board, effective at a future date, the board shall have power to fill such vacancy or vacancies to take effect when such resignation or resignations shall become effective, each director so appointed to hold office during the remainder of the term of office of the resigning director or directors.

Section 3.The business of the 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 by statute or by the articles of incorporation or by these bylaws directed or required to be exercised or done by the stockholders.

MEETINGS OF THE BOARD OF DIRECTORS

Section 4.The board of directors of the corporation may hold meetings, both regular and special, either within or without the State of Nevada.

Section 5.The first meeting of each newly elected board of directors shall be held at such time and place as shall be fixed by the vote of the stockholders at the annual meeting and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting, provided a quorum shall be present. In the event of the failure of the stockholders to fix the time or place of such first meeting of the newly elected board of directors, or in the event such meeting is not held at the time and place so fixed by the stockholders, the meeting maybe held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.

Section 6.Regular meetings of the board of directors may be held without notice at such time and place as shall from time to time be determined by the board.

Section 7.Special meetings of the board of directors may be called by the president or secretary on the written request of two directors. Written notice of special meetings of the board of directors will be given to each director ten days prior to the date of the meeting.

Section 8.A majority of the board of directors, at a meeting duly assembled, shall be necessary to constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as maybe otherwise specifically provided by statute or by the articles of incorporation. Any action required or permitted to be taken at a meeting of the directors maybe taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors entitled to vote with respect to the subject matter thereof.

COMMITTEES OF DIRECTORS

Section 9.The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation, which, to the extent provided in the resolution, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation robe affixed to all papers on which the corporation desires to place a seal. Such committee or committees shall have such name or names as maybe determined from time to time by resolution adopted by the board of directors.

Section 10.The committees shall keep regular minutes of their proceedings and report the same to the board when required.

COMPENSATION OF DIRECTORS

Section 11.The directors maybe paid their expenses, if any, of attendance at each meeting of the board of directors and maybe paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of special or standing committees maybe allowed like compensation for attending committee meetings.

ARTICLE IV

NOTICES

Section 1.Notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by facsimile telecommunication.

Section 2.Whenever all parties entitled to vote at any meeting, whether of directors or stockholders, consent, either by a writing on the records of the meeting or filed with the secretary, or by presence at such meeting and oral consent entered on the minutes, or by taking part in the deliberations at such meeting without objection, the doings of such meeting shall be as valid as if had at a meeting regularly called and noticed, and at such meeting any business maybe transacted which is not excepted from the written consent or to the consideration of which no objection for want of notice is made at the time, and if any meeting be irregular for want of notice or of such consent, provided a quorum was present at such meeting, the proceedings of said meeting maybe ratified and approved and rendered likewise valid and the irregularity or defect therein waived by a writing signed by all parties having the right to vote at such meetings; and such consent or approval of stockholders may be by proxy or attorney, but all such proxies and powers of attorney must be in writing.

Section 3.Whenever any notice whatever is required to be given under the provisions of the statutes, of the articles of incorporation or of these by-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto.

ARTICLE V

OFFICERS

Section 1.The officers of the corporation shall be chosen by the board of directors and shall be a president, a vice president, a secretary and a treasurer. Any person may hold two or more offices.

Section 2.The board of directors at its first meeting after each annual meeting of stockholders shall choose a president, a vice president, a secretary and a treasurer, none of whom need be a member of the board.

Section 3.The board of directors may appoint additional vice presidents, and assistant secretaries and assistant treasurers and such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the board.

Section 4.The salaries of all officers and agents of the corporation shall be fixed by the board of directors.

Section 5.The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer elected or appointed by the board of directors maybe removed at any time by the affirmative vote of a majority of the board of directors. Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise shall be filled by the board of directors.

THE PRESIDENT

Section 6.The president shall be the chief executive officer of the corporation, shall preside at all meetings of the stockholders and the board of directors, shall have general and active management of the business of the corporation, and shall see that all orders and resolutions of the board of directors are carried into effect.

Section 7.He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the board of directors to some other officer or agent of the corporation.

THE VICE PRESIDENT

Section 8.The vice president shall, in the absence or disability of the president, perform the duties and exercise the powers of the president and shall perform such other duties as the board of directors may from time to time prescribe.

THE SECRETARY

Section 9.The secretary shall attend all meetings of the board of directors and all meetings of the stockholders and record all the proceedings of the meetings of the corporation and of the board of directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the board of directors, and shall perform such other duties as maybe prescribed by the board of directors or president, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation and, when authorized by the board of directors, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the treasurer or an assistant secretary.

Section 10.The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as maybe designated by the board of directors.

Section 11.He shall disburse the funds of the corporation as maybe ordered by the board of directors taking proper vouchers for such disbursements, and shall render to the president and the board of directors, at the regular meetings of the board, or when the board of directors so requires, an account of all his transactions as treasurer and of the fmancial condition of the corporation.

Section 12.If required by the board of directors, he shall give the corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the board of directors for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation.

ARTICLE VI

CERTIFICATES OF STOCK

Section 1.Every stockholder shall be entitled to have a certificate, signed by the president or a vice president and the treasurer or an assistant treasurer, or the secretary or an assistant

secretary of the corporation, certifying the number of shares owned by him in the corporation. If the corporation is authorized to issue shares of more than one class or more than one series of any class, there shall be set forth upon the face or back of the certificate, or the certificate shall have a statement that the corporation will furnish to any stockholders upon request and without charge, a full or summary statement of the designations, preferences and relative, participating, optional or other special rights of the various classes of stock or series thereof and the qualifications, limitations or restrictions of such rights, and, if the corporation shall be authorized to issue only special stock, such certificate shall set forth in full or summarize the rights of the holders of such stock.

Section 2.Whenever any certificate is countersigned or otherwise authenticated by a transfer agent or transfer clerk, and by a registrar, then a facsimile of the signatures of the officers or agents of the corporation maybe printed or lithographed upon such certificate in lieu of the actual signatures. In case any officer or officers who shall have signed, or whose facsimile signature or signatures shall have been used on, 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 adopted by the corporation and be issued and delivered as though the person or persons who signed such certificate or certificates, or whose facsimile signature or signatures shall have been used thereon, had not ceased to be an officer or officers of such corporation.

LOST CERTIFICATES

Section 3.The board of directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that maybe made against the corporation with respect to the certificate alleged to have been lost or destroyed.

TRANSFER OF STOCK

Section 4.Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.

CLOSING OF TRANSFER BOOKS

Section 5.The directors may prescribe a period not exceeding sixty days prior to any meeting of the stockholders during which no transfer of stock on the books of the corporation maybe made, or may fix a day not more than sixty days prior to the holding of any such meeting as the day as of which stockholders entitled to notice of and to vote at such meeting shall be determined; and only stockholders of record on such day shall be entitled to notice or to vote at such meeting.

REGISTERED STOCKHOLDERS

Section 6.The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Nevada.

ARTICLE VII

GENERAL PROVISIONS

DIVIDENDS

Section 1.Dividends upon the capital stock of the corporation, subject to the provisions of the articles of incorporation, if any, maybe declared by the board of directors at any regular or special meeting pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the articles of incorporation.

Section 2.Before payment of any dividend, there maybe set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserves in the manner in which it was created.

Section 3.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

Section 4.The fiscal year of the corporation shall be fixed by resolution of the board of directors.

SEAL

Section 5.The corporate seal shall have inscribed thereon the name of the corporation, the year of its incorporation and the words “Corporate Seal, Nevada.”

ARTICLE VIII

AMENDMENTS

Section 1.These by-laws maybe altered or repealed at any regular meeting of the stockholders or of the board of directors or at any special meeting of the stockholders or of the board of directors if notice of such alteration or repeal be contained in the notice of such special meeting.

CERTIFICATE OF SECRETARY

I, the undersigned, do hereby certify:

(1)that I am the duly elected and acting Secretary of 99 Cents Only Stores, a Nevada corporation; and

(2)that the foregoing Bylaws, comprising 10 pages, constitute the Bylaws of said Corporation as duly adopted by the written consent of the Board of Directors on November 10, 1999.

IN WITNESS WHEREOF, I have hereunto subscribed my name as of this 10th day of November, 1999.

/s/ Jeff Gold

Jeff Gold

EX-3.5

Exhibit 3.5

CERTIFICATE OF INCORPORATION

OF

99 CENTS ONLY STORES TEXAS, INC.

I, the undersigned, for the purposes of incorporating and organizing a corporation under the General Corporation Law of the State of Delaware, do execute this Certificate of Incorporation and do hereby certify as follows:

FIRST. The name of the corporation is 99 Cents Only Stores Texas, Inc.

SECOND. The address of the corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street in the 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 General Corporation Law of the State of Delaware.

FOURTH. The total number of shares of stock which the corporation shall have authority to issue is one hundred (100) shares. All such shares are to be Common Stock, having a par value of $0.01 per share, and are to be of one class.

FIFTH. The name and mailing address of the incorporator is Kate Cregor, 355 South Grand Avenue, Suite 3500, Los Angeles, California 90071.

SIXTH. Unless and except to the extent that the by-laws of the corporation so require, the election of directors of the corporation need not be by written ballot.

SEVENTH. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the corporation is expressly authorized to make, alter and repeal the by-laws of the corporation, subject to the power of the stockholders of the corporation to alter or repeal any by-law whether adopted by them or otherwise.

EIGHTH. 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, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

NINTH. The corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this article.

The undersigned incorporator hereby acknowledges that the foregoing Certificate of Incorporation is her act and deed and that the facts stated therein are true.

Dated: January 22, 2003

/s/ Kate Cregor

Kate Cregor

Incorporator

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EX-3.6

Exhibit 3.6

BYLAWS
OF
99 CENTS ONLY STORES TEXAS, INC.
A Delaware Corporation
(the “Corporation”)

ARTICLE I

STOCKHOLDERS MEETINGS

Section 1Place of Meeting. Meetings of the Stockholders shall be held at the principal offices of the Corporation or at such place, within or without the State of Delaware, as may from time to time be designated for that purpose, by the Board.

Section 2Annual Meetings. Unless directors are elected by written consent in lieu of an annual meeting as permitted by this Section 2, an annual meeting of the Stockholders for the election of directors shall be held on such date and at such time as may be designated, from time to time, by the Board. Stockholders may, unless the Certificate of Incorporation otherwise provides, act by written consent to elect directors; provided, however, that if such consent is less than unanimous, such action by written consent may be in lieu of holding an annual meeting only if all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action. If the annual meeting for the election of directors is not held on the date designated therefor or action by written consent to elect directors in lieu of an annual meeting has not been taken, the directors shall cause the meeting to be held as soon as is convenient. Any other proper business may be transacted at the annual meeting.

Section 3Special Meetings. Special meetings of the Stockholders for any purpose or purposes may be called at any time by the Board, the Chairman of the Board or any two directors.

Section 4Notice of Meetings. Except as otherwise provided by the DGCL, written notice of each meeting of the Stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days prior to the date upon which the meeting is to be held to each Stockholder entitled to vote at such meeting. Such notice shall be deemed delivered when deposited in the United States mail, postage prepaid, addressed to the Stockholder at such person’s address as it appears on the stock records of the Corporation, or otherwise actually delivered to such address or such person. Such 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. If 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. If the adjournment is for more than 30 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 meeting.

Section 5Quorum. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, at each meeting of Stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, any meeting of the Stockholders may be adjourned from time to time by a majority of the votes represented either in person or by proxy, and

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no other business may be transacted at a meeting except that the Stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough Stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

Section 6Adjourned Meeting. Any Stockholders’ meeting, annual or special, whether or not a quorum is present, may be adjourned by vote of a majority of the shares present, either in person or by proxy. At any adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.

Section 7Chairman of Meeting; Opening of Polls. Meetings of Stockholders shall be presided over by the person designated by the Board, or in the absence of such designation, by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in his absence by the Chief Executive Officer, or in their absence by a chairman chosen at the meeting by the Stockholders. The Secretary shall act as secretary of the meeting, but in his absence, the chairman of the meeting may appoint any person to act as secretary of the meeting. The chairman of the meeting shall announce at each meeting of Stockholders the date and time of the opening of the polls for each matter upon which the Stockholders will vote.

Section 8Proxies. 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 such person by proxy.

Section 9Stockholder List. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of Stockholders, a complete list of the Stockholders entitled to vote at the 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 to the examination of any Stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, 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. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any Stockholder who is present.

Section 10Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the Certificate of Incorporation, any action required to be taken, or that may be taken, at any annual or special meeting of the Stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action to be taken, shall have been signed by the holders of outstanding stock eligible to vote on such action, having not less than the minimum number of votes of each class of stock that would be necessary to authorize or take such action at a meeting at which all shares of each class of stock entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of minutes of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

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Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or to an officer or agent of the Corporation having custody of the book in which proceedings of minutes of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

The Secretary shall give prompt notice of the taking of any corporate action without a meeting by less than unanimous written consent to those Stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided in this Section 10.

Section 11Inspectors of Election. In advance of any meeting of the Stockholders, the Board shall appoint at least one person, other than nominees for office, as inspectors of election, to act at such meeting or any adjournment thereof. The number of such inspectors of election shall be one or three. In case any person appointed as inspector fails to appear or refuses to act, the vacancy shall be filled by appointment by the Board in advance of the meeting, or at the meeting by the chairman of the meeting.

The duties of each such inspector shall include: determining the number of shares outstanding and voting power of each; determining the shares represented at the meeting; determining the existence of a quorum; determining the authenticity, validity and effect of proxies; receiving votes, ballots or consents; hearing and determining all challenges and questions in any way arising in connection with the right to vote; retaining for a reasonable period the disposition of any challenges made to the inspector’s determinations; counting and tabulating all votes; determining when the polls shall close; determining the result of any election; certifying the determination of the number of shares represented at the meeting, and the count of all votes and ballots; certifying any information considered in determining the validity and counting of proxies and ballots if that information is used for the purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the Stockholder holds of record; and performing such acts as may be proper to conduct the election or vote with fairness to all Stockholders.

An announcement shall be made at each meeting of the Stockholders by the chairman of the meeting of the date and time of the opening and closing of polls for each matter upon which the Stockholders will vote at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Delaware Court of Chancery upon application by a Stockholder shall determine otherwise.

Unless otherwise provided in the Certificate of Incorporation or these Bylaws, this Section 11 shall not apply to the Corporation if the Corporation does not have a class of voting stock that is:

(a)listed on a national securities exchange;

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(b)authorized for quotation on an interdealer quotation system of a registered national securities association; or

(c)held of record by more than 2,000 stockholders.

Section 12Record 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 entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.

If no record date is fixed:

(a)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;

(b)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 is necessary, shall be the day on which the first written consent is expressed;

(c)The record date for determining Stockholders for any other purpose shall be at the close of business on the day on which the Board 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 may fix a new record date for the adjourned meeting.

Section 13Conduct of Meetings. The Board may adopt such rules and regulations for the conduct of meetings of Stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of any meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to Stockholders of record, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (iv) restrictions on entry to meeting after the time fixed for commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

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Section 14Exception to Requirements of Notice. No notice is required to be given to any Stockholder under the Certificate of Incorporation or these Bylaws if under Section 230 of the DGCL no such notice is required to be given.

Section 15Matters Considered at Annual Meeting. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the meeting by or at the direction of the Board, or (c) otherwise properly brought before the meeting by a Stockholder. For business to be properly brought before an annual meeting by a Stockholder, the Stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to the Stockholders, notice by the Stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A Stockholder’s notice to the Secretary shall set forth as to each matter the Stockholder proposes to bring before the annual meeting (a) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation’s books, of the stockholder proposing such business, (c) the class and number of shares of the Corporation which are beneficially owned by the Stockholder, and (d) any material interest of the Stockholder in such business. Notwithstanding anything in the By-laws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section. The chairman of the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this section and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

Section 16Nominations for Director. Only persons who are nominated in accordance with the procedures set forth in this Section shall be eligible for election as Directors. Nominations of persons for election to the Board may be made at a meeting of Stockholders by or at the direction of the Board or by any Stockholder entitled to vote for the election of Directors at the meeting who complies with the notice procedures set forth in this Section. Such nominations, other than those made by or at the direction of the Board shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a Stockholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to the stockholders, notice by the Stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such Stockholder’s notice shall set forth (a) as to each person whom the Stockholder proposes to nominate for election or re-election as a Director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case

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pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such persons’ written consent to being named in the proxy statement as a nominee and to serving as a Director if elected); and (b) as to the Stockholder giving the notice (i) the name and address, as they appear on the Corporation’s books, of such stockholder and (ii) the class and number of shares of the Corporation which are beneficially owned by such stockholder. At the request of the Board any person nominated by the Board for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a stockholder’s notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded.

ARTICLE II
BOARD OF DIRECTORS

Section 1Powers. The business and affairs of the Corporation shall be managed by, or under the direction of the Board, except as may be otherwise provided by the DGCL or in the Certificate of Incorporation or these Bylaws.

Section 2Number. The Board shall consist of one or more members, the number thereof to be determined from time to time by resolution of the Board.

Section 3Place of Meeting. Unless otherwise provided in the Certificate of Incorporation, meetings, both regular and special, of the Board shall be held at the Corporation’s principal executive offices, or at such other place or places, as the Board or the Chairman of the Board may from time to time determine.

Section 4Regular Meetings. Immediately following each annual meeting of the Stockholders, the Board shall hold a regular meeting at the same place at which such Stockholders’ meeting is held, or any other place as may be fixed from time to by the Board or the Chairman of the Board. Notice of such meeting need not be given.

Other regular meetings of the Board shall be held without call at such time as the Board may from time to time determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day not a legal holiday. Notice of a regular meeting need not be given.

Section 5Special Meetings. Except as otherwise provided in the Certificate of Incorporation, special meetings of the Board for any purpose or purposes may be called at any time by the Chairman of the Board, the Chief Executive Officer or by any two directors.

Written notice of the time and place of special meetings shall be delivered personally to each director or communicated to each director by telephone or telegraph or telex or cable or mail or electronic mail or other form of recorded communication, charges prepaid, addressed to each director at that director’s address as it is shown on the records of the Corporation or, if it is not so shown on such records or is not readily ascertainable, at that director’s residence or usual place of

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business. In case such notice is mailed, it shall be deposited in the United States mail at least seven days prior to the time of the holding of the meeting. In case such notice is delivered personally, by telephone or by other form of written communication, it shall be delivered at least 48 hours before the time of the holding of the meeting. The notice shall state the time of the meeting, but need not specify the place of the meeting if the meeting is to be held at the principal executive office of the Corporation. The notice need not state the purpose of the meeting unless expressly provided otherwise by statute.

Section 6Meetings by Communication Equipment. Members of the Board, or any committee designated by the Board, may participate in a meeting of the Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting pursuant to this Section shall constitute presence in person at such meeting.

Section 7Quorum and Manner of Acting. The presence of a majority of the total number of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. In the absence of a quorum, a majority of the directors present may adjourn any meeting from time to time until a quorum is present. Notice of an adjourned meeting need not be given.

Section 8Action Without Meeting. Any action required or permitted to be taken at any meeting of the Board, 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.

Section 9Compensation of Directors. The Board may fix the compensation of directors.

Section 10Committees. The Board may, by resolution passed by a majority of the whole Board, 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 the 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 to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent authorized by the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. The Board may remove any director from a committee with or without cause at any time.

ARTICLE III
OFFICERS

Section 1Officers. The Board may elect such officers with such titles as the Board deems advisable. Each officer shall have the powers and duties set forth in these Bylaws and any resolution of the Board appointing such officer (to the extent such resolution is not inconsistent with these Bylaws), and to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board. The Board may designate two or more persons as Chairman of

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the Board, in which case each shall be a Co-Chairman of the Board. Each such officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Subject to contractual obligations to the Company, any officer may resign at any time upon written notice to the Corporation. The Board may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation. One person may hold any number of offices.

Section 2Chairman of the Board. The Chairman of the Board, if such an officer be elected, shall, if present, preside at all meetings of the Board and exercise and perform such other powers and duties as may be from time to time assigned to such person by the Board.

Section 3Chief Executive Officer. Subject to such supervisory powers, if any, as may be given by the Board to the Chairman of the Board, the Chief Executive Officer, if such an officer be elected, shall, subject to the control of the Board, have general supervision, direction and control of the business and the officers of the Corporation. The Chief Executive Officer shall exercise and perform such other powers and duties as may be from time to time assigned to such person by the Board, consistent with such person’s position as Chief Executive Officer.

Section 4President. Subject to such supervisory powers, if any, as may be given by the Board to the Chairman of the Board and the Chief Executive Officer, if there be such officers, the President shall be the chief operating officer of the Corporation and shall, subject to the control of the Board, have general supervision, direction, and control of the business and the officers of the Corporation (other than the Chairman and Chief Executive Officer). The President shall have the general powers and duties of management usually vested in the office of president and general manager of a Corporation, and shall have such other powers and duties as may be prescribed by the Board and the Chief Executive Officer.

Section 5Vice Presidents. In the absence or disability of the Chairman, the Chief Executive Officer and the President, the Vice Presidents, if any, in order of their rank as fixed by the Board, or, if not ranked, the Vice President designated by the Board shall perform all the duties of such officer, and when so acting shall have all the powers of, and be subject to all the restrictions upon, such offices. The Vice Presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board, the Chief Executive Officer or the President.

Section 6Secretary. The Secretary shall keep, or cause to be kept, at the principal executive office or such other place as the Board may direct, a book of minutes of all meetings and actions of directors, committees of directors, and Stockholders, with the time and place of holding, whether regular or special, and, if special, how authorized, the notice given, the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at Stockholders’ meetings, and the proceedings.

The Secretary shall give, or cause to be given, notice of all meetings of the Stockholders and of the Board required by the Bylaws or by law to be given, and he shall keep the seal of the Corporation, if one be adopted, in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board.

Section 7Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the

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properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings and shares, and shall send or cause to be sent to the Stockholders of the Corporation such financial statements and reports as are by law or these Bylaws required to be sent to them.

The Chief Financial Officer shall deposit all monies and other valuables in the name or to the credit of the Corporation with such depositories as may be designated by the Board or by an officer, if such authority is delegated by the Board. The Chief Financial Officer shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the President and directors, whenever they request it, an account of all transactions undertaken as Chief Financial Officer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board.

ARTICLE IV
INDEMNIFICATION OF DIRECTORS,
OFFICERS, EMPLOYEES AND OTHER AGENTS

Section 1Agents, Proceedings and Expenses. For the purposes of this Article IV, “agent” means any person who is or was a director, officer, employee or other agent of the Corporation, or is or was a director, officer, employee or other agent of the Corporation as a director, officer, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, or was a director, officer, employee or agent of a foreign or domestic corporation which was a predecessor corporation of the Corporation or of another enterprise at the request of such predecessor corporation; “proceeding” means any threatened, pending or complete action or proceeding, whether civil, criminal, administrative, or investigative; and “expenses” includes, without limitation, attorneys’ fees and any expenses of establishing a right to indemnification under Section 2 or Section 3 of this Article IV.

Section 2Actions Other Than By The Corporation. The Corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person 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, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or 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 action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contender 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, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.

Section 3Actions by the Corporation. The Corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by

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reason of the fact that such person 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 against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit 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 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 for negligence or misconduct in the performance of such person’s duty to the Corporation unless and only to the extent that the Delaware Court of Chancery or the court in which such action or suit 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 Delaware Court of Chancery or such other court shall deem proper.

Section 4Successful Defense by Agent. To the extent that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 2 and 3 of this Article IV, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.

Section 5Required Approval. Any indemnification under Sections 1 and 2 (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 present or former director, officer, employee or agent is proper in the circumstances because such person has met the applicable standard of conduct set forth in Sections 2 and 3 of this Article IV. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (a) by a majority vote of the members of the Board who are not parties to such action, suit or proceeding, even though less than a quorum, or (b) by a committee of such disinterested directors designated by majority vote of such disinterested directors, even though less than a quorum, or (c) if there are no such disinterested directors, or if such disinterested directors so direct, by independent legal counsel in a written opinion, or (d) by the affirmative vote of a majority of Stockholders.

Section 6Advance of Expenses. The Corporation may, in its discretion, pay the expenses (including attorneys’ fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding, in advance of the final disposition of such action, suit or proceeding, provided, however, that the payment of expenses incurred by a director or officer in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts advanced if it should ultimately be determined that the director or officer is not entitled to be indemnified by the Corporation as authorized in this Article IV or otherwise. Such expenses (including attorneys’ fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

Section 7Contractual Rights. The indemnification and advancement of expenses provided by, or granted pursuant to, the other sections of this Article IV shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of Stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity

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while holding such office and shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 8Limitations. No indemnification or advance shall be made under this Article IV, except as provided in Section 4, in any circumstances where it appears:

(a)That it would be inconsistent with a provision of the Certificate of Incorporation, a resolution of the Stockholders or an agreement in effect at the time of accrual of the alleged cause of action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

(b)That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

Section 9Insurance. The Corporation shall have the power to 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 against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article IV.

Section 10Constituent Corporations. For purposes of this Article IV, references to “the Corporation” shall include, in addition to the Corporation, any constituent corporation (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, officers, employees or agents, so that any person who is or was a 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, shall stand in the same position under the provisions of this Article IV with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued.

Section 11Definitions. For purposes of this Article IV, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article IV.

ARTICLE V
MISCELLANEOUS

Section 1Inspection of Books and Records by Stockholders. Any Stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the

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purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its Stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a Stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing which authorizes the attorney or other agent to so act on behalf of the Stockholder. The demand under oath shall be directed to the Corporation at its registered office in the State of Delaware or at its principal place of business.

Section 2Inspection of Books and Records by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its Stockholders and its other books and records for a purpose reasonably related to such person’s position as a director. Such right to examine the records and books of the Corporation shall include the right to make copies and extract therefrom.

Section 3Checks, Drafts, Evidences of Indebtedness. All checks, drafts, or other orders for payment of money, notes or other evidences of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by the Board. In the absence of such determination, the Chief Executive Officer, the President, the Chief Operating Officer and the Chief Financial Officer shall have the authority to sign or endorse such instruments and documents.

Section 4Corporate Contracts and Instruments; How Executed. The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such person’s authority may be general or confined to specific instances; and, unless so authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or agreement or to pledge its credit or to render it liable for any purpose or for any amount. In the absence of specific resolution of the Board relating to the authority of officers to execute contracts generally, the Chief Executive Officer, the President, the Chief Operating Officer and the Chief Financial Officer shall have the authority to execute contracts of the Corporation.

Section 5Certificates for Shares. Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by the Chairman or the President or a Vice-President, and by the Chief Financial Officer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation representing the number of shares owned by such person in the Corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

Section 6Transfer of Shares. Transfers of shares of the capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof, or by such person’s attorney thereunto authorized by a power of attorney duly executed and filed with the Secretary of the Corporation or a transfer agent of the Corporation, if any, and on surrender of the certificate or certificates for such shares properly endorsed. A person whose name appears on

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shares of stock and on the books of the Corporation shall be deemed the owner thereof as regards the Corporation, and upon any transfer of shares of stock the person or persons into whose name or names such shares shall have been transferred, shall enjoy and bear all rights, privileges and obligations of holders of stock of the Corporation and as against the Corporation or any other person or persons. The term “person” or “persons” wherever used herein shall be deemed to include any partnership, corporation, association or other entity. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact, if known to the Secretary or to such transfer agent, shall be so expressed in the entry of transfer.

Section 7Lost, Stolen or Destroyed Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such person’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 8Representation of Shares of Other Corporations. The Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer or any person designated by any of such officers is authorized, in the absence of authorization by the Board, to vote on behalf of the Corporation any and all shares of any other corporation or corporations, foreign or domestic, for which the Corporation has the right to vote. The authority granted to these officers to vote or represent on behalf of the Corporation any and all shares held by the Corporation in any other corporation or corporations may be exercised by any of these officers in person or by any person authorized to do so by proxy duly executed by these officers.

Section 9Construction and Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular. In addition, as used in these Bylaws, the following terms have the meanings set forth below:

“Board” means the Board of Directors of the Corporation.

“DGCL” means the Delaware General Corporation Law, as the same may from time to time be amended.

“Stockholders” means the stockholders of the Corporation.

Section 10Amendments to Bylaws. Unless otherwise provided in the Certificate of Incorporation, these Bylaws may be altered or repealed, and new Bylaws made, by the Board, but the Stockholders may make additional Bylaws and may alter and repeal any Bylaws whether adopted by them or otherwise.

Section 11Conformance to the Law. In the event that it is determined that these Bylaws, as now written or as amended, conflict with the DGCL, or any other applicable law, as now enforced or as amended, these Bylaws shall be deemed amended, without action of the Board or the Stockholders, to conform with such law. Such amendment to be so interpreted as to bring these

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Bylaws within minimum compliance. For purposes of this section, “amendment” shall include a repeal of, or a change in interpretation of, the relevant compendium.

Section 12Fiscal Year. The fiscal year of the Corporation shall be determined by the Board.

Section 13Dividends; Surplus. Subject to the provisions of the Certificate of Incorporation and any restrictions imposed by statute, the Board may declare dividends out of the net assets of the Corporation in excess of its capital or, in case there shall be no such excess, out of the net profits of the Corporation for the fiscal year then current and/or the preceding fiscal year, or out of any funds at the time legally available for the declaration of dividends (hereinafter referred to as “surplus or net profits”) whenever, and in such amounts as, in its sole discretion, the conditions and affairs of the Corporation shall render advisable. The Board in its sole discretion may, in accordance with law, from time to time set aside from surplus or net profits such sum or sums as it may think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for the purpose of maintaining or increasing the property or business of the Corporation, or for any other purpose as it may think conducive to the best interests of the Corporation.

Section 14Waiver of Notice. Whenever notice is required to be given under these Bylaws or the Certificate of Incorporation or the DGCL, a written waiver, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except where the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Stockholders, Board or any committee of the Board need be specified in any written waiver of notice unless so required by the Certificate of Incorporation or these Bylaws.

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EX-4.1

Exhibit 4.1

Execution Version

STOCKHOLDERS AGREEMENT

By and Among

NUMBER HOLDINGS, INC.

ARES CORPORATE OPPORTUNITIES FUND III, L.P.,

CANADA PENSION PLAN INVESTMENT BOARD

AND

THE OTHER STOCKHOLDERS PARTY THERETO

Dated as of January 13, 2012

TABLE OF CONTENTS

			Page
ARTICLE I.	DEFINITIONS; RULES OF CONSTRUCTION		1
Section 1.01.		Definitions	1
Section 1.02.		Rules of Construction	9
ARTICLE II.	REPRESENTATIONS AND WARRANTIES		9
ARTICLE III.	SHARE TRANSFERS		10
Section 3.01.		Restrictions on Transfer	10
Section 3.02.		Restrictive Legend	11
Section 3.03.		Securities Laws	11
Section 3.04.		Concurrent Transfers of Class A Common Stock and Class B Common Stock	11
Section 3.05.		Improper Transfer	12
ARTICLE IV.	RIGHTS OF CERTAIN STOCKHOLDERS		12
Section 4.01.		Rights of First Offer	12
Section 4.02.		Tag-Along Rights	14
Section 4.03.		Drag-Along Rights	16
Section 4.04.		Information; Confidentiality	19
Section 4.05.		Preemptive Rights	20
Section 4.06.		Board of Directors and Board Veto Rights	21
Section 4.07.		Affiliate Transactions	27
Section 4.08.		Qualified IPO	28
Section 4.09.		Call Right	29
Section 4.10.		Reorganization in Connection with an Initial Public Offering	29
ARTICLE V.	REGISTRATION RIGHTS		30
Section 5.01.		Company Registration	30
Section 5.02.		Demand Registration Rights	31
Section 5.03.		Registration Procedures	34
Section 5.04.		Registration Expenses	37
Section 5.05.		Indemnification	38
Section 5.06.		Holdback Agreements	40
Section 5.07.		Participation in Registrations	41
Section 5.08.		Rule 144	41

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ARTICLE VI.		MISCELLANEOUS		41
Section 6.01.			Notices	41
Section 6.02.			Binding Effect; Benefits	43
Section 6.03.			Amendment	43
Section 6.04.			Assignability	44
Section 6.05.			Governing Law; Submission to Jurisdiction	44
Section 6.06.			Enforcement	44
Section 6.07.			Severability	44
Section 6.08.			Additional Securities Subject to Agreement	44
Section 6.09.			Section and Other Headings	45
Section 6.10.			Counterparts	45
Section 6.11.			Termination of Certain Provisions	45
Section 6.12.			Waiver of Jury Trial	45
Section 6.13.			Further Assurances	45
Section 6.14.			Entire Agreement	45
EXHIBIT INDEX
Exhibit A	Form of Joinder Agreement
Exhibit B	Form of Consent of Spouse

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STOCKHOLDERS AGREEMENT

THIS STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of January 13, 2012, by and among Number Holdings, Inc., a Delaware corporation (the “Company”), Ares Corporate Opportunities Fund III, L.P., a Delaware limited partnership (“Ares”), the Canada Pension Plan Investment Board, a federal crown corporation incorporated pursuant to the Canada Pension Plan Investment Board Act of 1997 (Canada) (“CPPIB”), and the stockholders listed on Schedule A hereto (such parties and each other Person that executes a Joinder Agreement, a “Stockholder”).

WHEREAS, the parties hereto desire to enter into this Agreement to provide for certain rights and restrictions with respect to the Common Stock (as defined below).

NOW, THEREFORE, the parties mutually agree as follows:

ARTICLE I.

DEFINITIONS; RULES OF CONSTRUCTION

SECTION 1.01.Definitions.  The following terms, as used herein, have the following meanings:

“1933 Act” means the Securities Act of 1933 and the rules and regulations promulgated thereunder.

“1934 Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

“30% Rule” means those certain regulatory provisions applicable to CPPIB under Section 13 of the Canada Pension Plan Investment Board Regulations, which provisions preclude CPPIB from directly or indirectly investing in securities of a corporation to which are attached more than 30% of the votes that may be cast to elect the directors of the corporation, as those provisions may be interpreted, amended or replaced from time to time.

“99 Cents” means 99 Cents Only Stores, a California corporation.

“Additional Stock” has the meaning set forth in Section 4.05(a).

“Affiliate” of any specified Person means any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  No Person shall be deemed to be an Affiliate of another Person solely by virtue of the fact that both Persons own shares of the Company’s Capital Stock.

“Ares” has the meaning set forth in the recitals to this Agreement.

“Ares Directors” has the meaning set forth in Section 4.06(a)(ii)(1).

“Ares Observer” has the meaning set forth in Section 4.06(d)(i).

“beneficial owner” has the meaning set forth in Rules 13d-3 under the 1934 Act; and words of similar import such as “beneficial ownership” and “beneficially own” have meanings correlative to the foregoing.

“Board” means the Board of Directors of the Company.

“Board Observers” has the meaning set forth in Section 4.06(d)(iii).

“Business Day” means each day that is not a day on which banking institutions in the City of New York or Toronto, Ontario, Canada are authorized or obligated by law or executive order to close.

“Bylaws” means the Bylaws of the Company, as amended or amended and restated from time to time.

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person’s capital stock, and any debt, rights, warrants or options exercisable or exchangeable for or convertible into such capital stock.

“CEO Director” has the meaning set forth in Section 4.06(a)(ii)(4).

“Certificate of Incorporation” means the Company’s Certificate of Incorporation, as amended or amended and restated from time to time.

“Class A Common Stock” means the Class A Common Stock, par value $0.001 per share, of the Company.

“Class B Common Stock” means the Class B Common Stock, par value $0.001 per share, of the Company.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the Class A Common Stock and Class B Common Stock.

“Conditions” means any required material third-party or governmental approvals, compliance with applicable laws and the absence of any injunction or similar legal order preventing such transaction.

“control” means, with respect to any Person, the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and words of similar import such as “controlling” and “controlled” have meanings correlative to the foregoing.

“CPPIB” has the meaning set forth in the recitals to this Agreement.

“CPPIB Directors” has the meaning set forth in Section 4.06(a)(ii)(2).

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“CPPIB Observer” has the meaning set forth in Section 4.06(d)(ii).

“Delay Notice” has the meaning set forth in Section 5.02(a).

“Demand Holder” has the meaning set forth in Section 5.02(a).

“Demand Registration” has the meaning set forth in Section 5.02(a).

“Drag-Along Notice” has the meaning set forth in Section 4.03(c).

“Drag-Along Sale” has the meaning set forth in Section 4.03(a).

“Effective Date” means January 13, 2012.

“Effectiveness Period” has the meaning set forth in Section 5.02(a).

“Eligible Offering” means an offer by the Company or any of its subsidiaries after the Effective Date to Transfer or issue to any Person or Persons any Capital Stock of the Company, other than:

(a)a bona fide underwritten public offering registered under the 1933 Act or pursuant to a bona fide Rule 144A offering under the 1933 Act;

(b)any offer subsequent to an Initial Public Offering;

(c)to directors, officers, employees, consultants or unaffiliated third party advisors of, or other unaffiliated third party providers of service to, the Company or any of its subsidiaries, pursuant to any stock option, warrant, stock purchase plan or agreement, employment agreement or other benefit plans as bona fide compensatory arrangements approved by the Board;

(d)as consideration in connection with (i) the bona fide acquisition of the assets or securities of, (ii) any business combination, joint venture, license agreement or similar commercial transaction with, or (iii) the receipt of services from, any Person that is unaffiliated with the Company or any Major Stockholder in any transaction approved by the Board;

(e)as an inducement to a lender in connection with any bona fide debt financing, equipment leasing or real property leasing transaction, subject to terms and conditions approved by the Board; provided that no Major Stockholder or Affiliate of a Major Stockholder is the lead agent or lead lender, or holds a majority of the loans, commitments or similar interests, in such financing or leasing transaction;

(f)as a dividend, stock split or other distribution on outstanding Capital Stock or pursuant to a reorganization or a recapitalization approved by the Board; and

(g)in connection with any Drag-Along Sale.

“Excess Class B Call Right” has the meaning set forth in Section 4.09.

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“Excess Class B Stock” means that number of shares of Class B Common Stock owned by Ares and its Permitted Transferees in connection with CPPIB’s compliance with the 30% Rule, as such number of shares of Class B Common Stock may be adjusted from time to time pursuant to the terms of this Agreement. Excess Class B Stock shall initially mean 9,230 shares of Class B Common Stock.

“Excluded Transfer” means a Transfer by a Stockholder

(a)pursuant to an effective registration statement under the 1933 Act;

(b)required by the terms of the Stock Option Plan or pursuant to the terms of any employment agreement or stock option grant to which the Company or any of its subsidiaries is a party;

(c)in accordance with Section 4.03, 4.09, 5.01 and 5.02;

(d)to a Permitted Transferee of such Stockholder; provided that such Permitted Transferee, if not already a party hereto, shall execute and deliver to the Company a Joinder Agreement concurrently with such Transfer; or

(e)pursuant to the Put Right.

“GAAP” means generally accepted accounting principles, consistently applied, in the United States.

“Gold Observer” has the meaning set forth in Section 4.06(d)(iii).

“Independent Directors” has the meaning set forth in Section 4.06(a)(ii)(3).

“Initial Public Offering” means a fully committed, fully underwritten bona fide initial public offering of common stock of the Company pursuant to an effective registration statement filed under the 1933 Act (excluding registration statements filed on Form S-8, any similar successor form or another form used for a purpose similar to the intended use for such forms).

“Initiating Stockholder” has the meaning set forth in Section 4.08(b).

“Joinder Agreement” means a joinder agreement, a form of which is attached hereto as Exhibit A.

“Lock-up Period” has the meaning set forth in Section 5.06(a).

“Major Stockholder” means each of Ares and CPPIB, in each case so long as it, together with its Permitted Transferees, beneficially owns at least 15% of the then outstanding shares of Class A Common Stock.

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“Management Agreements” means (a) the management services agreement dated as of the Effective Date between the Company and an Affiliate of Ares and (b) the management services agreement dated as of the Effective Date between the Company and CPPIB.

“Marketable Securities” means securities listed on the New York Stock Exchange or the NASDAQ Stock Market, with a public float of at least $250 million, and not subject to restrictions on transfer except, solely in the case of an affiliate of the issuer of such securities, any such restrictions imposed on such affiliate under applicable securities laws.

“Minority Stockholders” means the Stockholders other than the Major Stockholders and their respective Permitted Transferees.

“Non-Executive Rollover Director” has the meaning set forth in Section 4.06(a)(ii)(7).

“Offerees” has the meaning set forth in Section 4.01(a).

“Offer Notice” has the meaning set forth in Section 4.01(a).

“Offeror” has the meaning set forth in Section 4.01(a).

“owner” means, with respect to any shares of Capital Stock, the Person that is the record owner of such shares of Capital Stock, as reflected on the applicable issuer’s stock records; and words of similar import such as “own” have meanings correlative to the foregoing.

“Permitted Transferee” means:

(a)with respect to any Stockholder who is a natural person, (i) such Stockholder’s spouse, parents, parents-in-law, descendants, nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law, (ii) such Stockholder’s heirs, legatees, beneficiaries or devisees and (iii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or other owners of which consist entirely of such Stockholder or such other persons referred to in clauses (i) and (ii) above;

(b)with respect to any Stockholder that is a trust, any other trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or other owners of which consist entirely of such trust or such trust’s beneficiaries;

(c)with respect to any Stockholder that is an investment fund, an investment partnership or an investment account, any Related Person of such Stockholder; and

(d)with respect to any Stockholder that is an entity and to which clause (c) above is not applicable, any controlled Affiliate of such Stockholder so long as such Transferee remains a controlled Affiliate of such Stockholder following the applicable Transfer;

provided that, in any of such cases, such Permitted Transferee is an accredited investor within the meaning of Regulation D under the 1933 Act.

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“Person” means an individual, a corporation, a general or limited partnership, a limited liability company, a joint stock company, an association, a trust or any other entity or organization, including a government, a political subdivision or an agency or instrumentality thereof.

“Piggyback Holder” has the meaning set forth in Section 5.01(a).

“Piggyback Registration” has the meaning set forth in Section 5.01(a).

“Preemptive Notice” has the meaning set forth in Section 4.05(a).

“Pro Rata Portion” means

(a)in connection with the exercise of (i) the Right of First Offer or (ii) preemptive rights pursuant to Section 4.05(d), with respect to each Major Stockholder on any date, a fraction, (1) the numerator of which is the number of shares of Class A Common Stock beneficially owned by such Major Stockholder and (2) the denominator of which is the number of shares of Class A Common Stock beneficially owned by both Major Stockholders, in each case on such date, and

(b)in any other case, with respect to any other Stockholder on any date, a fraction, (i) the numerator of which is the number of shares of Class A Common Stock owned by such Stockholder and (ii) the denominator of which is the number of shares of Class A Common Stock owned by all Stockholders, in each case on such date.

“Proposed Purchasers” has the meaning set forth in Section 4.05(c).

“Purchaser” has the meaning set forth in Section 4.02(a).

“Put Right” means the Put Right of each of Eric Schiffer, Jeff Gold and Howard Gold (as defined in each of their respective employment agreements dated as of the Effective Date).

“Qualified IPO” means an Initial Public Offering (a) in which the aggregate gross proceeds received by the Company are at least $75 million and (b) that has a public offering price per share of at least (i) $2,000 less (ii) the amount of all distributions made with respect to a share of Class A Common Stock from the Effective Date through the date of such Initial Public Offering (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event).

“Registrable Securities” means (a) the shares of Common Stock owned by any Stockholder at the time of determination, (b) the shares of Common Stock underlying any options, warrants or similar rights held by any Stockholder to the extent such rights are vested at the time of determination, and (c) any other securities issued or issuable with respect to such shares of Common Stock by way of a stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event.  A Registrable Security shall cease to be a Registrable Security when (i) a registration statement with respect to the offering of such security by the holder thereof shall have been declared effective under the 1933 Act and such security

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shall have been disposed of by such holder pursuant to such registration statement, (ii) such security has been sold to the public pursuant to Rule 144 (or any similar provision then in force) promulgated under the 1933 Act or (iii) such security shall have been otherwise Transferred by the holder thereof and new certificates for such security not bearing a legend restricting further transfer shall have been delivered by the Company or its transfer agent and any subsequent Transfer of such security shall not require registration or qualification under the 1933 Act or any similar state law then in force.

“Registration” has the meaning set forth in Section 5.03.

“Related Person” means, with respect to any Person, (a) an Affiliate of such Person, (b) any investment manager, investment advisor, managing member or general partner of such Person, (c) any investment fund, investment partnership, investment account or other investment Person whose investment manager, investment advisor, managing member or general partner is such Person or a Related Person of such Person, and (d) any equity investor, member, partner or officer of such Person.

“Representatives” means the directors, officers, employees, consultants, financial advisors, attorneys, accountants and other representatives of such Person, including representatives of its legal, accounting and financial advisors.

“Request Notice” has the meaning set forth in Section 5.02(a).

“Required Approval” means, as of any time of determination, (a) the approval of a majority of the directors on the Board or any duly appointed committee thereof, in each case, including the approval of (i) at least one Ares Director, if Ares is a Major Stockholder at such time and (ii) at least one CPPIB Director, if CPPIB is a Major Stockholder at such time, or (b) the approval of (x) Ares, if Ares is a Major Stockholder at such time and (y) CPPIB, if CPPIB is a Major Stockholder at such time.

“Restricted Debt” means, with respect to any Stockholder, any indebtedness of the Company or any of its subsidiaries (including debt securities or loans) purchased directly from the Company or any of its subsidiaries by such Stockholder or any of its Permitted Transferees.

“Right of First Offer” means the right of first offer provided in Section 4.01.

“Rollover Approval” means the approval of a majority of the directors on the Board or any duly appointed committee thereof, in each case, including the approval of at least one Rollover Director (or in lieu of the approval of at least one Rollover Director, the approval of holders of a majority of the shares of Common Stock then owned by the Rollover Stockholders).

“Rollover Directors” means Eric Schiffer, Jeff Gold and Howard Gold for so long as such individuals remain on the Board and, if none of such individuals remain on the Board, each other nominee appointed by the Rollover Stockholders pursuant to Section 4.06(a)(iv)(3) or 4.06(a)(v).

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“Rollover Stockholder” means each of The Gold Revocable Trust, dated October 26, 2005, Howard Gold, Jeff Gold, Karen Schiffer, Eric Schiffer and their respective Permitted Transferees who own shares of Common Stock.

“Sale Period” has the meaning set forth in Section 4.01(g).

“Sale Price” has the meaning set forth in Section 4.01(a).

“Second Offer Notice” has the meaning set forth in Section 4.01(d).

“Securities” means the Common Stock, any other capital stock of the Company or any of its subsidiaries, and Restricted Debt.

“Senior Credit Facility” means the Credit Agreement, dated as of January 13, 2012, among Number Merger Sub, Inc., the Company, Royal Bank of Canada, as administrative agent and as collateral agent, and each lender from time to time party thereto, as the same may be amended, modified, waived, refinanced or replaced from time to time with other indebtedness or receivables financing (whether under a new credit agreement, indenture, note or otherwise).

“Shelf Offering” has the meaning set forth in Section 5.01(d).

“Shelf Transfer Stockholder” has the meaning set forth in Section 5.01(d).

“Spousal Consent” means a spousal consent, a form of which is attached hereto as Exhibit B.

“Stockholder” has the meaning set forth in the recitals to this Agreement; provided that for purposes of Section 4.02 and any defined terms to the extent (but only to the extent) used therein, “Stockholders” shall mean (a) the Stockholders as of the Effective Date and (b) any other Stockholder that becomes a party to this Agreement after the Effective Date that the Board determines shall be included in the definition of “Stockholder” for purposes of Section 4.02, and in each case, their respective Permitted Transferees.

“Stockholder Transferor” has the meaning set forth in Section 4.02(a).

“Stock Option Plan” means the Number Holdings, Inc. 2012 Stock Incentive Plan.

“Subject Securities” has the meaning set forth in Section 4.01(a).

“Subsidiary Board” has the meaning set forth in Section 4.06(c).

“Tag-Along Notice” has the meaning set forth in Section 4.02(a).

“Tag-Along Offered Shares” has the meaning set forth in Section 4.02(a)(i).

“Tag-Along Right” has the meaning set forth in Section 4.02(a)(v).

“Tag-Along Sale” has the meaning set forth in Section 4.02(a).

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“Tag-Along Stockholder” means a Stockholder that elects to participate in a Tag-Along Sale pursuant to Section 4.02 hereof.

“Take-Down Notice” has the meaning set forth in Section 5.01(d).

“Third Party” has the meaning set forth in Section 4.03(a).

“Transfer” means the direct or indirect offer, sale, lease, donation, assignment (as collateral or otherwise), mortgage, pledge, grant, hypothecation, encumbrance, gift, bequest or transfer or disposition of any interest (legal or beneficial) in any security (including the transfer of any Person that owns such security or transfer by reorganization, merger, sale of substantially all of the assets or by operation of law).

“Transferee” means any Person to whom Securities are Transferred.

SECTION 1.02.    Rules of Construction.  Any provision of this Agreement that refers to the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation.”  References to numbered or letter articles, sections and subsections refer to articles, sections and subsections, respectively, of this Agreement unless expressly stated otherwise.  All references to this Agreement include, whether or not expressly referenced, the exhibits and schedules attached hereto.  References to a Section, paragraph, Exhibit or Schedule, such reference shall be to a Section or paragraph of, or Exhibit or Schedule to, this Agreement unless otherwise indicated.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The word “or” when used in this Agreement is not exclusive.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term.  Unless otherwise expressly indicated, any agreement, instrument, law or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a Person are also to its permitted successors and assigns.  In the event that any claim is made by any Person relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular Person or its counsel.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES

Each of the parties hereby severally represents and warrants to each of the other parties as follows:

(a)           Authority; Enforceability.  Such party (i) has the legal capacity or organizational power and authority to execute, deliver and perform its obligations under this Agreement and (ii) (in the case of parties that are not natural persons) is duly organized and

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validly existing and in good standing (in jurisdictions that recognize the concept of good standing) under the laws of its jurisdiction of organization.  This Agreement has been duly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable against it in accordance with the terms of this Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and to the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity).

(b)           Consent.  No consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party, other than those that have been made or obtained on or prior to the Effective Date, in connection with (i) the execution or delivery of this Agreement or (ii) the consummation of any of the transactions contemplated hereby.  To the extent the Stockholder is a natural person and is married and is a resident of a state governed by community property laws or similar laws relating to marital property, such Stockholder has delivered a Spousal Consent executed by his or her spouse.

(c)           No Other Agreements.  If such party is a Stockholder, except for the agreements among the Stockholders set forth herein (including Schedule B hereto) or contemplated hereby, as of the date such party became a party hereto, (i) there are no other binding agreements between or among such party, in its capacity as a Stockholder, and any of the other Stockholders, in each case solely in their capacity as such, with respect to the matters set forth herein, including with respect to the acquisition or disposition of shares of Common Stock or any interest therein or the voting of shares of Common Stock, and (ii) such party has no intent with any other Person to enter into any such binding agreements.

ARTICLE III.

SHARE TRANSFERS

SECTION 3.01.    Restrictions on Transfer.

(a)           No Stockholder shall (or shall permit any of its Permitted Transferees to) Transfer any Securities or any right, title or interest therein or thereto, (i) prior to the third anniversary of the Effective Date, to any Person and (ii) thereafter, to any Person that (or that has an Affiliate that) is primarily engaged (or has a material line of business that is engaged) in the business of retailing grocery or consumer goods (as reasonably determined in good faith by the Board), other than:

(1)           a Transfer to the Company or any of its subsidiaries,

(2)           with the prior written consent of each Major Stockholder,

(3)           as a Tag-Along Stockholder in accordance with the provisions of Section 4.02, or

(4)           an Excluded Transfer,

in each case, subject to compliance with Section 3.01(b), 3.03, 3.04, and, to the extent applicable,

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4.01 and 4.02.

(b)           No Minority Stockholder shall (or shall permit any of its Affiliates or Permitted Transferees to) Transfer any Securities or any right, title or interest therein or thereto to a Person that (or that has an Affiliate that) is engaged in the business of buying or selling securities or indebtedness of distressed, insolvent or bankrupt companies (as reasonably determined by the Board).

SECTION 3.02.    Restrictive Legend.  Each certificate representing shares of Common Stock held by a Stockholder will bear a legend in substantially the following form (with such additions thereto or changes therein as the Company may be advised by counsel are required by law or necessary to give full effect to this Agreement):

“The securities represented by represented by this Certificate have not been registered under the United States Securities Act of 1933, as amended (the “Act”), or applicable state securities laws and may not be offered, pledged, sold, assigned or otherwise transferred (“Transfer”) except pursuant to (i) an effective registration statement under the Act and applicable state securities laws or (ii) an applicable exemption from registration thereunder.

The securities represented by this certificate are also subject to the terms and conditions of the Stockholders Agreement, dated as of January 13, 2012, as it may be amended from time to time by and among Number Holdings, Inc. (the “Company”) and certain of its stockholders (the “Stockholders Agreement”).  The Stockholders Agreement contains, among other things, (1) significant restrictions on the transfer of the securities of the Company and (2) certain rights of first offer, tag-along and drag-along rights and restrictions applicable to the securities.  A copy of the Stockholders Agreement is available upon request from the Company.”

SECTION 3.03.    Securities Laws.  No Stockholder shall Transfer any Securities or any right, title or interest therein or thereto unless and until:

(a)           there is in effect a registration statement under the 1933 Act covering such proposed Transfer and such Transfer is made in accordance with such registration statement; or

(b)           such Stockholder shall have (i) notified the Company of the proposed Transfer, (ii) furnished the Company with a reasonable description of the circumstances surrounding the proposed Transfer and (iii) if reasonably requested by the Company’s counsel, furnished the Company with an opinion of counsel, in form and substance reasonably satisfactory to the Company, that such Transfer shall not require registration of such shares under the 1933 Act.

SECTION 3.04.    Concurrent Transfers of Class A Common Stock and Class B Common Stock.  Except (a) with the written consent of each of the Major Stockholders and (b) Transfers pursuant to Section 4.09, (i) each Transfer of shares of Class A Common Stock by any Stockholder to any Transferee shall be made simultaneously with a Transfer of an identical number of shares of Class B Common Stock to such Transferee; provided that in lieu of the

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Transfer of shares of Class B Common Stock, CPPIB may Transfer the Excess Class B Call Right with respect to an identical number of shares of Class B Common Stock and (ii) each Transfer of shares of Class B Common Stock by any Stockholder to any Transferee shall be made simultaneously with a Transfer of an identical number of shares of Class A Common Stock to such Transferee.  Notwithstanding the foregoing, no Transfer to the Company or any of its subsidiaries shall be permitted hereunder if such Transfer would reasonably be expected to result in (i) CPPIB violating the 30% Rule as it relates to CPPIB’s investment in the Company and its subsidiaries or (ii) CPPIB, as of any time of determination, holding more than 30% of the Class B Common Stock; provided that CPPIB shall take such actions as may reasonably be requested by the Company or the Transferring Stockholder to facilitate such Transfer (including in connection with the exercise of the Put Right), including by Transferring additional shares of Class B Common Stock to Ares or its designees as Excess Class B Stock.

SECTION 3.05.    Improper Transfer.  Any attempt to Transfer any Securities in violation of the terms of this Agreement shall be null and void ab initio and no right, title or interest therein or thereto shall be Transferred to the purported Transferee.  The Company will not give, and will not permit the Company’s transfer agent to give, any effect to such attempted Transfer on its records.

ARTICLE IV.

RIGHTS OF CERTAIN STOCKHOLDERS

SECTION 4.01.    Rights of First Offer.

(a)           Without limiting Section 3.01(a), if any Stockholder proposes to Transfer all or any portion of its shares of Common Stock (the “Subject Securities”), other than (i) pursuant to an Excluded Transfer or (ii) as a Tag-Along Stockholder pursuant to Section 4.02, such Stockholder (the “Offeror”) shall first give written notice (the “Offer Notice”) of such proposed Transfer to the Company and to the Major Stockholders (the “Offerees”), that sets forth (i) the number and type of Subject Securities, (ii) the cash amount per share that such holder proposes be paid for the Subject Securities (the “Sale Price”), (iii) the material terms of such proposed Transfer and (iv) if applicable, the identity of the proposed Transferee.  The Offer Notice shall constitute an irrevocable offer by the Offeror to sell to the Company the Subject Securities at the Sale Price on the terms set forth in the Offer Notice.

(b)           The Company shall have 15 days after delivery of the Offer Notice to notify the Offeror and the Major Stockholders that it accepts such offer in accordance with a determination made by a majority of the directors (excluding (i) if Ares or any of its Permitted Transferees is the Offeror, the Ares Directors, (ii) if CPPIB or any of its Permitted Transferees is the Offeror, the CPPIB Directors or (iii) if any of the Rollover Stockholders is the Offeror, the Rollover Directors) on the Board as to all or any portion of the Subject Securities for the Sale Price and on the terms set forth in the Offer Notice.

(c)           If the Company accepts such offer with respect to all of the Subject Securities, the closing of the purchase of such Subject Securities shall take place at the principal office of the Company at 10:00 a.m. on the 30th calendar day (unless such day is not a Business

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Day, in which case it will occur on the next Business Day) after the date on which the Offer Notice was delivered unless the parties agree on a different place or time, subject to the satisfaction of any Conditions, in which case, such closing shall be delayed pending satisfaction of such Conditions.  Subject to Section 4.01(g) below, if the Company accepts such offer with respect to less than all of the Subject Securities, the closing with respect to the Subject Securities to be purchased shall take place pursuant to the provisions of Section 4.01(f) below.

(d)           If the Company does not accept the offer as to all of the Subject Securities as provided by Section 4.01(b) above, then the Offeror shall promptly thereafter, but in any event within three Business Days, give a second written notice (the “Second Offer Notice”), which shall constitute an irrevocable offer by the Offeror to sell to the Major Stockholders all, but not less than all, of the Subject Securities the Company has not elected to purchase under Section 4.01(b), at the Sale Price and on the terms set forth in the Offer Notice.

(e)           Each Major Stockholder shall have 15 days after delivery of the Second Offer Notice to notify the Offeror and the other Major Stockholder that it accepts such offer as to all or any portion of the Subject Securities offered to the Major Stockholders for the Sale Price and on the terms set forth in the Offer Notice.  If more than one Major Stockholder accepts such offer, and the maximum number of Subject Securities specified in the notices delivered by the Major Stockholders exceed, in the aggregate, the number of Subject Securities subject to such offer, the Subject Securities shall be allocated to each Major Stockholder as follows: (i) first, there shall be allocated to each Major Stockholder the lesser of (A) the number of Subject Securities that such Major Stockholder elected to purchase in the notice delivered by such Major Stockholder and (B) the number of Subject Securities equal to such Major Stockholder’s Pro Rata Portion of the Subject Securities, calculated as of the date of the Offer Notice, and (ii) second, the balance of Subject Securities, if any, not allocated under clause (i) above shall be allocated to the Major Stockholder who elected to purchase a number of Subject Securities greater than such Major Stockholder’s Pro Rata Portion of the Subject Securities, calculated as of the date of the Offer Notice.

(f)            Subject to Section 4.01(g), if one or more Major Stockholders accept such offer, the closing of the purchase of such Subject Securities, together with the closing of the purchase of any Subject Securities by the Company, if applicable, shall take place at the principal office of the Company at 10:00 a.m. on the 30th calendar day (unless such day is not a Business Day, in which case it will occur on the next Business Day) after the date on which the Second Offer Notice was delivered unless the parties agree on a different place or time, subject to the satisfaction of any Conditions, in which case, such closing shall be delayed pending satisfaction of all Conditions.

(g)           Notwithstanding the foregoing, an Offeror shall not be required to sell any Subject Securities pursuant to this Section 4.01 unless the Offerees have agreed to purchase all of the Subject Securities specified in the Offer Notice.  If the Offerees have not collectively elected to purchase all of the Subject Securities prior to the date that is 15 days after the date the Offeror has delivered the Second Offer Notice, the Offeror shall have the right, subject to Section 3.01(b), 3.03, 3.04 and 4.02, to sell all but not less than all of the Subject Securities for a period of 120 days (which period may be extended to 180 days to satisfy any Conditions) (the “Sale Period”) at a price per share no less than the Sale Price and on terms not materially more

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favorable to the transferees thereof (including with respect to the representations, warranties and indemnities being given by the Offeror) than offered in the Offer Notice.  Upon consummation of the purchase and sale of such Subject Securities, the purchaser of such Subject Securities shall execute a Joinder Agreement and such Subject Securities shall continue to be subject to the provisions of this Agreement.  If the Offeror does not Transfer the Subject Securities before the end of the Sale Period, such Offeror may not sell any Subject Securities without repeating the foregoing procedures.

(h)           If the Company has accepted the offer as to all or any portion of the Subject Securities, then, contingent on the consummation of such sale to the Company, CPPIB shall take such actions as may reasonably be requested by the Company or the Offeror to facilitate such sale, including Transferring additional shares of Class B Common Stock to Ares or its designees to be owned by Ares or its designees as Excess Class B Stock.

SECTION 4.02.    Tag-Along Rights.

(a)           Except (1) Transfers for which a Right of First Offer has been exercised and (2) Excluded Transfers, if a Stockholder (the “Stockholder Transferor”) proposes to Transfer (a “Tag-Along Sale”) any shares of Common Stock to any Person (the “Purchaser”), the Stockholder Transferor shall give written notice (a “Tag-Along Notice”) of such proposed Transfer to the other Stockholders at least 15 days prior to the consummation of such proposed Tag-Along Sale setting forth:

(i)            the total number and class of shares of Common Stock proposed to be Transferred (the “Tag-Along Offered Shares”) and the purchase price per share of each class of Common Stock,

(ii)           the identity of the Purchaser;

(iii)          any other material terms and conditions of the proposed Transfer;

(iv)          the expected date of the proposed Transfer; and

(v)           an undertaking that each such Stockholder shall have the right (the “Tag-Along Right”) to elect to sell up to its Pro Rata Portion of such Tag-Along Offered Shares in accordance with the procedures set forth in Section 4.02(b).

(b)           Upon delivery of a Tag-Along Notice, each Stockholder (other than the Stockholder Transferor) shall have the right, but not the obligation, to sell up to its Pro Rata Portion of the Tag-Along Offered Shares at the same price per share, for the same form of consideration and pursuant to the same terms and conditions as set forth in the Tag-Along Notice.  If a Stockholder (other than the Stockholder Transferor) wishes to participate in the Tag-Along Sale, it shall provide written notice to the Stockholder Transferor no later than 10 days after the date of the Tag-Along Notice.  Such notice shall (i) set forth the number of shares of Common Stock that such Stockholder elects to include in the Tag-Along Sale, which number shall not exceed its Pro Rata Portion of the Tag-Along Offered Shares, and (ii) constitute such Stockholder’s binding agreement to sell such shares of Common Stock in the Tag-Along Sale on the terms and conditions applicable to the Tag-Along Sale.  The Stockholder Transferor shall not

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consummate the Tag-Along Sale unless the Purchaser purchases all of the shares of Common Stock requested to be included in the Tag-Along Sale by the Tag-Along Stockholders at the same time as the Purchaser acquires the shares being transferred to the Stockholder Transferor and on the same terms and conditions applicable to the Stockholder Transferor.

(c)           If requested by the Stockholder Transferor, each Tag-Along Stockholder shall make or provide the same representations, warranties, covenants, indemnities and agreements as the Stockholder Transferor makes or provides in connection with the Tag-Along Sale; provided that no Tag-Along Stockholder shall be required to make any representations and warranties in connection with such sale that (i) are not being made by each other Tag-Along Stockholder or (ii) relate to the Stockholder Transferor or any other Tag-Along Stockholder.  No Tag-Along Stockholder shall be (i) liable in respect of any indemnification provided in connection with a Tag-Along Sale (1) in the case of a breach by such Tag-Along Stockholder of any of its representations, warranties, covenants or agreements, in excess of the consideration to be received by such Tag-Along Stockholder in such Tag-Along Sale and, in all other cases, in excess of such Tag-Along Stockholder’s pro rata share of such indemnification obligation (based on proceeds to be received), (2) for the breach of any representations or warranties made by any other Stockholder and (3) other than on a several (and not a joint and several) basis with the other Stockholders or (ii) required to participate in any hold-back, escrow, contingent consideration or other similar items relating to such Tag-Along Sale in excess of such Tag-Along Stockholder’s pro rata participation in the Tag-Along Sale (based on proceeds to be received).  If a Tag-Along Sale is consummated, each Tag-Along Stockholder shall pay its pro rata share of the reasonable costs incurred by the Stockholder Transferor relating to the Tag-Along Sale (including reasonable legal fees and expenses) to the extent not paid or reimbursed by the Company or the Purchaser.

(d)           Each Tag-Along Stockholder shall (i) deliver at the closing of the Tag-Along Sale certificates evidencing the shares of Common Stock to be sold by such Stockholder in the Tag-Along Sale, duly endorsed in blank or accompanied by written instruments of transfer in form and substance reasonably satisfactory to the Stockholder Transferor, and (ii) execute such other documents as the Stockholder Transferor may reasonably request to consummate the Tag-Along Sale at the time specified by the Stockholder Transferor.

(e)           The Stockholder Transferor shall have the right for a period of 120 days (which period may be extended to 180 days to satisfy any Conditions) after the expiration of the 10-day period referred to in Section 4.02(b) to Transfer the shares of Common Stock subject to the Tag-Along Notice (not otherwise sold by the other Stockholders) to the Purchaser at a price not greater than the price contained in, and otherwise on terms and conditions not materially more favorable to the Stockholder Transferor (including with respect to representations, warranties and indemnities) than those set forth in, the Tag-Along Notice.  After the end of the 120-day period referred to in this Section 4.02(d), the Stockholder Transferor will not effect a Transfer of any shares of Common Stock that are the subject of the Tag-Along Notice without repeating the foregoing procedures.

(f)            If any shares of Common Stock are Transferred pursuant to this Section 4.02 to any Person that is not a party to this Agreement, such Person shall execute a Joinder

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Agreement as a condition to the purchase of such shares and such shares shall continue to be subject to the provisions of this Agreement.

(g)           Except as expressly provided in this Section 4.02, the Stockholder Transferor shall have no obligation to any Stockholder with respect to the sale of any shares of Common Stock owned by such Stockholder in connection with the Tag-Along Sale or as a result of any decision by the Stockholder Transferor to accept or consummate, or not to accept or consummate, any Tag-Along Sale (it being understood that any and all such decisions shall be made by the Stockholder Transferor in its sole discretion).

(h)           Notwithstanding the foregoing, a Stockholder may Transfer in the aggregate up to 5% (or, in the case of The Gold Revocable Trust, dated October 26, 2005, up to 9.99%) of the number of shares of each class of Common Stock owned by such Stockholder on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) to any Person without having to comply with the provisions of this Section 4.02.

SECTION 4.03.    Drag-Along Rights.

(a)           For so long as Ares and its Permitted Transferees, in the aggregate, continue to beneficially own (x) at least 50% of the number of shares of Class A Common Stock beneficially owned by Ares on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) or (y) more of the outstanding shares of Class A Common Stock than each of (1) CPPIB and its Permitted Transferees and (2) the Rollover Stockholders, Ares may propose, in any transaction or series of related transactions, directly or indirectly, to (i) Transfer to one or more Persons other than any of its Affiliates (each, a “Third Party”) at least 75% of the shares of each class of Common Stock then owned by Ares (excluding any Excess Class B Stock) or (ii) cause the Company or any of its subsidiaries to sell all or substantially all of the assets of the Company and its consolidated subsidiaries to one or more Third Parties, in each case, whether by merger, consolidation, business combination, stock purchase, asset purchase or otherwise (a “Drag-Along Sale”), and Ares shall have the right, but not the obligation, to require each Stockholder to:

(i)            sell (x) in the case of each Major Stockholder, a proportionate number of its shares of each class of Common Stock (including by requiring CPPIB to cause the Transfer of the Excess Class B Stock or the Excess Class B Call Right), (y) for so long as the Rollover Stockholders, in the aggregate, continue to own at least 25% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), in the case of each Rollover Stockholder, a proportionate number of its shares of each class of Common Stock, and (z) in all other instances, all of its shares of Common Stock, in each case, at the same price per share, for the same form of consideration, at the same time and on the same financial terms and conditions as Ares, provided that at least 75% of the value of the consideration to be received by each Stockholder is cash or Marketable Securities as determined in good faith by the Board;

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(ii)           vote, or execute a written consent with respect to, all of their Common Stock in favor of the transactions constituting such Drag-Along Sale;

(iii)          waive any appraisal or dissenters’ or similar rights with respect to such Drag-Along Sale; and

(iv)          otherwise participate in such Drag-Along Sale to the extent reasonably requested by Ares;

provided that (1) on or prior to the seventh anniversary of the Effective Date, neither Major Stockholder will be required to participate in any such Drag-Along Sale without its consent, unless the aggregate gross proceeds to be received by such Person for its Class A Common Stock on per share basis is at least (A) $2,000 less (B) the amount of all distributions made with respect to a share of Class A Common Stock from the Effective Date through the date of such Drag-Along Sale (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) and (2) after the seventh anniversary of the Effective Date, neither Major Stockholder will be required to participate in any such Drag-Along Sale without its consent, unless the aggregate gross proceeds to be received by such Person for its Class A Common Stock on a per share basis is at least (A) $1,000 less (B) the amount of all distributions made with respect to a share of Class A Common Stock from the Effective Date through the date of such Drag-Along Sale (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event).

(b)           Each Stockholder affirms that its agreement to vote for the approval of the transaction constituting the Drag-Along Sale under this Section 4.03 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 4.03 is in effect.

(c)           Ares shall, promptly upon determining the terms of the Drag-Along Sale but in any event not less than 15 days prior to the consummation of such proposed Drag-Along Sale, deliver to the other Stockholders written notice specifying the material terms of the Drag-Along Sale (including (i) the identity of the purchaser to which the Drag-Along Sale is proposed to be made, (ii) the price per share to be paid for each class of Common Stock and the total number of shares of Common Stock to be Transferred and (iii) the expected closing date of the proposed Drag-Along Sale) (the “Drag-Along Notice”); provided that, for so long as the Rollover Stockholders, in the aggregate, continue to own at least 25% of the number of shares of Class A Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), at least 30 calendar days prior to sending such Drag-Along Notice, Ares shall give the Rollover Stockholders a preliminary, non-binding notice that it is considering sending a Drag-Along Notice.

(d)           If requested by Ares, each Stockholder shall make or provide the same representations, warranties, covenants, indemnities and agreements that Ares makes or provides in connection with the Drag-Along Sale; provided that no Stockholder participating in such transaction shall be (i) required to make any representations and warranties other than

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representations and warranties as to itself with respect to good standing, due authorization, due execution enforceability, lack of conflicts, title to shares of Common Stock such Stockholder is required to sell in the Drag-Along Sale, no broker’s fees and investment qualifications, (ii) liable in respect of any indemnification provided in connection with a Drag-Along Sale (A) in the case of a breach by such Stockholder of any of its representations, warranties, covenants or agreements, in excess of the consideration to be received by such Stockholder in such Drag-Along Sale and, in all other cases (including with respect to a breach by the Company of any of its representations, warranties, covenants or agreements), in excess of such Stockholder’s pro rata share of such indemnification obligation (based on proceeds to be received), (B) for the breach of any representations or warranties made by Ares or any other Stockholder and (C) other than on a several (and not a joint and several) basis with the other Stockholders, (iii) required to participate in any hold-back, escrow, contingent consideration or other similar items relating to such Drag-Along Sale in excess of such Stockholder’s pro rata participation in the Drag-Along Sale (based on proceeds to be received) and (iv) required to agree to, or be deemed to have agreed to, any non-compete, non-solicitation and other similar restrictions, in each case, without such Stockholder’s prior written consent.  If a Drag-Along Sale is consummated, each Stockholder shall pay its pro rata share of the reasonable costs incurred by Ares relating to the Drag-Along Sale (including reasonable legal fees and expenses) to the extent not paid or reimbursed by the Company or the Third Party.

(e)           Each of the Stockholders shall (i) deliver at the closing of the Drag-Along Sale certificates evidencing the shares of Common Stock to be sold by such Stockholder in the Drag-Along Sale, duly endorsed in blank or accompanied by written instruments of transfer in form and substance reasonably satisfactory to Ares, and (ii) execute such other documents as Ares may reasonably request to consummate the Drag-Along Sale at the time specified by Ares.

(f)            Ares shall have the right for a period of 120 days (which period may be extended to 180 days to satisfy any Conditions) after the delivery of the Drag-Along Notice to consummate the Drag-Along Sale.  After the end of the 120-day period, Ares will not effect a Drag-Along Sale without repeating the foregoing procedures.

(g)           Except as expressly provided in this Section 4.03, Ares shall have no obligation to any Stockholder with respect to the sale of any shares of Common Stock owned by such Stockholder in connection with the Drag-Along Sale.  Notwithstanding anything herein to the contrary, Ares shall have no obligation to any other Stockholder as a result of any decision by Ares to accept or consummate, or not to accept or consummate, any Drag-Along Sale (it being understood that any and all such decisions shall be made by Ares in its sole discretion).

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SECTION 4.04.Information; Confidentiality.

(a)The Company shall deliver to each Major Stockholder and, for so long as the Rollover Stockholders, in the aggregate, continue to own at least 25% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), each Rollover Stockholder:

(i)as soon as available after the end of each fiscal quarter (but in no event later than the earlier of the date delivered under the Senior Credit Facility and 45 days after the end of each fiscal quarter), copies of:

(1)unaudited consolidated balance sheets of the Company and its subsidiaries as at the end of such quarter, and

(2)unaudited consolidated statements of income, stockholders’ equity and cash flows of the Company and its subsidiaries, for such quarter and for the portion of such fiscal year and the prior fiscal year ending with such quarter,

in each case prepared in accordance with GAAP applicable to periodic financial statements generally, fairly presenting, in all material respects, the financial position of the Persons being reported on and their results of operations and cash flows, subject to changes resulting from normal year-end adjustments; and

(ii)as soon as available after the end of each fiscal year of the Company (but in no event later than the earlier of the date delivered under the Senior Credit Facility and 90 days after the end of each fiscal year), copies of:

(1)audited consolidated balance sheets of the Company and its subsidiaries as at the end of such year, and

(2)audited consolidated statements of income, stockholders’ equity and cash flows of the Company and its subsidiaries for such year,

in each case, prepared in accordance with GAAP, fairly presenting, in all material respects, the financial position of the Persons being reported on and their results of operations and cash flows, and accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the Persons being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP.

(b)The Company shall timely notify CPPIB of any (i) decrease in the number of outstanding shares of Class B Common Stock or (ii) change in the voting rights relating to any class of Common Stock.  The Company agrees to reasonably cooperate with CPPIB to the extent reasonably requested by CPPIB to ensure CPPIB’s compliance at all times with the 30% Rule as it relates to CPPIB’s investment in the Company and its subsidiaries; provided that such cooperation does not reduce or otherwise adversely affect, other than in a de minimis respect, any

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other Stockholder’s economic interest in the Company or otherwise adversely affect, other than in a de minimis respect, any other Stockholder.

(c)Each Stockholder agrees, and will require each of its directors, officers, employees, agents and representatives to agree, to hold in confidence and not use or disclose to any third party (other than its legal counsel, financial advisors, accountants, tax return preparers and estate planning advisors) any information provided to or learned by such party in connection with its investment in the Company or such Stockholder’s rights under this Agreement.  Notwithstanding the foregoing, each Stockholder may disclose any confidential information (i) that, based on an opinion of such Stockholder’s legal counsel, is required by law, regulation or applicable rules to be disclosed, but only after providing the Company, to the extent practicable and legally permissible, with prior written notice and (at the Company’s sole expense) an opportunity to limit or eliminate such disclosure, (ii) that, based on an opinion of such Stockholder’s legal counsel, is necessary to be disclosed in the context of litigation involving such Stockholder, but only after providing the Company, to the extent practicable and legally permissible, with prior written notice and (at the Company’s sole expense) an opportunity to limit or eliminate such disclosure or (iii) with respect to a Stockholder that is an investment fund, to such Stockholder’s Related Persons.  Prior to disclosure of any confidential information in accordance with the preceding sentence, such Stockholder shall obtain reasonable assurances from the party or parties to whom such confidential information is disclosed that such party or parties will afford such information confidential treatment.

SECTION 4.05.Preemptive Rights.

(a)Subject to the terms and conditions of this Section 4.05 and applicable securities laws, if the Company or any subsidiary of the Company proposes to issue or sell any shares of its Capital Stock (“Additional Stock”) pursuant to an Eligible Offering, the Company shall deliver a written notice thereof (a “Preemptive Notice”) to each Stockholder that is an accredited investor within the meaning of Regulation D under the 1933 Act at least 15 days prior to the consummation of such Eligible Offering.  The Preemptive Notice shall:

(i)state the number, class and type of such Additional Stock to be offered;

(ii)state the price and terms upon which it proposes to offer such Additional Stock; and

(iii)contain an offer to sell to such Stockholder at the same price, for the same form of consideration to be paid by purchasers in the Eligible Offering and otherwise on the same terms and conditions, such Stockholder’s Pro Rata Portion of the Additional Stock.

(b)For a period of 10 days following the delivery of such Preemptive Notice, each such Stockholder shall be entitled, by written notice to the Company, to irrevocably elect to purchase all or part of the securities described therein.

(c)Notwithstanding anything to the contrary contained herein, if in connection with an Eligible Offering the Board (i) pursuant to a Required Approval, determines

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that compliance with the procedures set forth in Sections 4.05(a) and (b) would be detrimental to the Company and its subsidiaries, taken as a whole or (ii) determines in good faith that (x) it is necessary, desirable or appropriate to issue or sell Additional Stock to (A) satisfy a liquidity shortfall (as a result of insufficient working capital) or (B) avoid a default under any contract to which the Company or any of its subsidiaries is a party, and (y) compliance with the procedures set forth in Sections 4.05(a) and (b) would not be practicable or advisable, the Company may issue or sell all or a portion of the Additional Stock to purchasers in the Eligible Offering (the “Proposed Purchasers”) without complying with the provisions of this Section 4.05, if prior to such issuance or sale, either (1) the Proposed Purchasers agree to offer shares of Additional Stock at the same price, for the same consideration as issued or sold to the Proposed Purchasers and otherwise on the same terms and conditions in a manner that provides such Stockholder with the opportunity to purchase their Pro Rata Portion of such Additional Stock in a manner substantially similar to that set forth in Section 4.05(b) (subject to the timing set forth in this Section 4.05) or (2) the Company agrees to effect such other series of transactions that would allow such Stockholder to be in the same position (economic and otherwise) as if such Stockholder had the opportunity to purchase such Additional Stock pursuant to the Preemptive Notice, in each case, within 30 days after the closing of the issuance or sale of the Additional Stock to the Proposed Purchasers.

(d)Each Major Stockholder shall be entitled to purchase its Pro Rata Portion of any debt securities or other indebtedness to be issued, sold or incurred by the Company or any of its subsidiaries to the other Major Stockholder, pursuant to procedures substantially identical to those set forth in clauses (a) and (b) of this Section 4.05.

(e)The Stockholders shall in respect of any issuance of securities required to be issued pursuant to, and that are issued in accordance with, this Section 4.05 take all such actions required to amend the certificate of incorporation of the Company to provide for such increases in the authorized Capital Stock of the Company as may be necessary to permit such issuance.  The Company shall comply with any applicable securities laws before issuing any securities pursuant to this Section 4.05 and shall not be in violation of the provisions hereof by reason of such compliance.

SECTION 4.06.Board of Directors and Board Veto Rights.

(a)Board of Directors.  At each annual or special stockholders meeting called for the election of directors, and whenever the stockholders of the Company act by written consent with respect to the election of directors, each Stockholder shall vote or otherwise give such Stockholder’s consent in respect of all shares of the Capital Stock of the Company (whether now owned or hereafter acquired) owned by such Stockholder, and take all other appropriate action, and the Company shall take all necessary and desirable actions, to cause:

(i)the Bylaws of the Company to provide that the authorized number of directors on the Board shall be 11 (provided that, if each of the Major Stockholders consent, the Bylaws may be amended to provide that the authorized number of directors on the Board may be greater or less than 11, so long as, in the case of any such increase (other than an increase pursuant to Section 4.06(a)(iv)(3)), the Rollover Stockholders

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representation on the board (determined by the number of Rollover Directors then entitled to be on the Board) at the time of such amendment is proportionately increased);

(ii)the election to the Board of:

(1)four directors designated by Ares (the “Ares Directors”) (of which one such director will serve as the Chairman of the Board), for so long as Ares is a Major Stockholder;

(2)two directors designated by CPPIB (the “CPPIB Directors”) for so long as CPPIB is a Major Stockholder;

(3)two independent directors designated by Ares (for so long as Ares is a Major Stockholder), which directors shall be approved by CPPIB (for so long as CPPIB is a Major Stockholder), such approval not to be unreasonably withheld, conditioned or delayed (the “Independent Directors”);

(4)the then current chief executive officer of the Company (the “CEO Director”), which person shall initially be Eric Schiffer;

(5)Jeff Gold, for so long as he holds the position of President and Chief Operating Officer of the Company;

(6)Howard Gold, for so long as he holds the position of Executive Vice President of the Company; and

(7)If none of Jeff Gold, Howard Gold or Eric Schiffer is a member of the Board, so long as the Rollover Stockholders, in the aggregate, continue to own at least 50% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), one director designated by holders of a majority of the shares of Common Stock then owned by the Rollover Stockholders (the “Non-Executive Rollover Director”);

each such person shall hold office (subject to their earlier removal in accordance with clause (iii) below, the Bylaws of the Company and applicable law) until their respective successors shall have been elected and shall have qualified;

(iii)the removal from the Board of any director elected in accordance with clause (ii) above, with or without cause:

(1)in the case of any Ares Director or any Independent Director, for so long as Ares is a Major Stockholder only upon the written request of Ares; provided that the removal of any Independent Director must be approved by CPPIB (for so long as CPPIB is a Major

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Stockholder), such approval not to be unreasonably withheld, conditioned, or delayed;

(2)in the case of any CPPIB Director, for so long as CPPIB is a Major Stockholder only upon the written request of CPPIB;

(3)in the case of the CEO Director, upon the termination of such Person’s service (whether voluntary or involuntary) as the chief executive officer of the Company;

(4)in the case of Jeff Gold, upon the termination of his service (whether voluntary or involuntary) as President or Chief Operating Officer of the Company;

(5)in the case of Howard Gold, upon the termination of his service (whether voluntary or involuntary) as Executive Vice President; and

(6)in the case of the Non-Executive Rollover Director, for so long as the Rollover Stockholders, in the aggregate, continue to own at least 50% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), only upon the written request of a majority of the shares of Common Stock then owned by the Rollover Stockholders;

(iv)upon any vacancy in the Board as a result of any individual designated as provided in clause (ii)(1) through (4) and (7) above ceasing to be a member of the Board, whether by resignation or otherwise (other than by removal in accordance with clause (iii) above), the election to the Board as promptly as possible:

(1)in the case of a vacancy of any Ares Director or any Independent Director, an individual designated by Ares; provided that the replacement of any Independent Director must be approved by CPPIB (for so long as CPPIB is a Major Stockholder), such approval not to be unreasonably withheld, conditioned or delayed;

(2)in the case of a vacancy of any CPPIB Director, an individual designated by CPPIB;

(3)in the case of a vacancy of the CEO Director, the then current chief executive officer of the Company (and if upon Eric Schiffer ceasing to be a member of the Board, neither Jeff Gold or Howard Gold is a member of the Board, so long as the Rollover Stockholders, in the aggregate, continue to own at least 50% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend,

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reclassification, subdivision or reorganization, recapitalization or similar event), the election to the Board of an individual designated by holders of a majority of the shares of Common Stock then owned by the Rollover Stockholders, including, if necessary, by increasing the authorized number of directors on the Board); and

(4)in the case of a vacancy of the Non-Executive Rollover Director, an individual designated by holders of a majority of the shares of Common Stock then owned by the Rollover Stockholders; and

(v)upon Jeff Gold or Howard Gold ceasing to be a member of the Board, whether by resignation or otherwise, (x) either (1) the election to the Board of an individual designated by the Board or (2) a corresponding decrease in the authorized number of directors on the Board, or (y) if none of Jeff Gold, Howard Gold or Eric Schiffer is a member of the Board, so long as the Rollover Stockholders, in the aggregate, continue to own at least 50% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), the election to the Board of an individual designated by holders of a majority of the shares of Common Stock then owned by the Rollover Stockholders.

(b)Proxy for Excess Class B Stock.  To secure the obligation of Ares to vote its shares of Excess Class B Stock in accordance with the provisions of Section 4.06(a), Ares hereby irrevocably appoints CPPIB as its true and lawful proxy and attorney-in-fact, with full power of substitution, to vote all of the Excess Class B Stock for the election and removal of directors and all such other matters as expressly provided for in Section 4.06(a). CPPIB may exercise the irrevocable proxy granted to it pursuant to this Section 4.06(b) at any time Ares fails to comply with the provisions of Section 4.06(a). The proxy and power of attorney granted by Ares pursuant to this Section 4.06(b) are given to secure the performance of the obligations under this Agreement.  Such proxy and power of attorney are irrevocable until the termination of this Agreement.  Ares shall not incur any liability or obligation to CPPIB or any other Person, directly or indirectly, in connection with, or as a result of, any exercise of the proxy granted to CPPIB.

(c)Committees; Subsidiary Boards.  Subject to applicable law and the rules and regulations of any regulatory or quasi-regulatory body (and, following an Initial Public Offering, the rules of all applicable securities exchanges and listing requirements), each committee formed by the Board shall include at least two Ares Directors, one CPPIB Director and one Rollover Director, in each case, so long as the Stockholders are obligated to appoint an Ares Director, a CPPIB Director and a Rollover Director, respectively, pursuant to Section 4.06(a), unless a majority of the Board (including at least one Ares Director, one CPPIB Director and one Rollover Director, in each case, so long as the Stockholders are obligated to appoint an Ares Director, a CPPIB Director and a Rollover Director, respectively, pursuant to Section 4.06(a)) determines otherwise.  For so long as the Stockholders are obligated to appoint a Rollover Director pursuant to Section 4.06(a), the Company shall not, without a Rollover Approval, appoint, or cause the appointment of, an Ares Director (or any other director, officer, employee or agent of Ares) or a CPPIB Director (or any other director, officer, employee or

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agent of CPPIB) to the board of directors of any subsidiary of the Company (a “Subsidiary Board”) unless at least a proportionate number of Rollover Directors are given the opportunity to be appointed to such Subsidiary Board (determined by the number of Rollover Directors then on the Board).

(d)Board Observer Rights.

(i)If Ares is no longer entitled to nominate an Ares Director pursuant to Section 4.06(a), for so long as Ares or any of its Related Persons or Permitted Transferees remains a Stockholder, Ares shall have the right to appoint one observer to the Board (the “Ares Observer”).

(ii)If CPPIB is no longer entitled to nominate a CPPIB Director pursuant to Section 4.06(a), for so long as CPPIB or any of its Related Persons or Permitted Transferees remains a Stockholder, CPPIB shall have the right to appoint one observer to the Board (the “CPPIB Observer”).

(iii)For so long as David Gold is a consultant of the Company, David Gold shall have the right to serve as an observer to the Board (the “Gold Observer” and, collectively with the Ares Observer and the CPPIB Observer, the “Board Observers”).

The Company shall provide to each Board Observer copies of all documents pertaining to any meeting of the Board that are provided to each member of the Board and shall provide them at the same time as they are provided to such members; provided that the Company shall have the right to withhold any such materials from any Board Observer to the extent the Board determines, in its sole discretion, that such action is (i) necessary or advisable to preserve any evidentiary or attorney-client privilege or (ii) required to avoid a conflict of interest.  Each Board Observer shall have the right to attend each meeting of the Board in the same manner as the members thereof; provided that the Company shall have the right to exclude any Board Observer from any such meeting to the extent the Board determines, in its sole discretion, that such action is (i) necessary or advisable to preserve any evidentiary or attorney-client privilege or (ii) required to avoid a conflict of interest.  The rights of any Board Observer to receive information and attend Board meetings are subject to such Board Observer (i) executing a confidentiality agreement in a form as may be determined by the Company and (ii) abiding by such trading policies as are generally applicable to all directors, officers and employees of the Company, as may be adopted by the Board to ensure compliance with applicable securities laws.  The Board Observers shall not be entitled to receive any compensation from the Company.

(e)Quorum.  Except as set forth below, the presence of a majority of the directors then serving on the Board or any committee of the Board (including, if any such Person is then serving on such committee of the Board, at least one Ares Director, one CPPIB Director and one Rollover Director) shall be required to constitute a quorum of the Board or such committee of the Board.  If a quorum shall not be present at any called meeting of the Board or any committee of the Board, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at such meeting, until a quorum shall be present; provided, that (i) notice for any reconvened meeting shall be given in accordance with the

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Bylaws and (ii) the quorum for any reconvened or subsequent meeting shall be the presence of a majority of the directors then serving on the Board or such committee of the Board.

(f)Major Stockholder Veto Rights.  Other than in connection with any action taken pursuant to or in accordance with Section 4.03, 4.08 or Article V, the Company shall not (and shall not permit any of its subsidiaries to) directly or indirectly take (in one or a series of related actions) any of the following actions without the Required Approval:

(i)incur any indebtedness for borrowed money other than (1) indebtedness incurred pursuant to the Senior Credit Facility or any other agreement or instrument in effect as of the Effective Date, (2) trade debt, (3) indebtedness of up to $20 million in the aggregate outstanding at any time, (4) indebtedness between the Company and any of its subsidiaries or between subsidiaries of the Company, (5) any replacement, refinancing or refunding of any of the indebtedness in clauses (2) and (3) and this clause (5); provided that the principal amount of such refinancing or refunding does not exceed the principal amount of the indebtedness refunded or refinanced (plus all accrued interest, and the amount of all fees and expenses, including premiums, incurred in connection therewith);

(ii)issue or sell any Capital Stock of the Company or any of its subsidiaries, other than (1) in connection with a Qualified IPO, (2) pursuant to the Stock Option Plan or any other stock option plan approved by the Board, (3) in the form of a pro rata dividend or other pro rata distribution on shares of any class or series of outstanding Capital Stock, (4) in an amount up to $20 million in the aggregate or (5) pursuant to the exercise of preemptive rights in accordance with the terms of Section 4.05;

(iii)sell any assets of the Company or any subsidiary of the Company outside the ordinary course of business in one or a series of related transactions if the fair market value of the assets so sold exceeds $20 million;

(iv)declare or pay any dividends on, or make any other distributions in respect of, or redeem, any shares of the Company’s or any of its subsidiaries’ Capital Stock (excluding (1) repurchases of Capital Stock from current or former directors, officers or employees and (2) dividends and distributions to the Company or any of its wholly owned subsidiaries);

(v)transfer or acquire any assets or equity interests in any Person outside the ordinary course of business in one or a series of related transactions if the fair market value of the assets or equity interests so transferred or acquired exceeds $20 million;

(vi)amend its charter or bylaws in any manner adverse to any Major Stockholder;

(vii)enter into any merger, reorganization or recapitalization of the Company or of any subsidiary, voluntarily commence (or consent to the filing of) any

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proceeding or liquidate or file any petition seeking relief under Title 11 of the United States Code, or any other federal, state or foreign bankruptcy, insolvency or similar law;

(viii)increase or decrease the number of directors that comprise the entire Board;

(ix)approve the annual budget of the Company, including the operating and capital plans;

(x)approve any capital expenditures not consistent with the annual budget in excess of $5 million annually;

(xi)make any material change in the nature or scope of the Company’s business;

(xii)employ new members to, or terminate the employment of existing members of, executive management;

(xiii)change the Company’s fiscal year;

(xiv)make any material change in the tax or accounting policies of the Company (except as required by law or regulatory or quasi-regulatory bodies);

(xv)appoint or remove the Company’s independent auditors;

(xvi)form any joint ventures or subsidiaries, other than wholly owned subsidiaries;

(xvii)settle any material litigation; or

(xviii)enter into any agreement to do any of the foregoing.

(g)Additional Veto Right.  For so long as the Stockholders are required to elect a Rollover Director pursuant to Section 4.06(a), without the Rollover Approval, the Company shall not (and shall not permit any of its subsidiaries to) amend the charter or bylaws or similar organizational documents of the Company or any of its subsidiaries in a manner that is materially adverse to the Rollover Stockholders, in their capacity as stockholders, in a manner directly or indirectly disproportionate to the effect thereof on the other Stockholders.

(h)Transfer of Rights.  No Stockholder may Transfer any of its rights under this Section 4.06 to any Person other than to a Permitted Transferee who executes and delivers to the Company a Joinder Agreement in connection with the Transfer of shares of Common Stock to such Permitted Transferee.

SECTION 4.07.Affiliate Transactions.  The Company shall not (and shall not permit any of its subsidiaries to) enter into any transaction with Ares, CPPIB, Eric Schiffer, Jeff Gold or Howard Gold or any of their respective Affiliates or Permitted Transferees (determined, for purposes of this Section 4.07, without regard to the proviso at the end of the

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definition thereof), without the approval of a majority of the disinterested directors (including, in the case of any transaction with Ares, CPPIB or any of their respective Affiliates or Permitted Transferees, at least one Rollover Director), other than

(a)pursuant to any agreements entered into on or prior to the Effective Date and disclosed in, or incorporated by reference to, the definitive proxy statement of 99 Cents, filed with the U.S. Securities and Exchange Commission on December 12, 2011, or set forth on Schedule B hereto, but not any amendments, restatements, supplements or waivers to such agreements entered into without the approval of a majority of the disinterested directors (including, in the case of any agreements with Ares, CPPIB or any of their respective Affiliates or Permitted Transferees, at least one Rollover Director),

(b)transactions pursuant to, or expressly provided for under, this Agreement,

(c)transactions under the Management Agreements,

(d)the payment of reasonable and customary fees and reimbursement of reasonable expenses paid to, and indemnity provided on behalf of, directors, officers or employees of the Company or any of its subsidiaries,

(e)arm’s length transactions with portfolio companies of Ares, CPPIB and their respective Affiliates and Permitted Transferees in the ordinary course of business,

(f)transactions that (i) are on terms that are not less favorable in any material respect to the Company or any of its subsidiaries, as applicable, than those that could have been obtained in a comparable transaction with a third party on an arm’s length basis and (ii) involve aggregate consideration of less than $5 million,

(g)the issuance or sale by the Company or any of its subsidiaries of any Capital Stock pursuant to an Eligible Offering made in accordance with Section 4.05 or the incurrence of indebtedness (including pursuant to the issuance of debt securities) if the Rollover Stockholders are given the opportunity to purchase their Pro Rata Portion of such indebtedness after compliance with notice and election periods and other procedures substantially similar to those set forth in Section 4.05, or

(h)compliance with the terms of any debt or equity securities or other indebtedness of the Company or any of its subsidiaries purchased from any Person other than the Company or any of its subsidiaries.

SECTION 4.08.Qualified IPO.

(a)For so long as Ares and its Permitted Transferees, in the aggregate, continue to beneficially own at least 50% of the number of shares of Class A Common Stock beneficially owned by Ares on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), Ares may cause the Company to consummate a Qualified IPO; provided that so long as CPPIB and its Permitted Transferees, in the aggregate, continue to beneficially own at least 50% of the number of shares of Class A Common Stock beneficially owned by CPPIB on

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the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), CPPIB shall have the right to participate with Ares in the selection of managing underwriters for such offering.

(b)After the sixth year anniversary of this Agreement, either Major Stockholder (the “Initiating Stockholder”) may cause the Company to consummate a Qualified IPO; provided that so long as the other Major Stockholder and its Permitted Transferees, in the aggregate, continue to beneficially own at least 50% of the number of shares of Class A Common Stock beneficially owned by such other Major Stockholder on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), such other Major Stockholder shall have the right to participate with the Initiating Stockholder in the selection of managing underwriters for such offering.

(c)Following any demand to cause the Company to consummate a Qualified IPO pursuant to this Section 4.08, the Company shall take all actions necessary or reasonably requested by Ares or the Major Stockholders, as the case may be, to consummate any Qualified IPO, and shall use its reasonable best efforts to assure the success thereof, including entering into customary agreements with respect to such offering and the taking of all actions specified in Section 5.03 hereof.

(d)If any shares of Common Stock to be included in the registration statement effecting the Qualified IPO are to be sold other than for the Company’s own account, each Stockholder shall have the right (but not the obligation) to include its Pro Rata Portion of such secondary shares in such registration statement.

SECTION 4.09.Call Right.  Subject to all applicable laws, CPPIB shall have the right (the “Excess Class B Call Right”), but not the obligation, to acquire, at any time, all, but not less than all, of the then issued and outstanding Excess Class B Stock, and Ares shall have the obligation, upon CPPIB’s exercise of such right, to transfer to CPPIB (or, subject to Article III, its designee or assignee), all of its Excess Class B Stock for an amount per share equal to the par value of such shares.  If CPPIB desires to exercise the Excess Class B Call Right, it shall notify Ares in writing; provided that such notice may be revocable or conditional or both and CPPIB shall, to the extent applicable, receive representations and warranties from Ares that Ares has good and marketable title to such shares and that such shares will be transferred free and clear of all liens, claims and other encumbrances incurred by Ares, and no other representations and warranties.  CPPIB shall have the right to assign to any Person the Excess Class B Call Right solely in connection with a Transfer of a number of shares of Class A Common Stock identical to the number of shares of Class B Common Stock subject to the portion of the Excess Class B Call Right so assigned.

SECTION 4.10.Reorganization in Connection with an Initial Public Offering.  In the event of any Initial Public Offering where the managing underwriter or underwriters advise the Company that in its opinion the existing capital structure of the Company or any subsidiary of the Company would adversely affect the marketability, proposed offering price, timing, distribution method or probability of success of the offering, each Stockholder

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shall (a) consent to and vote for a recapitalization, reorganization or exchange of its Capital Stock of the Company or any subsidiary of the Company into securities that the managing underwriter or underwriters or the Board deems necessary, desirable or appropriate to ensure the success of such offering, and (b) take all actions (and execute all such documents) that the managing underwriter or underwriters or the Board deem necessary, desirable or appropriate to ensure the success of such offering or otherwise in connection with the consummation of such recapitalization, reorganization or exchange; provided that such recapitalization, reorganization or exchange shall not (i) result in a violation of the 30% Rule (it being understood that CPPIB and its Permitted Transferees shall take all actions (including exchanging all or any portion of its shares of Common Stock for shares of common stock of the Company (or any subsidiary of the Company) with limited or no voting rights) to the extent necessary to comply with the 30% Rule) or (ii) be implemented in a manner that has an economic or tax consequence, in either case that is material and adverse, for any Stockholder that is disproportionate to the consequence to the other Stockholders (without the prior written consent of such Stockholder).

ARTICLE V.

REGISTRATION RIGHTS

SECTION 5.01.Company Registration.

(a)Right to Piggyback on Registration of Common Stock.  Subject to Section 5.01(c), if at any time or from time to time following an Initial Public Offering, the Company proposes to register the Common Stock under the 1933 Act in connection with a public offering of such Common Stock on any form (including Form S-3 if the Company is then eligible) other than Form S-4 or Form S-8 or any similar successor forms or another form used for a purpose similar to the intended use for such forms (a “Piggyback Registration”), whether for its own account or for the account of one or more stockholders of the Company (including pursuant to a Demand Registration under Section 5.02 hereof), the Company shall give each Stockholder written notice of such determination (i) at least 30 days prior to the anticipated effective date of such Piggyback Registration and (ii) within 10 Business Days after the Company’s receipt of any notice of an exercise of demand registration rights.  Upon the written request of any Stockholder (the “Piggyback Holder”) given within 10 Business Days after receipt of any such notice by the Company, the Company shall use its reasonable best efforts to cause to be registered under the 1933 Act all of the Registrable Securities owned by such Stockholder that the Stockholder has requested to be registered; provided that if, at any time after giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay registration of all such securities, the Company may, at its election, give written notice of such determination to each Piggyback Holder and (i) in the case of a determination not to register all of such securities, shall be relieved of its obligation to register any Registrable Securities in connection with such registration (but not from any obligation of the Company to pay the registration expenses in connection therewith); and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities.  No registration effected under this Section 5.01 shall relieve the Company of its obligation to effect any registration upon demand under Section 5.02.

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(b)Selection of Underwriters.  If any Piggyback Registration involves an underwritten primary offering of the Company’s securities, the Board shall have the right to select any underwriter or underwriters to manage such Piggyback Registration.

(c)Priority on Piggyback Registrations.  In the event that the Piggyback Registration includes an underwritten offering, the Company shall so advise the Stockholders as part of the written notice given pursuant to Section 5.01(a) and the registration rights provided in Section 5.01(a) shall be subject to the condition that if the managing underwriter or underwriters of a Piggyback Registration advise the Company that in its opinion the number of Registrable Securities proposed to be sold in such Piggyback Registration exceeds the number that can be sold without adversely affecting the marketability, proposed offering price, timing, distribution method or probability of success of the offering, the Company and the Stockholders, as the case may be, will include in such registration only the number of Registrable Securities which, in the opinion of such underwriter or underwriters can be sold in such offering without such adverse effect.  The Registrable Securities so included in such Piggyback Registration shall be apportioned as follows: (a) first, to any shares of Common Stock that the Company proposes to sell and (b) second, pro rata among shares of the Registrable Securities included in such Piggyback Registration, in each case according to the total number of shares of the Registrable Securities requested for inclusion by the Piggyback Holder, or in such other proportions as shall mutually be agreed to among the Piggyback Holders.

(d)Shelf Take-Downs.  At any time that a shelf registration statement covering Registrable Securities is effective, if any Stockholder (a “Shelf Transfer Stockholder”) delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to Transfer all or part of its Registrable Securities included by it on the shelf registration statement (a “Shelf Offering”), then the Company shall amend or supplement the shelf registration statement as may be necessary to enable such Registrable Securities to be distributed pursuant to such Shelf Offering (taking into account the inclusion of Registrable Securities by any other holders pursuant to this Section 5.01(d)).  In connection with any Shelf Offering, the Shelf Transfer Stockholder shall also deliver the Take-Down Notice to all other holders of Registrable Securities included on such shelf registration statement and permit each such other holder to include up to its Pro Rata Portion of the Registrable Securities proposed to be Transferred (subject to any cut-backs as set forth in the last sentence of Section 5.01(c)) in such Shelf Offering by notifying the Shelf Transfer Stockholder and the Company within two Business Days after delivery of the Take-Down Notice to such other holder.

SECTION 5.02.Demand Registration Rights.

(a)Right to Demand.  Subject to Section 5.02(b) below, at any time or from time to time following an Initial Public Offering, each of Ares and CPPIB (each, a “Demand Holder”), may make a written request, which request will specify the aggregate number of Registrable Securities to be registered and will also specify the intended methods of disposition thereof (the “Request Notice”) to the Company for registration with the Commission under and in accordance with the provisions of the 1933 Act of all or part of the Registrable Securities then owned by the Demand Holder (a “Demand Registration”); provided that (i) the Company may, if the Board so determines that due to a pending or contemplated material acquisition or disposition or public offering or other material event involving the Company or any of its subsidiaries it

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would be inadvisable to effect such Demand Registration at such time (but in no event after such registration statement has become effective), the Company may, upon providing the Demand Holder written notice (the “Delay Notice”), defer such Demand Registration for a single period set forth in such Delay Notice with respect to such Demand Registration not to exceed 90 days; and the Company shall not postpone or delay a Demand Registration under this Section 5.02 more than once in any 12-month period, and (ii) if the Registrable Securities to be registered constitute less than all of the Registrable Securities beneficially owned by the Demand Holder, such Registrable Securities shall have an anticipated aggregate offering price of at least $5,000,000.  A registration pursuant to this Section 5.02 will be on such appropriate form of the Commission as shall be selected by the Demand Holder and be reasonably acceptable to the Company and as shall permit the intended method or methods of distribution specified by the Demand Holder, including a distribution to, and resale by, the partners of any Demand Holder.

The Company shall not be obligated to maintain a registration statement pursuant to a Demand Registration effective for more than (x) 360 days or (y) such shorter period when all of the Registrable Securities covered by such registration statement have been sold pursuant thereto (the “Effectiveness Period”).  Notwithstanding the foregoing, the Company shall not be obligated to effect more than one Demand Registration in any 90-day period following an Effectiveness Period or such longer period not to exceed 180 days as requested by an underwriter pursuant to Section 5.06.  Upon any such request for a Demand Registration, the Company will deliver any notices required by Section 5.01 and thereupon the Company will, subject to Section 5.01(c) and 5.02(f) hereof, use its reasonable best efforts to effect the prompt registration under the 1933 Act of:

(i)the Registrable Securities which the Company has been so requested to register by the Demand Holder as contained in the Request Notice and

(ii)all other Registrable Securities which the Company has been requested to register by the Piggyback Holders,

all to the extent required to permit the disposition of the Registrable Securities so to be registered in accordance with the intended method or methods of disposition of each seller of such Registrable Securities.

(b)Number of Demand Registrations. The Company will not be required to effect more than four registrations pursuant to this Section 5.02 upon the request of Ares and will not be required to effect more than four registrations pursuant to this Section 5.02 upon the request of CPPIB; provided that, at any time in which the Company is eligible to register shares of Common Stock on Form S-3 (or any successor form), the Demand Holder shall have an unlimited number of demand registrations on Form S-3.

(c)Revocation.  The Demand Holder may, at any time prior to the effective date of the registration statement relating to such Demand Registration, revoke such request by providing a written notice thereof to the Company and shall not be required to reimburse the Company for any of its expenses incurred in connection with such attempted registration; provided that, if the Demand Holder does not reimburse the Company pursuant to the following sentence, such attempted registration shall count as a Demand Registration, subject to Section

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5.02(d).  If the Demand Holder elects, in its sole discretion, to reimburse the Company for its reasonable out-of-pocket expenses incurred in the preparation, filing and processing of the Registration Statement, the attempted registration shall not be deemed to be a Demand Registration.

(d)Effective Registration.  A registration will not count as a Demand Registration and the Demand Holder shall not be required to reimburse the Company for its expenses incurred in the preparation, filing and processing of any registration statement pursuant to Section 5.02(c):

(i)if the Demand Holder determines in its good faith judgment to withdraw the proposed registration of any Registrable Securities requested to be registered by the Demand Holder due to a material adverse change in the Company (other than as a result of any action by the Demand Holder);

(ii)if such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason (other than as a result of any act by the Demand Holder) and the Company fails to have such stop order, injunction or other order or requirement removed, withdrawn or resolved to the Demand Holder’s satisfaction;

(iii)if the Demand Holder requests that the Company withdraw the registration at any time during the period specified in a Delay Notice or within 10 days thereafter; or

(iv)the conditions to closing specified in the underwriting agreement or purchase agreement entered into in connection with the registration relating to any such demand are not satisfied (other than as a result of a default or breach thereunder by the Demand Holder).

(e)Selection of Underwriters.  If any of the Registrable Securities covered by a Demand Registration are to be sold in an underwritten offering, the Demand Holder will have the right to select the managing underwriter(s) to administer the offering subject to the approval of the Company, which approval will not be unreasonably withheld, conditioned or delayed.

(f)Priority on Demand Registrations.  If the managing underwriter or underwriters of a Demand Registration advise the Company in writing that in its or their opinion the number of Registrable Securities proposed to be sold in such Demand Registration exceeds the number which can be sold without adversely affecting the marketability, proposed offering price, timing, distribution method or probability of success of the offering, the Company will include in such registration only the number of Registrable Securities which, in the opinion of such underwriter or underwriters, can be sold in such offering without such material adverse effect.  The Registrable Securities to be included in such Demand Registration shall be apportioned pro rata among the Demand Holder and the Piggyback Holders according to the total number of shares of the Registrable Securities requested for inclusion by the Demand Holder and the Piggyback Holders, or in such other proportions as shall mutually be agreed to among the Demand Holder and the Piggyback Holders.

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SECTION 5.03.Registration Procedures.  It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Article V that the Stockholders requesting inclusion in any Piggyback Registration or Demand Registration (a “Registration”) shall furnish to the Company such information regarding them, the Registrable Securities owned by them, the intended method of disposition of such Registrable Securities, and such agreements regarding indemnification, disposition of such securities and other matters referred to in and consistent with this Article V, as the Company shall reasonably request and as shall be required in connection with the action to be taken by the Company (such intended method of distribution may include a distribution to, and resale by, the partners of the holders of any Registrable Securities).  With respect to any Registration which includes Registrable Securities owned by a Stockholder, the Company will, subject to Sections 5.01 and 5.02:

(a)As promptly as possible (in the case of a Demand Registration, no more than 45 days after the Company’s receipt of a Request Notice that is not for a registration on Form S-3 or any successor or comparable form or in connection with an Initial Public Offering, no more than 60 days after the Company’s receipt of a Request Notice that is for a registration in connection with an Initial Public Offering and no more than 30 days after the Company’s receipt of a Request Notice that is for a registration on Form S-3 or any successor or comparable form) prepare and file with the Commission a registration statement on the appropriate form prescribed by the Commission for such intended method of disposition and use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter; provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to counsel representing the Stockholders selling Registrable Securities under such Registration copies of all documents proposed to be filed, which documents shall be subject to the review and reasonable comments of such counsel; provided, further, that the Company shall not be obligated to maintain such registration effective for a period longer than the Effectiveness Period;

(b)Prepare and file with the Commission such amendments and post-effective amendments to such registration statement and any documents required to be incorporated by reference therein as may be necessary to keep the registration statement effective for a period of not less than the Effectiveness Period (but not prior to the expiration of the time period referred to in Section 4(3) of the 1933 Act and Rule 174 thereunder, if applicable); cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act and comply with the 1933 Act in a timely manner; and comply with the provisions of the 1933 Act applicable to it with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such registration statement or supplement to the prospectus;

(c)Promptly incorporate in a prospectus supplement or post-effective amendment such information as the underwriter(s) or the Demand Holder reasonably request to be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such prospectus supplements or post-effective amendments as soon as practical after being notified of the matters to be incorporated in such supplement or amendment;

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(d)Furnish to such Stockholder, without charge, such number of conformed copies of the registration statement and any post-effective amendment thereto, as such Stockholder may reasonably request, and such number of copies of the prospectus (including each preliminary prospectus) and any amendments or supplements thereto, and any documents incorporated by reference therein, as the Stockholder or underwriter or underwriters, if any, may request in order to facilitate the disposition of the securities being sold by the Stockholder (it being understood that the Company consents to the use of the prospectus and any amendment or supplement thereto by the Stockholder covered by the registration statement and the underwriter or underwriters, if any, in connection with the offering and sale of the securities covered by the prospectus or any amendments or supplements thereto);

(e)Notify such Stockholder, at any time when a prospectus relating thereto is required to be delivered under the 1933 Act, when the Company becomes aware of the happening of any event as a result of which the prospectus included in such registration statement (as then in effect) contains any untrue statement of material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter delivered to the investors of such securities, such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(f)Provide a CUSIP number for all Registrable Securities no later than the effective date of the Registration and provide the applicable transfer agent and registrar for all such Registrable Securities with printed certificates representing the Registrable Securities that are in a form eligible for deposit with The Depositary Trust Company not later than the effective date of the registration statement;

(g)Use its reasonable best efforts to cause all securities included in such registration statement to be listed, by the date of the first sale of securities pursuant to such registration statement, on any national securities exchange, quotation system or other market on which the Common Stock is then listed or proposed to be listed by the Company, if any, or, failing that, to arrange for at least two market makers to register as such with respect to such securities with the Financial Industry Regulatory Authority, Inc.;

(h)Make generally available to its security holders an earnings statement, which need not be audited, satisfying the provisions of Section 11(a) of the 1933 Act as soon as reasonably practicable after the end of the 12-month period beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the registration statement, which statement shall cover said 12-month period;

(i)After the filing of a registration statement, (i) notify each Stockholder holding Registrable Securities covered by such registration statement of any stop order issued or, to the Company’s knowledge, threatened by the Commission and of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction, (ii) take all

35

reasonable actions to obtain the withdrawal of any order suspending the effectiveness of the registration statement or the qualification of any Registrable Securities at the earliest possible moment, and (iii) make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant, or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate and business documents and properties of the Company as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s Representatives to supply all such information reasonably requested by any such seller, underwriter, attorney, accountant, or agent in connection with such registration statement;

(j)In connection with the preparation and filing of each Registration, the Company shall give each holder of Registrable Securities included in such Registration, the underwriter(s) and their respective counsel, accountants and other representatives the opportunity to participate in the preparation of each registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto and comparable statements under the securities or blue sky laws of any jurisdiction and give each of the foregoing Persons access to the books and records, pertinent corporate and business documents and properties of the Company and its subsidiaries and such opportunities to discuss the business and affairs of the Company and its subsidiaries with the respective Representatives and the independent public accountants who have certified the Company’s consolidated financial statements, and supply all other information and respond to all other inquiries requested by such holders, underwriter(s), counsel, accountants and other representatives as shall be necessary or appropriate, in the opinion of such holders or underwriter(s), to conduct a reasonable investigation within the meaning of the 1933 Act, and the Company shall not file any registration statement or amendment thereto or any prospectus or supplement thereto to which such holder or such underwriter(s) shall reasonably object;

(k)Cause its employees to participate in “road shows” and other presentations as reasonably requested by the underwriters in connection with such Registration;

(l)Deliver promptly to counsel representing the Stockholders selling Registrable Securities under such Registration and each underwriter, if any, participating in the offering of the Registrable Securities, copies of all correspondence between the Commission and the Company, its counsel or auditors, and all memoranda relating to discussions with the Commission or its staff with respect to such Registration; and

(m)On or prior to the date on which the registration statement is declared effective, use its reasonable best efforts to (i) register or qualify, and cooperate with such underwriter or underwriters, if any, and their counsel in connection with the registration or qualification of, the securities covered by the registration statement for offer and sale under the securities or blue sky laws of each state and other jurisdiction of the United States as the managing underwriter or underwriters, if any, requests in writing, to use its reasonable best efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the Effectiveness Period and do any and all other acts or things necessary or advisable to enable the disposition in all such jurisdictions of the Registrable Securities covered by the applicable registration statement; provided that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified

36

or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject, (ii) obtain a “comfort” letter from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by comfort letters, which letter shall be addressed to the underwriters, and the Company shall use its reasonable best efforts to cause such comfort letter to also be addressed to the holders of such Registrable Securities, (iii) obtain an opinion from the Company’s outside counsel in customary form and covering such matters of the type customarily covered by such opinions, which opinion shall be addressed to the underwriters and the holders of such Registrable Securities, and (iv) enter into and perform its obligations under such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities included in the Request Notice, in the case of a Demand Registration, or the holders of a majority of the Registrable Securities being sold or the underwriters, if any, in the case of a Piggyback Registration, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including effecting a stock split, combination of shares, recapitalization, or reorganization), in each case, that does not have an economic or tax consequence, in either case that is material and adverse, for any Stockholder that is disproportionate to the consequence to the other Stockholders (without the prior written consent of such Stockholder).

The Stockholders, upon receipt of any notice from the Company of the happening of any event of the kind described in subsection (e) of this Section 5.03, will forthwith discontinue disposition of the Registrable Securities until the Stockholders’ receipt of the copies of the supplemented or amended prospectus contemplated by subsection (e) of this Section 5.03 or until it is advised in writing by the Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the prospectus, and, if so directed by the Company, each Stockholder will, or will request the managing underwriter or underwriters, if any, to, deliver, to the Company (at the Company’s sole expense) all copies, other than permanent file copies then in such Stockholder’s possession, of the prospectus covering such securities current at the time of receipt of such notice.

No holder of Registrable Securities shall be required to make any representations or warranties to or agreements with the Company, other than representations and warranties regarding such holder, such holder’s ownership of and title to the Registrable Securities to be sold in such offering, and its intended method of distribution and any liability of any such holder under such underwriting agreement shall be limited to liability arising from breach of its representations and warranties therein and shall be limited to an amount equal to the net amount received by such holder from the sale of Registrable Securities pursuant to such registration statement.

SECTION 5.04.Registration Expenses.

(a)Subject to Section 5.02(c), in the case of any Registration, the Company shall bear all expenses incident to the Company’s performance of or compliance with Sections 5.01, 5.02 and 5.03 of this Agreement, including all Commission and stock exchange or the Financial Industry Regulatory Authority, Inc. registration and filing fees and expenses, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and

37

disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), rating agency fees, printing expenses, messenger, telephone and delivery expenses, fees and disbursements of counsel for the Company and all independent certified public accountants and any fees and disbursements of underwriters customarily paid by issuers or sellers of securities (but not including any underwriting discounts or commissions, or transfer taxes, if any, attributable to the sale of Registrable Securities by a selling Stockholder or fees and expenses of more than one counsel representing the Stockholders selling Registrable Securities under such Registration as set forth in Section 5.04(b) below).

(b)In connection with each Registration initiated hereunder (whether a Demand Registration or a Piggyback Registration), the Company shall reimburse the holders covered by such registration for the reasonable fees and disbursements of one law firm chosen by a majority of the number of shares of Registrable Securities included in the Request Notice, in the event of a Demand Registration, and, in the case of a Piggyback Registration, the holders of a majority of the number of shares of Registrable Securities included in such Registration.

SECTION 5.05.Indemnification.

(a)Indemnification by the Company.  The Company agrees to indemnify and hold harmless each Stockholder, the underwriters selling such Stockholder’s Registrable Securities and their respective officers, directors, Affiliates and agents and each Person who controls (within the meaning of the 1933 Act or the 1934 Act) any of them, including any general partner or manager of any thereof, against all losses, claims, damages, liabilities and expenses (including reasonable out-of-pocket counsel fees and disbursements) arising out of or based upon any untrue or alleged untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus, or any amendment thereof or supplement thereto, or in any document incorporated by reference therein 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 the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except insofar as the same are made in reliance on and in conformity with any information with respect to such Stockholder furnished in writing to the Company by such Stockholder expressly for use therein.

(b)Indemnification by the Stockholders.  In connection with any registration statement in which a Stockholder is participating, each such Stockholder will furnish to the Company in writing such information and affidavits with respect to such Stockholder as the Company reasonably requests for use in connection with any registration statement or prospectus covering the Registrable Securities of such Stockholder and to the extent permitted by law agrees to indemnify and hold harmless the Company, its directors, officers and agents and each Person who controls (within the meaning of the 1933 Act or the 1934 Act) the Company, against any losses, claims, damages, liabilities and expenses arising out of or based upon any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements in the registration statement, prospectus or preliminary prospectus (in the case of the prospectus or preliminary prospectus, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is made in reliance on and in conformity with the information or affidavit with respect to such Stockholder so furnished in writing by such Stockholder expressly

38

for use in the registration statement or prospectus; provided that the obligation to indemnify shall be several, not joint and several, among such Stockholders and the liability of each such Stockholder shall be in proportion to and limited to the net amount received by such Stockholder from the sale of Registrable Securities pursuant to such registration statement in accordance with the terms of this Agreement.  The indemnity agreement contained in this Section 5.05(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of such Stockholder.  The Company and the holders of the Registrable Securities hereby acknowledge and agree that, unless otherwise expressly agreed to in writing by such holders, the only information furnished or to be furnished to the Company for use in any registration statement or prospectus relating to the Registrable Securities or in any amendment, supplement or preliminary materials associated therewith are statements specifically relating to (a) the beneficial ownership of shares of Common Stock by such holder and its Affiliates, (b) transactions or the relationship between such holder and its Affiliates, on the one hand, and the Company, on the other hand (c) the name and address of such holder and (d) any additional information about such holder or the plan of distribution (other than for an underwritten offering) required by law or regulation to be disclosed in any such document.

(c)Conduct of Indemnification Proceedings.  Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest may exist between such indemnified and indemnifying parties with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party.  The failure to so notify the indemnifying party shall not relieve the indemnifying party from any liability hereunder with respect to the action, except to the extent that such indemnifying party is materially prejudiced by the failure to give such notice; provided that any such failure shall not relieve the indemnifying party from any other liability which it may have to any other party or to such indemnified party other than pursuant to this Section 5.05.  No indemnifying party in the defense of any such claim or litigation, shall, except with the consent of such indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement with respect to such indemnified party 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 of such claim or litigation.  An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party which are in addition to or may conflict with those available to any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels.

(d)Contribution.  If for any reason the indemnification provided for in the preceding paragraphs (a) and (b) of this Section 5.05 is unavailable to an indemnified party as contemplated by the preceding paragraphs (a) and (b) of this Section 5.05 or is insufficient to hold such indemnified party harmless, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability (i) in

39

such proportion as is appropriate to reflect the relative benefits received by the indemnified party and the indemnifying party, or (ii) if the allocation provided by the preceding clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in the preceding clause (i) but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand shall be determined by reference to, among other things, whether the untrue or alleged omission to state a material fact relates to information supplied by the Company or by the sellers of Registrable Securities or other sellers participating in the registration statement and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  In no event shall the liability of any such Stockholder be greater in amount than the amount of net proceeds received by such Stockholder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided in paragraph (b) of this Section 5.05 had been available.

SECTION 5.06.Holdback Agreements.

(a)Whenever the Company proposes to register any of its equity securities under the 1933 Act in an underwritten offering for its own account (other than on Form S-4 or S-8 or any similar successor form or another form used for a purpose similar to the intended use of such forms) or is required to use its reasonable efforts to effect the registration of any Registrable Securities under the 1933 Act pursuant to Section 5.01 or 5.02, each holder of Registrable Securities agrees by acquisition of such Registrable Securities not to effect any sale or distribution, including any sale pursuant to Rule 144 under the 1933 Act, or to request registration under Section 5.02 of any Registrable Securities for the time period reasonably requested by the managing underwriter for the underwritten offering; provided that in no event shall such period exceed 180 days (the “Lock-up Period”) after the effective date of the registration statement relating to such registration, except (i) as part of such registration or (ii) in the case of a private sale or distribution, unless the transferee agrees in writing to be subject to this Section 5.06.  If requested by such managing underwriter, each holder of Registrable Securities agrees to execute a holdback agreement, in customary form, consistent with the terms of this Section 5.06(a); provided, that if the Company or any underwriter releases any holder of Registrable Securities from such holdback agreement, it shall similarly release all other holders of Registrable Securities on a pro rata basis.  Notwithstanding the foregoing, no Stockholder shall be subject to a Lock-up Period in excess of 180 days in any calendar year due to the registration of any Registrable Securities pursuant to Section 5.02.  The Company shall use commercially reasonable efforts to request such underwriter to include provisions in the applicable holdback agreements that permit the repurchase of equity by the Company or its designees under the Put Right.

(b)The Company agrees not to effect any sale or distribution of any of its equity securities or securities convertible into or exchangeable or exercisable for any such equity securities within the Lock-up Period (except as part of such underwritten registration or pursuant to registrations on Form S-8, S-4 or any successor forms thereto), except that such restriction shall not prohibit any such sale or distribution after the effective date of the registration statement (i) pursuant to any stock option, warrant, stock purchase plan or agreement or other

40

benefit plans approved by the Board to officers, directors or employees of the Company or its subsidiaries; (ii) pursuant to Section 4(2) of the 1933 Act or (iii) as consideration to any third party seller in connection with the bona fide acquisition by the Company or any subsidiary of the Company of the assets or securities of any Person in any transaction approved by the Board.  In addition, upon the request of the managing underwriter, the Company shall use its reasonable best efforts to cause each holder of its equity securities or any securities convertible into or exchangeable or exercisable for any of such securities whether outstanding on the Effective Date or issued at any time after the Effective Date (other than any such securities acquired in a public offering), to agree not to effect any such public sale or distribution of such securities during such period, except as part of any such registration if permitted, and to cause each such holder to enter into a similar agreement to such effect with such managing underwriter.  Notwithstanding the foregoing, the Company shall not be subject to a Lock-up Period in excess of 180 days in any calendar year due to the registration of any Registrable Securities pursuant to Section 5.02.

SECTION 5.07.Participation in Registrations.  No Stockholder may participate in any Registration hereunder that is underwritten unless such Stockholder (a) agrees to sell its securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements (provided that such underwriting arrangements shall not (x) limit any of such Stockholder’s rights under this Agreement or (y) contain terms that have a material and adverse effect on any Stockholder that is disproportionate to the effect on the other Stockholders (without the prior written consent of such Stockholder)), and (b) completes and executes all questionnaires, powers of attorney, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements.

SECTION 5.08.Rule 144.  After the Initial Public Offering, the Company shall use commercially reasonable efforts to timely file any reports required to be filed by it under the 1933 Act and the 1934 Act and the rules and regulations adopted by the Commission thereunder, and it will take such further action as any holder may reasonably request to enable such holder to sell Registrable Securities without registration under the 1933 Act as permitted by (i) Rules 144 and 144A and Regulation S under the 1933 Act, as such Rules may be amended from time to time, or (ii) any similar rules or regulation hereafter adopted by the Commission.  Upon the request of a holder of Registrable Securities, the Company, at its own expense, will deliver to such holder:  (i) a written statement as to whether it has complied with the requirements that would make the exemption provided by such Rule or Rules available to such holder (and such holder shall be entitled to rely on the accuracy of such written statement), (ii) a copy of the most recent annual or quarterly report of the Company and (iii) such other reports and documents as such holder may reasonably request in order to avail itself of any rule or regulation of the Commission allowing it to sell Registrable Securities without registration.

ARTICLE VI.

MISCELLANEOUS

SECTION 6.01.Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made at the address or facsimile number set forth on the

41

signature pages hereof (or in the relevant Joinder Agreement), or at such other address or facsimile number as such party shall have furnished to the Company in writing; provided that:

(a)unless otherwise specified by Ares in a notice delivered by Ares in accordance with this Section 6.01, any notice required to be delivered to Ares shall be properly delivered if delivered to:

Ares Corporate Opportunities Fund III, L.P.
c/o Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Facsimile:	(310) 201-4170
Attention:	Adam Stein
with a copy (which shall not constitute notice) to
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Facsimile:	(310) 557-2193
Attention:	Michael A. Woronoff, Esq.

(b)unless otherwise specified by CPPIB in a notice delivered by CPPIB in accordance with this Section 6.01, any notice required to be delivered to CPPIB shall be properly delivered if delivered to:

Canada Pension Plan Investment Board
One Queen Street East, Suite 2600
P.O. Box 101
Toronto, ON M5C 2W5
Facsimile:	(416) 868-8684
Attention:	Shane Feeney
with a copy (which shall not constitute notice) to
Torys LLP
1114 Avenue of the Americas
New York, NY 10036
Facsimile:	(212) 682-0200
Attention:	Stefan P. Stauder

(c)unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 6.01, any notice required to be delivered to the Company shall be properly delivered if delivered to:

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Number Holdings Inc.
c/o Ares Management LLC
2000 Avenue of the Stars
Los Angeles, California 90067
Facsimile:	(310) 201-4170
Attention:	Adam Stein
and
Number Holdings Inc.
c/o Canada Pension Plan Investment Board
One Queen Street East, Suite 2600
P.O. Box 101
Toronto, ON M5C 2W5
Facsimile:	(416) 868-8684
Attention:	Shane Feeney
with a copy (which shall not constitute notice) to
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Facsimile:	(310) 557-2193
Attention:	Michael A. Woronoff, Esq.

Notice shall be delivered (i) by nationally recognized overnight courier delivery for next business day delivery, (ii) by hand delivery, or (iii) by facsimile or electronic mail transmission followed by overnight delivery the next Business Day. Legal counsel for the respective parties may send to the other party any notices, requests, demands or other communications required or permitted to be given hereunder by such party. Each such notice or other communication shall for all purposes of this Agreement be treated as effective, or as having been given, only upon receipt thereof at the address specified hereunder.

SECTION 6.02.Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns.  Except as set forth in Section 5.05 and 6.14, nothing in this Agreement, express or implied, is intended or shall be construed to give any Person other than the parties to this Agreement or their respective successors or permitted assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

SECTION 6.03.Amendment.  This Agreement may not be amended, restated, modified or supplemented in any respect and the observance of any term of this Agreement may not be waived by the Company except by a written instrument executed by Ares and CPPIB, in each case, so long as it or any of its Permitted Transferees remains a Stockholder, and to the extent (and only to the extent) the interests of the Minority Stockholders are adversely and disproportionately affected by such amendment, modification, supplement or waiver, by a majority of the shares of Class A Common Stock then owned by the Minority Stockholders.  In

43

addition, for so long as the Rollover Stockholders, in the aggregate, continue to own at least 25% of the number of shares of Common Stock owned by the Rollover Stockholders on the Effective Date (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event), no provision of Section 4.04, Sections 4.06(a), (c), (d), (e) and (g), Section 4.07 or this Section 6.03 may be amended, restated, supplemented or waived by the Company without the written approval of the holders of a majority of the shares of Class A Common Stock then owned by the Rollover Stockholders.  No consent of any Minority Stockholder shall be required to the joinder of those Persons who become parties hereto by executing a Joinder Agreement in accordance to the terms of this Agreement.

SECTION 6.04.Assignability.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or any Stockholder except as otherwise expressly stated hereunder or with the prior written consent of Ares and CPPIB, in each case, so long as it or any of its Permitted Transferees remains a Stockholder and any attempted assignment in violation of this Section 6.04 shall be null and void ab initio.  A Permitted Transferee who executes a Joinder Agreement in accordance with the provisions hereof may be assigned any rights available hereunder in connection with a Transfer of Common Stock to such Permitted Transferee; provided that the rights of each Stockholder set forth in Section 4.06 may only be held by such Stockholder and one Permitted Transferee of such Stockholder at a time.

SECTION 6.05.Governing Law; Submission to Jurisdiction.  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.  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 New York or in any New York state court located in New York county 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.

SECTION 6.06.Enforcement.  Without limiting or waiving in any respect any rights or remedies of the parties hereto under this Agreement now or hereinafter existing at law or in equity, each of the parties hereto (a) expressly agree that the provisions of this Agreement may be specifically enforced against each of the parties hereto in any court of competent jurisdiction and (b) hereby waive any requirement for the posting of any bond or similar collateral in connection therewith.

SECTION 6.07.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.  If any of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

SECTION 6.08.Additional Securities Subject to Agreement.  All shares of Common Stock of the Company that any Stockholder hereafter acquires by means of a stock

44

split, stock dividend, distribution, exercise of options or warrants or otherwise (other than pursuant to a public offering) whether by merger, consolidation or otherwise (including shares of a surviving corporation into which the shares of Common Stock of the Company are exchanged in such transaction) will be subject to the provisions of this Agreement to the same extent as if owned on the Effective Date.

SECTION 6.09.Section and Other Headings.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

SECTION 6.10.Counterparts.  This Agreement and any joinders thereto may be executed in any number of counterparts, including by way of electronic transmission (e.g., pdf and facsimile formats), 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.

SECTION 6.11.Termination of Certain Provisions.  Other than the rights and obligations set forth in Section 4.02, Section 4.06(a), Section 4.06(f), Article V and Article VI, all rights and obligations under this Agreement will terminate and be of no force and effect upon the consummation of a Qualified IPO.  Notwithstanding the foregoing, (a) if the managing underwriter or underwriters of a Qualified IPO advise the Company that in its opinion the survival of the rights and obligations set forth in Section 4.06(f) would adversely affect the marketability, proposed offering price, timing, distribution method or probability of success of such Qualified IPO, Section 4.06(f) will terminate and be of no force and effect upon the consummation of such Qualified IPO, and (b) in connection with a Qualified IPO, the parties will agree to any amendment to the surviving provisions necessary to comply with applicable securities laws and the rules of all applicable securities exchanges and listing requirements.

SECTION 6.12.Waiver of Jury Trial.  Each party to this Agreement, for itself and its Related Persons, hereby irrevocably and unconditionally waives to the fullest extent permitted by applicable law all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to the actions of the parties hereto or their respective Related Persons pursuant to this Agreement or in the negotiation, administration, performance or enforcement of this Agreement.

SECTION 6.13.Further Assurances.  Each party agrees that it shall, from time to time after the Effective Date, execute and deliver such other documents and instruments and take such other actions as may be reasonably requested by the Company or any Major Stockholder to carry out the transactions contemplated by this Agreement.

SECTION 6.14.Entire Agreement.  This Agreement supersedes all prior agreements, whether written or oral, between the parties with respect to its subject matter and constitutes (along with the exhibits and other documents delivered pursuant to this Agreement) a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter.

45

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first set forth above.

NUMBER HOLDINGS, INC.
By:	/s/ Eric Schiffer
Name:	Eric Schiffer
Title:	Chief Executive Officer

[Signature Page to Stockholders Agreement]

ARES CORPORATE OPPORTUNITIES FUND III, L.P.
By: ACOF Operating Manager III, LLC
By:	/s/ Adam Stein
Name:	Adam Stein
Title:	Authorized Signatory

[Signature Page to Stockholders Agreement]

CANADA PENSION PLAN INVESTMENT BOARD
By:	/s/ André Bourbonnais
Name:	André Bourbonnais
Title:	Authorized Signatory
By:	/s/ Jim Fasano
Name:	Jim Fasano
Title:	Authorized Signatory

[Signature Page to Stockholders Agreement]

THE GOLD REVOCABLE TRUST, DATED OCTOBER 26, 2005
By:	/s/ David Gold
Name:	David Gold
Title:	Trustee
By:	/s/ Sherry Gold
Name:	Sherry Gold
Title:	Trustee
HOWARD GOLD
By:	/s/ Howard Gold
JEFF GOLD
By:	/s/ Jeff Gold
KAREN SCHIFFER
By:	/s/ Karen Schiffer
ERIC SCHIFFER
By:	/s/ Eric Schiffer

[Signature Page to Stockholders Agreement]

SCHEDULE A

The Gold Revocable Trust, dated October 26, 2005

Howard Gold

Jeff Gold

Karen and Eric Schiffer

EXHIBIT A

FORM OF JOINDER AGREEMENT

WHEREAS, simultaneously with the execution of this Agreement, the undersigned is acquiring        shares of Class A Common Stock and        shares of Class B Common Stock (together, the “Common Stock”), par value $0.001 per share of Number Holdings, Inc., a Delaware corporation (the “Company”); and

WHEREAS, as a condition to the acquisition of the Common Stock, the undersigned has agreed to join in a certain Stockholders Agreement, dated as of January 13, 2012 (the “Stockholders Agreement”), among the Company and the Stockholders (as such term is defined in the Stockholders Agreement) party thereto; and

WHEREAS, the undersigned understands that the execution of this Agreement is a condition precedent to the acquisition of the Common Stock;

NOW, THEREFORE, as an inducement to both the transferor of the Common Stock and the other Stockholders to allow the Transfer (as such term is defined in the Stockholders Agreement) of the Common Stock to the undersigned, the undersigned agrees as follows:

1.             The undersigned hereby joins in the Stockholders Agreement and agrees to be bound by the terms and provisions of the Stockholders Agreement as provided by the Stockholders Agreement as a Stockholder.

2.             The undersigned hereby agrees that the certificate or certificates to be issued to the undersigned representing the Common Stock shall be legended as follows:

“The securities represented by represented by this Certificate have not been registered under the United States Securities Act of 1933, as amended (the “Act”), or applicable state securities laws and may not be offered, pledged, sold, assigned or otherwise transferred (“Transfer”) except pursuant to (i) an effective registration statement under the Act and applicable state securities laws or (ii) an applicable exemption from registration thereunder.

The securities represented by this certificate are also subject to the terms and conditions of the Stockholders Agreement, dated as of January 13, 2012, as it may be amended from time to time by and among Number Holdings, Inc. and certain of its stockholders.  The Stockholders Agreement contains, among other things, (1) significant restrictions on the transfer of the securities of the Company and (2) certain rights of first offer, tag-along and drag-along rights and restrictions applicable to the securities.  A copy of the Stockholders Agreement is available upon request from the Company.”

IN WITNESS WHEREOF, the undersigned has executed this Agreement this      day of                         , 20    .

A-2

Name:

Title:

Address:

A-3

EXHIBIT B

CONSENT OF SPOUSE

I,                                 , spouse of                                 , have read and hereby approve the Stockholders Agreement, dated as of January 13, 2012 (the “Stockholders Agreement”), among Number Holdings, Inc. and the stockholders party thereto.  I agree to be bound by the provisions of the Stockholders Agreement insofar as I may have any rights in said Stockholders Agreement or any shares of Common Stock (as such term is defined in the Stockholders Agreement) covered thereby under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the Stockholders Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Consent of Spouse this      day of                         , 20    .

Name:

Address:

B-1

EX-5.1

Exhibit 5.1

Proskauer Rose LLP   2049 Century Park East, 32nd Floor   Los Angeles, CA 90067-3206

July 9, 2012

99¢ Only Stores

4000 East Union Pacific Avenue

City of Commerce, California 90023

Ladies and Gentlemen:

We have acted as special counsel to 99¢ Only Stores, a California corporation (the “Company”), in connection with the preparation of the registration statement on Form S-4 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission pursuant to the Securities Act of 1933, with respect to the issuance and exchange of up to $250,000,000 aggregate principal amount of the Company’s 11% Senior Notes due 2019 (the “Exchange Notes”) for a like principal amount of outstanding 11% Senior Notes due 2019. The Exchange Notes will be issued under the indenture, dated as of December 29, 2011, as supplemented by the Supplemental Indenture, dated as of January 13, 2012 (the “Indenture”), by and among the Company, the subsidiary guarantors named on Schedule 1 hereto (the “Subsidiary Guarantors” and, together with the Company, the “Subject Persons”), and Wilmington Trust, National Association, as trustee (the “Trustee”).  The Exchange Notes will be unconditionally guaranteed by each of the Subsidiary Guarantors pursuant to the guarantees contained in the Indenture (the “Exchange Guarantees”).

In connection with the rendering of this opinion, we have investigated such questions of law and examined originals or certified, conformed or reproduction copies of such agreements, instruments, documents and records of the Subject Persons, such certificates of public officials and such other documents as we have deemed relevant, including, without limitation: (i) the amended and restated articles of incorporation of the Company, as amended to date; (ii) the amended and restated bylaws of the Company, as amended to date; (iii) the governing documents of the Subsidiary Guarantor that is organized under the laws of the State of Delaware (the “Delaware Guarantor”); (iv) certain resolutions of the Board of Directors of the Company and the Delaware Guarantor, respectively, relating to the authorization of the Exchange Notes and the Exchange Guarantees; (v) the Registration Statement; (vi) specimens of the Exchange Notes to be issued pursuant to the terms of the Indenture; (vii) the form of guarantee to be endorsed upon each Exchange Note by each Subsidiary Guarantor pursuant to the terms of the Indenture; and (vii) the Indenture.

In giving this opinion, we have assumed, without independent verification, the genuineness of all signatures, the legal capacity of natural persons and the authenticity of all documents we have examined.  As to questions of fact relevant to this opinion, without any independent verification, we have relied upon written statements of certain public officials and officers of the Company.  We have assumed, without independent verification, that the Indenture constitutes the legal, valid and binding obligation of the Trustee.

Beijing | Boca Raton | Boston | Chicago | Hong Kong | London | Los Angeles | New Orleans | New York | Newark | Paris | São Paulo | Washington, DC

For purposes of this opinion, we also have assumed, without independent verification, that (i) each Subsidiary Guarantor other than the Delaware Guarantors has the requisite corporate, limited liability company or partnership, as applicable, power and authority to execute, deliver and perform its Exchange Guarantee; and (ii) the execution, delivery and performance by each Subsidiary Guarantor other than the Delaware Guarantors of its Exchange Guarantee have been duly authorized by all requisite corporate, limited liability company or partnership, as applicable, action on the part of such Subsidiary Guarantor.

Based upon the foregoing, and subject to the qualifications below, it is our opinion that:

1.When the Registration Statement has become effective and the Exchange Notes have been duly executed by the Company, authenticated by the Trustee and delivered in accordance with the terms of the Indenture, the Notes will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law), including, without limitation, principles regarding good faith and fair dealing.

2.When the Registration Statement has become effective and the Exchange Notes have been duly executed by the Company, authenticated by the Trustee and delivered in accordance with the terms of the Indenture, and the Exchange Guarantees have been duly executed and delivered, each Exchange Guarantee will constitute a legal, valid and binding obligation of the applicable Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally and by general equitable principles (regardless of whether enforcement is sought in equity or at law), including, without limitation, principles regarding good faith and fair dealing.

This opinion is limited in all respects to the federal laws of the United States, the laws of the State of New York, the Delaware General Corporation Law (including the statutory provisions, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting the foregoing), the Delaware Limited Liability Company Act and the Delaware Revised Uniform Limited Partnership Act, and we express no opinion as to the laws, statutes, rules or regulations of any other jurisdiction.

This opinion may not be relied upon by you or any other person, firm, corporation or entity for any purpose other than in connection with the Registration Statement without our prior written consent.

We hereby consent to the filing of this opinion letter as Exhibit 5.1 to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus contained in the Registration Statement.  In giving the foregoing consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

Very truly yours,

/s/ Proskauer Rose LLP

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Schedule 1

Subsidiary Guarantor	State or other Jurisdiction of Organization
99 Cents Only Stores	Nevada
99 Cents Only Stores Texas, Inc.	Delaware

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EX-10.4

Exhibit 10.4

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
13023 Hawthorne Boulevard, Hawthorne, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 13023 Hawthorne Boulevard, Hawthorne, CA (including the building of approximately 15,000 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Eleven Thousand Two Hundred Thirty-Six and 00/100 Dollars ($11,236.00)] per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

Store #6

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law. TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02       Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03       Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04       Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)           that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)           that this LEASE has not been canceled or terminated;

(c)           the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)           that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)           that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)            the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01       Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02       Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03       Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04       Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05       Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06       Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07       No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08       Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09       Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10       Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11       Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12       Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13       [RESERVED]

Section 12.14       Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15       Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16       Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17       Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18       Hazardous Materials.

(a)           As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)           Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)           LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)           The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #6)]

EXHIBIT “A”

Legal Description

The following described real property in the city of Hawthorne, county of Los Angeles, state of California:

LOTS 468 AND 469 OF INGLEDALE ACRES TRACT, IN THE CITY OF HAWTHORNE, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 21, PAGES 78 AND 79 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EX-10.5

Exhibit 10.5

99¢ ONLY STORES
STANDARD MULTI- TENANT FORM LEASE
6161 Atlantic Boulevard, Maywood, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between 6135-6161 Atlantic Boulevard Partnership, a California general partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One except that the provisions of Section 1.09 shall govern the matters set forth in said Section.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 6161 Atlantic Boulevard, Maywood, CA (including the building of approximately 16,972 square feet of ground floor retail space and the parking areas (if any)), located in an integrated retail shopping center (the “SHOPPING CENTER”), which is owned by LANDLORD and which is described in Exhibit “A”.  The SHOPPING CENTER, which includes the land, and all buildings and all other

improvements hereafter located thereon, including, without, limitation, the PREMISES and “COMMON AREAS,” as defined in Section 4.05(a) below, is shown on Exhibit “B”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017 unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand and 00/100 Dollars ($12,000.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) COMMON AREA COSTS (See Section 4.05) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

Section 1.09Definition of Tenant’s Pro Rata Share and Limitations on Operating Expenses.  For purposes of determining “TENANT’s PRO RATA SHARE” (as such term is used in this LEASE) of the various charges, costs and expenses imposed on TENANT as OPERATING EXPENSES, the parties agree that such share shall be determined as set forth in this Section 1.09, subject only to such express modifications of the provisions of this Section 1.09 as may appear in this LEASE.

(a)TENANT’s PRO RATA SHARE shall be determined as a percentage of the aggregate cost of an item included within OPERATING EXPENSES and chargeable to TENANT pursuant to the terms or this LEASE as is equal to the ratio that the leasable ground

Store #14

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floor area contained within the PREMISES bears to the total leasable ground floor area contained within the SHOPPING CENTER, subject to the other provisions of this Section 1.09.

(b)For purposes of computation of the leasable floor area of the PREMISES and of the SHOPPING CENTER:

(i)The leasable ground floor area of the PREMISES, and the ratio of the land area contained within the PREMISES (being the land area encompassed within the outer building lines of the PREMISES) to the total land area within the “TAX PARCEL” (as such term is defined below), as measured by TENANT’s architect.  If LANDLORD disagrees with such measurement(s), LANDLORD at its expense may have the PREMISES and/or such ratio of land area measured by an architect retained by LANDLORD and such two architects shall then meet to resolve any dispute in the measurement.  In so measuring the PREMISES, the architect(s) shall exclude all structural supports, including columns and walls, all vertical risers, any area not generally accessible to TENANT such as mechanical rooms, and any portion of any of the COMMON AREAS including those abutting the PREMISES.  LANDLORD and TENANT agree that the total ground floor square footage of all buildings in the SHOPPING CENTER other than the PREMISES, for all purposes of this LEASE, is 37,799 square feet.  It is also acknowledged by LANDLORD and TENANT that the only leasable area within the PREMISES is the ground floor area.

(ii)If, following execution of this LEASE, a building is constructed on a portion of the SHOPPING CENTER, including any area added to the SHOPPING CENTER, LANDLORD shall cause the leasable floor area of such building to be so measured and such leasable floor area shall be added to the total leasable floor area of all buildings then built within the SHOPPING CENTER.  Basements, mezzanines and the floor area of elevated stories shall all be deemed leasable for purposes of the computations to be made pursuant to this Section 1.09, measured by LANDLORD’s architect in accordance with Section 1.09(b)(i) above; provided, however, that mezzanines and basements which are primarily used for storage, mechanical equipment, or incidental offices supporting primary retail uses shall not be deemed to be leasable area for purposes of the computations made pursuant to this Section 1.09.  If TENANT disagrees with such measurement, then TENANT at its expense may have an architect of its selection measure such additional areas and the two architects shall meet and resolve the dispute.

(iii)Under no circumstance, regardless of the measurement of either the leasable floor area of the PREMISES or of the SHOPPING CENTER shall TENANT’s PRO RATA SHARE of any of the OPERATING EXPENSES exceed thirty-one percent (31%) of the aggregate of any item, or the total of all items, included within the OPERATING EXPENSES at any time.

(iv)Under no circumstance, regardless of any computation of TENANT’s PRO RATA SHARE, the nature or extent of OPERATING EXPENSES, the period of the TERM at issue or for any other reason shall the OPERATING EXPENSES required to be paid by TENANT for any twelve month period of the TERM of this LEASE following the first 12 full months of the TERM of this LEASE exceed by more than five percent (5%) the amount

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of OPERATING EXPENSES required to be paid by TENANT for the preceding twelve (12) month period of this LEASE.

(v)Nothing in this Section 1.09 shall limit or otherwise modify any restrictions set forth in this LEASE against LANDLORD’s modification of the SHOPPING CENTER including the COMMON AREAS.

(c)TENANT’s PRO RATA SHARE with respect to REAL PROPERTY TAXES, as such term is defined below, shall be equal to the ratio that the area of the land contained in the PREMISES bears to the total land area contained in the tax parcel on which the PREMISES are located (the “TAX PARCEL”).

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

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ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

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The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  Subject to Section 4.07 below, TENANT shall reimburse LANDLORD for TENANT’s PRO RATA SHARE, as defined in and subject to the provisions of subsection 1.09(c), of all “REAL PROPERTY TAXES” assessed on the TAX PARCEL during the LEASE TERM.  For purposes of determining the same, in addition to the provisions of Section 1.09, the provisions of this Section shall govern the computation of TENANT’s PRO RATA SHARE of REAL PROPERTY TAXES.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting that portion of the SHOPPING CENTER which is the tax assessment parcel that includes the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such

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lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES; (iv) any assessment for highway, street or traffic control improvements, sanitary or storm sewers, utilities or for other off-site improvements of any nature made in connection with the development of the SHOPPING CENTER; (v) any property tax applicable to a so called “out parcel” or any other land or improvements not within the boundaries of the SHOPPING CENTER; (vi) any taxes assessed on the personal property of any tenant or other occupant of the SHOPPING CENTER.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES (and if the PREMISES are included in a tax assessment parcel which includes portions of the SHOPPING CENTER in addition to the PREMISES, then such contest shall be as to the entire tax assessment parcel which includes the PREMISES) and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises nor with any portion of the COMMON AREAS.

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Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES and all other buildings and improvements within the SHOPPING CENTER. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD and/or the owner of the SHOPPING CENTER deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain and/or cause the owner of the SHOPPING CENTER to maintain, in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES and SHOPPING CENTER, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

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(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above, and (ii) its pro rata share of that portion of the insurance premiums for policies which LANDLORD is required to maintain or cause to be maintained pursuant to Section 4.04(c) above which is allocable to the COMMON AREAS.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM, TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance,

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LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation, and if at any time LANDLORD is not the sole owner of the SHOPPING CENTER, then LANDLORD shall cause the owner of the SHOPPING CENTER to do the same.

Section 4.05Common Areas; Use, Maintenance and Costs.

(a)Common Areas.  As used in this LEASE, COMMON AREAS shall mean all areas within the SHOPPING CENTER (whether owned by LANDLORD or any other owner affiliated with LANDLORD of any portion of the SHOPPING CENTER) which are not leased or held for the exclusive use of TENANT or other tenants, including, but not limited to, all parking areas, driveways, sidewalks, loading areas (except any loading area for the exclusive use of TENANT or any other tenants in the SHOPPING CENTER), access roads, storm drains, curbs, parking area lighting, directional signs, landscaping and planted areas as depicted on Exhibit “B” or existing, or to be in existence, in or about the SHOPPING CENTER during the TERM hereof.  The SHOPPING CENTER shall be operated as a single, contiguous shopping center (i.e., no fences, landscaping or other barriers which separate any portion of the SHOPPING CENTER from the remaining portion thereof) and LANDLORD shall not change, or permit others to temporarily or permanently change, the size, location, nature and use of any of the COMMON AREAS, including the quantity, location, sizing or proximity to the PREMISES of vehicle parking spaces, or convert COMMON AREAS into leasable areas, or increase or decrease COMMON AREA land.  If any portion of the SHOPPING CENTER is sold or otherwise conveyed to any person, or if additional areas are added to the SHOPPING CENTER, LANDLORD shall cause such portion(s) so sold, and such portions of such areas so added as are not leased or otherwise occupied exclusively by a tenant or other occupant, to continue to be subjected, or to be subjected, to the COMMON AREA uses required by this LEASE.  To the extent the COMMON AREAS ever include areas not owned by LANDLORD, LANDLORD shall not consent to any change in any of such areas, or any use thereof, which would violate the terms of this LEASE, including (without limitation) the provisions of this Section, but rather LANDLORD shall use its best efforts to enforce all legal rights which LANDLORD may have to avoid any such violation.  Notwithstanding the foregoing, LANDLORD may make such modifications to the COMMON AREA of the SHOPPING CENTER as may be required to comply with applicable laws and ordinances, but in doing so LANDLORD shall use all reasonable efforts to avoid any adverse effect on the visibility of, access to, or use of the PREMISES by TENANT and its invitees.

LANDLORD represents and warrants to TENANT that there are no agreements or other arrangements made with neighboring property owners, other tenants of the SHOPPING CENTER, or other parties, that affect the PREMISES, the COMMON AREAS or the SHOPPING CENTER, or portions thereof or conflict with TENANT’s rights or LANDLORD’s obligations hereunder, including but not limited to:  the use of vehicle parking spaces, the maintenance of asphalt, concrete, landscaping or other areas without structures, future development, utility services, security, vehicular or pedestrian access or egress, signage, drainage, advertising or TENANT’s use of the PREMISES, the COMMON AREAS or the SHOPPING CENTER.  LANDLORD shall operate the SHOPPING CENTER as an integrated retail center and shall adopt and enforce reasonable, non-discriminatory rules governing the use of the COMMON AREA of the SHOPPING CENTER, including the parking areas.

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(b)Use of Common Areas.  TENANT shall have the nonexclusive right (in common with other tenants) to use the COMMON AREAS for the purposes intended at no additional cost to TENANT, subject to such reasonable, and non-discriminatory rules and regulations as LANDLORD may establish from time to time which do not conflict with the LEASE.  TENANT shall abide by such rules and regulations.  LANDLORD may temporarily close any of the COMMON AREAS only as necessary to perform any acts in the COMMON AREAS as are necessary to meet LANDLORD’s obligations hereunder; provided that (1) LANDLORD gives TENANT a minimum of ten (10) days written notice thereof (except in the case of an emergency), (2) LANDLORD takes all reasonable actions to avoid so doing during any of TENANT’s peak business periods (October 1 - December 24, Fridays, Saturdays, Sundays, and the one week periods preceding and including Independence Day, Valentine’s Day, Easter, and any Federal holiday), and (3) LANDLORD takes all reasonable actions to minimize any detrimental affects to TENANT’s business operations at the PREMISES as a result of such closure.  LANDLORD shall not permit any carnivals, fireworks stands, Christmas Tree sales, pumpkin patch sales, telephones, kiddy rides, vending machines, recycling centers or machines or any such or similar activities in the COMMON AREA at any time.

(c)Vehicle Parking.  TENANT and its invitees and customers shall be entitled to the nonexclusive use of all vehicle parking spaces in the SHOPPING CENTER for non-reserved parking without the payment of any ADDITIONAL RENT by TENANT or charge to TENANT or its invitees or customers.  All such vehicle parking spaces shall be available only for customers of tenants of the SHOPPING CENTER, the tenants of the SHOPPING CENTER and their employees.  LANDLORD (at LANDLORD’s sole expense, and not as a part of LANDLORD’s COMMON AREA COSTS) shall institute and enforce rules (such as time limits, no employee parking, etc.) regulating the use of the parking spaces located within the SHOPPING CENTER to help insure that there is adequate parking available for TENANT’s customers at all times.  If TENANT notifies LANDLORD that there is a recurring problem of a shortage of parking spaces for TENANT’s customers, then LANDLORD agrees to use all reasonable efforts to alleviate such parking problem, but LANDLORD shall not be required to create structured parking or make other capital improvements in connection therewith so long as the SHOPPING CENTER complies with all applicable laws and ordinances governing parking.  During the LEASE TERM, neither LANDLORD nor any other owner of any portion of the SHOPPING CENTER shall charge a fee for, or require validation for, parking within the SHOPPING CENTER.  Provided that LANDLORD shall designate parking behind the premises of the other tenants for parking by said tenants’ employees, then LANDLORD may designate parking spaces behind the PREMISES for use by TENANT’s employees, subject to TENANT’s reasonable approval of the location and number thereof.

(d)Maintenance of Common Areas.  LANDLORD shall maintain and operate, or cause to be maintained and operated, the COMMON AREAS in good order, condition and repair, comparable with high quality shopping centers in the county in which the PREMISES is located.  TENANT shall pay TENANT’s PRO RATA SHARE (as set forth in Section 4.06 and limited as set forth in Sections 1.09(b) and 4.07) of the reasonable “out of pocket” costs incurred by LANDLORD as necessary for the maintenance, operation and repair of the COMMON AREAS (“COMMON AREA COSTS”).  COMMON AREA COSTS include, but are not limited to, the following:  utilities for the COMMON AREAS; repairing, resurfacing,

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repaving, signs (lamps, ballasts, sign faces and cabinet) maintaining, painting, lighting (which shall be provided from at least, one hour before sunset and one hour after TENANT closes for business), cleaning parking areas; providing security for the COMMON AREAS, all as LANDLORD may reasonably deem necessary for the maintenance, operation, and repair of the COMMON AREAS.  In no event shall TENANT hereby have any responsibility for the payment of any marketing, advertising, or promotional expenses.  If any portion of the COMMON AREAS for which TENANT is obligated to bear a portion of the repair expense cannot be repaired in an economical manner, the cost of any replacement shall be amortized over its useful life, and TENANT shall be liable only for its pro rata share of that portion of the amortized cost which is applicable to the remaining LEASE TERM.

Notwithstanding anything to the contrary contained herein, COMMON AREA COSTS shall not include the following:

(i)Supervision or management salaries or similar fees;

(ii)Security costs or other similar fees, unless TENANT expressly agrees thereto in writing;

(iii)depreciation of real property or improvements which form part of COMMON AREAS;

(iv)Repairs, replacement or improvements made prior to the date hereof;

(v)Repairs arising from defects in the initial construction of the SHOPPING CENTER;

(vi)Repairs necessitated by the negligence of LANDLORD or any other owner of any portion of the SHOPPING CENTER and which are required to cure violations of laws in effect on the date hereof;

(vii)Payments of principal of interest or amortization of indebtedness or any cost of financing or refinancing of any buildings, other improvements or the real property constituting the SHOPPING CENTER or the depreciation of any of the same;

(viii)Compensation paid to officers or executives of LANDLORD or any other owner of any portion of the SHOPPING CENTER;

(ix)Costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the leasing or sale of space in the SHOPPING CENTER, including, without limitation, brokerage costs, commissions and advertising and promotional expenses;

(x)Legal fees, other than those in the filing, institution or prosecution of any application or proceeding filed or instituted by LANDLORD in order to reduce REAL

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PROPERTY TAXES with respect to a tax assessment parcel which includes the PREMISES or the COMMON AREAS;

(xi)The cost of repairs or replacements incurred by reason of fire or other casualty or condemnation to the extent that either (1) LANDLORD is compensated therefor through proceeds of insurance or condemnation awards; or (2) LANDLORD failed to obtain insurance against fire or casualty as required under the terms of this LEASE;

(xii)The cost of initial construction or completion of the COMMON AREAS or any part of the SHOPPING CENTER;

(xiii)Any portion of amounts paid to any firm or entity affiliated with LANDLORD or any other owner of any portion of the SHOPPING CENTER for services or materials, to the extent such amount exceeds the then existing market rates for the same services or materials in the same geographic location;

(xiv)Expenditures made by LANDLORD or any other owner of any portion of the SHOPPING CENTER which are in the nature of capital improvements;

(xv)Costs arising from any cleanup, repair or remediation of “HAZARDOUS MATERIALS,” as defined in Section 12.20 below, to the extent that such action is attributable to the presence, use, generation, storage, release or disposal of HAZARDOUS MATERIALS on, under or in the SHOPPING CENTER or otherwise (unless caused by the acts TENANT or TENANT’s agents or employees in which event the provisions of Section 5.04 below shall apply);

(xvi)Legal expenses incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in enforcing and/or negotiating the terms of any lease for space in the SHOPPING CENTER;

(xvii)The cost of any work or service performed for, or facilities furnished to, the particular benefit of any other tenant or occupant of the SHOPPING CENTER;

(xviii)The amount of any judgement applicable to the operation, ownership or maintenance of the SHOPPING CENTER and all costs associated with the defense of such action;

(xix)The amount of any rent paid by LANDLORD or any other owner of any portion of the SHOPPING CENTER to a ground lessor;

(xx)Any license, permit and inspection fees, consulting, legal and accounting fees or similar fees and other costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the ownership, operations and leasing of the SHOPPING CENTER;

(xxi)Any costs for accountants or other financial consultants of LANDLORD with respect to the SHOPPING CENTER.

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(e)Loading.  TENANT shall be permitted, at all times, the exclusive use of those areas labeled and depicted as “TENANT’s LOADING AREAS” on Exhibit “B” and other areas abutting the PREMISES, as necessary, for making deliveries of merchandise, storing shopping carts, operating vending machines, installing courier boxes, installing bike racks, and otherwise as necessary or desirable for the smooth and ordinary operation of its business.  Subject to the provisions of Section 6.05, as they apply to alterations, additions, and improvements of the PREMISES, TENANT may change TENANT’s LOADING AREAS to facilitate TENANT’s receipt of merchandise and/ or the storage/use of shopping carts, provided that TENANT obtains LANDLORD’s prior written consent, which shall not be unreasonably withheld.

Section 4.06Operating Expenses Tenant’s Share and Payment.  For the purposes of Sections 4.06 and 4.07, the term “OPERATING EXPENSES” shall mean TENANT’s responsibility for all:  REAL PROPERTY TAXES (as defined and calculated in accordance with Section 4.02 above), insurance premiums (as set forth in Sections 4.04(b) and 4.04(c)), and COMMON AREA COSTS (as set forth in Section 4.05(d)).  TENANT shall be responsible for the payment of its pro-rata share of all OPERATING EXPENSES only during the LEASE TERM, and subject to the provisions of Section 1.09.

LANDLORD shall take all reasonable actions to minimize (to the extent reasonably possible) the OPERATING EXPENSES (and each component thereof).  The foregoing sentence shall not in any way affect any of LANDLORD’s obligations, including maintenance of the COMMON AREAS as otherwise provided in the LEASE.  In furtherance of the foregoing, LANDLORD’s reasonable actions may include at LANDLORD’s option, soliciting multiple competitive bids and communicating with TENANT so that TENANT shall have the opportunity to assist LANDLORD in minimizing the COMMON AREA COSTS as set forth above.

At least 30 days prior to the RENT COMMENCEMENT DATE and at least 30 days prior to the start of each calendar year, and on other occasions if LANDLORD so elects, during the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s best estimate of all OPERATING EXPENSES for the ensuing calendar year (which may be based on the ACTUAL OPERATING EXPENSES fox the then current calendar year) and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ESTIMATED OPERATING EXPENSES”).  TENANT shall thereafter pay on a monthly basis (subject to the limitations in Sections 1.09 and 4.07) TENANT’s PRO RATA SHARE of the ESTIMATED OPERATING EXPENSES (prorated for any fractional periods) with each subsequent monthly installment of BASE RENT.

Within ninety (90) days after the end of each calendar year during the LEASE TERM and within ninety (90) days of the expiration of the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s calculation of all OPERATING EXPENSES for the prior calendar year and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ACTUAL OPERATING EXPENSE NOTICE”).  LANDLORD shall indicate the total amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such period on such ACTUAL OPERATING EXPENSE NOTICE, and TENANT shall pay (in a lump sum) any shortfall (if the ESTIMATED

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OPERATING EXPENSES paid by TENANT were less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period) as set forth in any such ACTUAL OPERATING EXPENSE NOTICE to LANDLORD within fifteen (15) days after receipt thereof, except that TENANT may object to any costs included therein which TENANT, in good faith and in reasonable detail, objects by written notice to LANDLORD within said 15-day period.  TENANT’s failure to so object within such fifteen (15) day period shall not preclude TENANT from any subsequent objection to any items included in any such notice from LANDLORD or, as to any future such notice, any costs of a nature contained in such notice; provided, however, that the provisions of Section 4.07 below shall at all times govern and restrict all audits and reviews of all such OPERATING EXPENSES.  If the ESTIMATED OPERATING EXPENSES paid by TENANT are less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXPENSE NOTICE, then TENANT shall, within thirty (30) days following receipt of such ACTUAL OPERATING EXPENSE NOTICE, subject to 4.08 below, pay the difference between TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES, as set forth in such notice and the amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such calendar year.  If the ESTIMATED OPERATING EXPENSES paid by TENANT exceed TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXFENSE NOTICE, then such overpayment shall be credited to any of TENANT’s subsequent payment obligations to LANDLORD under this LEASE, if any, and if any credit remains unapplied as of the expiration or earlier termination of the LEASE TERM, then such amounts shall be paid in a lump sum to TENANT by LANDLORD within ten (10) days after the determination of such amounts.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES ever includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.

Section 4.07Audit.  LANDLORD shall maintain commercially reasonable and detailed records concerning all components of OPERATING EXPENSES for at least twenty four (24) months following the completion of each calendar year.  TENANT shall have the right to audit such records.  If any such audit reveals an overpayment of OPERATING EXPENSES by TENANT, LANDLORD shall promptly refund said overpayment to TENANT, subject to LANDLORD’s right to dispute such result as described in this Section.  In addition, if any such audit reveals errors in LANDLORD’s favor exceeding three percent (3%) then LANDLORD shall also reimburse TENANT for the cost of the audit.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.  TENANT shall use reasonable efforts to maintain any information gained from its review and/or audit of LANDLORD’s books and records confidential and shall not knowingly disclose such information to any other person except as may be required by law or regulation.  Any dispute arising out of such audit or review, including without limitation, whether the results of such audit or review are accurate, shall be resolved in accordance with the

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provisions of Section 12.16 of this LEASE and nothing in this Section shall be deemed to supersede the right of either party to dispute the result of any such audit or review.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any, and any “exclusives” previously granted to other tenants at the SHOPPING CENTER, as set forth on Exhibit “C” hereto.  TENANT shall not use the PREMISES for any use that violates the provisions of Exhibit “C” so long as such “exclusives” are effective; provided, however, TENANT may continue to use the PREMISES in a manner consistent with TENANT’s actual use thereof as the tenant thereof prior to the EFFECTIVE DATE, subject only to (i) third party claims asserted by tenants of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives” claiming infringement of exclusivity in the SHOPPING CENTER or (ii) claims asserted by Landlord at the request of a tenant of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives”.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.  LANDLORD represents and warrants that, except as set forth on Exhibit “C” hereto, LANDLORD has not granted to, and has no knowledge of, restrictions of any kind applicable to the SHOPPING CENTER which in any way now or hereafter will limit TENANT’s ability to sell any specific product or assortment of products which are now or may hereafter be sold as of the date of this LEASE at any of TENANT’s other locations.  LANDLORD shall indemnify and defend TENANT against any and all claims asserted by third parties claiming infringement of exclusivity in the SHOPPING CENTER.  If at any time during the TERM of this LEASE LANDLORD grants any form of “exclusive” whatsoever to any person (which cannot be an “exclusive” which violates the terms of this Section or of this LEASE), or if at any time there is any other owner of any portion of the SHOPPING CENTER and if LANDLORD learns that such other owner of the SHOPPING CENTER has granted any “exclusives” other than those set forth on Exhibit “C”, then in any of such events LANDLORD shall promptly notify TENANT, supplying TENANT with the name of the person in whose favor such “exclusive” is granted and the specific details of such “exclusive”.  No “exclusives” other than those set forth on Exhibit “C” shall restrict or otherwise affect the right of use of the PREMISES as set forth in this LEASE.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of

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this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

Section 5.03Signs.  TENANT shall have the right to place such signs on the exterior of the PREMISES as TENANT may desire; provided that such signs comply with applicable laws.  TENANT shall have the right to use and to modify any sign area used by TENANT prior to the EFFECTIVE DATE if the PREMISES is currently occupied by TENANT or (if not currently occupied by TENANT) the most recent prior tenant of the PREMISES, whether such sign area(s) is(are) located on the PREMISES, within the COMMON AREAS, or elsewhere in the SHOPPING CENTER.  TENANT shall also have the right to modify existing monument signage or add additional monument signage in the COMMON AREA or elsewhere in the SHOPPING CENTER, subject only to (i) applicable governmental approvals, (ii) availability of any currently existing sign areas/panels not currently used by existing tenants of the SHOPPING CENTER or reserved for future tenants of vacant units in the SHOPPING CENTER, and (iii) any existing written obligations of LANDLORD to existing tenants of the SHOPPING CENTER.  LANDLORD agrees to disclose the relevant details of any such obligations to TENANT upon request.  LANDLORD shall use its reasonable best efforts to obtain any required approvals from the other tenants of the SHOPPING CENTER and applicable governmental agencies in connection with any signs desired to be installed by TENANT, provided that LANDLORD shall not be required to incur any cost or expense in connection with obtaining such approvals other than de minimis administrative expense.  For a period of time 60 days following the end of the LEASE TERM, TENANT shall be permitted to place two signs not to exceed 24 inches by 36 inches in size, in prominent places visible from the exterior of the PREMISES informing the public of TENANT’s relocation and other similar information.  LANDLORD shall cooperate with TENANT to obtain the best possible signage in TENANT’s judgment.  LANDLORD shall seek the cooperation of the City of Maywood and any entity affiliated therewith to obtain TENANT’s maximum desired signage.

Section 5.04TENANT shall have the right to place such signs on the exterior of the PREMISES as TENANT may desire; provided that such signs comply with applicable laws.  TENANT shall have the right to use and to modify any sign area used by any prior tenant of the PREMISES, whether such sign area is located on the PREMISES, within the COMMON AREAS, or elsewhere in the SHOPPING CENTER.  TENANT shall also have the right to modify existing monument signage or add additional monument signage in the COMMON AREA or elsewhere in the SHOPPING CENTER, subject only to applicable governmental approvals and any existing written obligations of LANDLORD to existing tenants of the

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SHPPING CENTER.  LANDLORD represents to TENANT that LANDLORD has disclosed to TENANT in writing the relevant details of all such obligations.  LANDLORD shall use its best efforts to obtain any required approvals from the other tenants of the SHOPPING CENTER and applicable governmental agencies in connection with any signs desired to be installed by TENANT.  For a period of time 60 days following the end of the LEASE TERM, TENANT shall be permitted to place two signs not to exceed 24 inches by 36 inches in size, in prominent places visible from the exterior of the PREMISES informing the public of TENANT’s relocation and other similar information.  LANDLORD shall cooperate with TENANT to obtain the best possible signage in TENANT’s judgment.  LANDLORD shall seek the cooperation of the City of Maywood and any entity affiliated therewith to obtain TENANT’s maximum desired signage.

Section 5.05Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES and the SHOPPING CENTER;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES or the SHOPPING CENTER;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or the SHOPPING CENTER or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

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As used in the above Subsections 5.04(i), (ii), (iii) and (iv), the term “LANDLORD” shall include any affiliate of LANDLORD that owns the SHOPPING CENTER, and all of  the employees, agents, contractors and invitees, as applicable of LANDLORD or such affiliate of LANDLORD.

Section 5.06Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

Section 5.07Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES and its use of the COMMON AREAS for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

Section 5.08Exclusivity; Use Restrictions; Co-Tenancy.

(a)Exclusivity.  TENANT shall have the exclusive right to operate a one-price general merchandise variety and discount retail store within the SHOPPING CENTER.  This restriction, however, shall not prevent LANDLORD from leasing space in the SHOPPING CENTER to a single price point use that:  (i) does not sell a broad array of merchandise (e.g. a one-price dry cleaner, one-price clothing store, one-price restaurant); and (ii) does not use or advertise the terms “99”, “98”, “dollar”, “cents” (whether spelled out or in symbols) or any variant on the same.

(b)Use Restrictions.  No portion of the SHOPPING CENTER, including, without limitation, the PREMISES, may used for any of the following:

(i)Any uses that are not consistent with first class shopping centers in the area of the PREMISES, which shall include, but not be limited to any uses which include:

(1)nude (or partially nude) bars or nightclubs, or theaters of any kind

(2)massage parlors

(3)adult book stores,

(4)escort services,

(5)bail bonds or pawn shops,

(6)the sale of used or second hand products of any kind (excluding the sale of high quality antiques, or the operation of a high quality antique store or high quality second hand product, operations, such as Play It Again

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Sports, or the sale, on an incidental basis, of antiques or collectibles),

(7)tattoo parlors,

(8)adult video stores,

(9)any use of a questionable moral character,

(10)indoor swap meets, and

(11)any movie theater, gymnasium, bowling alley, library, church, auditorium, museum, automobile repair, automobile sales, high volume buffet style restaurant exceeding 3,000 square feet in size (such as Home Town Buffet), banquet facility or bar, disco, nightclub, hotel, manufacturing, warehouse or other industrial use (except incidental to other permitted uses), or entertainment facility (such as Chuck E Cheese, Discovery Zone, Tutor Time, or Leaps and Bounds).

(ii)Any use which requires a zoning variance or conditional use permit for a non-retail use, or due to insufficient parking within the SHOPPING CENTER.

(iii)Any use which uses the terms “99,” “98,” “dollar,” or any similar terms (whether “spelled out” or in numerical form) in any manner as part of a trade name or logo or in any manner as a material portion of any signage or trade dress.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its

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obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause,

(c)conditions arising in or about the PREMISES or upon other portions of SHOPPING CENTER, or from other sources or places or from new construction or repair of the PREMISES or the SHOPPING CENTER, or

(d)any act or omission of any other tenant of the SHOPPING CENTER.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, all COMMON AREAS (including, without limitation, all parking areas), and the existing COMMON AREA signs and electrical service thereto, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may

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be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the SHOPPING CENTER or the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title to the SHOPPING CENTER or the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

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Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  TENANT, with the consent of LANDLORD, which shall not unreasonably be withheld or delayed, shall also be permitted to make such alterations to the COMMON AREAS abutting the PREMISES as may be required to comply with any statute, law or ordinance or to meet the requirements of any conditional use or other permit.  All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

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ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the

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reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES or the COMMON AREAS are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES and the COMMON AREAS have been repaired and restored.

Section 7.04Common Areas.  If the COMMON AREAS are damaged or destroyed by any casualty or other cause the provisions of Sections 7.01 and 7.02 shall apply to the same extent and manner as if the PREMISES had been so damaged or destroyed.  Section 7.03 shall apply pending the completion of repair of all COMMON AREAS in the SHOPPING CENTER.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs within the COMMON AREA are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; OR (vi) a material portion of the COMMON AREAS is taken, then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES or the SHOPPING CENTER under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD or the owner(s) of the SHOPPING CENTER (including any owner(s) of the SHOPPING CENTER that may be an affiliate of LANDLORD, as the case may be; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES and the COMMON AREAS.

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ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01 and subsection 5.07(b) above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

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(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

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(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that

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LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES or any portion of the SHOPPING CENTER which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be

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deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES or the SHOPPING CENTER to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES or the SHOPPING CENTER which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

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Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

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Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any

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such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

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Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES, or the SHOPPING CENTER by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES or the SHOPPING CENTER without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES or the SHOPPING CENTER, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES or the SHOPPING CENTER.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	6135-6161 Atlantic Boulevard Partnership,
	a California general partnership
	By:	/s/ David Gold
		Name: David Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #14)]

EXHIBIT “A”

Legal Description

[See Attached]

EXHIBIT “B”

SITE PLAN

Description of Leased PREMISES, COMMON AREAS, and SHOPPING CENTER

[See Attached]

EXHIBIT “C”

“EXCLUSIVES”

For purposes hereof “exclusives” shall include any of those restrictions applicable to TENANT set forth in that certain Assignment and Amendment of Lease dated December 10, 1999, by and among LANDLORD, Royal Enterprises, Inc., and Alejo Markets, Inc.

EX-10.6

Exhibit 10.6

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
14139 Paramount Boulevard, Paramount, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between David Gold and Sherry Gold, Trustees of the Gold Revocable Trust Dated 10/26/2005 (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 14139 Paramount Boulevard, Paramount, CA (including the building of approximately 13,145 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Thirteen Thousand One Hundred and 00/100 Dollars ($13,100.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

Store #27

2

(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02       Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03       Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04       Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)           that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)           that this LEASE has not been canceled or terminated;

(c)           the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)           that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)           that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)            the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01       Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02       Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03       Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04       Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05       Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06       Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07       No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08       Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09       Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10       Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11       Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12       Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13       [RESERVED]

Section 12.14       Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15       Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16       Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17       Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18       Hazardous Materials.

(a)           As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)           Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)           LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)           The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:

David Gold and Sherry Gold, Trustees of the Gold Revocable Trust Dated 10/26/2005
By:	/s/ David Gold
	Name: David Gold
	Title: Trustee
By:	/s/ Sherry Gold
	Name: Sherry Gold
	Title: Trustee

“TENANT”:

99¢ ONLY STORES,
a California corporation
By:	/s/ Eric Schiffer
	Name: Eric Schiffer
	Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #27)]

EXHIBIT “A”

Legal Description

The real property in the City of Los Angeles, County of Los Angeles, State of California, described as:

All of Lot 4 of Tract No. 5792, as per map recorded in Book 67 Pages 63 and 64 of Maps, in the office of the County Recorder of said county, and Lots 5, 6 and 7 and the southerly 5 feet of Lot 67, all of Lot 68 and 69 of Tract 5792, as per map recorded in Book 67, Pages 53 and 64 of Maps in the office of the County Recorder of said county.

Except that portion of Lot 69 lying southerly of a line parallel with the north line of said Lot 69 which passes through a point in the east line of Lot 69, distant northerly thereon 75 feet from the most southerly corner of said Lot 69.

EX-10.7

Exhibit 10.7

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
6122-6130 Pacific Boulevard, Huntington Park, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Au Zone Investment #2, L.P., a California limited partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01         Landlord’s Address:

c/o Jeff Gold

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

Section 1.02         Tenant’s Address:

c/o Eric Schiffer

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

With a copy to:

Number Holdings, Inc.

2000 Avenue of the Stars, 12th Floor

Los Angeles, CA 90067

Attn: Kevin Frankel

Section 1.03         Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 6122-6130 Pacific Boulevard, Huntington Park, CA (including the building of approximately 12,373 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04         Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05         Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06         [RESERVED]

Section 1.07         [RESERVED]

Section 1.08         Rent and Other Charges Payable by Tenant.

(a)           Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand Three Hundred Seventy-Three and 00/100 Dollars ($12,373.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)           Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01         Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02         Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

Store #33

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03         Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04         Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01         Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02         [RESERVED]

Section 3.03         Base Rent Adjustment.

(a)           The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)           Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04         Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01         Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02         Property Taxes.

(a)           Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)           Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)           Personal Property Taxes.

(i)            TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)           If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)           TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03         Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04         Insurance Policies.

(a)           Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)            be primary and non-contributing;

(ii)           contain cross-liability endorsements; and

(iii)          contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)           Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)           Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)           Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)           General Insurance Provisions.

(i)            Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)           If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)          TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)          Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01         Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02         Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03         Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04         Indemnity.

(a)           Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)            TENANT’s use of the PREMISES;

(ii)           the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)          any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)           Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)            LANDLORD’s ownership or operation of the PREMISES;

(ii)           the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)          any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)          subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05         Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06         Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01         Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02         Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)           theft, fire, steam, electricity, water, gas or rain,

(b)           the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)           conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03         Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04         Tenant’s Obligations.

(a)           Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)           TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)           TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05         Alterations, Additions, and Improvements.

(a)           TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)           TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06         Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01         Partial Damage to Premises.

(a)           TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)           If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)            repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)           terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)           If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02         Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03         Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01         Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)           loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)           the value of the leasehold estate (i.e., the leasehold bonus value);

(c)           relocation expenses incurred by TENANT as a result of such taking; and

(d)           loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01         Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02         TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01       Defaults.  TENANT shall be in material default under this LEASE:

(a)           If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)           If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)           (i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)           if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)          if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)          if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)           All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02       Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)           Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)            the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)           the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)          the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)          any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)           Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)           The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03       Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04       Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05       Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01       Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02       Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03       Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04       Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)           that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)           that this LEASE has not been canceled or terminated;

(c)           the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)           that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)           that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)            the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01       Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02       Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03       Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04       Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05       Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06       Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07       No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08       Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09       Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10       Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11       Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12       Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13       [RESERVED]

Section 12.14       Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15       Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16       Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17       Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18       Hazardous Materials.

(a)           As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)           Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)           LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)           The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

Section 12.19       Additional Space.  LANDLORD and TENANT acknowledge that there is additional space connected to the PREMISES (the “ADDITIONAL SPACE”) that is currently vacant, which LANDLORD may lease to a third party at any time in its sole discretion.  If LANDLORD desires to lease the ADDITIONAL SPACE to a third party, if ever during the term of this LEASE, LANDLORD shall (i) provide TENANT with advance notice of such election at least 60 days prior to the proposed lease date, and (ii) LANDLORD and TENANT shall amend this LEASE to address the rights and obligations of the new tenant prior to the execution of any such new lease or the commencement of any occupancy thereunder.  Any such amendment shall be reasonably acceptable to both LANDLORD and TENANT, and the parties agree that terms and conditions shall be reasonably consistent with those set forth in that certain lease dated the date hereof, by and between LANDLORD and TENANT, for property located at 12123-12125 Carson Street, Hawaiian Gardens, CA, as such terms may be modified by their mutual agreement.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:

Au Zone Investment #2, L.P.,
a California limited partnership
By:	Au Zone Investments #3, LLC,
	a California limited liability company, its General Partner
	By:	/s/ David Gold
		Name: David Gold
		Title: President

“TENANT”:

99¢ ONLY STORES,
a California corporation
By:	/s/ Eric Schiffer
	Name: Eric Schiffer
	Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #33)]

EXHIBIT “A”

Legal Description

All that real property situated in the City of Huntington Park, Los Angeles County, California described as follows:

PARCEL 1:

THE NORTH 20 FEET OF LOT 7 AND ALL OF LOT 8 IN BLOCK 28, AS PER MAP RECORDED IN BOOK 3 PAGE 91 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL 2:

LOTS 15, 16 AND 17 IN BLOCK 23, AS PER MAP RECORDED IN BOOK 3 PAGE 91 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPTING THE SOUTH 20 FEET OF LOT 17 CONVEYED TO THE CITY OF HUNTINGTON PARK FOR STREET PURPOSES BY DEED RECORDED IN BOOK 5502 PAGE 5 OF DEEDS.

EX-10.8

Exhibit 10.8

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
14901 Hawthorne Boulevard, Lawndale, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Au Zone Investment #2, L.P., a California limited partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA 90023
Telephone: (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA 90023
Telephone: (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Attn: Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 14901 Hawthorne Boulevard, Lawndale, CA (including the building of approximately 14,152 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand Six Hundred and 00/100 Dollars ($12,600.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

Store #34

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	Au Zone Investment #2, L.P.,
	a California limited partnership
	By:	Au Zone Investments #3, LLC,
		a California limited liability company, its General Partner
		By:	/s/ David Gold
			Name: David Gold
			Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #34)]

EXHIBIT “A”

Legal Description

All that real property situated in the City of Lawndale, Los Angeles County, California described as follows:

Lots 26, 27, 28, 29, 30, 31, 32, 33, 34, and 35 in Block 5 of Lawndale, in the City of Lawndale, in the County of Los Angeles, State of California, as per Map recorded in Book 9 Page 122 of Maps, in the Office of the County Recorder of said County.

EX-10.9

Exhibit 10.9

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
5599 Atlantic Avenue, North Long Beach, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 5599 Atlantic Avenue, North Long Beach, CA (including the building of approximately 11,980 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Nine Thousand Five Hundred Twenty-Eight and 17/100 Dollars ($9,528.17) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

Store #38

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or  consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #38)]

EXHIBIT “A”

Legal Description

The following described property in the City of Long Beach, county of Los Angeles, state of California:

Lots 16, 17, 18 of Tract No. 5737, as per map recorded in Book 61 Page(s) 40 and 41 of Maps, in the office of the County Recorder of said County.

EX-10.10

Exhibit 10.10

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
1514 North Main Street, Santa Ana, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Howard Gold, an individual, Jeff Gold, an individual, Eric J. Schiffer, an individual, and Karen R. Schiffer, an individual (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 1514 North Main Street, Santa Ana, CA (including the building of approximately 20,228 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately ten (10) years beginning on the EFFECTIVE DATE and ending on January 31, 2022, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand and 00/100 Dollars ($12,000.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto (the “LETTER AGREEMENT”), and (ii)  the provisions of subsection 3.03 (b) below; provided, however, that from and after February 1, 2017, and continuing to the expiration of the INITIAL LEASE TERM, BASE RENT shall increase to, and TENANT shall pay monthly, an amount equal to one hundred ten percent (110%) of the BASE RENT amount set forth above, as the same may be adjusted in accordance with the terms of the LETTER AGREEMENT.  BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Store #39

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Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties

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shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law. TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:

	/s/ Howard Gold
	Howard Gold, an individual
	/s/ Jeff Gold
	Jeff Gold, an individual
	/s/ Eric J. Schiffer
	Eric J. Schiffer, an individual
	/s/ Karen R. Schiffer
	Karen R. Schiffer, an individual
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #39)]

EXHIBIT “A”

Legal Description

BEGINNING AT A POINT IN THE SOUTH LINE OF SAID LOT 2, 55 FEET EAST OF THE SOUTHWEST CORNER THEREOF; THENCE NORTH PARALLEL TO THE WEST LINE OF SAID LOTS 2 AND 4, 110 FEET IN THE NORTH LINE OF SAID LOT 3, WHICH IS 85 FEET EAST OF THE NORTHWEST CORNER THEREOF; THENCE EAST ON SAID NORTH LINE 49 FEET; THENCE SOUTH PARALLEL TO THE WEST LINE OF SAID LOTS 2 AND 3, 110 FEET TO THE SOUTH LINE THEREOF; THENCE WEST ON SAID SOUTH LINE OF SAID LOT 2, 49 FEET TO THE POINT OF BEGINNING.

PORTION OF THE LAND ALLOTTED TO JOCAB ROSS, DECREE OF PARTITION OF THE RANCHO SANTIAGO DEED SEPTEMBER 12, 1968 IN BOOK “B”, PAGE 410 ICT COURT OF THE 17TH JUDICIAL DISTRICT IN Y, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF LOT 3 IN BLOCK “A” OF SWANNERS’ ADDITION TO THE TOWN OF SANTA ANA, AS PER MAP RECORDED IN BOOK 19, PAGE 46 OF MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, THENCE NORTH 115.68 FEET ALONG THE WEST LINE OF MAIN STREET TO THE SOUTH LINE OF THE LAND DESCRIBED IN DEED TO THE FIRST NATIONAL BANK IN SANTA ANA, RECORDED JULY 13, 1953 IN BOOK 2435, PAGE 608, OFFICIAL RECORDS; THENCE WEST 284.76 FEET ALONG SAID SOUTH LINE OF THE FIRST NATIONAL BANK LAND AND THE WESTERLY PROLONGATION THEREOF TO THE CENTERLINE OF SYCAMORE STREET; THENCE SOUTH 115.74 FEET ALONG THE CENTERLINE OF SYCAMORE STREET TO THE NORTH LINE OF SAID LOT 3; THENCE EAST 284.76 FEET ALONG SAID NORTH LINE TO SAID LOT 3 TO THE POINT OF BEGINNING.

EX-10.11

Exhibit 10.11

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
6121 Wilshire Boulevard, Los Angeles, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 6121 Wilshire Boulevard, Los Angeles, CA (including the building of approximately 18,569 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately ten (10) years beginning on the EFFECTIVE DATE and ending on January 31, 2022, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twenty-Five Thousand Eight Hundred Forty-Two and 83/100 Dollars ($25,842.83) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto (the “LETTER AGREEMENT”), and (ii) the provisions of subsection 3.03 (b) below; provided, however, that from and after February 1, 2017, and continuing to the expiration of the INITIAL LEASE TERM, BASE RENT shall increase to, and TENANT shall pay monthly, an amount equal to one hundred ten percent (110%) of the BASE RENT amount set forth above, as the same may be adjusted in accordance with the terms of the LETTER AGREEMENT.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Store #41

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Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties

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shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

Section 12.19Redevelopment.  Landlord shall have the right to terminate the LEASE effective at any time following January 31, 2017, provided that (i) LANDLORD shall provide TENANT with written notice of such termination (the “TERMINATION NOTICE”) at least 360 days prior to the termination date, (ii) any such termination shall be solely for the purpose of facilitating a re-development of the property in which the PREMISES is located; and (iii) TENANT shall be given an option to relocate the PREMISES to new premises on the following terms:

(a)The TERMINATION NOTICE shall depict preliminary plans for the proposed new premises (including parking) as well as LANDLORD’s opinion of fair market rental value therefore.

(b)The proposed new premises shall include a building of at least 15,000 square feet in size and otherwise shall be substantially equivalent or superior to the PREMISES as to the quality of furnishings and tenant fixtures, and the proposed new premises shall (A) be located within 350 feet of the Western boundary of the PREMISES, (B) face Wilshire

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Boulevard, (C) be substantially at ground level, provided that parking shall be convenient, but need not be at ground level, and (D) have parking ratios not less than required by applicable zoning laws and permit approvals.

(c)LANDLORD shall schedule and conduct any redevelopment so as to reasonably minimize any disruption of the TENANT’s business between the date of termination of the LEASE and the relocation to the new premises if TENANT makes such election to relocate to such new premises.

(d)The reasonable out-of-pocket costs and expenses incurred by TENANT in connection with such relocation shall be shared (split 50/50) between LANDLORD and TENANT.

(e)If TENANT makes an election to relocate to the new premises, the LEASE shall be amended to reflect the new premises and shall otherwise be on the same terms as this LEASE (e.g., the new lease shall be for the balance of the INITIAL LEASE TERM (if applicable) or the EXTENDED TERM, and if not already exercised, TENANT shall have the option of electing an EXTENDED TERM), except that the BASE RENT for such new premises shall be adjusted to the then “fair market value” as agreed-to by LANDLORD and TENANT as part of such election as provided in clause (f) below.

(f)LANDLORD and TENANT shall endeavor in good faith to determine the “fair market value” to be used as the Base Rent for the new premises (“NEW BASE RENT”) within forty-five (45) days from the date of the TERMINATION NOTICE.  If LANDLORD and TENANT are unable to reach an agreement on the NEW BASE RENT, then each of LANDLORD and TENANT shall make, and submit to the other, a separate written statement of its proposed fair market “base rent” within ten (10) days of the expiration of the foregoing forty-five day period, and the determination of NEW BASE RENT shall be submitted to arbitration as hereinafter provided:

(i)Within thirty (30) days from the expiration of such forty-five day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

(ii)The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted base rent, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s base rent shall be the NEW BASE RENT.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

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(iii)If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

(iv)The fees of such arbitrator shall be paid by the party whose submitted base rent was not closest to such arbitrator’s determination of fair market rental value.

(g)To be effective, TENANT’s election to relocate to the new premises must be given to LANDLORD in writing within sixty (60) days of delivery of the TERMINATION NOTICE; provided, however, that if the precise location and configuration of the proposed new premises, including applicable parking and signage rights changes during the course of planning/permitting so as to be less desirable in any material respect than the preliminary plans set forth in the TERMINATION NOTICE (as updated from time to time by LANDLORD and notified in writing to TENANT), then TENANT shall have thirty (30) days to revoke such election from each such notice of change from LANDLORD.

Section 12.20Subway Construction.  TENANT hereby acknowledges that subway-related construction is planned near the PREMISES, and LANDLORD shall have no liability in connection with disruptions caused thereby.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:

	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #41)]

EXHIBIT “A”

Legal Description

THE WEST 108 FEET OF LOT “A” OF TRACT NO. 9866, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 137, PAGES 4 AND 5 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

LOT 4 IN BLOCK 1 OF TRACT NO. 7555, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 80, PAGES 51 AND 52 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

LOTS 36 AND 37 IN BLOCK 1 OF TRACT NO. 7555, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 80, PAGES 51 TO 53 INCLUSIVE OF MAPS, IN OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EX-10.12

Exhibit 10.12

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
6101 Wilshire Boulevard, Los Angeles, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Au Zone Investment #2, L.P., a California limited partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of parking spaces, driveways, and access roads located on or relating to the real property commonly known as 6101 Wilshire Boulevard, Los Angeles, CA, which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately ten (10) years beginning on the EFFECTIVE DATE and ending on January 31, 2022, unless sooner terminated in accordance

with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Non-exclusive right to use for temporary parking of vehicles as more particularly described in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of One Thousand Five Hundred Ninety and 00/100 Dollars ($1,590.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto (the “LETTER AGREEMENT”), and (ii) the provisions of subsection 3.03 (b) below; provided, however, that from and after February 1, 2017, and continuing to the expiration of the INITIAL LEASE TERM, BASE RENT shall increase to, and TENANT shall pay monthly, an amount equal to one hundred ten percent (110%) of the BASE RENT amount set forth above, as the same may be adjusted in accordance with the terms of the LETTER AGREEMENT.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL

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LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the

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EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the purpose of non-exclusive parking of vehicles, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for no other purpose during the LEASE TERM.  In addition, TENANT may use the parking areas on the PREMISES for customer parking for any store of TENANT’s located near the PREMISES.  Nothing in this Section 5.01 shall be construed to permit TENANT to encumber title to the PREMISES with a parking covenant or similar encumbrance for the benefit of any other real property.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the PREMISES as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.  If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

Section 12.19Redevelopment.  This LEASE shall terminate automatically either (i) upon the termination of that certain Standard Single-Tenant Form Lease dated the date hereof, by and between HKJ Gold, Inc., a California corporation, as landlord, and TENANT, as tenant, for premises located at 6121 Wilshire Boulevard, Los Angeles, CA (the “STORE LEASE”), pursuant to Section 12.19 thereof, or (ii) if TENANT, as tenant under the STORE LEASE, elects to relocate to the new premises in connection with Section 12.19 thereof, upon TENANT’s moving out of the original premises demised under the STORE LEASE in connection with such relocation.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	Au Zone Investment #2, L.P.,
	a California limited partnership
	By:	Au Zone Investments #3, LLC, a California limited liability company, its General Partner
		By:		/s/ David Gold
				Name: David Gold
				Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:		/s/ Eric Schiffer
			Name: Eric Schiffer
			Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #41 (Parking))]

EXHIBIT “A”

Legal Description

LOTS 40 AND 41 IN BLOCK J OF TRACT 7555, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 80 PAGES 51 THROUGH 53 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT ALL OIL, GAS AND MINERALS WITHIN OR UNDERLYING, OR WHICH MAY BE PRODUCED FROM THAT PORTION LYING BELOW A DEPTH OF 500 FEET MEASURED VERTICALLY FROM THE PRESENT SURFACE OF SAID LAND, BUT WITHOUT THE RIGHT OF SURFACE ENTRY, AS GRANTED TO FRANCES S. MONTGOMERY II AND PINE TREE COMPANY, A LIMITED PARTNERSHIP, EACH AS TO AN UNDIVIDED 1/2 INTEREST BY DEED RECORDED JUNE 19, 1972 AS INSTRUMENT NO. 3342.

EX-10.13

Exhibit 10.13

99¢ ONLY STORES

STANDARD SINGLE-TENANT FORM LEASE

8625 Woodman Avenue, Arleta, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Au Zone Investment #2, L.P., a California limited partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One except that the provisions of Section 1.09 shall govern the matters set forth in said Section.

Section 1.01Landlord’s Address:

c/o Jeff Gold

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

With a copy to:

Number Holdings, Inc.

2000 Avenue of the Stars, 12th Floor

Los Angeles, CA 90067

Attn: Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 8625 Woodman Avenue, Arleta, CA (including the building of approximately 20,345 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately ten (10) years beginning on the EFFECTIVE DATE and ending on January 31, 2022, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Fifteen Thousand Seven Hundred Fifty and 00/100 Dollars ($15,750.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto (the “LETTER AGREEMENT”), and (ii)  the provisions of subsection 3.03 (b) below; provided, however, that from and after February 1, 2017, and continuing to the expiration of the INITIAL LEASE TERM, BASE RENT shall increase to, and TENANT shall pay monthly, an amount equal to one hundred ten percent (110%) of the BASE RENT amount set forth above, as the same may be adjusted in accordance with the terms of the LETTER AGREEMENT. The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

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Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties

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shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.  If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the PREMISES.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the

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terms of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request. LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery. Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640. Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640. The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

Section 12.19Landlord’s Additional Construction.  LANDLORD may elect to construct an additional building(s) in the parking lot, providing that all of the following are complied with:

(a)Such additional building(s) are solely contained within Pad “A”, Pad “B”, and Pad “C” identified on Exhibit “A”, but in no event shall any such additional building be constructed on both Pad “A” and Pad “B”.

(b)Such additional building area does not result in a reduction of more than ten thousand (10,000) square feet of parking lot area on Pad “A” or Pad “B”.  The use by customers and occupants of parking spaces available to them on a non-exclusive basis shall not be considered a reduction of parking area.

(c)Such additional building(s) shall not exceed 1 story (basement areas completely below grade are okay) in height (no mezzanine areas, or rooftop storage or patio

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areas) and shall not exceed twenty five (25) feet in height from the foundation of the PREMISES to the highest point on the roof, parapet, or any rooftop equipment.

(d)Such additional building(s) shall be made in first class condition.  All equipment (if any) shall be completely screened from public view.

(e)No such additional building area shall be used for uses except for retail sales of merchandise of any kind (not one-price general merchandise store), or restaurant use (not for banquet facilities), or any other use with TENANT’s prior written consent, which shall not be unreasonably withheld.

(f)No construction shall occur during October through December in any year.

(g)Construction shall be done so as to avoid and cut down on any interference with the business operations of TENANT on the PREMISES during construction, including the use of the parking areas.

In connection with any such additional construction, the Lease shall not be modified except that the obligation for the payment of the property taxes and not the maintenance of the common areas (primarily parking areas) shall shift to LANDLORD, and TENANT shall be required to reimburse LANDLORD for TENANT’s share of all costs incurred by LANDLORD in connection therewith.  TENANT shall reimburse LANDLORD for TENANT’s pro-rata share (by such method of allocation as LANDLORD may reasonably deem appropriate) within twenty (20) days of LANDLORD’s request for the reimbursement therefore.  TENANT shall continue to pay the insurance for the PREMISES.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	Au Zone Investment #2, L.P.,
	a California limited partnership
	By:	Au Zone Investments #3, LLC,
		a California limited liability company, its General Partner
		By:	/s/ David Gold
			Name:		David Gold
			Title:		President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name:		Eric Schiffer
		Title:		Chief Executive Officer

[Affiliate Lease Signature Page (Store #42)]

EXHIBIT “A”

Legal Description

PARCEL 1:

THAT PORTION OF LOT 10 OF TRACT NO. 14620, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 348 PAGES 2 AND 3 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING NORTHEASTERLY OF A LINE BEARING NORTH 16 DEGREES 38 MINUTES 53 SECONDS WEST 304.09 FEET FROM A POINT IN THE SOUTHEAST LINE OF SAID LOT 10, DISTANT THEREON NORTH 73 DEGREES 21 MINUTES 07 SECONDS EAST 116.44 FEET FROM THE MOST SOUTHERLY CORNER OF SAID LOT TO A POINT IN THE NORTHWESTERLY LINE OF SAID LOT DISTANT NORTHEASTERLY THEREON 43.41 FEET FROM THE MOST WESTERLY CORNER OF SAID LOT.

PARCEL 2:

A SLOPE EASEMENT OVER A STRIP OF LAND 7 FEET WIDE, THE EASTERLY LINE OF SAID EASEMENT BEING THE COURSE ABOVE DESCRIBED AS HAVING A BEARING OF NORTH 16 DEGREES 38 MINUTES 53 SECONDS WEST AND A DISTANCE OF 304.09 FEET.

EX-10.14

Exhibit 10.14

99¢ ONLY STORES
STANDARD SINGLE-TENANT FORM LEASE
2566 E. Florence Avenue, Walnut Park, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA 90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA 90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 2566 E. Florence Avenue, Walnut Park, CA (including the building of approximately 7,943 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Eight Thousand Nine Hundred Eighty-Eight and 83/100 Dollars ($8,988.83) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage. LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

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insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better. LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04. At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02       Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03       Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04       Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)           that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)           that this LEASE has not been canceled or terminated;

(c)           the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)           that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)           that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)            the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01       Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02       Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03       Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04       Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05       Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06       Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07       No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08       Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09       Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10       Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11       Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12       Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13       [RESERVED]

Section 12.14       Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15       Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16       Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17       Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18       Hazardous Materials.

(a)           As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)           Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)           LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)           The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #44)]

EXHIBIT “A”

Legal Description

THOSE PORTIONS OF LOTS 58, 59 AND 60 OF TRACT NO. 2080, AS PER MAP RECORDED IN BOOK 22 PAGE(S) 162 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT IN THE SOUTH LINE OF FLORENCE AVENUE AS WIDENED (BEING A POINT DISTANT SOUTHWESTERLY 20 FEET, MEASURED AT RIGHT ANGLES FROM THE NORTH LINE OF SAID LOT 58) DISTANT WESTERLY ALONG SAID SOUTH LINE, 106.5 FEET FROM THE EAST LINE OF LOT 57 OF SAID TRACT; THENCE SOUTHERLY PARALLEL WITH THE WEST LINE OF SAID LOT 56, 116.74 FEET, MORE OR LESS, TO THE SOUTH LINE OF SAID LOT 58; THENCE WESTERLY ALONG THE SOUTH LINE OF LOTS 58, 59 AND 60 OF THE SOUTHWEST CORNER OF SAID LOT 60; THENCE NORTHERLY ALONG THE WEST LINE OF SAID LOT 60, 116.70 FEET MORE OR LESS, TO SAID SOUTH LINE DOWN FLORENCE AVENUE, AS WIDENED; THENCE EASTERLY ALONG FLORENCE AVENUE TO THE POINT OF BEGINNING.

EX-10.15

Exhibit 10.15

99¢ ONLY STORES
STANDARD MULTI- TENANT FORM LEASE
SHOPPING CENTER
3420 West Lincoln Avenue, Anaheim, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One except that the provisions of Section 1.09 shall govern the matters set forth in said Section.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 3420 West Lincoln Avenue, Anaheim, CA (including the building of approximately 26,000 square feet of ground floor retail space and the parking areas (if any)), located in an integrated retail shopping center (the “SHOPPING CENTER”), which is owned by LANDLORD and which is described

in Exhibit “A”.  The SHOPPING CENTER, which includes the land, and all buildings and all other improvements hereafter located thereon, including, without, limitation, the PREMISES and “COMMON AREAS,” as defined in Section 4.05(a) below, is shown on Exhibit “B”.

Section 1.04Lease Term.  Approximately ten (10) years beginning on the EFFECTIVE DATE and ending on January 31, 2022, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Sixteen Thousand Five Hundred Thirty-Seven and 50/100 Dollars ($16,537.50) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto (the “LETTER AGREEMENT”), and (ii) the provisions of subsection 3.03 (b) below; provided, however, that from and after February 1, 2017, and continuing to the expiration of the INITIAL LEASE TERM, BASE RENT shall increase to, and TENANT shall pay monthly, an amount equal to one hundred ten percent (110%) of the BASE RENT amount set forth above, as the same may be adjusted in accordance with the terms of the LETTER AGREEMENT.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) COMMON AREA COSTS (See Section 4.05) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

Section 1.09Definition of Tenant’s Pro Rata Share and Limitations on Operating Expenses.  For purposes of determining “TENANT’s PRO RATA SHARE” (as such term is used in this LEASE) of the various charges, costs and expenses imposed on TENANT as OPERATING EXPENSES, the parties agree that such share shall be determined as set forth in

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this Section 1.09, subject only to such express modifications of the provisions of this Section 1.09 as may appear in this LEASE.

(a)TENANT’s PRO RATA SHARE shall be determined as a percentage of the aggregate cost of an item included within OPERATING EXPENSES and chargeable to TENANT pursuant to the terms or this LEASE as is equal to the ratio that the leasable ground floor area contained within the PREMISES bears to the total leasable ground floor area contained within the SHOPPING CENTER, subject to the other provisions of this Section 1.09.

(b)For purposes of computation of the leasable floor area of the PREMISES and of the SHOPPING CENTER:

(i)The leasable ground floor area of the PREMISES, and the ratio of the land area contained within the PREMISES (being the land area encompassed within the outer building lines of the PREMISES) to the total land area within the “TAX PARCEL” (as such term is defined below), as measured by TENANT’s architect.  If LANDLORD disagrees with such measurement(s), LANDLORD at its expense may have the PREMISES and/or such ratio of land area measured by an architect retained by LANDLORD and such two architects shall then meet to resolve any dispute in the measurement.  In so measuring the PREMISES, the architect(s) shall exclude all structural supports, including columns and walls, all vertical risers, any area not generally accessible to TENANT such as mechanical rooms, and any portion of any of the COMMON AREAS including those abutting the PREMISES.  LANDLORD and TENANT agree that the total ground floor square footage of all buildings in the SHOPPING CENTER other than the PREMISES, for all purposes of this LEASE, is 11,000 square feet.  It is also acknowledged by LANDLORD and TENANT that the only leasable area within the PREMISES is the ground floor area.

(ii)If, following execution of this LEASE, a building is constructed on a portion of the SHOPPING CENTER, including any area added to the SHOPPING CENTER, LANDLORD shall cause the leasable floor area of such building to be so measured and such leasable floor area shall be added to the total leasable floor area of all buildings then built within the SHOPPING CENTER.  Basements, mezzanines and the floor area of elevated stories shall all be deemed leasable for purposes of the computations to be made pursuant to this Section 1.09, measured by LANDLORD’s architect in accordance with Section 1.09(b)(i) above; provided, however, that mezzanines and basements which are primarily used for storage, mechanical equipment, or incidental offices supporting primary retail uses shall not be deemed to be leasable area for purposes of the computations made pursuant to this Section 1.09.  If TENANT disagrees with such measurement, then TENANT at its expense may have an architect of its selection measure such additional areas and the two architects shall meet and resolve the dispute.

(iii)Under no circumstance, regardless of the measurement of either the leasable floor area of the PREMISES or of the SHOPPING CENTER shall TENANT’s PRO RATA SHARE of any of the OPERATING EXPENSES exceed seventy and 3/10 percent (70.3%) of the aggregate of any item, or the total of all items, included within the OPERATING EXPENSES at any time.

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(iv)Under no circumstance, regardless of any computation of TENANT’s PRO RATA SHARE, the nature or extent of OPERATING EXPENSES, the period of the TERM at issue or for any other reason shall the OPERATING EXPENSES required to be paid by TENANT for any twelve month period of the TERM of this LEASE following the first 12 full months of the TERM of this LEASE exceed by more than five percent (5%) the amount of OPERATING EXPENSES required to be paid by TENANT for the preceding twelve (12) month period of this LEASE.

(v)Nothing in this Section 1.09 shall limit or otherwise modify any restrictions set forth in this LEASE against LANDLORD’s modification of the SHOPPING CENTER including the COMMON AREAS.

(c)TENANT’s PRO RATA SHARE with respect to REAL PROPERTY TAXES, as such term is defined below, shall be equal to the ratio that the area of the land contained in the PREMISES bears to the total land area contained in the tax parcel on which the PREMISES are located (the “TAX PARCEL”).

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT

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has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been

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active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  Subject to Section 4.07 below, TENANT shall reimburse LANDLORD for TENANT’s PRO RATA SHARE, as defined in and subject to the provisions of subsection 1.09(c), of all “REAL PROPERTY TAXES” assessed on the TAX PARCEL during the LEASE TERM.  For purposes of determining the same, in addition to the provisions of Section 1.09, the provisions of this Section shall govern the computation of TENANT’s PRO RATA SHARE of REAL PROPERTY TAXES.

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(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting that portion of the SHOPPING CENTER which is the tax assessment parcel that includes the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES; (iv) any assessment for highway, street or traffic control improvements, sanitary or storm sewers, utilities or for other off-site improvements of any nature made in connection with the development of the SHOPPING CENTER; (v) any property tax applicable to a so called “out parcel” or any other land or improvements not within the boundaries of the SHOPPING CENTER; (vi) any taxes assessed on the personal property of any tenant or other occupant of the SHOPPING CENTER.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES (and if the PREMISES are included in a tax assessment parcel which includes portions of the SHOPPING CENTER in addition to the PREMISES, then such contest shall be as to the entire tax assessment parcel which includes the PREMISES) and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises nor with any portion of the COMMON AREAS.

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Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES and all other buildings and improvements within the SHOPPING CENTER. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD and/or the owner of the SHOPPING CENTER deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain and/or cause the owner of the SHOPPING CENTER to maintain, in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES and SHOPPING CENTER, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

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(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above, and (ii) its pro rata share of that portion of the insurance premiums for policies which LANDLORD is required to maintain or cause to be maintained pursuant to Section 4.04(c) above which is allocable to the COMMON AREAS.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM, TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance,

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LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation, and if at any time LANDLORD is not the sole owner of the SHOPPING CENTER, then LANDLORD shall cause the owner of the SHOPPING CENTER to do the same.

Section 4.05Common Areas; Use, Maintenance and Costs.

(a)Common Areas.  As used in this LEASE, COMMON AREAS shall mean all areas within the SHOPPING CENTER (whether owned by LANDLORD or any other owner affiliated with LANDLORD of any portion of the SHOPPING CENTER) which are not leased or held for the exclusive use of TENANT or other tenants, including, but not limited to, all parking areas, driveways, sidewalks, loading areas (except any loading area for the exclusive use of TENANT or any other tenants in the SHOPPING CENTER), access roads, storm drains, curbs, parking area lighting, directional signs, landscaping and planted areas as depicted on Exhibit “B” or existing, or to be in existence, in or about the SHOPPING CENTER during the TERM hereof.  The SHOPPING CENTER shall be operated as a single, contiguous shopping center (i.e., no fences, landscaping or other barriers which separate any portion of the SHOPPING CENTER from the remaining portion thereof) and LANDLORD shall not change, or permit others to temporarily or permanently change, the size, location, nature and use of any of the COMMON AREAS, including the quantity, location, sizing or proximity to the PREMISES of vehicle parking spaces, or convert COMMON AREAS into leasable areas, or increase or decrease COMMON AREA land.  If any portion of the SHOPPING CENTER is sold or otherwise conveyed to any person, or if additional areas are added to the SHOPPING CENTER, LANDLORD shall cause such portion(s) so sold, and such portions of such areas so added as are not leased or otherwise occupied exclusively by a tenant or other occupant, to continue to be subjected, or to be subjected, to the COMMON AREA uses required by this LEASE.  To the extent the COMMON AREAS ever include areas not owned by LANDLORD, LANDLORD shall not consent to any change in any of such areas, or any use thereof, which would violate the terms of this LEASE, including (without limitation) the provisions of this Section, but rather LANDLORD shall use its best efforts to enforce all legal rights which LANDLORD may have to avoid any such violation.  Notwithstanding the foregoing, LANDLORD may make such modifications to the COMMON AREA of the SHOPPING CENTER as may be required to comply with applicable laws and ordinances, but in doing so LANDLORD shall use all reasonable efforts to avoid any adverse effect on the visibility of, access to, or use of the PREMISES by TENANT and its invitees.

LANDLORD represents and warrants to TENANT that there are no agreements or other arrangements made with neighboring property owners, other tenants of the SHOPPING CENTER, or other parties, that affect the PREMISES, the COMMON AREAS or the SHOPPING CENTER, or portions thereof or conflict with TENANT’s rights or LANDLORD’s obligations hereunder, including but not limited to:  the use of vehicle parking spaces, the maintenance of asphalt, concrete, landscaping or other areas without structures, future development, utility services, security, vehicular or pedestrian access or egress, signage, drainage, advertising or TENANT’s use of the PREMISES, the COMMON AREAS or the SHOPPING CENTER.  LANDLORD shall operate the SHOPPING CENTER as an integrated retail center and shall adopt and enforce reasonable, non-discriminatory rules governing the use of the COMMON AREA of the SHOPPING CENTER, including the parking areas.

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(b)Use of Common Areas.  TENANT shall have the nonexclusive right (in common with other tenants) to use the COMMON AREAS for the purposes intended at no additional cost to TENANT, subject to such reasonable, and non-discriminatory rules and regulations as LANDLORD may establish from time to time which do not conflict with the LEASE.  TENANT shall abide by such rules and regulations.  LANDLORD may temporarily close any of the COMMON AREAS only as necessary to perform any acts in the COMMON AREAS as are necessary to meet LANDLORD’s obligations hereunder; provided that (1) LANDLORD gives TENANT a minimum of ten (10) days written notice thereof (except in the case of an emergency), (2) LANDLORD takes all reasonable actions to avoid so doing during any of TENANT’s peak business periods (October 1 - December 24, Fridays, Saturdays, Sundays, and the one week periods preceding and including Independence Day, Valentine’s Day, Easter, and any Federal holiday), and (3) LANDLORD takes all reasonable actions to minimize any detrimental affects to TENANT’s business operations at the PREMISES as a result of such closure.  LANDLORD shall not permit any carnivals, fireworks stands, Christmas Tree sales, pumpkin patch sales, telephones, kiddy rides, vending machines, recycling centers or machines or any such or similar activities in the COMMON AREA at any time.

(c)Vehicle Parking.  TENANT and its invitees and customers shall be entitled to the nonexclusive use of all vehicle parking spaces in the SHOPPING CENTER for non-reserved parking without the payment of any ADDITIONAL RENT by TENANT or charge to TENANT or its invitees or customers.  All such vehicle parking spaces shall be available only for customers of tenants of the SHOPPING CENTER, the tenants of the SHOPPING CENTER and their employees.  LANDLORD (at LANDLORD’s sole expense, and not as a part of LANDLORD’s COMMON AREA COSTS) shall institute and enforce rules (such as time limits, no employee parking, etc.) regulating the use of the parking spaces located within the SHOPPING CENTER to help insure that there is adequate parking available for TENANT’s customers at all times.  If TENANT notifies LANDLORD that there is a recurring problem of a shortage of parking spaces for TENANT’s customers, then LANDLORD agrees to use all reasonable efforts to alleviate such parking problem, but LANDLORD shall not be required to create structured parking or make other capital improvements in connection therewith so long as the SHOPPING CENTER complies with all applicable laws and ordinances governing parking.  During the LEASE TERM, neither LANDLORD nor any other owner of any portion of the SHOPPING CENTER shall charge a fee for, or require validation for, parking within the SHOPPING CENTER.  Provided that LANDLORD shall designate parking behind the premises of the other tenants for parking by said tenants’ employees, then LANDLORD may designate parking spaces behind the PREMISES for use by TENANT’s employees, subject to TENANT’s reasonable approval of the location and number thereof.

(d)Maintenance of Common Areas.  LANDLORD shall maintain and operate, or cause to be maintained and operated, the COMMON AREAS in good order, condition and repair, comparable with high quality shopping centers in the county in which the PREMISES is located.  TENANT shall pay TENANT’s PRO RATA SHARE (as set forth in Section 4.06 and limited as set forth in Sections 1.09(b) and 4.07) of the reasonable “out of pocket” costs incurred by LANDLORD as necessary for the maintenance, operation and repair of the COMMON AREAS (“COMMON AREA COSTS”).  COMMON AREA COSTS include, but are not limited to, the following:  utilities for the COMMON AREAS; repairing, resurfacing,

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repaving, signs (lamps, ballasts, sign faces and cabinet) maintaining, painting, lighting (which shall be provided from at least, one hour before sunset and one hour after TENANT closes for business), cleaning parking areas; providing security for the COMMON AREAS, all as LANDLORD may reasonably deem necessary for the maintenance, operation, and repair of the COMMON AREAS.  In no event shall TENANT hereby have any responsibility for the payment of any marketing, advertising, or promotional expenses.  If any portion of the COMMON AREAS for which TENANT is obligated to bear a portion of the repair expense cannot be repaired in an economical manner, the cost of any replacement shall be amortized over its useful life, and TENANT shall be liable only for its pro rata share of that portion of the amortized cost which is applicable to the remaining LEASE TERM.

Notwithstanding anything to the contrary contained herein, COMMON AREA COSTS shall not include the following:

(i)Supervision or management salaries or similar fees;

(ii)Security costs or other similar fees, unless TENANT expressly agrees thereto in writing;

(iii)depreciation of real property or improvements which form part of COMMON AREAS;

(iv)Repairs, replacement or improvements made prior to the date hereof;

(v)Repairs arising from defects in the initial construction of the SHOPPING CENTER;

(vi)Repairs necessitated by the negligence of LANDLORD or any other owner of any portion of the SHOPPING CENTER and which are required to cure violations of laws in effect on the date hereof;

(vii)Payments of principal of interest or amortization of indebtedness or any cost of financing or refinancing of any buildings, other improvements or the real property constituting the SHOPPING CENTER or the depreciation of any of the same;

(viii)Compensation paid to officers or executives of LANDLORD or any other owner of any portion of the SHOPPING CENTER;

(ix)Costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the leasing or sale of space in the SHOPPING CENTER, including, without limitation, brokerage costs, commissions and advertising and promotional expenses;

(x)Legal fees, other than those in the filing, institution or prosecution of any application or proceeding filed or instituted by LANDLORD in order to reduce REAL

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PROPERTY TAXES with respect to a tax assessment parcel which includes the PREMISES or the COMMON AREAS;

(xi)The cost of repairs or replacements incurred by reason of fire or other casualty or condemnation to the extent that either (1) LANDLORD is compensated therefor through proceeds of insurance or condemnation awards; or (2) LANDLORD failed to obtain insurance against fire or casualty as required under the terms of this LEASE;

(xii)The cost of initial construction or completion of the COMMON AREAS or any part of the SHOPPING CENTER;

(xiii)Any portion of amounts paid to any firm or entity affiliated with LANDLORD or any other owner of any portion of the SHOPPING CENTER for services or materials, to the extent such amount exceeds the then existing market rates for the same services or materials in the same geographic location;

(xiv)Expenditures made by LANDLORD or any other owner of any portion of the SHOPPING CENTER which are in the nature of capital improvements;

(xv)Costs arising from any cleanup, repair or remediation of “HAZARDOUS MATERIALS,” as defined in Section 12.20 below, to the extent that such action is attributable to the presence, use, generation, storage, release or disposal of HAZARDOUS MATERIALS on, under or in the SHOPPING CENTER or otherwise (unless caused by the acts TENANT or TENANT’s agents or employees in which event the provisions of Section 5.04 below shall apply);

(xvi)Legal expenses incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in enforcing and/or negotiating the terms of any lease for space in the SHOPPING CENTER;

(xvii)The cost of any work or service performed for, or facilities furnished to, the particular benefit of any other tenant or occupant of the SHOPPING CENTER;

(xviii)The amount of any judgement applicable to the operation, ownership or maintenance of the SHOPPING CENTER and all costs associated with the defense of such action;

(xix)The amount of any rent paid by LANDLORD or any other owner of any portion of the SHOPPING CENTER to a ground lessor;

(xx)Any license, permit and inspection fees, consulting, legal and accounting fees or similar fees and other costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the ownership, operations and leasing of the SHOPPING CENTER;

(xxi)Any costs for accountants or other financial consultants of LANDLORD with respect to the SHOPPING CENTER.

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(e)Loading.  TENANT shall be permitted, at all times, the exclusive use of those areas labeled and depicted as “TENANT’s LOADING AREAS” on Exhibit “B” and other areas abutting the PREMISES, as necessary, for making deliveries of merchandise, storing shopping carts, operating vending machines, installing courier boxes, installing bike racks, and otherwise as necessary or desirable for the smooth and ordinary operation of its business.  Subject to the provisions of Section 6.05, as they apply to alterations, additions, and improvements of the PREMISES, TENANT may change TENANT’s LOADING AREAS to facilitate TENANT’s receipt of merchandise and/ or the storage/use of shopping carts, provided that TENANT obtains LANDLORD’s prior written consent, which shall not be unreasonably withheld.

Section 4.06Operating Expenses Tenant’s Share and Payment.  For the purposes of Sections 4.06 and 4.07, the term “OPERATING EXPENSES” shall mean TENANT’s responsibility for all:  REAL PROPERTY TAXES (as defined and calculated in accordance with Section 4.02 above), insurance premiums (as set forth in Sections 4.04(b) and 4.04(c)), and COMMON AREA COSTS (as set forth in Section 4.05(d)).  TENANT shall be responsible for the payment of its pro-rata share of all OPERATING EXPENSES only during the LEASE TERM, and subject to the provisions of Section 1.09.

LANDLORD shall take all reasonable actions to minimize (to the extent reasonably possible) the OPERATING EXPENSES (and each component thereof).  The foregoing sentence shall not in any way affect any of LANDLORD’s obligations, including maintenance of the COMMON AREAS as otherwise provided in the LEASE.  In furtherance of the foregoing, LANDLORD’s reasonable actions may include at LANDLORD’s option, soliciting multiple competitive bids and communicating with TENANT so that TENANT shall have the opportunity to assist LANDLORD in minimizing the COMMON AREA COSTS as set forth above.

At least 30 days prior to the RENT COMMENCEMENT DATE and at least 30 days prior to the start of each calendar year, and on other occasions if LANDLORD so elects, during the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s best estimate of all OPERATING EXPENSES for the ensuing calendar year (which may be based on the ACTUAL OPERATING EXPENSES fox the then current calendar year) and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ESTIMATED OPERATING EXPENSES”).  TENANT shall thereafter pay on a monthly basis (subject to the limitations in Sections 1.09 and 4.07) TENANT’s PRO RATA SHARE of the ESTIMATED OPERATING EXPENSES (prorated for any fractional periods) with each subsequent monthly installment of BASE RENT.

Within ninety (90) days after the end of each calendar year during the LEASE TERM and within ninety (90) days of the expiration of the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s calculation of all OPERATING EXPENSES for the prior calendar year and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ACTUAL OPERATING EXPENSE NOTICE”).  LANDLORD shall indicate the total amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such period on such ACTUAL OPERATING EXPENSE NOTICE, and TENANT shall pay (in a lump sum) any shortfall (if the ESTIMATED

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OPERATING EXPENSES paid by TENANT were less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period) as set forth in any such ACTUAL OPERATING EXPENSE NOTICE to LANDLORD within fifteen (15) days after receipt thereof, except that TENANT may object to any costs included therein which TENANT, in good faith and in reasonable detail, objects by written notice to LANDLORD within said 15-day period.  TENANT’s failure to so object within such fifteen (15) day period shall not preclude TENANT from any subsequent objection to any items included in any such notice from LANDLORD or, as to any future such notice, any costs of a nature contained in such notice; provided, however, that the provisions of Section 4.07 below shall at all times govern and restrict all audits and reviews of all such OPERATING EXPENSES.  If the ESTIMATED OPERATING EXPENSES paid by TENANT are less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXPENSE NOTICE, then TENANT shall, within thirty (30) days following receipt of such ACTUAL OPERATING EXPENSE NOTICE, subject to 4.08 below, pay the difference between TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES, as set forth in such notice and the amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such calendar year.  If the ESTIMATED OPERATING EXPENSES paid by TENANT exceed TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXFENSE NOTICE, then such overpayment shall be credited to any of TENANT’s subsequent payment obligations to LANDLORD under this LEASE, if any, and if any credit remains unapplied as of the expiration or earlier termination of the LEASE TERM, then such amounts shall be paid in a lump sum to TENANT by LANDLORD within ten (10) days after the determination of such amounts.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES ever includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.

Section 4.07Audit.  LANDLORD shall maintain commercially reasonable and detailed records concerning all components of OPERATING EXPENSES for at least twenty four (24) months following the completion of each calendar year.  TENANT shall have the right to audit such records.  If any such audit reveals an overpayment of OPERATING EXPENSES by TENANT, LANDLORD shall promptly refund said overpayment to TENANT, subject to LANDLORD’s right to dispute such result as described in this Section.  In addition, if any such audit reveals errors in LANDLORD’s favor exceeding three percent (3%) then LANDLORD shall also reimburse TENANT for the cost of the audit.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.  TENANT shall use reasonable efforts to maintain any information gained from its review and/or audit of LANDLORD’s books and records confidential and shall not knowingly disclose such information to any other person except as may be required by law or regulation.  Any dispute arising out of such audit or review, including without limitation, whether the results of such audit or review are accurate, shall be resolved in accordance with the

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provisions of Section 12.16 of this LEASE and nothing in this Section shall be deemed to supersede the right of either party to dispute the result of any such audit or review.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any, and any “exclusives” previously granted to other tenants at the SHOPPING CENTER, as set forth on Exhibit “C” hereto.  TENANT shall not use the PREMISES for any use that violates the provisions of Exhibit “C” so long as such “exclusives” are effective; provided, however, TENANT may continue to use the PREMISES in a manner consistent with TENANT’s actual use thereof as the tenant thereof prior to the EFFECTIVE DATE, subject only to (i) third party claims asserted by tenants of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives” claiming infringement of exclusivity in the SHOPPING CENTER or (ii) claims asserted by Landlord at the request of a tenant of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives”.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.  LANDLORD represents and warrants that, except as set forth on Exhibit “C” hereto, LANDLORD has not granted to, and has no knowledge of, restrictions of any kind applicable to the SHOPPING CENTER which in any way now or hereafter will limit TENANT’s ability to sell any specific product or assortment of products which are now or may hereafter be sold as of the date of this LEASE at any of TENANT’s other locations.  LANDLORD shall indemnify and defend TENANT against any and all claims asserted by third parties claiming infringement of exclusivity in the SHOPPING CENTER.  If at any time during the TERM of this LEASE LANDLORD grants any form of “exclusive” whatsoever to any person (which cannot be an “exclusive” which violates the terms of this Section or of this LEASE), or if at any time there is any other owner of any portion of the SHOPPING CENTER and if LANDLORD learns that such other owner of the SHOPPING CENTER has granted any “exclusives” other than those set forth on Exhibit “C”, then in any of such events LANDLORD shall promptly notify TENANT, supplying TENANT with the name of the person in whose favor such “exclusive” is granted and the specific details of such “exclusive”.  No “exclusives” other than those set forth on Exhibit “C” shall restrict or otherwise affect the right of use of the PREMISES as set forth in this LEASE.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of

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this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

Section 5.03Signs.  TENANT shall have the right to place such signs on the exterior of the PREMISES as TENANT may desire; provided that such signs comply with applicable laws.  TENANT shall have the right to use and to modify any sign area used by TENANT prior to the EFFECTIVE DATE if the PREMISES is currently occupied by TENANT or (if not currently occupied by TENANT) the most recent prior tenant of the PREMISES, whether such sign area(s) is(are) located on the PREMISES, within the COMMON AREAS, or elsewhere in the SHOPPING CENTER.  TENANT shall also have the right to modify existing monument signage or add additional monument signage in the COMMON AREA or elsewhere in the SHOPPING CENTER, subject only to (i) applicable governmental approvals, (ii) availability of any currently existing sign areas/panels not currently used by existing tenants of the SHOPPING CENTER or reserved for future tenants of vacant units in the SHOPPING CENTER, and (iii) any existing written obligations of LANDLORD to existing tenants of the SHOPPING CENTER.  LANDLORD agrees to disclose the relevant details of any such obligations to TENANT upon request.  LANDLORD shall use its reasonable best efforts to obtain any required approvals from the other tenants of the SHOPPING CENTER and applicable governmental agencies in connection with any signs desired to be installed by TENANT, provided that LANDLORD shall not be required to incur any cost or expense in connection with obtaining such approvals other than de minimis administrative expense.  For a period of time 60 days following the end of the LEASE TERM, TENANT shall be permitted to place two signs not to exceed 24 inches by 36 inches in size, in prominent places visible from the exterior of the PREMISES informing the public of TENANT’s relocation and other similar information.  LANDLORD shall cooperate with TENANT to obtain the best possible signage in TENANT’s judgment.  LANDLORD shall seek the cooperation of the City of Anaheim and any entity affiliated therewith to obtain TENANT’s maximum desired signage.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

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(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES and the SHOPPING CENTER;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES or the SHOPPING CENTER;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or the SHOPPING CENTER or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

As used in the above Subsections 5.04(i), (ii), (iii) and (iv), the term “LANDLORD” shall include any affiliate of LANDLORD that owns the SHOPPING CENTER, and all of the employees, agents, contractors and invitees, as applicable of LANDLORD or such affiliate of LANDLORD.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES and its use of the COMMON AREAS for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

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Section 5.07Exclusivity; Use Restrictions; Co-Tenancy.

(a)Exclusivity.  TENANT shall have the exclusive right to operate a one-price general merchandise variety and discount retail store within the SHOPPING CENTER.  This restriction, however, shall not prevent LANDLORD from leasing space in the SHOPPING CENTER to a single price point use that:  (i) does not sell a broad array of merchandise (e.g. a one-price dry cleaner, one-price clothing store, one-price restaurant); and (ii) does not use or advertise the terms “99”, “98”, “dollar”, “cents” (whether spelled out or in symbols) or any variant on the same.

(b)Use Restrictions.  No portion of the SHOPPING CENTER, including, without limitation, the PREMISES, may used for any of the following:

(i)Any uses that are not consistent with first class shopping centers in the area of the PREMISES, which shall include, but not be limited to any uses which include:

(1)nude (or partially nude) bars or nightclubs, or theaters of any kind

(2)massage parlors

(3)adult book stores,

(4)escort services,

(5)bail bonds or pawn shops,

(6)the sale of used or second hand products of any kind (excluding the sale of high quality antiques, or the operation of a high quality antique store or high quality second hand product, operations, such as Play It Again Sports, or the sale, on an incidental basis, of antiques or collectibles),

(7)tattoo parlors,

(8)adult video stores,

(9)any use of a questionable moral character,

(10)indoor swap meets, and

(11)any movie theater, gymnasium, bowling alley, library, church, auditorium, museum, automobile repair, automobile sales, high volume buffet style restaurant exceeding 3,000 square feet in size (such as Home Town Buffet), banquet facility or bar, disco, nightclub, hotel,

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manufacturing, warehouse or other industrial use (except incidental to other permitted uses), or entertainment facility (such as Chuck E Cheese, Discovery Zone, Tutor Time, or Leaps and Bounds).

(ii)Any use which requires a zoning variance or conditional use permit for a non-retail use, or due to insufficient parking within the SHOPPING CENTER.

(iii)Any use which uses the terms “99,” “98,” “dollar,” or any similar terms (whether “spelled out” or in numerical form) in any manner as part of a trade name or logo or in any manner as a material portion of any signage or trade dress.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause,

(c)conditions arising in or about the PREMISES or upon other portions of SHOPPING CENTER, or from other sources or places or from new construction or repair of the PREMISES or the SHOPPING CENTER, or

(d)any act or omission of any other tenant of the SHOPPING CENTER.

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Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, all COMMON AREAS (including, without limitation, all parking areas), and the existing COMMON AREA signs and electrical service thereto, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane)

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shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the SHOPPING CENTER or the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title to the SHOPPING CENTER or the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  TENANT, with the consent of LANDLORD, which shall not unreasonably be withheld or delayed, shall also be permitted to make such alterations to the COMMON AREAS abutting the PREMISES as may be required to comply with any statute, law or ordinance or to meet the requirements of any conditional use or other permit.  All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so

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requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

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(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.  If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction,

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LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES or the COMMON AREAS are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES and the COMMON AREAS have been repaired and restored.

Section 7.04Common Areas.  If the COMMON AREAS are damaged or destroyed by any casualty or other cause the provisions of Sections 7.01 and 7.02 shall apply to the same extent and manner as if the PREMISES had been so damaged or destroyed.  Section 7.03 shall apply pending the completion of repair of all COMMON AREAS in the SHOPPING CENTER.

ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs within the COMMON AREA are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; OR (vi) a material portion of the COMMON AREAS is taken, then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES or the SHOPPING CENTER under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD or the owner(s) of the SHOPPING CENTER (including any owner(s) of the SHOPPING CENTER that

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may be an affiliate of LANDLORD, as the case may be; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES and the COMMON AREAS.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01 and subsection 5.07(b) above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

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(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

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(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within

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three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance

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of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES or any portion of the SHOPPING CENTER which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES or the SHOPPING CENTER to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES or the SHOPPING CENTER which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

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Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

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Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has

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full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall

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be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES, or the SHOPPING CENTER by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES or the SHOPPING CENTER without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.

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TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES or the SHOPPING CENTER, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES or the SHOPPING CENTER.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:

	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #50)]

EXHIBIT “A”

Legal Description

ALL THAT CERTAIN LAND SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF ORANGE, CITY OF ANAHEIM, DESCRIBED AS FOLLOWS:

PARCEL A:

PARCEL 2, AS SHOWN ON A MAP FILED IN BOOK 21, PAGE 45 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA.

EXCEPTING FROM A PORTION OF SAID LAND, AN UNDIVIDED ONE-HALF INTEREST IN AND TO ALL MINERALS RIGHT BELOW A DEPTH OF 500 FEET MEASURED FROM THE SURFACE OF SAID LAND, BUT WITHOUT THE RIGHT TO ENTER UPON THE SURFACE OF SAID LAND FOR THE PURPOSE OF TAKING OR EXTRACTING THE MINERALS, AS RESERVED IN DEED RECORDED OCTIBER 15, 1954 IN BOOK 2844, PAGE 184 OF OFFICIAL RECORDS.

PARCEL B:

THE RIGHT OF FREE ACCESS TO AND THE USE OF THE “COMMON USE AREA” AS CONTAINED IN THAT CERTAIN AGREEMENT EXECUTED BY AND BETWEEN STATER BROS. MARKETS AND INTERNATIONAL MANAGEMENT CORPORATION RECORDED MARCH 3, 1969 IN BOOK 8889, PAGE 89 AND THAT CERTAIN ADDENDUM TO AGREEMENT RECORDED DECEMBER 17, 1970 IN BOOK 9492, PAGE656, BOTH OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA.

EXHIBIT “B”

SITE PLAN

Description of Leased PREMISES, COMMON AREAS, and SHOPPING CENTER

[See Attached]

EXHIBIT “C”

“EXCLUSIVES”

For purposes hereof “exclusives” shall include any of those restrictions applicable to TENANT set forth in that certain agreement dated December 5, 1968, and recorded March 3, 1969 in Book 8889, Pages 89 — 100, of the Official Records of Orange County, California, and amended in Addendum to Agreement dated September 24, 1969, and recorded December 17, 1970 in Book 9492, Pages 656 — 663, of the Official Records of Orange County, California, as the same may have been amended, as such restrictions are modified by that certain Agreement dated March 18, 1996, by and between Stater Bros. Markets, a California corporation, and 99¢ Only Stores, a California corporation.

EX-10.16

Exhibit 10.16

99¢ ONLY STORES
STANDARD MULTI- TENANT FORM LEASE
THE GARDENS CENTER
12123-12125 Carson Street, Hawaiian Gardens, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between Au Zone Investment #2, L.P., a California limited partnership (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One except that the provisions of Section 1.09 shall govern the matters set forth in said Section.

Section 1.01Landlord’s Address:

c/o Jeff Gold
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer
4000 E. Union Pacific Avenue
Commerce, CA  90023
Telephone:  (213) 980-8145

With a copy to:

Number Holdings, Inc.
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA  90067
Attn:  Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 12123-12125 Carson Street, Hawaiian Gardens, CA (including the building of approximately 15,042 square feet of ground floor retail space and the parking areas (if any)), located in an integrated retail shopping center (the “SHOPPING CENTER”), which is owned by LANDLORD and which is

described in Exhibit “A”.  The SHOPPING CENTER, which includes the land, and all buildings and all other improvements hereafter located thereon, including, without, limitation, the PREMISES and “COMMON AREAS,” as defined in Section 4.05(a) below, is shown on Exhibit “B”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand Five Hundred Twenty-Three and 50/100 Dollars ($12,523.50) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) COMMON AREA COSTS (See Section 4.05) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

Section 1.09Definition of Tenant’s Pro Rata Share and Limitations on Operating Expenses.  For purposes of determining “TENANT’s PRO RATA SHARE” (as such term is used in this LEASE) of the various charges, costs and expenses imposed on TENANT as OPERATING EXPENSES, the parties agree that such share shall be determined as set forth in this Section 1.09, subject only to such express modifications of the provisions of this Section 1.09 as may appear in this LEASE.

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(a)TENANT’s PRO RATA SHARE shall be determined as a percentage of the aggregate cost of an item included within OPERATING EXPENSES and chargeable to TENANT pursuant to the terms or this LEASE as is equal to the ratio that the leasable ground floor area contained within the PREMISES bears to the total leasable ground floor area contained within the SHOPPING CENTER, subject to the other provisions of this Section 1.09.

(b)For purposes of computation of the leasable floor area of the PREMISES and of the SHOPPING CENTER:

(i)The leasable ground floor area of the PREMISES, and the ratio of the land area contained within the PREMISES (being the land area encompassed within the outer building lines of the PREMISES) to the total land area within the “TAX PARCEL” (as such term is defined below), as measured by TENANT’s architect.  If LANDLORD disagrees with such measurement(s), LANDLORD at its expense may have the PREMISES and/or such ratio of land area measured by an architect retained by LANDLORD and such two architects shall then meet to resolve any dispute in the measurement.  In so measuring the PREMISES, the architect(s) shall exclude all structural supports, including columns and walls, all vertical risers, any area not generally accessible to TENANT such as mechanical rooms, and any portion of any of the COMMON AREAS including those abutting the PREMISES.  LANDLORD and TENANT agree that the total ground floor square footage of all buildings in the SHOPPING CENTER other than the PREMISES, for all purposes of this LEASE, is 42,943 square feet.  It is also acknowledged by LANDLORD and TENANT that the only leasable area within the PREMISES is the ground floor area.

(ii)If, following execution of this LEASE, a building is constructed on a portion of the SHOPPING CENTER, including any area added to the SHOPPING CENTER, LANDLORD shall cause the leasable floor area of such building to be so measured and such leasable floor area shall be added to the total leasable floor area of all buildings then built within the SHOPPING CENTER.  Basements, mezzanines and the floor area of elevated stories shall all be deemed leasable for purposes of the computations to be made pursuant to this Section 1.09, measured by LANDLORD’s architect in accordance with Section 1.09(b)(i) above; provided, however, that mezzanines and basements which are primarily used for storage, mechanical equipment, or incidental offices supporting primary retail uses shall not be deemed to be leasable area for purposes of the computations made pursuant to this Section 1.09.  If TENANT disagrees with such measurement, then TENANT at its expense may have an architect of its selection measure such additional areas and the two architects shall meet and resolve the dispute.

(iii)Under no circumstance, regardless of the measurement of either the leasable floor area of the PREMISES or of the SHOPPING CENTER shall TENANT’s PRO RATA SHARE of any of the OPERATING EXPENSES exceed twenty-five and 9/10 per cent (25.9%) of the aggregate of any item, or the total of all items, included within the OPERATING EXPENSES at any time.

(iv)Under no circumstance, regardless of any computation of TENANT’s PRO RATA SHARE, the nature or extent of OPERATING EXPENSES, the period of the TERM at issue or for any other reason shall the OPERATING EXPENSES required to be

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paid by TENANT for any twelve month period of the TERM of this LEASE following the first 12 full months of the TERM of this LEASE exceed by more than five percent (5%) the amount of OPERATING EXPENSES required to be paid by TENANT for the preceding twelve (12) month period of this LEASE.

(v)Nothing in this Section 1.09 shall limit or otherwise modify any restrictions set forth in this LEASE against LANDLORD’s modification of the SHOPPING CENTER including the COMMON AREAS.

(c)TENANT’s PRO RATA SHARE with respect to REAL PROPERTY TAXES, as such term is defined below, shall be equal to the ratio that the area of the land contained in the PREMISES bears to the total land area contained in the tax parcel on which the PREMISES are located (the “TAX PARCEL”).

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty (180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

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ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

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The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  Subject to Section 4.07 below, TENANT shall reimburse LANDLORD for TENANT’s PRO RATA SHARE, as defined in and subject to the provisions of subsection 1.09(c), of all “REAL PROPERTY TAXES” assessed on the TAX PARCEL during the LEASE TERM.  For purposes of determining the same, in addition to the provisions of Section 1.09, the provisions of this Section shall govern the computation of TENANT’s PRO RATA SHARE of REAL PROPERTY TAXES.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting that portion of the SHOPPING CENTER which is the tax assessment parcel that includes the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such

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lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES; (iv) any assessment for highway, street or traffic control improvements, sanitary or storm sewers, utilities or for other off-site improvements of any nature made in connection with the development of the SHOPPING CENTER; (v) any property tax applicable to a so called “out parcel” or any other land or improvements not within the boundaries of the SHOPPING CENTER; (vi) any taxes assessed on the personal property of any tenant or other occupant of the SHOPPING CENTER.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES (and if the PREMISES are included in a tax assessment parcel which includes portions of the SHOPPING CENTER in addition to the PREMISES, then such contest shall be as to the entire tax assessment parcel which includes the PREMISES) and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises nor with any portion of the COMMON AREAS.

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Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES and all other buildings and improvements within the SHOPPING CENTER. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD and/or the owner of the SHOPPING CENTER deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain and/or cause the owner of the SHOPPING CENTER to maintain, in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES and SHOPPING CENTER, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

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(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above, and (ii) its pro rata share of that portion of the insurance premiums for policies which LANDLORD is required to maintain or cause to be maintained pursuant to Section 4.04(c) above which is allocable to the COMMON AREAS.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM, TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance,

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LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation, and if at any time LANDLORD is not the sole owner of the SHOPPING CENTER, then LANDLORD shall cause the owner of the SHOPPING CENTER to do the same.

Section 4.05Common Areas; Use, Maintenance and Costs.

(a)Common Areas.  As used in this LEASE, COMMON AREAS shall mean all areas within the SHOPPING CENTER (whether owned by LANDLORD or any other owner affiliated with LANDLORD of any portion of the SHOPPING CENTER) which are not leased or held for the exclusive use of TENANT or other tenants, including, but not limited to, all parking areas, driveways, sidewalks, loading areas (except any loading area for the exclusive use of TENANT or any other tenants in the SHOPPING CENTER), access roads, storm drains, curbs, parking area lighting, directional signs, landscaping and planted areas as depicted on Exhibit “B” or existing, or to be in existence, in or about the SHOPPING CENTER during the TERM hereof.  The SHOPPING CENTER shall be operated as a single, contiguous shopping center (i.e., no fences, landscaping or other barriers which separate any portion of the SHOPPING CENTER from the remaining portion thereof) and LANDLORD shall not change, or permit others to temporarily or permanently change, the size, location, nature and use of any of the COMMON AREAS, including the quantity, location, sizing or proximity to the PREMISES of vehicle parking spaces, or convert COMMON AREAS into leasable areas, or increase or decrease COMMON AREA land.  If any portion of the SHOPPING CENTER is sold or otherwise conveyed to any person, or if additional areas are added to the SHOPPING CENTER, LANDLORD shall cause such portion(s) so sold, and such portions of such areas so added as are not leased or otherwise occupied exclusively by a tenant or other occupant, to continue to be subjected, or to be subjected, to the COMMON AREA uses required by this LEASE.  To the extent the COMMON AREAS ever include areas not owned by LANDLORD, LANDLORD shall not consent to any change in any of such areas, or any use thereof, which would violate the terms of this LEASE, including (without limitation) the provisions of this Section, but rather LANDLORD shall use its best efforts to enforce all legal rights which LANDLORD may have to avoid any such violation.  Notwithstanding the foregoing, LANDLORD may make such modifications to the COMMON AREA of the SHOPPING CENTER as may be required to comply with applicable laws and ordinances, but in doing so LANDLORD shall use all reasonable efforts to avoid any adverse effect on the visibility of, access to, or use of the PREMISES by TENANT and its invitees.

LANDLORD represents and warrants to TENANT that there are no agreements or other arrangements made with neighboring property owners, other tenants of the SHOPPING CENTER, or other parties, that affect the PREMISES, the COMMON AREAS or the SHOPPING CENTER, or portions thereof or conflict with TENANT’s rights or LANDLORD’s obligations hereunder, including but not limited to:  the use of vehicle parking spaces, the maintenance of asphalt, concrete, landscaping or other areas without structures, future development, utility services, security, vehicular or pedestrian access or egress, signage, drainage, advertising or TENANT’s use of the PREMISES, the COMMON AREAS or the SHOPPING CENTER.  LANDLORD shall operate the SHOPPING CENTER as an integrated retail center and shall adopt and enforce reasonable, non-discriminatory rules governing the use of the COMMON AREA of the SHOPPING CENTER, including the parking areas.

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(b)Use of Common Areas.  TENANT shall have the nonexclusive right (in common with other tenants) to use the COMMON AREAS for the purposes intended at no additional cost to TENANT, subject to such reasonable, and non-discriminatory rules and regulations as LANDLORD may establish from time to time which do not conflict with the LEASE.  TENANT shall abide by such rules and regulations.  LANDLORD may temporarily close any of the COMMON AREAS only as necessary to perform any acts in the COMMON AREAS as are necessary to meet LANDLORD’s obligations hereunder; provided that (1) LANDLORD gives TENANT a minimum of ten (10) days written notice thereof (except in the case of an emergency), (2) LANDLORD takes all reasonable actions to avoid so doing during any of TENANT’s peak business periods (October 1 - December 24, Fridays, Saturdays, Sundays, and the one week periods preceding and including Independence Day, Valentine’s Day, Easter, and any Federal holiday), and (3) LANDLORD takes all reasonable actions to minimize any detrimental affects to TENANT’s business operations at the PREMISES as a result of such closure.  LANDLORD shall not permit any carnivals, fireworks stands, Christmas Tree sales, pumpkin patch sales, telephones, kiddy rides, vending machines, recycling centers or machines or any such or similar activities in the COMMON AREA at any time.

(c)Vehicle Parking.  TENANT and its invitees and customers shall be entitled to the nonexclusive use of all vehicle parking spaces in the SHOPPING CENTER for non-reserved parking without the payment of any ADDITIONAL RENT by TENANT or charge to TENANT or its invitees or customers.  All such vehicle parking spaces shall be available only for customers of tenants of the SHOPPING CENTER, the tenants of the SHOPPING CENTER and their employees.  LANDLORD (at LANDLORD’s sole expense, and not as a part of LANDLORD’s COMMON AREA COSTS) shall institute and enforce rules (such as time limits, no employee parking, etc.) regulating the use of the parking spaces located within the SHOPPING CENTER to help insure that there is adequate parking available for TENANT’s customers at all times.  If TENANT notifies LANDLORD that there is a recurring problem of a shortage of parking spaces for TENANT’s customers, then LANDLORD agrees to use all reasonable efforts to alleviate such parking problem, but LANDLORD shall not be required to create structured parking or make other capital improvements in connection therewith so long as the SHOPPING CENTER complies with all applicable laws and ordinances governing parking.  During the LEASE TERM, neither LANDLORD nor any other owner of any portion of the SHOPPING CENTER shall charge a fee for, or require validation for, parking within the SHOPPING CENTER.  Provided that LANDLORD shall designate parking behind the premises of the other tenants for parking by said tenants’ employees, then LANDLORD may designate parking spaces behind the PREMISES for use by TENANT’s employees, subject to TENANT’s reasonable approval of the location and number thereof.

(d)Maintenance of Common Areas.  LANDLORD shall maintain and operate, or cause to be maintained and operated, the COMMON AREAS in good order, condition and repair, comparable with high quality shopping centers in the county in which the PREMISES is located.  TENANT shall pay TENANT’s PRO RATA SHARE (as set forth in Section 4.06 and limited as set forth in Sections 1.09(b) and 4.07) of the reasonable “out of pocket” costs incurred by LANDLORD as necessary for the maintenance, operation and repair of the COMMON AREAS (“COMMON AREA COSTS”).  COMMON AREA COSTS include, but are not limited to, the following:  utilities for the COMMON AREAS; repairing, resurfacing,

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repaving, signs (lamps, ballasts, sign faces and cabinet) maintaining, painting, lighting (which shall be provided from at least, one hour before sunset and one hour after TENANT closes for business), cleaning parking areas; providing security for the COMMON AREAS, all as LANDLORD may reasonably deem necessary for the maintenance, operation, and repair of the COMMON AREAS.  In no event shall TENANT hereby have any responsibility for the payment of any marketing, advertising, or promotional expenses.  If any portion of the COMMON AREAS for which TENANT is obligated to bear a portion of the repair expense cannot be repaired in an economical manner, the cost of any replacement shall be amortized over its useful life, and TENANT shall be liable only for its pro rata share of that portion of the amortized cost which is applicable to the remaining LEASE TERM.

Notwithstanding anything to the contrary contained herein, COMMON AREA COSTS shall not include the following:

(i)Supervision or management salaries or similar fees;

(ii)Security costs or other similar fees, unless TENANT expressly agrees thereto in writing;

(iii)depreciation of real property or improvements which form part of COMMON AREAS;

(iv)Repairs, replacement or improvements made prior to the date hereof;

(v)Repairs arising from defects in the initial construction of the SHOPPING CENTER;

(vi)Repairs necessitated by the negligence of LANDLORD or any other owner of any portion of the SHOPPING CENTER and which are required to cure violations of laws in effect on the date hereof;

(vii)Payments of principal of interest or amortization of indebtedness or any cost of financing or refinancing of any buildings, other improvements or the real property constituting the SHOPPING CENTER or the depreciation of any of the same;

(viii)Compensation paid to officers or executives of LANDLORD or any other owner of any portion of the SHOPPING CENTER;

(ix)Costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the leasing or sale of space in the SHOPPING CENTER, including, without limitation, brokerage costs, commissions and advertising and promotional expenses;

(x)Legal fees, other than those in the filing, institution or prosecution of any application or proceeding filed or instituted by LANDLORD in order to reduce REAL

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PROPERTY TAXES with respect to a tax assessment parcel which includes the PREMISES or the COMMON AREAS;

(xi)The cost of repairs or replacements incurred by reason of fire or other casualty or condemnation to the extent that either (1) LANDLORD is compensated therefor through proceeds of insurance or condemnation awards; or (2) LANDLORD failed to obtain insurance against fire or casualty as required under the terms of this LEASE;

(xii)The cost of initial construction or completion of the COMMON AREAS or any part of the SHOPPING CENTER;

(xiii)Any portion of amounts paid to any firm or entity affiliated with LANDLORD or any other owner of any portion of the SHOPPING CENTER for services or materials, to the extent such amount exceeds the then existing market rates for the same services or materials in the same geographic location;

(xiv)Expenditures made by LANDLORD or any other owner of any portion of the SHOPPING CENTER which are in the nature of capital improvements;

(xv)Costs arising from any cleanup, repair or remediation of “HAZARDOUS MATERIALS,” as defined in Section 12.20 below, to the extent that such action is attributable to the presence, use, generation, storage, release or disposal of HAZARDOUS MATERIALS on, under or in the SHOPPING CENTER or otherwise (unless caused by the acts TENANT or TENANT’s agents or employees in which event the provisions of Section 5.04 below shall apply);

(xvi)Legal expenses incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in enforcing and/or negotiating the terms of any lease for space in the SHOPPING CENTER;

(xvii)The cost of any work or service performed for, or facilities furnished to, the particular benefit of any other tenant or occupant of the SHOPPING CENTER;

(xviii)The amount of any judgement applicable to the operation, ownership or maintenance of the SHOPPING CENTER and all costs associated with the defense of such action;

(xix)The amount of any rent paid by LANDLORD or any other owner of any portion of the SHOPPING CENTER to a ground lessor;

(xx)Any license, permit and inspection fees, consulting, legal and accounting fees or similar fees and other costs incurred by LANDLORD or any other owner of any portion of the SHOPPING CENTER in connection with the ownership, operations and leasing of the SHOPPING CENTER;

(xxi)Any costs for accountants or other financial consultants of LANDLORD with respect to the SHOPPING CENTER.

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(e)Loading.  TENANT shall be permitted, at all times, the exclusive use of those areas labeled and depicted as “TENANT’s LOADING AREAS” on Exhibit “B” and other areas abutting the PREMISES, as necessary, for making deliveries of merchandise, storing shopping carts, operating vending machines, installing courier boxes, installing bike racks, and otherwise as necessary or desirable for the smooth and ordinary operation of its business.  Subject to the provisions of Section 6.05, as they apply to alterations, additions, and improvements of the PREMISES, TENANT may change TENANT’s LOADING AREAS to facilitate TENANT’s receipt of merchandise and/ or the storage/use of shopping carts, provided that TENANT obtains LANDLORD’s prior written consent, which shall not be unreasonably withheld.

Section 4.06Operating Expenses Tenant’s Share and Payment.  For the purposes of Sections 4.06 and 4.07, the term “OPERATING EXPENSES” shall mean TENANT’s responsibility for all:  REAL PROPERTY TAXES (as defined and calculated in accordance with Section 4.02 above), insurance premiums (as set forth in Sections 4.04(b) and 4.04(c)), and COMMON AREA COSTS (as set forth in Section 4.05(d)).  TENANT shall be responsible for the payment of its pro-rata share of all OPERATING EXPENSES only during the LEASE TERM, and subject to the provisions of Section 1.09.

LANDLORD shall take all reasonable actions to minimize (to the extent reasonably possible) the OPERATING EXPENSES (and each component thereof).  The foregoing sentence shall not in any way affect any of LANDLORD’s obligations, including maintenance of the COMMON AREAS as otherwise provided in the LEASE.  In furtherance of the foregoing, LANDLORD’s reasonable actions may include at LANDLORD’s option, soliciting multiple competitive bids and communicating with TENANT so that TENANT shall have the opportunity to assist LANDLORD in minimizing the COMMON AREA COSTS as set forth above.

At least 30 days prior to the RENT COMMENCEMENT DATE and at least 30 days prior to the start of each calendar year, and on other occasions if LANDLORD so elects, during the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s best estimate of all OPERATING EXPENSES for the ensuing calendar year (which may be based on the ACTUAL OPERATING EXPENSES fox the then current calendar year) and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ESTIMATED OPERATING EXPENSES”).  TENANT shall thereafter pay on a monthly basis (subject to the limitations in Sections 1.09 and 4.07) TENANT’s PRO RATA SHARE of the ESTIMATED OPERATING EXPENSES (prorated for any fractional periods) with each subsequent monthly installment of BASE RENT.

Within ninety (90) days after the end of each calendar year during the LEASE TERM and within ninety (90) days of the expiration of the LEASE TERM, LANDLORD shall provide a written notice to TENANT setting forth in reasonable detail LANDLORD’s calculation of all OPERATING EXPENSES for the prior calendar year and TENANT’s share thereof, and such supporting documentation as TENANT may reasonably request (“ACTUAL OPERATING EXPENSE NOTICE”).  LANDLORD shall indicate the total amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such period on such ACTUAL OPERATING EXPENSE NOTICE, and TENANT shall pay (in a lump sum) any shortfall (if the ESTIMATED

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OPERATING EXPENSES paid by TENANT were less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period) as set forth in any such ACTUAL OPERATING EXPENSE NOTICE to LANDLORD within fifteen (15) days after receipt thereof, except that TENANT may object to any costs included therein which TENANT, in good faith and in reasonable detail, objects by written notice to LANDLORD within said 15-day period.  TENANT’s failure to so object within such fifteen (15) day period shall not preclude TENANT from any subsequent objection to any items included in any such notice from LANDLORD or, as to any future such notice, any costs of a nature contained in such notice; provided, however, that the provisions of Section 4.07 below shall at all times govern and restrict all audits and reviews of all such OPERATING EXPENSES.  If the ESTIMATED OPERATING EXPENSES paid by TENANT are less than TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXPENSE NOTICE, then TENANT shall, within thirty (30) days following receipt of such ACTUAL OPERATING EXPENSE NOTICE, subject to 4.08 below, pay the difference between TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES, as set forth in such notice and the amount of ESTIMATED OPERATING EXPENSES paid by TENANT for such calendar year.  If the ESTIMATED OPERATING EXPENSES paid by TENANT exceed TENANT’s PRO RATA SHARE of the ACTUAL OPERATING EXPENSES for such period as set forth herein and in such ACTUAL OPERATING EXFENSE NOTICE, then such overpayment shall be credited to any of TENANT’s subsequent payment obligations to LANDLORD under this LEASE, if any, and if any credit remains unapplied as of the expiration or earlier termination of the LEASE TERM, then such amounts shall be paid in a lump sum to TENANT by LANDLORD within ten (10) days after the determination of such amounts.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES ever includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.

Section 4.07Audit.  LANDLORD shall maintain commercially reasonable and detailed records concerning all components of OPERATING EXPENSES for at least twenty four (24) months following the completion of each calendar year.  TENANT shall have the right to audit such records.  If any such audit reveals an overpayment of OPERATING EXPENSES by TENANT, LANDLORD shall promptly refund said overpayment to TENANT, subject to LANDLORD’s right to dispute such result as described in this Section.  In addition, if any such audit reveals errors in LANDLORD’s favor exceeding three percent (3%) then LANDLORD shall also reimburse TENANT for the cost of the audit.  To the extent that TENANT’s PRO RATA SHARE of OPERATING EXPENSES includes COMMON AREA COSTS attributable to portions of the SHOPPING CENTER not owned by LANDLORD, LANDLORD’s obligations under this Section shall include the same information pertaining to such other areas of the SHOPPING CENTER.  TENANT shall use reasonable efforts to maintain any information gained from its review and/or audit of LANDLORD’s books and records confidential and shall not knowingly disclose such information to any other person except as may be required by law or regulation.  Any dispute arising out of such audit or review, including without limitation, whether the results of such audit or review are accurate, shall be resolved in accordance with the

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provisions of Section 12.16 of this LEASE and nothing in this Section shall be deemed to supersede the right of either party to dispute the result of any such audit or review.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any, and any “exclusives” previously granted to other tenants at the SHOPPING CENTER, as set forth on Exhibit “C” hereto.  TENANT shall not use the PREMISES for any use that violates the provisions of Exhibit “C” so long as such “exclusives” are effective; provided, however, TENANT may continue to use the PREMISES in a manner consistent with TENANT’s actual use thereof as the tenant thereof prior to the EFFECTIVE DATE, subject only to (i) third party claims asserted by tenants of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives” claiming infringement of exclusivity in the SHOPPING CENTER or (ii) claims asserted by Landlord at the request of a tenant of the SHOPPING CENTER or any third parties who are beneficiaries of such “exclusives”.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.  LANDLORD represents and warrants that, except as set forth on Exhibit “C” hereto, LANDLORD has not granted to, and has no knowledge of, restrictions of any kind applicable to the SHOPPING CENTER which in any way now or hereafter will limit TENANT’s ability to sell any specific product or assortment of products which are now or may hereafter be sold as of the date of this LEASE at any of TENANT’s other locations.  LANDLORD shall indemnify and defend TENANT against any and all claims asserted by third parties claiming infringement of exclusivity in the SHOPPING CENTER.  If at any time during the TERM of this LEASE LANDLORD grants any form of “exclusive” whatsoever to any person (which cannot be an “exclusive” which violates the terms of this Section or of this LEASE), or if at any time there is any other owner of any portion of the SHOPPING CENTER and if LANDLORD learns that such other owner of the SHOPPING CENTER has granted any “exclusives” other than those set forth on Exhibit “C”, then in any of such events LANDLORD shall promptly notify TENANT, supplying TENANT with the name of the person in whose favor such “exclusive” is granted and the specific details of such “exclusive”.  No “exclusives” other than those set forth on Exhibit “C” shall restrict or otherwise affect the right of use of the PREMISES as set forth in this LEASE.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of

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this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

Section 5.03Signs.  TENANT shall have the right to place such signs on the exterior of the PREMISES as TENANT may desire; provided that such signs comply with applicable laws.  TENANT shall have the right to use and to modify any sign area used by TENANT prior to the EFFECTIVE DATE if the PREMISES is currently occupied by TENANT or (if not currently occupied by TENANT) the most recent prior tenant of the PREMISES, whether such sign area(s) is(are) located on the PREMISES, within the COMMON AREAS, or elsewhere in the SHOPPING CENTER.  TENANT shall also have the right to modify existing monument signage or add additional monument signage in the COMMON AREA or elsewhere in the SHOPPING CENTER, subject only to (i) applicable governmental approvals, (ii) availability of any currently existing sign areas/panels not currently used by existing tenants of the SHOPPING CENTER or reserved for future tenants of vacant units in the SHOPPING CENTER, and (iii) any existing written obligations of LANDLORD to existing tenants of the SHOPPING CENTER.  LANDLORD agrees to disclose the relevant details of any such obligations to TENANT upon request.  LANDLORD shall use its reasonable best efforts to obtain any required approvals from the other tenants of the SHOPPING CENTER and applicable governmental agencies in connection with any signs desired to be installed by TENANT, provided that LANDLORD shall not be required to incur any cost or expense in connection with obtaining such approvals other than de minimis administrative expense.  For a period of time 60 days following the end of the LEASE TERM, TENANT shall be permitted to place two signs not to exceed 24 inches by 36 inches in size, in prominent places visible from the exterior of the PREMISES informing the public of TENANT’s relocation and other similar information.  LANDLORD shall cooperate with TENANT to obtain the best possible signage in TENANT’s judgment.  LANDLORD shall seek the cooperation of the City of Hawaiian Gardens and any entity affiliated therewith to obtain TENANT’s maximum desired signage.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

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(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES and the SHOPPING CENTER;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES or the SHOPPING CENTER;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or the SHOPPING CENTER or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

As used in the above Subsections 5.04(i), (ii), (iii) and (iv), the term “LANDLORD” shall include any affiliate of LANDLORD that owns the SHOPPING CENTER, and all of the employees, agents, contractors and invitees, as applicable of LANDLORD or such affiliate of LANDLORD.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES and its use of the COMMON AREAS for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

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Section 5.07Exclusivity; Use Restrictions; Co-Tenancy.

(a)Exclusivity.  TENANT shall have the exclusive right to operate a one-price general merchandise variety and discount retail store within the SHOPPING CENTER.  This restriction, however, shall not prevent LANDLORD from leasing space in the SHOPPING CENTER to a single price point use that:  (i) does not sell a broad array of merchandise (e.g. a one-price dry cleaner, one-price clothing store, one-price restaurant); and (ii) does not use or advertise the terms “99”, “98”, “dollar”, “cents” (whether spelled out or in symbols) or any variant on the same.

(b)Use Restrictions.  No portion of the SHOPPING CENTER, including, without limitation, the PREMISES, may used for any of the following:

(i)Any uses that are not consistent with first class shopping centers in the area of the PREMISES, which shall include, but not be limited to any uses which include:

(1)nude (or partially nude) bars or nightclubs, or theaters of any kind

(2)massage parlors

(3)adult book stores,

(4)escort services,

(5)bail bonds or pawn shops,

(6)the sale of used or second hand products of any kind (excluding the sale of high quality antiques, or the operation of a high quality antique store or high quality second hand product, operations, such as Play It Again Sports, or the sale, on an incidental basis, of antiques or collectibles),

(7)tattoo parlors,

(8)adult video stores,

(9)any use of a questionable moral character,

(10)indoor swap meets, and

(11)any movie theater, gymnasium, bowling alley, library, church, auditorium, museum, automobile repair, automobile sales, high volume buffet style restaurant exceeding 3,000 square feet in size (such as Home Town Buffet), banquet facility or bar, disco, nightclub, hotel,

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manufacturing, warehouse or other industrial use (except incidental to other permitted uses), or entertainment facility (such as Chuck E Cheese, Discovery Zone, Tutor Time, or Leaps and Bounds).

(ii)Any use which requires a zoning variance or conditional use permit for a non-retail use, or due to insufficient parking within the SHOPPING CENTER.

(iii)Any use which uses the terms “99,” “98,” “dollar,” or any similar terms (whether “spelled out” or in numerical form) in any manner as part of a trade name or logo or in any manner as a material portion of any signage or trade dress.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause,

(c)conditions arising in or about the PREMISES or upon other portions of SHOPPING CENTER, or from other sources or places or from new construction or repair of the PREMISES or the SHOPPING CENTER, or

(d)any act or omission of any other tenant of the SHOPPING CENTER.

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Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, all COMMON AREAS (including, without limitation, all parking areas), and the existing COMMON AREA signs and electrical service thereto, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane)

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shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the SHOPPING CENTER or the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title to the SHOPPING CENTER or the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  TENANT, with the consent of LANDLORD, which shall not unreasonably be withheld or delayed, shall also be permitted to make such alterations to the COMMON AREAS abutting the PREMISES as may be required to comply with any statute, law or ordinance or to meet the requirements of any conditional use or other permit.  All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so

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requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration or earlier termination of the LEASE, except that:  (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

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(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located.  TENANT shall pay the cost of such repairs, except that upon satisfactory completion of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.  If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction,

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LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES or the COMMON AREAS are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES and the COMMON AREAS have been repaired and restored.

Section 7.04Common Areas.  If the COMMON AREAS are damaged or destroyed by any casualty or other cause the provisions of Sections 7.01 and 7.02 shall apply to the same extent and manner as if the PREMISES had been so damaged or destroyed.  Section 7.03 shall apply pending the completion of repair of all COMMON AREAS in the SHOPPING CENTER.

ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If:  (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs within the COMMON AREA are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; OR (vi) a material portion of the COMMON AREAS is taken, then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES or the SHOPPING CENTER under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD or the owner(s) of the SHOPPING CENTER (including any owner(s) of the SHOPPING CENTER that

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may be an affiliate of LANDLORD, as the case may be; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES and the COMMON AREAS.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01 and subsection 5.07(b) above.  A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

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(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)  If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

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(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within

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three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount.  Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance

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of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES or any portion of the SHOPPING CENTER which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES or the SHOPPING CENTER to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES or the SHOPPING CENTER which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

Section 11.02Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

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Section 11.04Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)that this LEASE has not been canceled or terminated;

(c)the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

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Section 12.03Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

Section 12.08Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has

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full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13[RESERVED]

Section 12.14Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall

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be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18Hazardous Materials.

(a)As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

(b)Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES, or the SHOPPING CENTER by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES or the SHOPPING CENTER without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.

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TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES or the SHOPPING CENTER, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES or the SHOPPING CENTER.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	Au Zone Investment #2, L.P.,
	a California limited partnership
	By:	Au Zone Investments #3, LLC,
		a California limited liability company, its General Partner
		By:	/s/ David Gold
			Name: David Gold
			Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #46)]

EXHIBIT “A”

Legal Description

[See Attached]

EXHIBIT “B”

SITE PLAN

Description of Leased PREMISES, COMMON AREAS, and SHOPPING CENTER

[See Attached]

EXHIBIT “C”

“EXCLUSIVES”

For purposes hereof, “exclusives” shall include any of those restrictions applicable to TENANT set forth in the following excerpts from leases with other tenants in the SHOPPING CENTER:

Bartha’s Donuts

Landlord agrees that from and after the execution of this Lease by the parties, Landlord shall not enter into any new lease of all or any portion of the Shopping Center granting to any other tenant or occupant of the Shopping Center the right to utilize the premises leased or owned by such other tenant or occupant primarily for the following: the sale of freshly baked donuts (the “Exclusive Use”).  The foregoing restriction pertaining to the Exclusive Use shall not apply to the incidental use of the premises leased or owned by such other tenant or occupant for the Exclusive Use or the sale or leasing of goods and services that are a part of the Exclusive Use, and the parties hereto agree that, among other things, devoting up to twenty-five percent (25%) of the leased premises for the sale or leasing of such goods and services shall be deemed incidental.  The foregoing restriction pertaining to the Exclusive Use shall also not apply to any uses permitted under leases of portions of the Shopping Center in effect as of the date of execution of the Lease by Landlord and Tenant.  The foregoing restriction pertaining to the Exclusive Use shall also not apply to any tenant over 4,000 square feet. The foregoing restriction pertaining to the Exclusive Use shall also not apply to any tenant whose use clause would describe its business as a convenient store or market, or any similar type uses. The provisions of this paragraph shall be personal to the original Tenant named in the Lease and cannot be assigned to any other person or entity.  Any assignment of the Lease or subletting of fifty percent (50%) or more of the Premises shall cause the provisions of this paragraph to terminate and be of no further force or effect.  Further, the provisions of this paragraph shall also terminate and be of no further force or effect if Tenant fails to commence operation of its business for the Exclusive Use as Tenant’s primary business at the Premises as and when required by the Lease or if Tenant ceases to use and occupy the Premises for the Exclusive Use as Tenant’s primary use of the Premises.

Kentucky Fried Chicken

7.02 Restrictions.

Lessee shall not, without Lessor’s prior written consent (a) conduct any auction or bankruptcy sale, (b) conduct any fire sale except as a result of a fire on the Premises, (c) conduct any close-out sale except at the expiration of the Lease Term, (d) sell any so-called “surplus,” “Army and Navy” or “secondhand” goods, as those terms are generally used at this time and from time to time hereafter, on or from the premises, (e) permit anything to be done on the Premises which will in any way obstruct, interfere with or infringe on the rights of other occupants of the land owned by the Lessor surrounding the Premises, (f) cause, maintain or permit any nuisance on the Premises or cause or merit any waste to be committed on the Premises or cause or merit any waste to be committed on the Premises, or (g) bring or keep on the Premises any material or

permit any act thereon which is prohibited by any law, statute, ordinance or governmental regulation now in force or hereinafter enacted or promulgated, or which is prohibited by any Standard form of fire insurance policy.

7.03 Prohibited Uses.

Lessor shall agree within The Gardens center to not lease space to any other restaurant or takeout food operator primarily engaged in the sale of chicken.

Check Into Cash

P. Exclusives: Landlord agrees not to enter into any new leases for space within the same shopping center with another tenant who provides check advance services, as a separate service for a fee to non-employees.

Little Caesars Pizza

Section 45: Delete as worded and replace with:

“Landlord shall not permit, during the lease term, in this shopping center or on any adjacent or contiguous property now owned or hereafter acquired by the Landlord, its successors and assigns or any entity with which Landlord is associated, the operation or maintenance, other than by Tenant, of a facility which sells pizza, pasta items or other Italian related foods.

Landlord shall be allowed to have an existing or future market tenant sell the separate ingredients for the above, however, they shall not be allowed to sell as a prepared product. Also, Landlord shall not grant any existing or future Tenant any exclusive right to sell any food or beverage which would in any way prohibit Tenant from selling any items allowed Paragraph 5 of this Lease.

Subway

Exclusive Use:  Throughout the Term, provided Tenant is not in default, and so long as Tenant is open for business as a Subway sandwich shop, Landlord will not lease space, or consent to any assignment or subletting, within the Shopping Center to any tenant whose authorized use clause describes its business as any of the following competitive franchises: Blimpies, Quiznos, Miami Subs, TOGO’s, Schotzky’s Deli, McAlisters, and similar operations to the above which offer sub-type sandwiches as its primary business. Further, Landlord shall indemnify, defend and hold Tenant harmless from any third party claim or suit regarding any other exclusive right granted by Landlord, not attached in the Exclusive and Use Restrictions attached as Exhibit “I” hereto. Also, should it be discovered that a tenant in the Shopping Center is in violation of this Exclusive Use, then Landlord shall be obligated to use commercially reasonable efforts to pursue the violating tenant.

C-2

MetroPCS

1.EXCLUSIVE USE.  Landlord agrees that from and after the execution of this Lease by the parties, Landlord shall not enter into any new lease of all or any portion of the Shopping Center granting to any other tenant or occupant of the Shopping Center the right to utilize the premises leased or owned by such other tenant or occupant primarily for the following: a retail store offering pre-paid mobile phone plans (the “Exclusive Use”).  The foregoing restriction pertaining to the Exclusive Use shall not apply to the incidental use of the premises leased or owned by such other tenant or occupant for the Exclusive Use or the sale or leasing of goods and services that are a part of the Exclusive Use, and the parties hereto agree that, among other things, devoting up to fifteen percent (15%) of the leased premises for the sale or leasing of such goods and services shall be deemed incidental.  The foregoing restriction pertaining to the Exclusive Use shall also not apply to any uses permitted under leases of portions of the Shopping Center in effect as of the date of execution of the Lease by Landlord and Tenant, or any Tenant occupying over 3,000 square feet. The Exclusive Use shall not restrict Landlord from leasing to other mobile phone retail stores such as but not limited to Verizon, T-Mobile, AT&T, or Sprint. If a tenant or other occupant of any portion of the Shopping Center violates its lease or other agreement with Landlord in such manner as to cause a violation of the restrictions pertaining to the Exclusive Use contained in this paragraph, Landlord shall use commercially reasonable efforts to cause such tenant or occupant to comply with the applicable provisions of its lease or agreement with Landlord and cease the violating use; provided, however, that Landlord shall not be obligated to litigate against such tenant or other occupant, and Landlord shall have no liability to Tenant for, nor shall Tenant have any right to abate Rent by reason of, the unauthorized acts of such tenant or other occupant.  If any existing lease would permit another tenant or occupant of the Shopping Center to use its premises for the Exclusive Use only with the prior consent or approval of Landlord, and Landlord reasonably believes that it cannot disapprove a request by the tenant or other occupant under such existing lease to change to such use, then Landlord shall have the right to consent to such use and the same shall not constitute a breach or default of Landlord’s obligations under this paragraph.  The provisions of this paragraph shall be personal to the original Tenant named in the Lease and cannot be assigned to any other person or entity.  Any assignment of the Lease or subletting of fifty percent (50%) or more of the Premises shall cause the provisions of this paragraph to terminate and be of no further force or effect.  Further, the provisions of this paragraph shall also terminate and be of no further force or effect if Tenant fails to commence operation of its business for the Exclusive Use as Tenant’s primary business at the Premises as and when required by the Lease or if Tenant ceases to use and occupy the Premises for the Exclusive Use as Tenant’s primary use of the Premises.

Safe Road Insurance

Exclusive Use: Subject to the rights of existing tenants, their assignees and sublessees, during the Term of this Lease, including any option periods, Landlord agrees that, so long as Tenant is not in default under any material term or condition of this Lease and is in possession of the Premises and open for business, it shall not lease space, or consent to the assignment or subletting, to any other tenant whose authorized use clause would describe tenant’s primary business as the sale and marketing of auto insurance policies. Notwithstanding the above, this exclusive shall not apply to the following; (a) tenants over three thousand (3,000) square feet in size within the Shopping Center, and (d) any Tenant who sells or markets auto insurance as an incidental part of its business (defined as less than 20% of its business).

C-3

EX-10.18

Exhibit 10.18

99¢ ONLY STORES

STANDARD SINGLE-TENANT FORM LEASE

2606 North Broadway, Los Angeles, CA

THIS LEASE (the “LEASE”) is made, executed and effective as of the 13th day of January, 2012 (the “EFFECTIVE DATE”) by and between HKJ Gold, Inc., a California corporation (the “LANDLORD”), and 99¢ ONLY STORES, a California corporation (the “TENANT”), who agree as follows:

ARTICLE ONE

BASIC TERMS

This Article One contains the Basic Terms of the LEASE between LANDLORD and TENANT named below.  Other Articles, Sections and Paragraphs of the LEASE referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms.  If there is any conflict or ambiguity between the provisions of this Article One and other portions of this LEASE, then such other portions shall control and supersede the provisions of this Article One.

Section 1.01Landlord’s Address:

c/o Jeff Gold

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

Section 1.02Tenant’s Address:

c/o Eric Schiffer

4000 E. Union Pacific Avenue

Commerce, CA 90023

Telephone: (213) 980-8145

With a copy to:

Number Holdings, Inc.

2000 Avenue of the Stars, 12th Floor

Los Angeles, CA 90067

Attn: Kevin Frankel

Section 1.03Premises.  The demised premises (the “PREMISES”) consists of that certain real property, including all improvements thereon, commonly known as 2606 North Broadway, Los Angeles, CA (including the building of approximately 10,000 square feet of ground floor retail space and the parking areas (if any)), which is owned by LANDLORD and which is described in Exhibit “A”.

Section 1.04Lease Term.  Approximately five (5) years beginning on the EFFECTIVE DATE and ending on January 31, 2017, unless sooner terminated in accordance with this LEASE (the “INITIAL LEASE TERM”).  TENANT shall have the options to extend the LEASE TERM beyond the INITIAL LEASE TERM as set forth in Section 2.02.  The INITIAL LEASE TERM plus all EXTENDED TERMS exercised by TENANT pursuant to Section 2.02 below shall hereinafter be referred to collectively as the LEASE TERM.

Section 1.05Permitted Uses.  Retail store use, which may include, without limitation, the sale of beer and wine for off-site consumption, and the sales of all other products sold in TENANT’s other 99¢ Only Stores, subject to limitation, if any, set forth in Article 5 hereof.

Section 1.06[RESERVED]

Section 1.07[RESERVED]

Section 1.08Rent and Other Charges Payable by Tenant.

(a)Base Rent.  During the INITIAL LEASE TERM, TENANT shall pay the sum of Twelve Thousand Six Hundred and 00/100 Dollars ($12,600.00) per month (the “BASE RENT”) as rent for the PREMISES, subject to adjustment in accordance with (i) the terms of that certain letter agreement dated October 11, 2011, by and among TENANT, LANDLORD and the other parties thereto, and (ii) the provisions of subsection 3.03 (b) below.  The BASE RENT shall be subject to adjustment during the EXTENDED TERMS in accordance with Section 3.03 below.  All adjustments to “BASE RENT” during any of the EXTENDED TERMS shall be made and effective as of February 1 of the particular calendar year in which such adjustment is made.

(b)Other Periodic Payments.  (i) Real Properly Taxes (See Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04); (iv) [RESERVED]; (v) Maintenance, Repairs and Alterations (See Article Six) and as to all such items see Section 1.09.  The aggregate of all items described in this Section 1.08 (b) is sometimes referred to in this LEASE as the “OPERATING EXPENSES”.

ARTICLE TWO

LEASE TERM

Section 2.01Lease of Premises For Lease Term.  LANDLORD leases the PREMISES to TENANT and TENANT leases the PREMISES from LANDLORD for the LEASE TERM.  The LEASE TERM is for the period stated in Section 1.04 above and shall begin and end or the dates specified in Section 1.04 above, unless the beginning or end of the LEASE TERM is changed under any provision of this LEASE.

Section 2.02Right to Extend Lease Term.  TENANT shall have the right to extend the LEASE TERM, on the terms and provisions set forth in this LEASE, for one (1) additional period of five (5) years (the “EXTENDED TERM”) following expiration of the INITIAL LEASE TERM by giving written notice of exercise to LANDLORD at least one hundred eighty

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(180) days prior to the expiration of the INITIAL LEASE TERM.  The BASE RENT during each such EXTENDED TERM shall be subject to increase as set forth in Section 3.03.

Section 2.03Delivery of Premises.  The PREMISES previously have been delivered by LANDLORD and accepted by TENANT in the condition specified in Section 6.01.

Section 2.04Holding Over.  If TENANT does not vacate the PREMISES upon the expiration or earlier termination of the LEASE and LANDLORD thereafter accepts rent from TENANT, TENANT’s occupancy of the PREMISES shall be a “month-to-month” tenancy, subject to all of the terms of this LEASE applicable to a month-to-month tenancy, except that the BASE RENT payable by TENANT during such month-to-month tenancy shall be equal to the BASE RENT in effect as of the expiration of the LEASE TERM.  Notwithstanding the foregoing, in the event that LANDLORD shall serve TENANT with a notice to vacate the PREMISES, then thirty (30) days after receipt of such notice from LANDLORD, if TENANT has not vacated the PREMISES, the BASE RENT shall be equal to 150% of the BASE RENT in effect immediately prior to such expiration of this LEASE.

ARTICLE THREE

BASE RENT

Section 3.01Time and Manner of Payment.  Beginning on the EFFECTIVE DATE and the first day of each calendar month thereafter during the LEASE TERM, TENANT shall pay LANDLORD the BASE RENT, in advance.  The BASE RENT shall be payable to LANDLORD at LANDLORD’s address or to such other party and/or address as LANDLORD may designate by written notice to TENANT at least ten (10) days prior to the effective date of such notice.  BASE RENT for any partial month shall be prorated based on the actual number of days in the calendar month involved.  The PREPAID RENT shall be applied as TENANT elects to TENANT’s BASE RENT and ADDITIONAL RENT obligations hereunder.

Section 3.02[RESERVED]

Section 3.03Base Rent Adjustment.

(a)The BASE RENT (subject to adjustment as set forth in Section 1.08(a) above) payable during the EXTENDED TERM, subject to the provisions of part (b) of this Section 3.03, shall be increased from the BASE RENT payable immediately prior to the first month of the EXTENDED TERM to the then fair market rental rate determined in connection with part (b) of this Section 3.03.

(b)Determination of Fair Market Rental Rate.  In connection with the determination of the BASE RENT for the EXTENDED TERM under this LEASE, the parties shall have thirty (30) days after LANDLORD receives the notice of exercise of TENANT’s option to extend the lease term in which to agree on a fair market rental rate for the PREMISES for the EXTENDED TERM.  If the parties agree on the fair market rental rate for the EXTENDED TERM during that period, they shall immediately execute an amendment to this

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LEASE, stating the agreed BASE RENT for the EXTENDED TERM based on such agreed fair market rental rate.

If the parties are unable to reach an agreement on the BASE RENT for the EXTENDED TERM during such thirty (30) day period, then each party shall make, and submit to the other, a separate written statement of its proposed fair market BASE RENT for the EXTENDED TERM within ten (10) days of the expiration of such thirty (30) day period, and the determination of such BASE RENT for the EXTENDED TERM shall be submitted to arbitration as hereinafter provided:

Within such ten (10) day period, LANDLORD and TENANT shall agree on a single arbitrator (and LANDLORD or TENANT may consult with such arbitrator prior to his or her appointment) who shall, by profession, be a real estate broker or appraiser who is a member of the American Institute of Appraisers, or any successor organization and who shall have been active over the ten (10) year period ending on the date of such appointment on a full-time basis in the leasing (or appraisal, as the case may be) of commercial properties in the area in which the PREMISES are located.

The arbitrator’s determination of the fair market rental value shall be final and conclusive and shall be limited solely to the issue of whether LANDLORD’s or TENANT’s submitted BASE RENT for the EXTENDED TERM, as applicable, is the closest to such arbitrator’s determination of fair market rental value, and such party’s BASE RENT for the EXTENDED TERM shall be the BASE RENT for the EXTENDED TERM.  The arbitrator shall reach such a decision and notify LANDLORD and TENANT of such determination within thirty (30) days of his or her appointment.

If LANDLORD and TENANT are unable to reach an agreement upon and appoint a single arbitrator, then the appointment of the arbitrator shall be made by the Presiding Judge of the Superior Court of Los Angeles County, or, if he or she refuses to act, by any State or Federal judge sitting in the County of Los Angeles.

Section 3.04Termination; Advance Payments.  Upon termination of this LEASE under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any other termination not resulting from TENANT’s default, and after TENANT has vacated the PREMISES in accordance with Section 6.06 below, LANDLORD shall immediately refund or credit to TENANT (or TENANT’s successor) any advance payments made by TENANT to LANDLORD, any amounts paid for OPERATING EXPENSES or otherwise which apply to any time periods after the effective date of the termination of the LEASE and, if LANDLORD fails to use good faith efforts to deliver the PREMISES to TENANT, any and all amounts which may be due from LANDLORD pursuant to Section 2.03 above.

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ARTICLE FOUR

OTHER CHARGES PAYABLE BY TENANT

Section 4.01Additional Rent.  All charges payable by TENANT other than BASE RENT are called “ADDITIONAL RENT.”  Unless this LEASE provides otherwise, TENANT shall pay all ADDITIONAL RENT then due with the next monthly installment of BASE RENT.  The term “rent” shall mean BASE RENT and ADDITIONAL RENT.

Section 4.02Property Taxes.

(a)Real Property Taxes.  TENANT shall pay directly to the tax assessor the real property taxes on the PREMISES.  LANDLORD shall provide the tax bill to TENANT at least thirty (30) days prior to its due date, and, provided LANDLORD so complies, TENANT shall pay the share prior to its due date.  TENANT should have the right to apply for a reduction in the assessed value of the PREMISES and to challenge any reassessment of the PREMISES.  LANDLORD may elect to pay the REAL PROPERTY TAXES directly (after providing reasonable advance notice thereof to TENANT) and in such event TENANT shall reimburse LANDLORD for the amount of such REAL PROPERTY TAXES within ten (10) days of TENANT’s receipt of LANDLORD’s request therefore accompanied by reasonable evidence of payment.  REAL PROPERTY TAXES may be paid in the maximum number of installments permitted without penalty or other charges.

(b)Definition of “Real Property Tax.”  “REAL PROPERTY TAXES” shall mean all ad valorem real property taxes and assessments due and applicable during the LEASE TERM which are assessed by any lawful authority against the real property constituting the PREMISES, less any rebates, credits or abatements which are granted or agreed upon by such lawful authority.  The term “REAL PROPERTY TAXES” shall not, however, include the following:  (i) [RESERVED]; (ii) income, profits, including gross profits, franchise, gift, estate, inheritance, succession, conveyance, transfer, sales, transaction, excise, capital or other tax assessments upon LANDLORD or the rent payable under this LEASE; and (iii) any interest, fine or penalty for late payment or nonpayment by LANDLORD of REAL PROPERTY TAXES.

(c)Personal Property Taxes.

(i)TENANT shall pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to TENANT.

(ii)If any of TENANT’s personal property is included with the REAL PROPERTY TAXES, TENANT shall pay LANDLORD the taxes for the personal property taxes within fifteen (15) days after TENANT receives a copy of the applicable tax bill and a written statement from LANDLORD for such personal property taxes; subject to such personal property taxes against TENANT’s property interests being able to be separately identified on such invoice.

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(d)TENANT, at its sole cost and expense, shall have the right to contest, or to cause LANDLORD to contest, the REAL PROPERTY TAXES pertaining to the PREMISES and any personal property taxes assessed against TENANT’s personal property interests.  If LANDLORD shall contest any such taxes, TENANT shall be entitled to its pro rata share of any refund obtained hereunder for any period of time during which TENANT was responsible for payment of REAL PROPERTY TAXES under this Section 4.02, and the entirety of any personal property tax refunds (net of a corresponding pro-rata share of any reasonable out of pocket costs incurred by LANDLORD to collect said refund.

Section 4.03Utilities.  TENANT shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services supplied to the PREMISES.  LANDLORD represents to TENANT that neither the PREMISES nor any other premises are jointly metered with any other premises.

Section 4.04Insurance Policies.

(a)Tenant’s Insurance.

During the LEASE TERM, TENANT shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring TENANT against liability for bodily injury, property damage (including loss of use of property) and personal injury, arising out of the operation, use or occupancy of the PREMISES.  TENANT shall name LANDLORD as an additional insured under such policy.  The amount of such insurance shall be not less than One Million Dollars ($1,000,000.00) per occurrence.  The liability insurance obtained by TENANT under this Section 4.04(a) shall:

(i)be primary and non-contributing;

(ii)contain cross-liability endorsements; and

(iii)contain such coverage for contractual breach as may be provided by such standard form of policy.

(b)Landlord’s Property Insurance.  During the LEASE TERM, LANDLORD shall maintain fire and extended coverage policies covering the PREMISES. The limits for such insurance shall be for the full replacement value of the property so insured.  Such policies shall provide protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), sprinkler leakage and any other perils which LANDLORD deems reasonably necessary and may include business interruption coverage covering a maximum of twelve (12) months from the date of such damage or destruction.  Such insurance shall be carried with an insurance company with a Best rating of B+ or better and LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.  LANDLORD shall not obtain insurance for TENANT’s fixtures or equipment or building improvements installed by TENANT on the PREMISES.  TENANT shall not do or permit anything to be done which invalidates any such

6

insurance policies.  LANDLORD may maintain earthquake insurance at LANDLORD’s sole cost and expense and TENANT shall not be required to pay its pro rata share thereof.

(c)Landlord’s Liability Insurance.  During the LEASE TERM, LANDLORD shall maintain in full force and effect, general public liability insurance, insuring against liability for injury or death to persons and loss of or damage to property occurring in, on or about the PREMISES, in an amount equal to not less than $3,000,000.00 per occurrence.  Such insurance shall also provide contractual coverage of LANDLORD’s liability to TENANT under the indemnification provisions of this LEASE and shall name TENANT as an additional insured.  Such insurance shall be with an insurance carrier having a Best rating of B+ or better.  LANDLORD shall, upon TENANT’s request, provide TENANT with a certificate of insurance evidencing such coverage.

(d)Payment of Premiums.  LANDLORD shall pay all premiums for the insurance policies described in Sections 4.04(b) and 4.04(c) above.  TENANT shall, in accordance with Sections 4.06, as limited by Section 4.07, reimburse LANDLORD for (i) its pro rata share of the insurance premiums for policies which LANDLORD is obligated to maintain or cause to be maintained under Section 4.04(b) above.  Upon LANDLORD’s request, TENANT shall deliver to LANDLORD a copy of any policy of insurance (or certificate of insurance, at TENANT’s option) which TENANT is required to maintain under this Section 4.04.  At least thirty (30) days prior to the expiration of any such policy, TENANT shall deliver to LANDLORD a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which TENANT is required to maintain under this Section 4.04 is in full force and effect and containing such other information which LANDLORD reasonably requires.

(e)General Insurance Provisions.

(i)Any insurance which TENANT is required to maintain under this LEASE, shall include a provision stating that TENANT’s insurance carrier shall endeavor to give LANDLORD not less than thirty (30) days’ written notice prior to any cancellation or modification of such coverage.

(ii)If TENANT fails to deliver any policy of insurance (or certificate or renewal) to LANDLORD required under this LEASE within thirty (30) days following written request from LANDLORD for such evidence of insurance, or within ten (10) days prior to expiration of the then current insurance coverage, then LANDLORD may obtain such insurance, in which case LANDLORD shall immediately notify TENANT and TENANT shall reimburse LANDLORD for the cost of such insurance within fifteen (15) days after receipt of a statement that indicates the cost of such insurance.

(iii)TENANT shall maintain all insurance required under this LEASE with companies holding a “General Policy Rating” of B+ or better, as set forth in the most current issue of “Best Key Rating Guide”.  LANDLORD and TENANT acknowledge the insurance markets are rapidly changing and that insurance in the form and amounts described in this Section 4.04 may not be available in the future.  If at any time during the LEASE TERM,

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TENANT is unable to maintain the insurance required under the LEASE, TENANT shall nevertheless maintain insurance coverage which is customary and commercially reasonable in the insurance industry for TENANT’s type of business, as that coverage may change from time to time.

(iv)Unless prohibited under any applicable insurance policies maintained, LANDLORD and TENANT each hereby waive any and all rights of recovery against the other, or against the officers, employees, agents or representatives of the other, for loss of or damage to its property or the property of others under its control, if such loss or damage is covered by any insurance policy in force (whether or not described in this LEASE) at the time of such loss or damage.  Upon obtaining the required policies of insurance, LANDLORD and TENANT shall give notice to the insurance carriers of this mutual waiver of subrogation.

ARTICLE FIVE

USE OF PREMISES

Section 5.01Permitted Uses.  TENANT may use the PREMISES only for the uses permitted in Section 1.05 above and for business offices in connection therewith and such other uses related or incidental thereto, consistent with all laws, federal, state or local, and with any applicable regulation of any government body and for any other legal use or purpose during the LEASE TERM, specifically excluding any restrictions of record with respect to the PREMISES as of the date hereof, if any.  LANDLORD agrees to fully cooperate with TENANT in maintaining its beer and wine sales permit.

Section 5.02Manner of Use.  TENANT shall not cause or permit the PREMISES to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which constitutes a nuisance or waste.  TENANT shall obtain and pay for all permits required for TENANT’s occupancy of the PREMISES and, except as otherwise hereinafter provided, shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, regulations, orders and requirements regulating the specific use by TENANT of the PREMISES as set forth in Section 1.05 above.  Notwithstanding any other provision of this LEASE, if at any time during the LEASE TERM the PREMISES is not in conformity with any present or future law or regulation relating to the use, occupation or reconstruction thereof (including, without limitation, the Americans with Disabilities Act, earthquake safety codes, fire sprinkler codes, and laws governing the presence of regulated or hazardous substances (such as asbestos) incorporated into the PREMISES (which were not placed there by TENANT) or is subject to any order of any governmental agency ordering any rebuilding, alteration or repair thereof, LANDLORD shall immediately at its own cost and expense, and without any right of reimbursement from TENANT (unless the work is required because of TENANT’s particular use of the PREMISES), effect such alterations and repairs to the PREMISES as may be necessary to comply with such laws, regulations, orders or requirements.  All such alterations and repairs, if made to the PREMISES, shall be made in accordance with the plans and specifications approved in writing by TENANT.

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Section 5.03Signs.  TENANT shall have the right to place signs as TENANT may desire on the exterior of the PREMISES on the roof of the BUILDING as TENANT may desire; provided that such signs comply with applicable laws and are made, installed, and maintained in a professional manner.

Section 5.04Indemnity.

(a)Except for losses, damages and claims arising out of the negligence or willful misconduct of LANDLORD or LANDLORD’s agents, contractors and employees, TENANT shall indemnify defend and hold LANDLORD harmless from and against any and all costs, claims, demands or liability arising from:

(i)TENANT’s use of the PREMISES;

(ii)the conduct of TENANT’s business or anything else done by TENANT or permitted by TENANT to be done in or about the PREMISES; or

(iii)any misrepresentation or breach of warrant by TENANT under this LEASE.

(b)Except for losses, damages and claims to the extent arising out of the acts or omissions of TENANT or TENANT’s agents, contractors and employees, LANDLORD shall, indemnify, defend and hold TENANT harmless from and against any and all costs, claims, demands or liability arising from:

(i)LANDLORD’s ownership or operation of the PREMISES;

(ii)the conduct of LANDLORD or anything else done by LANDLORD or permitted by LANDLORD to be done in or about the PREMISES;

(iii)any misrepresentation or breach of warranty by LANDLORD under this LEASE; and

(iv)subject to TENANT’s obligations pursuant to Section 12.20 below, actual or threatened violations of any laws governing or regulating “HAZARDOUS MATERIALS” as defined in Section 12.20 below, within, upon, under, or adjacent to the PREMISES or other damages, fines, penalties, acts, costs, claims, or liabilities incurred in connection therewith, including, without limitation, the cost of any investigation, remediation, restoration, cleanup and/or abatement.

Section 5.05Landlord’s Access.  LANDLORD or its agents may enter the PREMISES at reasonable times to inspect the PREMISES; or for any other purpose LANDLORD deems reasonably necessary.  Except in the case of an emergency any such entry by LANDLORD shall be during TENANT’s regular business hours at the PREMISES and shall be with reasonable prior notice of LANDLORD’s intent to enter.

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Section 5.06Quiet Possession.  So long as TENANT is not in default under this LEASE, TENANT may occupy and enjoy the PREMISES for the full LEASE TERM without interference or hindrance by LANDLORD or anyone claiming under or through LANDLORD.

ARTICLE SIX

CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS

Section 6.01Condition of PREMISES.  LANDLORD is deemed to have delivered the PREMISES to TENANT in a clean and good condition free of all tenancies and claims of rights of possession by any other person, in full compliance with all applicable local, county, and state and federal laws and regulations, and with all existing asbestos related materials removed (or, solely as to pipes and the roof area, encapsulated) in accordance with applicable laws.  In the event that TENANT is notified by a governmental agency that the PREMISES violate any covenants or restrictions of record, or any applicable building or other code, regulation or ordinance in effect, it shall be the obligation of LANDLORD, after written notice from TENANT, to rectify any such violation to the extent reasonably practicable and at LANDLORD’s sole cost and expense.  TENANT’s sole and exclusive remedy for LANDLORD’s failure to rectify any such violation shall be termination of the LEASE.

Section 6.02Exemption of Landlord from Liability.  Except to the extent that same shall be the result of (i) the negligence or willful misconduct of LANDLORD or of LANDLORD’s agents, contractors or employees, or (ii) LANDLORD’s failure to perform its obligations under the terms of this LEASE, or (iii) any misrepresentations made by LANDLORD herein, LANDLORD shall not be liable for any damage or injury to the person, business (or any loss of income therefrom), goods, wares or property of TENANT, TENANT’s employees, invitees, clients, customers or any other person in or about the PREMISES, whether such damage or injury is caused by or results from:

(a)theft, fire, steam, electricity, water, gas or rain,

(b)the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures or any other cause, or

(c)conditions arising in or about the PREMISES, or from other sources or places or from new construction or repair of the PREMISES.

Section 6.03Landlord’s Obligations.  Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation) and Section 6.04(b) below, and subject to the provisions of Section 6.04 regarding repairs during the initial construction warranty period, LANDLORD shall, at its sole cost and expense, keep the foundations, resurfacing or replacement of parking lot surface, structural portions of the building (including foundations, the slab, and compliance with earthquake code), replacement of the structural portions of the roof (and the roof membrane), the structural portions of the roof top signage, if any, the pylon signage, if any, exterior walls, fire sprinkler system (if any) and utility connections to the building (water, sewer, electrical, phone, etc.) in good order, condition and repair.  LANDLORD shall make repairs

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under this Section 6.03 within a reasonable time after receipt of written notice from TENANT of the need for such repairs.  If LANDLORD fails to commence to meet any obligation hereunder, including without limitation Section 6.03 and Section 4.05, within a reasonable amount of time after TENANT’s notice thereof (not exceeding 15 days, except in the case of an emergency or dangerous condition, in which event no notice shall be required), then TENANT may, but shall not be obligated to do so and without waiving any other rights or remedies provided hereunder or by law, perform any portion of LANDLORD’s obligations and deduct all reasonable amounts expended in connection therewith from TENANT’s subsequent, financial obligations to LANDLORD.  All notices sent to LANDLORD prerequisite of TENANT’s exercise of its rights pursuant to the provisions of the foregoing sentence shall contain the words ‘Notice of Intention to Exercise Self-Help Rights’ in the “Re” line or otherwise prominently noted at the top of such notice. Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of recorded non-disturbance agreements from each lender, TENANT shall send copies of any notice referring to TENANT’s self-help rights to such lender(s) as TENANT has been notified in writing by LANDLORD from time to time, at such addresses as LANDLORD specifies in such notice(s).  TENANT will accept a cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The self-help and offset rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’ or such other name as may be employed by TENANT in its retail operations prior to such assignment.  Notwithstanding anything to the contrary contained herein, TENANT shall have the right to install and maintain antennae and/or a satellite dish on the roof of the PREMISES, subject to applicable law.  TENANT shall promptly repair any damage to, the roof of the PREMISES which is caused by the installation and maintenance of said antennae and/or satellite dish.

Section 6.04Tenant’s Obligations.

(a)Except as provided in Section 5.02, Section 6.03, Article Seven (Damage or Destruction) and Article Eight (Condemnation), TENANT shall keep all portions of the PREMISES (excepting foundations, exterior walls, sidewalks, and other obligations of LANDLORD) in good order, condition and repair (including interior and exterior repainting and refinishing, as needed), subject to ordinary and reasonable wear and tear; provided, however, that TENANT’s obligations in respect of the parking lot surface and roof (and the roof membrane) shall be general maintenance obligations (and LANDLORD shall be responsible for any necessary replacements thereof).

(b)TENANT shall fulfill all of TENANT’s obligations under this Section 6.04, except as otherwise provided, at TENANT’s expense.  If TENANT fails to maintain, repair or replace the PREMISES as required by this Section 6.04, LANDLORD may, upon fifteen (15) days’ prior notice to TENANT (except that no notice shall be required in the case of an emergency), enter the PREMISES and perform such maintenance or repair (including replacement, as needed) on behalf of TENANT; provided that TENANT has not begun such repairs prior to LANDLORD’s entry upon the PREMISES to perform such work.  If LANDLORD performs such work on behalf of TENANT, then TENANT shall reimburse

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LANDLORD for its reasonable out-of-pocket costs incurred in performing such maintenance or repair for which TENANT is responsible promptly upon demand.

(c)TENANT agrees not to permit any mechanic’s, materialmen’s or other liens to be filed against all or any part of the PREMISES, nor against TENANT’S leasehold interest in the PREMISES, by reason of or in connection with any repairs, alterations, improvements or other work contracted for or undertaken by or at the direction of TENANT.  LANDLORD will have the right at all reasonable times to post on the PREMISES and record any notices of non-responsibility which it deems necessary for protection from such liens.  If any such liens are filed, TENANT shall, at its sole cost, cause such liens to be released of record or bonded so that they no longer affect title the PREMISES, not later than ten (10) days after TENANT is notified in writing of the filing thereof.  If TENANT fails to cause any such liens to be so released or bonded within such ten (10) day period, and if TENANT has been so notified of the existence of such lien(s), LANDLORD may, without waiving its rights and remedies based on such breach, and without releasing TENANT from any of its obligations, cause such liens to be released by any means it shall deem proper, including payment in satisfaction of the claims giving rise to such liens.  TENANT agrees to pay to LANDLORD within thirty (30) days after receipt of invoice from LANDLORD, any sum paid by LANDLORD to remove such liens.

Section 6.05Alterations, Additions, and Improvements.

(a)TENANT shall have the right to make (i) non-structural alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS without LANDLORD’s prior written consent and (ii) any other alterations, additions, or improvements to the PREMISES and TENANT’s LOADING AREAS with LANDLORD’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, including (without limitation, as to items of work performed by or at the direction of TENANT, the requirements of the Americans with Disabilities Act (“ADA”).  Upon completion of any such work and within a reasonable time after LANDLORD provides TENANT with a notice so requesting, TENANT shall provide LANDLORD with copies of as built plans, copies of all constructions contracts, and proof of payment for all labor and materials, to the extent that the same are available to TENANT.

(b)TENANT shall pay when due all claims for labor and material furnished to the PREMISES.  TENANT shall give LANDLORD at least twenty (20) days’ prior written notice of the commencement of any work on the PREMISES, regardless of whether LANDLORD’s consent to such work is required.  LANDLORD may elect to record and post notices of non-responsibility on the PREMISES.

Section 6.06Condition upon Termination.  Upon the termination of the LEASE, TENANT shall surrender the PREMISES to LANDLORD, broom clean and in the same condition as received, ordinary wear and tear and damage by casualty excepted.  TENANT shall not be obligated to repair any damage which LANDLORD is required to repair under Article Seven or elsewhere under this LEASE.  All alterations, additions and improvements shall become LANDLORD’s property and shall be surrendered to LANDLORD upon the expiration

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or earlier termination of the LEASE, except that: (i) TENANT may remove any of TENANT’s trade fixtures, machinery or equipment and signs; and (ii) TENANT shall remove all antennae and satellite dishes installed by TENANT on the roof of the PREMISES and all communications and computer wiring and cables installed by TENANT in the PREMISES.  TENANT shall repair, at TENANT’s expense, any damage to the PREMISES caused by the removal of any such trade fixtures, machinery or equipment, signs, and any antennae, satellite dishes, wiring and cabling.  In connection with any required repair to the roof of the PREMISES, TENANT shall obtain LANDLORD’s prior approval (which shall not unreasonably be withheld) to the roofing contractor selected by TENANT for such repair work.

ARTICLE SEVEN

DAMAGE OR DESTRUCTION

Section 7.01Partial Damage to Premises.

(a)TENANT shall notify LANDLORD in writing immediately upon the occurrence of any damage to the PREMISES.  If (i) the PREMISES is only partially damaged (i.e., less than twenty-five percent (25%) of the PREMISES is untenantable as a result of such damage or (ii) less than twenty-five percent (25%) of TENANT’s operations are materially impaired), and if such damage is covered by insurance required to be carried by LANDLORD hereunder or otherwise carried by LANDLORD, this LEASE shall remain in effect and LANDLORD shall repair the damage as soon as reasonably possible.  Notwithstanding the foregoing, in the event that (i) more than twenty-five percent (25%) of the PREMISES is untenantable as a result of such casualty, or (ii) more than twenty-five, percent (25%) of TENANT’s operations in the PREMISES are materially impaired as a result of such casualty, or (iii) in TENANT’s reasonable opinion, it would take more than one hundred eighty (180) days after the date of such casualty, to restore the PREMISES; TENANT shall have the right to terminate this LEASE, upon notice thereof to LANDLORD.

(b)If the cause of the damage is not covered by the insurance policies which LANDLORD is obligated to maintain under Section 4.04(b) or otherwise carried by LANDLORD, LANDLORD shall elect either to:

(i)repair the damage as soon as reasonably possible, in which case, subject to TENANT’s right of termination as set forth above, this LEASE shall remain in full force and effect, or

(ii)terminate this LEASE as of the date the damage occurred.  LANDLORD shall notify TENANT within thirty (30) days after receipt of notice of the occurrence of the damage whether LANDLORD elects to repair the damage or terminate the LEASE.  LANDLORD’s failure to so notify TENANT within such period shall be deemed an election by LANDLORD to terminate this LEASE.  If LANDLORD elects to terminate this LEASE, TENANT may elect to continue this LEASE in full force and effect, in which case TENANT shall repair any damage to the PREMISES and any building in which the PREMISES is located. TENANT shall pay the cost of such repairs, except that upon satisfactory completion

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of such repairs, LANDLORD shall deliver to TENANT any insurance proceeds received by LANDLORD for the damage repaired by TENANT.  TENANT shall give LANDLORD written notice of such election within ten (10) days after receiving LANDLORD’s termination notice, and in such event LANDLORD shall have no responsibility to repair or replace TENANT’s trade fixtures, inventory, or other personal property, all of which shall be TENANT’s responsibility to handle as TENANT determines in TENANT’s sole discretion.

(c)If the damage to the PREMISES occurs during the last six (6) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) and such damage will require more than thirty (30) days to repair, or (ii) if, in the reasonable opinion of either party hereto, less than twelve (12) months of the LEASE TERM (including any previously exercised option granted pursuant to Section 2.02 above) would remain following completion of the repair of the PREMISES, then either LANDLORD or TENANT may elect to terminate this LEASE as of the date the damage occurred, regardless of whether such damage is insured, and regardless of the extent of such damage.  The party electing to terminate this LEASE shall give written notification to the other party of such election within thirty (30) days after TENANT’s notice to LANDLORD of the occurrence of the damage.  Notwithstanding any such election by LANDLORD to terminate this LEASE pursuant to the terms of this subsection, if TENANT has one or more unexercised options to extend the LEASE TERM pursuant to Section 2.02 above remaining, then TENANT shall have thirty (30) days following the date of such damage and destruction to exercise any such option.  If TENANT so exercises any such option, then LANDLORD shall not be permitted to terminate this LEASE, and any notice from LANDLORD of its intention to terminate the LEASE prior to TENANT’s notice of its intention to exercise such option shall be null and void.

Section 7.02Substantial or Total Destruction.   If the PREMISES are substantially or totally destroyed by any cause whatsoever, and regardless of whether LANDLORD receives any insurance proceeds, this LEASE shall terminate as of the date the destruction occurred.  Notwithstanding the preceding sentence, and subject to Section 7.02(a) and 7.01(c) above, if the PREMISES can be rebuilt within one hundred fifty (150) days after the date of destruction, LANDLORD may elect to rebuild the PREMISES at LANDLORD’s own expense, in which case this LEASE shall remain in full force and effect.  LANDLORD shall notify TENANT of such election within thirty (30) days after TENANT’s notice of the occurrence of total or substantial destruction.  If LANDLORD so elects, LANDLORD shall rebuild the PREMISES at LANDLORD’s sole expense.

Section 7.03Temporary Reduction of Rent.  If the PREMISES are damaged or destroyed, any BASE RENT and ADDITIONAL RENT payable during the period of such damage, repair and/or restoration (including a reasonable time for TENANT to reopen the PREMISES) shall be reduced in proportion to the amount of square footage damaged, destroyed or otherwise rendered unusable for TENANT’s use.  In the event that, in TENANT’s reasonable business judgement, it is impossible or impractical to operate its business in the PREMISES in the ordinary course in that portion of the PREMISES not so damaged or destroyed, then all BASE RENT and ADDITIONAL RENT shall abate until the PREMISES have been repaired and restored.

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ARTICLE EIGHT

CONDEMNATION

Section 8.01Eminent Domain.  If all or any portion of the PREMISES are taken under the power of eminent domain (all of which are called “CONDEMNATION”), this LEASE shall terminate as to the part taken or sold on the date the condemning authority takes title or possession, whichever occurs first.  If: (i) more than twenty percent (20%) of the (A) floor area of the PREMISES is taken or (B) the parking spaces are taken; or (ii) regardless of the portion of the PREMISES or parking so taken, if during the six months following such taking TENANT’s sales decrease by an amount equal to twenty percent (20%) of the sales for prior to such taking; or (iii) if, in TENANT’s reasonable business judgement, TENANT is unable to load and unload, merchandise at the PREMISES in a reasonable manner as a result of such taking; or (iv) if any of TENANT’s signs are taken and cannot be replaced with reasonably equivalent signs in a reasonably equivalent location as determined by TENANT in its reasonable business judgment; or (v) more than ten percent of the storefront of the PREMISES is taken; then in any of such events TENANT may terminate this LEASE as of the date the condemning authority takes title or possession, by delivering written notice to LANDLORD.  If TENANT does not so terminate this LEASE, this LEASE shall remain in effect as to the portion of the PREMISES not taken, except that the BASE RENT and ADDITIONAL RENT shall be reduced in proportion to the reduction in the floor area of the PREMISES.  Any award for the taking of all or any part of the PREMISES under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of LANDLORD; provided, however, that TENANT shall be entitled to any award for, or to bring an action for a separate award for, the following:

(a)loss of or damage to TENANT’s trade fixtures, personal property and tenant improvements that have been paid for by TENANT;

(b)the value of the leasehold estate (i.e., the leasehold bonus value);

(c)relocation expenses incurred by TENANT as a result of such taking; and

(d)loss of business and good will.

In the event that this LEASE is not terminated by reason of such condemnation, LANDLORD shall to the extent of award of damages received by LANDLORD in connection with such condemnation, repair any damage to the PREMISES.

ARTICLE NINE

ASSIGNMENT AND SUBLETTING

Section 9.01Assignment and Subletting.  TENANT, without LANDLORD’S consent, may assign or sublet any or all of its interest in the Premises.  Promptly following any such assignment or subletting, TENANT shall notify LANDLORD of the name and address of such sublessee or assignee.  Any such subletting or assignment shall be subject to all of the terms

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of this LEASE including, without limitation, any restrictions pertaining to the use of the PREMISES set forth in subsection 5.01above. A condition to the effectiveness of any assignment of this LEASE shall be that TENANT delivers, or causes to be delivered, to LANDLORD a true copy of the fully executed instrument effecting such assignment, and a form of assumption of TENANT’S obligations under this LEASE by such assignee in form reasonably acceptable to LANDLORD.

Section 9.02TENANT Liability.  Except in the case of the assignment of this LEASE in connection with a merger or consolidation involving TENANT, or the sale of all or substantially all of the assets of TENANT, in which, immediately following such transaction, the entity surviving such merger or consolidation or the transferee of such assets, as the case may be, continues to conduct the business of TENANT as a whole in substantially the same manner that such business was being conducted by TENANT immediately prior to such transaction, TENANT shall, in the event of an assignment or sublease hereunder, remain primarily liable under this LEASE; provided, however, TENANT shall be relieved of its obligations under this LEASE upon LANDLORD’s written consent.

ARTICLE TEN

DEFAULTS; REMEDIES

Section 10.01Defaults.  TENANT shall be in material default under this LEASE:

(a)If TENANT fails to pay rent or any other charge due within five (5) business days (being Monday through Friday, exclusive of days on which national banks located in the State of California are not open for business) following written notice from LANDLORD that such sum is past due;

(b)If TENANT fails to perform any of TENANT’s non-monetary obligations under this LEASE for a period of thirty (30) days after written notice from LANDLORD; provided that if more than thirty (30) days are required to complete such performance, TENANT shall not be in default if TENANT commences such performance within the thirty (30) day period and thereafter diligently pursues its completion.

(c)(i)If TENANT makes a general assignment or general arrangement for the benefit of creditors;

(ii)if a petition for adjudication of bankruptcy or for reorganization or rearrangement is filed by or against TENANT and is not dismissed within thirty (30) days;

(iii)if a trustee or receiver is appointed to take possession of substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE and possession is not restored to TENANT within thirty (30) days; or

(iv)if substantially all of TENANT’s assets located at the PREMISES or of TENANT’s interest in this LEASE is subjected to attachment, execution or other judicial seizure which is not discharged within thirty (30) days.

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If a court of competent jurisdiction determines that any of the acts described in this subparagraph (c) is not a default under this LEASE, and a trustee is appointed to take possession (or of TENANT remains a debtor in possession) and such trustee or TENANT transfers TENANT’s interest hereunder, then LANDLORD shall receive, as ADDITIONAL RENT, the excess, if any, of the rent (or any other consideration) paid in connection with such assignment or sublease over the rent payable by TENANT under this LEASE.

(d)All notices which are prerequisite of any default sent to TENANT pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the Letter so that it is clear it is a notice of default.

Section 10.02Remedies.  On the occurrence of any material default by TENANT, LANDLORD may, at any time thereafter, with or without notice or demand and without limiting LANDLORD in the exercise of any right or remedy which LANDLORD may have:

(a)Terminate TENANT’s right to possession of the PREMISES by any lawful means, in which case this LEASE shall terminate and TENANT shall immediately surrender possession of the PREMISES to LANDLORD.  In such event, LANDLORD shall be entitled to recover from TENANT all damages incurred by LANDLORD by reason of TENANT’s default, including:

(i)the worth at the time of the award of the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD had earned at the time of the termination;

(ii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which LANDLORD would have earned after termination until the time of the award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided;

(iii)the worth at the time of the award of the amount by which the unpaid BASE RENT, ADDITIONAL RENT and other charges which TENANT would have paid for the balance of the LEASE TERM after the time of award exceeds the amount of such rental loss that TENANT proves LANDLORD could have reasonably avoided; and

(iv)any other amount necessary to compensate LANDLORD for all the detriment proximately caused by TENANT’s failure to perform its obligations under the LEASE or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses LANDLORD incurs in maintaining or preserving the PREMISES after such default, the cost of recovering possession of the PREMISES, expenses of reletting, including necessary renovation or alteration of the PREMISES, LANDLORD’s reasonable attorneys’ fees incurred in connection therewith, and any real estate commission paid or payable.

As used in subparts (i) and (ii) above, the “worth at the time of the award” is computed by allowing interest on unpaid amounts at the rate of ten percent (10%) per annum, or such lesser

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amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at the time of the award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%).  If TENANT has abandoned the PREMISES, LANDLORD shall have the option of (i) retaking possession of the PREMISES and recovering from TENANT the amount specified in this Section 10.03(a), or (ii) proceeding under Section 10.03(b); or

(b)Maintain TENANT’s right to possession, in which case this LEASE shall continue in effect whether or not TENANT has abandoned the PREMISES.  In such event, LANDLORD shall be entitled to enforce all of LANDLORD’s rights and remedies under this LEASE, including the right to recover the rent as it becomes due.

(c)The first (1st) time during each calendar year during the LEASE TERM that TENANT fails to pay BASE RENT or any items of ADDITIONAL RENT, which shall be payable to LANDLORD hereunder, or any other charge due from TENANT hereunder within three (3) calendar days after the five (5) business day period set forth in Section 10.01(a) above, TENANT shall pay to LANDLORD a late charge in the amount of five percent (5%) of the amount due (the “LATE CHARGE”).  Any time after the first (1st) time during any calendar year during the LEASE TERM, that TENANT shall be required to pay a LATE CHARGE as provided above, that TENANT fails to pay any other amount due under this LEASE within five (5) days after due (regardless of whether any notice of such delinquency is given by LANDLORD), TENANT shall pay the LATE CHARGE on such overdue amount. Notwithstanding anything to the contrary contained herein, in the event that LANDLORD fails to demand payment of any such LATE CHARGE within 365 days of the accrual of said LATE CHARGE, then LANDLORD shall lose the right to demand payment of such LATE CHARGE.  The parties hereby agree that such LATE CHARGE represents a fair and reasonable estimate of the costs that LANDLORD will incur by reason of the late payment by TENANT.

Section 10.03Landlord’s Default.  In the event that LANDLORD shall fail to perform any obligation required to be performed by it as set forth in this LEASE, and such failure shall continue for a period of thirty (30) days after receipt of written notice from TENANT specifying such failure, then LANDLORD shall be in default hereunder, provided that, if the nature of LANDLORD’s obligation is such that more than thirty (30) days are required for performance, then LANDLORD shall not be in default if LANDLORD commences performance within such 30-day period and thereafter diligently prosecutes same to completion.  In the event that LANDLORD shall be in default under the terms of this LEASE, then TENANT shall have the right, in addition to any other remedies it may have at law or in equity, to (i) remedy LANDLORD’s default and deduct from the next payments of rent due under the LEASE any amounts incurred by TENANT in so remedying LANDLORD’s default, and (ii) such other remedies as may be permitted at law or in equity.  All notices which are prerequisite of any default sent to LANDLORD pursuant to the terms of this LEASE shall contain the words “Notice of Default” in the “Re:” line of the letter, and shall note within the text of the letter that TENANT has rights to offset the rent, so that it is clear it is a notice of default and that TENANT may offset the rent.  Subject to satisfaction of the provisions of Section 11.01 with respect to TENANT’s receipt of a non-disturbance agreement from each lender, TENANT shall send copies of any notice of default to such lender(s) of which LANDLORD notifies TENANT in

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writing from time to time, at such addresses as LANDLORD so notifies TENANT.  TENANT will accept any cure by any such lender as a cure, to the extent of such cure, of LANDLORD’s obligations under this LEASE.  The rights set forth in this Section shall inure solely to the benefit of 99¢ Only Stores and only such of its assignees as may be owned by it, under the control of it, under the control of any entity which also controls it, or which own not less than ten (10) stores operated under the name ‘99¢ Only Stores’.

Section 10.04Cumulative remedies.  The exercise of any right or remedy hereunder by either party under this Article Ten shall not prevent such party from exercising any other right or remedy hereunder.

Section 10.05Landlord Self Help.  If, pursuant to express provisions of this LEASE giving LANDLORD the right to remedy breaches of TENANT’s obligations after notice to TENANT, LANDLORD performs obligations to be performed by TENANT then amounts properly expended by LANDLORD in accordance with the terms of this LEASE in performance of such obligations shall earn interest at the rate of seven percent (7%) per annum until such amounts and the accrued interest thereon are discharged in full.

ARTICLE ELEVEN

PROTECTION OF LENDERS

Section 11.01Subordination.  LANDLORD represents and warrants to TENANT that to the best knowledge of LANDLORD there are no encumbrances affecting the PREMISES which are prior in interest to this LEASE.  LANDLORD shall have the right to subordinate this LEASE to any ground lease, deed of trust or mortgage encumbering the PREMISES, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof, whenever made or recorded; provided that the holder of such encumbrance enters into a non-disturbance agreement with TENANT in a form which is reasonably and acceptable with TENANT.  In the event that TENANT is provided with a non-disturbance agreement in a form reasonably acceptable to TENANT, then TENANT shall cooperate with LANDLORD and any lender which is acquiring a security interest in the PREMISES or the LEASE and shall execute such further documents and assurances as such lender may require, provided that TENANT’s obligations under this LEASE shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and TENANT shall not be deprived of its rights under this LEASE.  TENANT’s right to quiet possession of the PREMISES during the LEASE TERM shall not be disturbed if TENANT pays rent and performs all of TENANT’s obligations under this LEASE and is not otherwise in default.  LANDLORD shall, promptly following execution of this LEASE, cause any holder of an existing ground lease, deed of trust or mortgage encumbering the PREMISES to enter into a non-disturbance agreement with TENANT in a form reasonably acceptable to TENANT.  If, as of the date of execution of this LEASE, there are any mortgages or deeds of trust affecting any portion of the PREMISES which are prior in interest to this LEASE, then the execution and delivery to TENANT, and recordation in the Official Records of the County in which the PREMISES are situated, of a non-disturbance agreement which meets the requirements of this Section shall be a condition to TENANT’s obligations under this LEASE.

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Section 11.02       Attornment.  If LANDLORD’s interest in the PREMISES is acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure sale, and if such acquiring party has delivered a non-disturbance agreement to TENANT as required by this LEASE, then TENANT shall attorn to the transferee of or successor to LANDLORD’s interest in the PREMISES and recognize such transferee or successor as LANDLORD under this LEASE.

Section 11.03       Signing of Documents.  TENANT shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination or agreement to do so.

Section 11.04       Estoppel Certificates.  Upon either party’s written request, the other party shall execute, acknowledge and deliver to the requesting party a written statement certifying:

(a)           that none of the terms or provisions of this LEASE have been changed (or if they have been changed, stating how they have been changed);

(b)           that this LEASE has not been canceled or terminated;

(c)           the last date of payment of the BASE RENT and other charges and the time period covered by such payment;

(d)           that the requesting party is not in default under this LEASE (or, if the requesting party is claimed to be in default, stating why);

(e)           that TENANT has accepted possession of the PREMISES and the LEASE is in full force and effect; and

(f)            the amount of the monthly BASE RENT at the time of such statement.

Neither party shall be required or asked to undertake any covenants in any such estoppel certificate or to undertake any investigation or inquiry in the preparation of the same.

Each party shall deliver such statement to the requesting party within fifteen (15) days after the requesting party’s request.  LANDLORD may give any such statement by TENANT to any prospective purchaser or encumbrancer of the PREMISES, and TENANT, may give any such statement by LANDLORD to any prospective assignee, sublessee of any interest of TENANT in the PREMISES.  Such purchaser, encumbrancer, assignee or sublessee may rely conclusively upon such statement as true and correct.  In addition, TENANT shall, within fifteen (15) business days after LANDLORD’s request, provide LANDLORD, with a copy of TENANT’s most recent financial statement which is available to the public at the time of such request.

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ARTICLE TWELVE

MISCELLANEOUS PROVISIONS

Section 12.01       Non-Discrimination.  TENANT promises, and it is a condition to the continuance of this LEASE, that there will be no discrimination against, or segregation of, any person or group of persons on the basis of race, color, sex, creed, national origin or ancestry in the leasing, subleasing, transferring, occupancy of the PREMISES or any portion thereof.

Section 12.02       Severability.  A determination by a court of competent jurisdiction that any provision of this LEASE or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this LEASE, which shall remain in full force and effect.

Section 12.03       Interpretation.  The captions of the Articles or Sections of this LEASE are to assist the parties in reading this LEASE and are not a part of the terms or provisions of this LEASE.  Whenever required by the context of this LEASE, the singular shall include the plural the plural shall include the singular.  The masculine, feminine and neuter genders shall each include the other.  No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision.

Section 12.04       Incorporation of Prior Agreements; Modifications.  This LEASE is the only agreement between the parties pertaining to the lease of the PREMISES and no other agreements are effective.  All amendments to this LEASE shall be in writing and signed by all parties.  Any other attempted amendment shall be void.

Section 12.05       Notices.  All notices required or permitted under this LEASE shall be in writing and shall be personally delivered, or sent by certified mail, return receipt requested, postage prepaid.  Notices to TENANT shall be delivered to the address specified in Section 1.02.  Notices to LANDLORD shall be delivered to the address specified in Section 1.01.  In addition, the parties may each designate, in writing, up to two (2) additional persons at a time during the LEASE TERM to whom simultaneous notice shall be given by the other party, which person may be a mortgagee of the PREMISES.  All notices shall be effective upon delivery.  Either party may change its notice address, or the notice address for the additional person whom it has designated as hereinabove provided, upon written notice to the other party.  The notice address of each party shall be a street address, not a post office box.

Section 12.06       Waivers.  All waivers must be in writing and signed by the waiving party.  LANDLORD’s failure to enforce any provision of this LEASE or its acceptance of rent shall not be a waiver and shall not prevent LANDLORD from enforcing that provision or any other provision of this LEASE in the future.

Section 12.07       No Recordation.  Neither party shall record this LEASE without prior written consent from the other party.  However, either LANDLORD or TENANT may require that a “Short Form” memorandum of this LEASE executed by both parties be recorded.  The party requiring such recording shall pay all transfer taxes and recording fees.

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Section 12.08       Binding Effect; Choice of Law.  This LEASE binds and inures to the benefit of any party who legally acquires any rights or interest in this LEASE from LANDLORD or TENANT.  However, LANDLORD shall have no obligation to TENANT’s successor unless the rights or interests of TENANT’s successor are properly acquired in accordance with the terms of this LEASE.  The laws of the state in which the PREMISES are located shall govern this LEASE.

Section 12.09       Corporate Authority; Partnership Authority.  If LANDLORD or TENANT is a corporation, each person signing this LEASE on behalf of such party represents and warrants that he has full authority to do so and that this LEASE binds the corporation.  If LANDLORD or TENANT is a partnership, each person or entity signing this LEASE for such party represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this LEASE binds the partnership and all general partners of the partnership.

Section 12.10       Execution of Lease.  This LEASE may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single binding instrument.

Section 12.11       Survival.  All representations and warranties of LANDLORD and TENANT shall survive the termination of this LEASE.

Section 12.12       Confidentiality.  The parties hereto shall keep this LEASE and all documents delivered pursuant to this LEASE strictly confidential, except as deemed reasonably necessary for bona fide lenders, prospective purchasers, governmental entities, accountants, legal advisers, etc.

Section 12.13       [RESERVED]

Section 12.14       Consent/Duty to Act Reasonably.  All requests for consent or approval required or permitted under this LEASE shall be made in writing and in reasonable detail and otherwise in the manner required for notices hereunder.  No such requests for consent or approval shall be unreasonably refused or delayed.  Any refusal of any such request for consent or approval shall also be made in writing and otherwise in the manner required for notices hereunder and shall identify, in reasonable detail, the reasons for such refusal.  Without affecting the generality of this Section 12.14, unless otherwise specifically stated in this LEASE, if any such request for consent or approval shall not be refused within ten (10) business days after the making thereof, then such consent or approval shall be deemed granted.  LANDLORD and TENANT shall act reasonably and in good faith and take no action which might result in the frustration of the reasonable expectations of a sophisticated lessor or lessee concerning the benefits and use enjoyed under the LEASE.

Section 12.15       Brokers.  Each of the parties represents and warrants to the other that it has dealt with no broker in connection with this LEASE, and, insofar as it knows, no other broker or other person is entitled to any commission or fee in connection with this LEASE.  LANDLORD represents and warrants to TENANT that TENANT shall have no responsibility

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regarding any agreement made between LANDLORD and any broker and that TENANT shall have no responsibility for the payment of any commission or fee.  Each of the parties hereby indemnifies the other against any commission or fee such indemnifying party may have incurred in connection with this LEASE.

Section 12.16       Legal Proceedings.  Any and all disputes arising under or in connection with this LEASE shall be determined by a reference proceeding under California Code of Civil Procedure (“C.C.P.”) section 638 filed in the Superior Court for Fresno County.  Such reference shall be assigned to the JUDICIAL ARBITRATION AND MEDIATION SERVICES “JAMS” principal office in Los Angeles County, California, and shall be conducted by such retired judge as may be assigned to such matter by JAMS, which retired judge shall be deemed the “appointee referee” pursuant to the agreement of the parties under C.C.P. section 640.  Procedural rules shall be determined by the then current practices of JAMS for commercial disputes.  If at the time of any such dispute JAMS or its successor in interest is not in existence, or does not maintain an office in Los Angeles County, then the reference proceeding shall be assigned to such alternative dispute resolution service (which shall assign the retired judge, as above), or to such retired judge as may be agreed upon by the parties or, absent agreement, as determined by the presiding judge of the Fresno County Superior Court, and such determination shall be final and binding on the parties as the “appointed judge” under C.C.P. section 640.  The referee appointed hereunder may also determine any award of costs and reasonable attorneys fees to be awarded in such proceeding.  THE PARTIES HEREBY IRREVOCABLY WAIVE ANY RIGHT TO A TRIAL BY JURY OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE.

The foregoing provisions of this Section 12.16 shall not apply to a proceeding in unlawful detainer which shall be conducted in accordance with, and before the court and at the venue, provided by the current statutes of the State of California at the time any such unlawful detainer proceeding may be commenced.

Section 12.17       Successors And Assigns.  All agreements, covenants, rights and liabilities contained herein shall be binding upon and shall inure to the respective parties hereto, and their several respective heirs, executors, administrators, successors and assigns.

Section 12.18       Hazardous Materials.

(a)           As used in this LEASE, the term “HAZARDOUS MATERIALS” means any flammable items, explosives, radioactive materials, and any other substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “toxic substances” or similar term now or subsequently regulated under any applicable federal, state of local laws or regulations including, without limitation, petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs, and similar compounds, and any other products and materials which are subsequently found to have adverse effects on the environmentor the health and safety of persons.

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(b)           Except as otherwise provided herein, TENANT shall not cause or permit any HAZARDOUS MATERIAL to be generated, produced, brought upon, used, stored, treated or disposed of in or about the PREMISES by TENANT, its agents, employees, contractors, sublessees or (solely with respect to the interior of the PREMISES) invitees without the prior written consent of LANDLORD, which shall not be unreasonably withheld.  In addition, TENANT shall not cause or permit an underground storage tank to be installed under the PREMISES without the prior written consent of LANDLORD, which consent shall be in LANDLORD’s sole and absolute discretion.  Notwithstanding anything to the contrary contained herein, TENANT shall be permitted to store, use and dispose of, in the PREMISES, such HAZARDOUS MATERIALS which are incidental and customary to the operation of TENANT’s business, or which TENANT sells as a matter of course at other 99¢ Only Stores, provided that TENANT shall comply with all applicable laws, rules and regulations in the storage, use and disposal of such HAZARDOUS MATERIALS.  TENANT shall indemnify and hold LANDLORD, its agents and employees, harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of TENANT’s violation of this Section.

(c)           LANDLORD represents and warrants that (i) there are, and as of the EFFECTIVE DATE there shall be, no Hazardous Materials in, on or about the PREMISES, (ii) LANDLORD has not caused or permitted, and shall not cause or permit, any HAZARDOUS MATERIALS to be brought onto the PREMISES.  LANDLORD shall indemnify and hold TENANT and TENANT’s agents and employees harmless from any and all costs, liabilities, claims, expenses, penalties, and damages of any kind including, but not limited to, attorneys’ fees and the cost of any investigation, remediation, restoration, cleanup and/or abatement which is necessary as a result of LANDLORD’s violation of this Section.

(d)           The obligations under this Section 12.18 shall survive the expiration or earlier termination of this LEASE.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, LANDLORD and TENANT have executed this LEASE effective as of the date set forth below next to LANDLORD’s signature, and have initialed all Riders which are attached to or incorporated by reference in this LEASE.

“LANDLORD”:
	HKJ Gold, Inc.,
	a California corporation
	By:	/s/ Jeff Gold
		Name: Jeff Gold
		Title: President
“TENANT”:
	99¢ ONLY STORES,
	a California corporation
	By:	/s/ Eric Schiffer
		Name: Eric Schiffer
		Title: Chief Executive Officer

[Affiliate Lease Signature Page (Store #51)]

EXHIBIT “A”

Legal Description

PARCEL 1:

LOT 5 IN BLOCK 13 OF EAST LOS ANGELES TRACT, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3 PAGE 194 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE SOUTH 6 FEET THEREOF.

PARCEL 2:

AN EASEMENT FOR ALLEY PURPOSES OVER THOSE PORTIONS OF LOTS 5 AND 6 IN BLOCK 13 OF SAID EAST LOS ANGELES TRACT, IN THE CITY OF LOS ANGELES, INCLUDED WITHIN A STRIP OF LAND 12 FEET IN WIDGHT THE CENTER LINE OF WHICH STRIP IS THE SOUTHERLY LINE OF SAID LOTS 5 AND 6.

PARCEL 3:

LOT 6 IN BLOCK 13 OF EAST LOS ANGELES, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3 PAGES 194 AND 195 OF MISCELLANOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THE WESTERLY 20 FEET THEREOF.

EX-10.31

Exhibit 10.31

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of January 13, 2012 (the “Effective Date”), is entered into by and among 99 Cents Only Stores, a California corporation (the “Company”), Number Holdings, Inc., a Delaware Corporation (“Parent”), and Eric Schiffer (“Executive”).

RECITAL

WHEREAS, the Company and Executive are entering into this Agreement in connection with the consummation of the transactions (collectively, the “Merger”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated October 11, 2011, among Parent, Number Merger Sub, Inc., a California Corporation, and the Company; and

WHEREAS, the Company, Parent and Executive desire to enter into this Agreement setting forth, among other matters, the terms and conditions of Executive’s employment with the Company.

AGREEMENT

NOW, THEREFORE, in consideration of Executive’s employment and the covenants and other obligations of the parties contained herein, the Company, Parent and Executive agree as follows:

1.Employment.

(a)Term.  Executive’s employment under this Agreement shall commence on the Effective Date and shall continue until the fifth anniversary of the Effective Date (“Term”), unless earlier terminated as set forth under Section 4.  After the Term, Executive’s continued employment with the Company shall be pursuant to such terms and conditions as Executive and the Company may agree.

(b)Duties and Responsibilities.  Executive shall serve as the full-time Chief Executive Officer of the Company and shall have the duties and responsibilities customarily associated with such position, and such additional duties and responsibilities as may from time to time be assigned to him by the Company’s Board of Directors (the “Board”) and that are ordinarily performed, undertaken and exercised by persons situated in a similar capacity at a company the size and nature of the Company.  Executive shall report directly to the Board.  Executive shall (i) devote his full business time to the business and affairs of the Company and not engage in any other business activities, as a director, officer, employee or consultant or in any other capacity, whether or not he receives compensation therefor and (ii) observe and comply with all rules, regulations, policies and practices of the Company.  Notwithstanding the foregoing, Executive may serve on the boards of charitable organizations, engage in charitable and community affairs and activities, and manage his personal investments, provided that such activities do not adversely interfere with the performance of Executive’s duties and responsibilities hereunder.

2.Compensation.

(a)Base Salary.  So long as he remains employed by the Company, during the Term Executive shall be paid a base salary (“Base Salary”), which initially shall be at the annual rate of $500,000 (the “Initial Base Salary”), payable in installments consistent with the Company’s normal payroll practices.  Executive’s Base Salary shall be reviewed annually by the Board to determine, in the Board’s sole discretion, if such Base Salary should be changed, provided that during the Term, the Base Salary shall not be decreased below $500,000.

(b)Annual Incentive Bonus.

(i)So long as he remains employed by the Company, during the Term Executive shall be eligible to earn an annual incentive bonus (“Bonus”) for each fiscal year of the Company beginning on or after April 1, 2012.  Executive’s target Bonus shall be 200% of the Initial Base Salary, and the targeted range for the Bonus shall be from 162.5% to 237.5% of the Initial Base Salary, with the actual level of payment contingent upon the level of achievement of pre-established performance goals set by the Board.  The target and range for the Bonus described in the preceding sentence may be adjusted downward by the Board in the event that Executive’s Base Salary is increased from the Initial Base Salary, provided that during the Term, (x) the sum of Executive’s Base Salary and target Bonus shall not be decreased below the sum of such amounts as in effect on the Effective Date and (y) the targeted range for the Bonus shall not be adjusted downward if, as a result of such adjustment, either the low end or high end of the range of Executive’s total compensation opportunity (i.e., his Base Salary plus Bonus) is less than the low end or high end of such range as in effect on the Effective Date.

(ii)The Bonus shall not be earned until the date that it is paid, and Executive must be an employee in good standing on such date in order to receive any Bonus; provided, that if Executive’s employment is terminated without Cause (as defined below) or he resigns for Good Reason (as defined below) after the last day of the applicable fiscal year but before annual incentive bonuses are paid, generally, to employees of the Company, then Executive shall be entitled to receive the Bonus (if any) for such fiscal year based on the actual level of achievement of the applicable performance goals, and subject to the terms set forth in Section 4(b).  The Bonus (if any) shall be paid within 90 days following completion of the applicable fiscal year and in no event later than March 15th after each fiscal year end.  Payment of any Bonus will be at the sole discretion of Parent based on its evaluation of the level of achievement of performance goals.

(c)Option Grant.  Executive shall be granted non-qualified stock options (the “Options”) to purchase units consisting in the aggregate of up to 1.66667% of each of the Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”) and the Class B Common Stock, par value $0.001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), of Parent on a fully-diluted basis as of the Effective Date, subject to the terms of the Stock Option Plan.  The Options with respect to each unit (consisting of one share of Class A Common Stock and one share of Class B Common Stock) shall have an exercise price equal to $1,000. All Options shall vest in equal annual installments over five years from the Effective Date.  If Executive’s employment is terminated by the Company without Cause or Executive resigns his employment for Good Reason, the

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vested and unexpired Options shall be exercisable by Executive in cash until (i) the later of (A) 18 months following such termination or resignation and (B) 42 months following the closing of the Merger or (ii) if earlier, the expiration thereof.  Upon the occurrence of a Change in Control (as defined below), all unexpired Options shall immediately vest and become exercisable.

(d)Payment.  Payment of all compensation and other amounts to Executive under this Agreement shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices, and shall be subject to applicable withholding requirements.

3.Employee Benefits.

(a)Business Expenses.  Upon timely submission of itemized expense statements and other documentation in accordance with the procedures specified by the Company, Executive shall be entitled to reimbursement for actual out of pocket business and travel expenses duly incurred by Executive in the course of his duties hereunder in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.

(b)Benefit Plans.  So long as he remains employed by the Company, during the Term Executive shall be entitled to participate in the Company’s employee benefit plans and programs (“Benefit Plans”) as they may exist from time to time, in each case as offered by the Company to its senior executives generally, subject to the terms and conditions thereof.  Nothing in this Agreement shall require the Company to maintain any Benefit Plan, or shall preclude the Company from terminating or amending any Benefit Plan from time to time.

(c)Vacation.  Executive shall be entitled to vacation time in accordance with the Company’s vacation policy for senior executives.  Executive acknowledges that given his position at the Company, Executive will remain generally available and accessible to the Company’s senior managers and the Board through an electronic means of communication when reasonably possible.

4.Termination of Employment.  This Agreement may be terminated prior to the expiration of the Term in accordance with this Section 4.

(a)For Cause.  The Company may terminate Executive’s employment for “Cause” immediately upon written notice for any of the following reasons: (i) Executive has been indicted for or charged with a felony, which causes a material disruption in Executive’s performance of his duties hereunder that is not cured within 30 calendar days following written notice of such breach, (ii) Executive has been convicted of, pled guilty to, or has entered a nolo contendere plea to a misdemeanor where imprisonment of greater than one month is imposed, other than for a traffic-related offense, or a felony, (iii) any act of material misconduct or gross negligence by Executive in the performance of his duties or any act of moral turpitude by Executive, (iv) Executive’s commission of any act of theft, fraud or material dishonesty, (v) Executive’s willful failure to perform any reasonable duties assigned to him by the Board or Executive’s refusal or willful failure to follow the lawful directives of the Board after written notice from the Company of, and 30 calendar days to cure, such refusal or failure, (vi) any material breach by Executive of the material terms set forth in this Agreement (including the Restrictive Covenant Agreement),

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the Rollover Letter or the Stockholders Agreement that is not cured within 30 calendar days following written notice of such breach, and (vii) Executive’s unlawful appropriation of a material corporate opportunity.  “Cause” shall cease to exist for an event on the 60th day following the later of (A) its occurrence or (B) knowledge thereof by a majority of the Board (not including Executive or any other employee of the Company, if applicable) that the conduct has occurred and, if applicable, such conduct has resulted in the requisite consequences hereunder, unless the Company has given Executive a notice thereof prior to such date; provided that any waiver by the Company of any conduct, event or occurrence that otherwise would have constituted Cause shall not be a waiver of any subsequent conduct, event or occurrence of the same or any other type, and in addition may be considered by the Company for purposes of the Company’s right to terminate Executive’s employment for Cause in connection with such subsequent conduct, event or occurrence of the same or any other type.

Upon termination of Executive’s employment for Cause (i) the Company shall be under no further obligation to Executive, except to pay (A) all accrued but unpaid Base Salary to the date of termination within 30 days following such termination, less all applicable deductions, and (B) any earned and vested benefits and payments pursuant to the terms of any Benefit Plan (the payments and benefits described in subsections (A) and (B) herein shall be referred herein as the “Accrued Benefits”) and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(b)Without Cause; Good Reason.  The Company may terminate Executive’s employment at any time without Cause immediately upon written notice; and Executive may terminate Executive’s employment at any time for Good Reason.  Upon termination of Executive’s employment by the Company without Cause or by Executive for Good Reason during the Term, Executive shall be entitled to receive (i) an amount equal to three times the sum of (A) Executive’s Base Salary, plus (B) Executive’s target Bonus for the fiscal year in which the termination of employment occurs (the “Severance Amount”), one half of which Severance Amount shall be paid in equal installments over three years in accordance with the Company’s regular payroll schedule, and the remainder of which Severance Amount shall be payable in three annual installments (the first installment occurring on the 60th day following termination of employment and the remaining two installments payable on the next two anniversaries thereof), (ii) full vesting of all outstanding and then-unvested Options, (iii) payment of any earned but unpaid Bonus attributable to a previously completed fiscal year and (iv) continued coverage under the Company’s group health plans (or, to the extent such coverage is not permissible under the terms of such plan(s), comparable coverage) for Executive and Executive’s dependents (to the extent covered under such plan(s) immediately prior to such termination), at the Company’s sole expense until the earlier of (A) one year following the date of Executive’s termination of employment with the Company and (B) the date Executive is or becomes eligible for comparable coverage under health plans of another employer.  The foregoing payments and benefits shall commence on the 60th day following termination of employment (or, in the case of (iii) above, at the same time as such bonuses are paid to employees, generally, if later) provided that Executive has executed a release of claims against the Company substantially in the form attached hereto as Exhibit C (“Release”), and such release of claims has become effective, by such date and shall be contingent on Executive’s continued compliance with all post-termination restrictive covenants applicable to Executive, including, without limitation, the covenants contained in the Restrictive Covenant Agreement.  For purposes of the foregoing calculations in this Section 4(b),

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“Base Salary” shall mean the base salary in effect on the date of termination of employment without regard to any reduction that may have given rise to Good Reason.

A termination of Executive’s employment under this Section 4(b) does not include a termination of employment by reason of Executive’s Disability (as defined below) or upon the death of Executive.

“Good Reason” means the occurrence of any of the following events, without Executive’s consent, (i) a material reduction in Executive’s Base Salary, (ii) a material reduction in Executive’s title, or duties and responsibilities, (iii) relocation outside of Los Angeles County, or (iv) a material breach by the Company of any material term set forth in this Agreement (it being acknowledged and agreed that a material term of this Agreement includes, but is not limited to, Sections 2(a) and 2(b)(i)).  The occurrence of the events described in (i) through (iv) above only shall constitute Good Reason if (A) Executive provides the Company written notice within 90 days following the occurrence of the event that allegedly constitutes Good Reason (the “Good Reason Notice”); (B) the Company fails to cure such event within 30 days after receiving such Good Reason Notice; and (C) Executive resigns within 60 days following delivery of such Good Reason Notice.  For the avoidance of doubt, Executive’s job shall require significant travel outside of Los Angeles County, which shall not constitute Good Reason.

(c)Resignation.  Executive may resign his employment (without Good Reason) upon providing the Company 30 days prior written notice.  In the event of such resignation by Executive, upon the effective date of Executive’s resignation (i) the Company shall be under no further obligation to Executive, except to pay the Accrued Benefits and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(d)Disability; Death.  The Company may terminate Executive’s employment if Executive experiences a “Disability,” which for purposes of this Agreement means a “Total Disability” (or equivalent) as defined under the Company’s Long Term Disability Plan in effect at the time of the disability.  In the event that Executive’s employment is terminated by reason of Executive’s Disability or upon the death of Executive, (i) the Company shall be under no further obligation to Executive (or his estate), except to pay the Accrued Benefits and (ii) Options that would have vested in the 12 months following such termination of employment had Executive remained employed shall become immediately vested.  In addition, all Options that are vested as of the termination of Executive’s employment (including Options whose vesting accelerates pursuant to this paragraph) shall be exercisable for 12 months following the employment termination date (or, if earlier, the expiration date of the Options), after which time they shall immediately terminate and no longer be exercisable.

(e)Cooperation.  Following termination of employment for any reason, Executive shall (i) cooperate with the Company, as reasonably requested by the Company, to effect a transition of Executive’s responsibilities and to ensure that the Company is aware of all matters being handled by Executive and (ii) cooperate and provide assistance to the Company at its reasonable request in connection with any action, suit or proceeding brought by or against the Company or any of its Affiliates (or in which any of them is or may be a party) or that relates in any way to Executive’s acts or omissions while employed by the Company.  The Company

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agrees to reimburse Executive promptly for actual out-of-pocket expenses incurred by him in connection with assisting the Company in the manner described in the immediately preceding sentence in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.  Upon termination for any reason, Executive shall be deemed to have resigned from all offices and directorships then held with the Company or any of its subsidiaries.  Executive’s obligations under this Section 4(e) shall survive the termination of Executive’s employment and the expiration or termination of the Agreement.

(f)Company Property.  All assets, property and equipment and all tangible and intangible information relating to the Company, its Affiliates and their respective employees, customers or vendors furnished to, obtained by or prepared by Executive or any other person during the course of or incident to Executive’s employment by the Company or any of its subsidiaries are and shall remain the sole property of the Company (“Company Property”).  Company Property includes, but is not limited to, computer equipment, books, manuals, records, reports, notes, correspondence, contracts, customer lists, business cards, advertising, sales, financial, personnel, operations, and manufacturing materials and information, data processing reports, computer programs, software, customer information and records, business records, price lists or information, and samples, and in each case shall include all copies thereof in any medium, including paper, electronic and magnetic media and all other forms of information storage.  Executive shall further permanently delete any Company information from any computers or other electronic storage devices owned by Executive.  Upon request of the Company, Executive shall certify in writing that Executive has complied with the requirements of this Section 4(f).  Notwithstanding the foregoing, Executive shall be permitted to retain one or more copies of his contacts list and his appointment calendars.  Executive’s obligations under this Section 4(f) shall survive termination of Executive’s employment and the expiration or termination of the Agreement until Executive has returned all Company Property to the Company.

(g)Executive’s Put Right.  Certain capitalized terms used in this Section 4(g) are defined in clause (xi) below.

(i)Subject to the terms and conditions set forth in this Section 4(g), Executive shall have the right (the “Initial Put Right”), but not the obligation, during the Initial Put Period to cause Parent (or, at Parent’s election, one or more of its designees) to purchase Executive’s Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units, upon (A) the termination of his employment by the Company without Cause or (B) Executive’s termination of his employment with the Company for Good Reason.

(ii)Executive may exercise the Initial Put Right by delivering to Parent at any time during the Initial Put Period (1) a Put Notice, (2) certificates representing all shares of Common Stock included in the Put Units (the “Certificates”) duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).

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(iii)The per unit purchase price for the Put Units purchased pursuant to the exercise of the Initial Put Right shall be the Initial Purchase Price.

(iv)Parent shall not be required to repurchase any Put Units if, after giving pro forma effect to (A) such repurchase and all other repurchases pursuant to the exercise, prior to the repurchase of such Put Units, of “put” rights held by any Other Specified Employee (including the incurrence of any debt by the Company or any of its subsidiaries incurred or expected to be incurred to effect any such repurchases) and (B) any severance payments Parent or any of its subsidiaries has made or is obligated to make to Executive or any Other Specified Employee whose employment with the Company has been terminated as of the date of the repurchase of such Put Units, in each case, taking into account the timing such payments are required to be made (the transactions described in the foregoing clauses (A) and (B), the “Pro Forma Transactions”), (x) the Current Cushion or the Projected Cushion would be below 25%, (y) in the reasonable good faith judgment of the Board, such repurchase would be prohibited pursuant to applicable law or regulation or would result in a breach of the terms of any Applicable Contract or (z) the Company would not be permitted to make such repurchase either (1) pursuant to the exception contained in Section 4.07(b)(14) of the Senior Indenture or (2) with amounts then available to make Restricted Payments (as defined in the Senior Indenture) under Sections 4.07(a)(4)(C)(i), (iv) and (v) of the Senior Indenture (or, in each case, any similar clause in any amendment to, or replacement of, the Senior Indenture) (the occurrence of any matter described in the foregoing clause (x), (y) or (z), a “Restriction”).  All calculations and other determinations made in the reasonable good faith judgment of the Board, consistent with past practice, in connection with the determination of the Current Cushion or the Projected Cushion shall be binding on Executive.  If, following the date of this Agreement, Parent or any of its subsidiaries incurs additional indebtedness for borrowed money, Parent shall, or shall cause such subsidiary to, request its lenders to include provisions in any credit facilities or debt agreements governing such indebtedness to permit repurchases of equity as contemplated in this Section 4(g); provided that in no event shall Parent or any such subsidiary be required to accept any adverse term in exchange for such provisions.  Parent shall deliver a written notice to Executive within 5 business days following delivery of a Put Notice specifying whether a Restriction applies and, if so, providing reasonable detail (including relevant calculations) regarding such Restriction.  During the period from and after delivery of such notice through and including the expected Put Closing Date (the “Interim Period”), Parent shall not change its financial or capital budgeting forecasts included in the Internal Projections, including any change to the methodology or assumptions used in deriving such forecasts, for purposes of calculating the Projected Cushion, except to the extent reasonably necessary to reflect (x) the Company’s actual financial results for the fiscal quarter ending prior to delivery of the Put Notice or any fiscal period during the Interim Put Period, (y) the occurrence or discovery during the Interim Period of an event beyond the reasonable control of Parent that, in the reasonable good faith judgment of the Board, materially impairs the Company’s ability to meet the forecasts included in the Internal Projections or (z) changes to the assumptions underlying the forecasts included in the Internal Projections that, in the good faith judgment of the Board, are reasonably necessary to achieve a legitimate business objective and, in any event under clause (x), (y) and (z), any such changes are not for the purpose of avoiding Parent’s obligations under this Section 4(g).

(v)If, following the valid exercise of the Initial Put Right, Parent is not required to repurchase the Put Units due to the applicability of a Restriction, and at any time

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during the remainder of the Initial Put Period the Restrictions cease to apply, Parent will (A) promptly notify Executive that the Restrictions have ceased to apply and (B) repurchase the Put Units for the Initial Purchase Price (subject to the continued inapplicability of the Restrictions) on the Put Closing Date.

(vi)If, following the valid exercise of the Initial Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Initial Put Period or (B) on the expected Put Closing Date following the expiration of the Initial Put Period, then (A) the Put Notice exercising the Initial Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release, (B) Parent shall notify Executive within 10 days following the first date, if any, during the Extended Put Period, on which the Restrictions cease to apply, and (C) subject to the terms and conditions set forth in this Section 4(g), Executive will have the right (the “Second Put Right” and, together with the Initial Put Right, the “Put Rights”), but not the obligation, during the 30 days following receipt of such notice from Parent (the “Second Put Period”), to cause Parent (or, at Parent’s election, one or more of its designees) to purchase the Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units.  Executive may exercise the Second Put Right by delivering to Parent at any time during the Second Put Period (1) a Put Notice, (2) the Certificates, duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions are applicable on the expected Put Closing Date, the Executive may elect in his sole discretion to withdraw the Put Notice exercising the Second Put Right at any time that the Restrictions remain applicable, and if Executive so elects, Parent shall promptly return to Executive the Certificates and the Release.  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Extended Put Period or (B) on the expected Put Closing Date following the expiration of the Extended Put Period, then the Put Notice exercising the Second Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release.

(vii)The per unit purchase price for the Put Units to be purchased pursuant to the exercise of the Second Put Right shall be the fair market value of the Put Units as of the date of delivery of the Put Notice during the Second Put Period as determined by the Appraisal Process.

(viii)Notwithstanding any other provision in this Section 4(g), if the number of Put Units exceeds the Maximum Required Number, Parent may, at its election, purchase less than all of the Put Units; provided that Parent (or one or more of its designees) shall purchase at least the Maximum Required Number of Put Units.

(ix)The closing of the repurchase of the Put Units (the “Put Closing”) shall occur on the date (the “Put Closing Date”) that is the first business day following the later of (A) 45 days following the valid exercise of the Put Right, and (B) 5 business days following the determination of the fair market value of the Put Units in accordance with the Appraisal Process

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(or, if on the later of such dates the Restrictions are applicable, the first business day thereafter on which the Restrictions are no longer applicable).

(x)At the Put Closing, (A) Parent (or one or more of its designees) shall pay to Executive the purchase price by check or wire transfer of immediately available funds to an account designated by Executive in the Put Notice and (B) upon receipt of such funds, (x) the Certificates shall be deemed to be released to Parent and (y) the Release shall be deemed to be delivered to Parent and dated as of the Put Closing Date, and Parent shall be authorized to write such date into the Release, in each case, without any further action by Executive.  Executive shall further execute and deliver such further documents and take such other actions to effectuate the repurchase of the Put Units as Parent may reasonably request.

(xi)Certain Definitions:

“Applicable Contract” means any contract to which Parent or any of its subsidiaries is a party or by which any such Person is bound, including any credit facilities or debt agreements, other than a contract with the Company, any subsidiary of the Company, Ares, CPPIB or any of their respective controlled affiliates.

“Appraisal Process” means the following process which shall begin on the business day following delivery of the applicable Put Notice: (i) Executive and Parent shall negotiate to set a valuation in good faith; and (ii) if they cannot agree within 10 days following delivery of the Put Notice (or such longer period as Executive and Parent may agree), then (A) Parent and Executive shall mutually agree upon and promptly appoint an appraiser of national recognition (or, in the event Parent and Executive cannot agree on an appraiser, then Parent and Executive shall each select an appraiser of national recognition, and the appraisers chosen by Parent and Executive shall mutually agree upon and appoint an appraiser of national recognition), (B) each of Parent and Executive shall submit to each other and to such appraiser within 15 days following the engagement of the appraiser (x) its valuation of the fair market value of the Put Units and (y) reasonable documentation in support of such valuation, and (C) the appraiser shall select either Parent’s or Executive’s valuation of the fair market value of the Put Units.  Notwithstanding the foregoing, if Executive delivers a Put Notice during the final 45 days of the Initial Put Period and on such date a Restriction applies, the Appraisal Process described in clause (ii) of the foregoing sentence shall not commence unless and until such Restriction ceases to apply at any time during the remainder of the Initial Put Period.  The appraiser shall make such selection within 20 days after the receipt of both parties’ valuations and documentation with respect thereto, and Parent and Executive shall cooperate in all reasonable respects with the appraiser.  In determining which party’s valuation of the fair market value of the Put Units to select, the appraiser shall not discount the value of the Put Units for illiquidity or minority status or other similar status. The appraiser’s selection of either party’s valuation shall be final, conclusive and binding upon Executive and Parent, and the cost of such appraiser shall be borne entirely by the party whose valuation of the fair market value of the Put Units was not selected by the appraiser.  For the avoidance of doubt, the appraiser’s determination shall be limited solely to selecting Parent or Executive’s valuation of the fair market value of the Put Units.  Each of Parent and Executive shall, promptly following a written request by the other party, provide the other party and its representatives and advisors copies of all documents and other information in such party’s possession reasonably requested by the other party in connection with the Appraisal Process

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“Credit Facility” means the Credit Agreement, dated as of January 13, 2012, among the Company, Parent, Royal Bank of Canada, as administrative agent and collateral agent, and the other lenders party thereto (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

“Current Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level actually achieved by the Company for the most recent four fiscal quarter period ending prior to the delivery of the Put Notice (calculated after giving effect to the Pro Forma Transactions), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

“Extended Put Period” means the three year period following the last day of the Initial Put Period.

“Initial Purchase Price” means the greater of (x) $1,000 less the per unit amount of any distributions made with respect to the Put Units prior to the repurchase thereof, and (y) the fair market value of the Put Units as of the date of delivery of the Put Notice during the Initial Put Period as determined by the Appraisal Process.

“Initial Put Period” means the one year period following the termination of Executive’s employment with the Company without Cause or for Good Reason.

“Internal Projections” means the internal financial projections of the Company prepared in the ordinary course of business, as shared with the Board and, if applicable, the Company’s lenders.

“Maximum Required Number” means the whole number of Put Units that may be purchased for $12.5 million, at the price per unit determined in accordance with Section 4(g).

“Other Specified Employees” means Jeff Gold and Howard Gold.

“Projected Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level the Company is expected to achieve for each of the four fiscal quarters ending on or after the delivery of the Put Notice (based on the Internal Projections as shared with the Board and lenders in the ordinary course of business and calculated after giving effect to the Pro Forma Transactions, it being agreed that in the event a replacement Chief Executive Officer has not been hired by the Company as of the date the Put Notice shall have been delivered such projections shall include estimated compensation for such person which shall not exceed 110% of Executive’s potential total compensation for the relevant period (including Executive’s Base Salary and target Bonus whether or not earned)), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

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“Put Notice” means a written, irrevocable notice delivered by Executive to Parent exercising the Put Rights. Such notice shall contain an express, unqualified representation and warranty by Executive to Parent (and its designee) that as of the date of delivery and through the Put Closing Date (A) Executive has, and will have, full right, title and interest in and to the Put Units, (B) Executive has, and will have, all necessary power and authority, and has taken, and will take, all necessary action to sell the Put Units as contemplated by this Section 4(g), and (C) the Put Units are and will be free and clear of any and all liens, claims, charges and encumbrances, other than those arising as a result of or under the terms of this Agreement, the Stockholders Agreement, or under securities laws.

“Put Units” means a number of units (each consisting of one share of Class A Common Stock and one share of Class B Common Stock) with respect to which Executive has elected to exercise the Put Right, as specified in the Put Notice; provided that Executive may not exercise the Put Right for more than the lesser of (A) 20,000 units (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) and (B) such number of units as Executive owns on the date the Put Notice is delivered.

“Senior Indenture” means the indenture, dated as of December 29, 2011, among the Company, the guarantors party thereto and Wilmington Trust National Association, as trustee (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

5.Other Agreements.  On the Effective Date, Executive shall execute and deliver to the Company the Restrictive Covenant Agreement.

6.Consent to Incurring Indebtedness for Stockholder Dividend.  Until the earlier of (i) an Initial Public Offering (as defined in the Stockholders Agreement), (ii) termination of Executive’s employment and (iii) five years after the closing date of the Merger, without the prior written consent of either Executive or Jeff Gold, the Company will not incur indebtedness for borrowed money for the purpose of paying a dividend to its stockholders or repurchasing or redeeming shares of capital stock then held by Ares (as defined below) or CPPIB (as defined below) (whether such dividend, repurchase or redemption occurred prior to or after such incurrence) if:

(a)Immediately following such incurrence, and after giving effect thereto, the aggregate amount of Indebtedness (as defined below) of Parent and its subsidiaries on a consolidated basis on such date exceeds five times EBITDA (as defined below) (measured over the immediately preceding four fiscal quarters for which financial statements are available), and

(b)at the time of such incurrence, the Company’s EBITDA measured from the closing date of the Merger through the last date of the most recently ended fiscal quarter of the Company for which financial statements have been prepared is at least 80% of the budgeted level for EBITDA in the financing plan established in connection with the Merger.

For the avoidance of doubt, (i) the refinancing, repurchase or similar transaction in respect of any debt financing incurred in connection with the Merger shall not be deemed to be the payment of a dividend to the Company’s stockholders or the incurrence of indebtedness for

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purposes hereof; provided that the principal amount of any debt incurred to effect such refinancing, repurchase or similar transaction does not exceed the principal amount of the debt so refinanced or repurchased and any fees and expenses (including original issue discount, upfront fees or similar fees) paid or payable to unaffiliated third parties in connection therewith, and (ii) the repayment at par of bona fide indebtedness held by a stockholder of the Company shall not be considered a dividend for purposes hereof.

“EBITDA” shall have the meaning given to such term in the Senior Indenture, as in effect on the date hereof.

“Indebtedness” shall have the meaning given to such term in the Senior Indenture, as in effect on the date hereof.

7.Representations, Warranties and Agreements.

(a)Executive hereby represents and warrants, for himself and on behalf of his attorneys, heirs, assigns, successors, executors and administrators, that as of the date hereof:  (i) there are no agreements, oral or written, to which Executive is a party or by which Executive is bound that prevent or make unlawful Executive’s execution and delivery of, or performance under, this Agreement; (ii) to the best actual knowledge and belief of Executive, none of the information supplied by Executive to Company in connection with Executive’s employment by Company misstated a material fact or omitted material facts necessary to make the information supplied by Executive not materially misleading; (iii) Executive does not have any business or employment relationship that creates a conflict between the interests of Executive and the Company or any of its subsidiaries; (iv) Executive has no claim to, and no promise has been made by the Company or any of its subsidiaries to Executive for, incentive or any other kind of compensation prior to the Effective Date other than (A) accrued but unpaid salary and unreimbursed business expenses properly incurred by Executive in the ordinary course of business, (B) compensation and benefits disclosed in the Compensation Discussion and Analysis and the accompanying compensation tables in the Company’s definitive proxy statement filed with the Securities Exchange Commission on July 27, 2011, and (C) rental income generated by certain real property leased by Executive or his Affiliates to the Company as disclosed on Exhibit A to the lease letter agreement, dated October 11, 2011, among Parent, the Company, Executive and the other tenants party thereto; and (v) other than claims to enforce his rights under the Rollover Letter or the Stockholders Agreement, Executive has no claim, and Executive is not aware of any facts that exist to support any claim by Executive, against the Company or any of its subsidiaries of any nature whatsoever, whether in Executive’s capacity as an employee, officer, director, or shareholder of the Company.

(b)During the Term, Executive will not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others.

8.Section 409A.  Notwithstanding anything herein to the contrary:

(a)Although the Company does not guarantee to Executive any particular tax treatment relating to the payments and benefits under this Agreement, it is intended that such payments and benefits be exempt from, or comply with, Section 409A of the Internal Revenue

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Code (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), and all provisions of this Agreement shall be administered, interpreted and construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding any other provision hereof, in no event shall the Company be liable for, or be required to indemnify Executive for, any liability of Executive for taxes or penalties under Section 409A.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided, that this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

(d)Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within ten calendar days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.  If under this Agreement, an amount is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.

(e)Notwithstanding any other provision hereof, if Executive is, as of the date of termination, a “specified employee” for purposes of Treas.  Reg. § 1.409A-1(i), then any amount payable to Executive pursuant to Section 4 hereof that is neither a short-term deferral within the meaning of Treas.  Reg. § 1.409A-1(b)(4) nor within the involuntary separation pay limit under Treas.  Reg. § 1.409A-1(b)(9)(iii)(A) will not be paid before the date that is six months after the date of termination, or if earlier, the date of Executive’s death, to the extent such delay is necessary in order to avoid the imposition of taxes under Section 409A.  Any payments to which Executive would otherwise be entitled during such non-payment period will be accumulated and paid or otherwise provided to Executive on the first day of the seventh month following such date of termination, or if earlier, within 30 calendar days after Executive’s death to his surviving spouse (or to his estate if Executive’s spouse does not survive him).

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9.Miscellaneous.

(a)Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of law principles.

(b)Assignment and Transfer.  Executive’s rights and obligations under this Agreement shall not be transferable by assignment or otherwise, and any purported assignment, transfer or delegation thereof shall be void.  This Agreement shall inure to the benefit of, and be binding upon and enforceable by, any purchaser of substantially all of the Company’s assets, any corporate successor to the Company or any assignee thereof.

(c)Entire Agreement.  This Agreement and its Exhibits, together with the Stock Option Plan and any agreement under which the Options are granted, contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersede any prior or contemporaneous written or oral agreements, representations and warranties between them respecting the subject matter hereof.  Without limiting the foregoing, this Agreement expressly supersedes all prior agreements (written or oral) relating to Executive’s employment with the Company or any of its subsidiaries.

(d)Amendment and Waiver; Rights Cumulative.  This Agreement may be amended, waived or discharged only by a writing signed by Executive and by a duly authorized representative of the Company (other than Executive).  No failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance.  All waivers by either party hereto must be contained in a written instrument signed by the party to be charged and, in the case of the Company, by a duly authorized representative of the Company (other than Executive).  The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either party hereto (or by its successor), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies.

(e)Severability.  If any term, provision, covenant or condition of this Agreement, or the application thereof to any person, place or circumstance, shall be held to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and circumstances shall remain in full force and effect.

(f)Dispute Resolution.  Executive shall be bound by Parent’s mandatory dispute resolution procedures as may be in effect from time to time with respect to all matters pertaining to his employment (including termination of employment) with the Company, which procedures include mandatory arbitration to resolve all issues, and shall execute the Arbitration Agreement attached hereto as Exhibit B and incorporated herein.  This Section 9(f) shall survive the termination of Executive’s employment and the expiration or termination of this Agreement.

(g)Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made by (i) by nationally recognized overnight courier delivery for next business day

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delivery, (ii) by hand delivery, or (iii) by facsimile or electronic mail transmission followed by overnight delivery the next business day to the addresses listed below, and shall be deemed given on the date of initial delivery.  Legal counsel for the respective parties may send to the other party any notices, requests, demands or other communications required or permitted to be given hereunder by such party.

If to Executive:

At the address listed in the Company’s personnel records.

If to the Company:

99 Cents Only Stores
4000 Union Pacific Avenue
Commerce, CA 90023
Telephone: (323) 980-8145
Facsimile: (323) 307-9611
Attention: General Counsel

with copies to:

Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Telephone: (310) 201-4100
Facsimile: (310) 201-4170
Attention: Adam Stein

and

Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Telephone: (310) 284-4582
Facsimile: (310) 557-2193
Attention: Michael A. Woronoff, Esq.

(h)Further Assurances.  Executive shall, upon the Company’s reasonable request, execute such further documents and take such other actions as may be permitted or reasonably required by law to implement the purposes, objectives, terms, and provisions of this Agreement.

(i)Interpretation.  The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement.  The language in all parts of this Agreement shall be in all cases construed according to its fair meaning and not strictly for or against the Company or Executive.  As used herein:  (i)  reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (ii) reference to any law, rule or regulation means such law, rule or regulation as amended, modified,

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codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any law, rule or regulation means that provision of such law, rule or regulation from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision; (iii) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular article, section or other provision hereof; (iv) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (v) “or” is used in the inclusive sense of “and/or”; and (vi) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

(j)Acknowledgement.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.

(k)Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be considered to have the force and effect of an original.

(l)Each Party the Drafter.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.  This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party to this Agreement because that party drafted or caused that party’s legal representative to draft any of its provisions.

(m)Time of Essence.  Time is and shall be of the essence in connection with this Agreement and the terms and conditions contained herein.

(n)Survival.  To the extent not otherwise expressly provided in this Agreement, all rights and obligations of any party in Sections 4, 6, 7 and 9 of this Agreement not fully satisfied or performed, as applicable, on the date Executive’s employment is terminated, shall survive the termination of Executive’s employment and the expiration or termination of this Agreement

(o)Defined Terms.  As used in this Agreement, the following terms shall have the meanings ascribed to them below:

“Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person.  The term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.  “Controlled” and “controlling” have meanings correlative to the foregoing.

“Ares” means Ares Corporate Opportunities Fund III, L.P. or any of its Affiliates.

“beneficial ownership” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

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“Change in Control” means the occurrence of any of the following:

(i)the acquisition (including any acquisition through purchase, reorganization, merger, consolidation or similar transaction), directly or indirectly, in one or more transactions by a Person (other than Ares or CPPIB, but not including any portfolio company of any of the foregoing) of beneficial ownership of shares or securities representing 50% or more of the total voting power of the Voting Securities, in each case calculated on a fully diluted basis after giving effect to such acquisition; provided, that none of the following shall constitute a Change in Control under this clause (i): (A) any acquisition by any Permitted Holder, (B) any acquisition that does not result in any Person (other than a Permitted Holder), beneficially owning shares or securities representing 50% or more of the total voting power of the Voting Securities, and (C) any acquisition, after which Parent or its Affiliates have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Parent Board.

(ii)after an Initial Public Offering, any election has occurred of Persons to the Parent Board that causes two-thirds of the Parent Board to consist of Persons other than (A) members of the Parent Board on the Effective Date, (B) Persons who were nominated for election as members of the Parent Board at a time when two-thirds of the Parent Board consisted of Persons who were members of the Parent Board on the Effective Date and (C) Persons who were designated for election as members of the Parent Board pursuant to the Stockholders Agreement;  provided that any Person nominated for election by a Parent Board at least two-thirds of whom constituted Persons described in clauses (A), (B) or (C) or by Persons who were themselves nominated by such board shall, for this purpose, be deemed to have been nominated by a Parent Board composed of Persons described in clause (A); or

(iii)(A) a complete liquidation or dissolution of Parent or (B) the sale or other disposition (including by means of a merger or consolidation), directly or indirectly, of all or substantially all of the assets of Parent and its subsidiaries, taken as a whole, to any Person other than a Person at least 50% of whose voting securities, measured by voting power rather than number of securities, are owned and controlled by one or more Permitted Holders.

“CPPIB” means Canada Pension Plan Investment Board or any of its Affiliates.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“group” shall have the meaning given thereto in Section 13(d)(3) or 14(d)(2) of the Exchange Act.

“Parent Board” means the board of directors of Parent.

“Permitted Holders” means the stockholders of Parent immediately following the consummation of the Merger and their respective Affiliates and Permitted Transferees, and any group consisting solely of such Persons.

“Permitted Transferees” shall have the meaning ascribed thereto in the Stockholders Agreement, but, in the case of any investment partnership, shall exclude the limited partners of such partnership and its portfolio companies.

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“Person” means any individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group.

“Restrictive Covenant Agreement” means the Non-Competition, Non-Solicitation and Confidentiality Agreement attached hereto as Exhibit A, as the same may be amended, modified, supplemented or replaced from time to time.

“Rollover Letter” means the agreement entered into simultaneously with the signing of the Merger Agreement by Parent, Executive and the other parties thereto, as the same may be amended, modified, supplemented or replaced from time to time.

“Stock Option Plan” means Parent’s stock option plan dated on or about the date hereof, as the same may be amended, modified, supplemented or replaced from time to time.

“Stockholders Agreement” means the Stockholders Agreement relating to Parent entered into simultaneously with the closing of the Merger, as the same may be amended, modified, supplemented or replaced from time to time.

“Voting Securities” means the securities of Parent entitled to vote in the election of directors of the Parent Board.

[Remainder of Page Intentionally Left Blank / Signatures on Next Page]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

99 CENTS ONLY STORES
By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary
NUMBER HOLDINGS, INC.
By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary
ERIC SCHIFFER
/s/ Eric Schiffer

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EXHIBIT A

NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT

20

EXHIBIT B

ARBITRATION AGREEMENT

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EXHIBIT C

RELEASE

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EX-10.32

Exhibit 10.32

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of January 13, 2012 (the “Effective Date”), is entered into by and among 99 Cents Only Stores, a California corporation (the “Company”), Number Holdings, Inc., a Delaware Corporation (“Parent”), and Jeff Gold (“Executive”).

RECITAL

WHEREAS, the Company and Executive are entering into this Agreement in connection with the consummation of the transactions (collectively, the “Merger”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated October 11, 2011, among Parent, Number Merger Sub, Inc., a California Corporation, and the Company; and

WHEREAS, the Company, Parent and Executive desire to enter into this Agreement setting forth, among other matters, the terms and conditions of Executive’s employment with the Company.

AGREEMENT

NOW, THEREFORE, in consideration of Executive’s employment and the covenants and other obligations of the parties contained herein, the Company, Parent and Executive agree as follows:

1.Employment.

(a)Term.  Executive’s employment under this Agreement shall commence on the Effective Date and shall continue until the fifth anniversary of the Effective Date (“Term”), unless earlier terminated as set forth under Section 4.  After the Term, Executive’s continued employment with the Company shall be pursuant to such terms and conditions as Executive and the Company may agree.

(b)Duties and Responsibilities.  Executive shall serve as the full-time Chief Operating Officer and President of the Company and shall have the duties and responsibilities customarily associated with such position, and such additional duties and responsibilities as may from time to time be assigned to him by the Company’s Chief Executive Officer and Board of Directors (the “Board”) and that are ordinarily performed, undertaken and exercised by persons situated in a similar capacity at a company the size and nature of the Company.  Executive shall report directly to the Chief Executive Officer.  Executive shall (i) devote his full business time to the business and affairs of the Company and not engage in any other business activities, as a director, officer, employee or consultant or in any other capacity, whether or not he receives compensation therefor and (ii) observe and comply with all rules, regulations, policies and practices of the Company.  Notwithstanding the foregoing, Executive may serve on the boards of charitable organizations, engage in charitable and community affairs and activities, and manage his personal investments, provided that such activities do not adversely interfere with the performance of Executive’s duties and responsibilities hereunder.

2.Compensation.

(a)Base Salary.  So long as he remains employed by the Company, during the Term Executive shall be paid a base salary (“Base Salary”), which initially shall be at the annual rate of $400,000 (the “Initial Base Salary”), payable in installments consistent with the Company’s normal payroll practices.  Executive’s Base Salary shall be reviewed annually by the Board to determine, in the Board’s sole discretion, if such Base Salary should be changed, provided that during the Term, the Base Salary shall not be decreased below $400,000.

(b)Annual Incentive Bonus.

(i)So long as he remains employed by the Company, during the Term Executive shall be eligible to earn an annual incentive bonus (“Bonus”) for each fiscal year of the Company beginning on or after April 1, 2012.  Executive’s target Bonus shall be 200% of the Initial Base Salary, and the targeted range for the Bonus shall be from 162.5% to 237.5% of the Initial Base Salary, with the actual level of payment contingent upon the level of achievement of pre-established performance goals set by the Board.  The target and range for the Bonus described in the preceding sentence may be adjusted downward by the Board in the event that Executive’s Base Salary is increased from the Initial Base Salary, provided that during the Term, (x) the sum of Executive’s Base Salary and target Bonus shall not be decreased below the sum of such amounts as in effect on the Effective Date and (y) the targeted range for the Bonus shall not be adjusted downward if, as a result of such adjustment, either the low end or high end of the range of Executive’s total compensation opportunity (i.e., his Base Salary plus Bonus) is less than the low end or high end of such range as in effect on the Effective Date.

(ii)The Bonus shall not be earned until the date that it is paid, and Executive must be an employee in good standing on such date in order to receive any Bonus; provided, that if Executive’s employment is terminated without Cause (as defined below) or he resigns for Good Reason (as defined below) after the last day of the applicable fiscal year but before annual incentive bonuses are paid, generally, to employees of the Company, then Executive shall be entitled to receive the Bonus (if any) for such fiscal year based on the actual level of achievement of the applicable performance goals, and subject to the terms set forth in Section 4(b).  The Bonus (if any) shall be paid within 90 days following completion of the applicable fiscal year and in no event later than March 15th after each fiscal year end.  Payment of any Bonus will be at the sole discretion of Parent based on its evaluation of the level of achievement of performance goals.

(c)Option Grant.  Executive shall be granted non-qualified stock options (the “Options”) to purchase units consisting in the aggregate of up to 1.45833% of each of the Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”) and the Class B Common Stock, par value $0.001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), of Parent on a fully-diluted basis as of the Effective Date, subject to the terms of the Stock Option Plan.  The Options with respect to each unit (consisting of one share of Class A Common Stock and one share of Class B Common Stock) shall have an exercise price equal to $1,000. All Options shall vest in equal annual installments over five years from the Effective Date.  If Executive’s employment is terminated by the Company without Cause or Executive resigns his employment for Good Reason, the

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vested and unexpired Options shall be exercisable by Executive in cash until (i) the later of (A) 18 months following such termination or resignation and (B) 42 months following the closing of the Merger or (ii) if earlier, the expiration thereof.  Upon the occurrence of a Change in Control (as defined below), all unexpired Options shall immediately vest and become exercisable.

(d)Payment.  Payment of all compensation and other amounts to Executive under this Agreement shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices, and shall be subject to applicable withholding requirements.

3.Employee Benefits.

(a)Business Expenses.  Upon timely submission of itemized expense statements and other documentation in accordance with the procedures specified by the Company, Executive shall be entitled to reimbursement for actual out of pocket business and travel expenses duly incurred by Executive in the course of his duties hereunder in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.

(b)Benefit Plans.  So long as he remains employed by the Company, during the Term Executive shall be entitled to participate in the Company’s employee benefit plans and programs (“Benefit Plans”) as they may exist from time to time, in each case as offered by the Company to its senior executives generally, subject to the terms and conditions thereof.  Nothing in this Agreement shall require the Company to maintain any Benefit Plan, or shall preclude the Company from terminating or amending any Benefit Plan from time to time.

(c)Vacation.  Executive shall be entitled to vacation time in accordance with the Company’s vacation policy for senior executives.  Executive acknowledges that given his position at the Company, Executive will remain generally available and accessible to the Company’s senior managers and the Board through an electronic means of communication when reasonably possible.

4.Termination of Employment.  This Agreement may be terminated prior to the expiration of the Term in accordance with this Section 4.

(a)For Cause.  The Company may terminate Executive’s employment for “Cause” immediately upon written notice for any of the following reasons: (i) Executive has been indicted for or charged with a felony, which causes a material disruption in Executive’s performance of his duties hereunder that is not cured within 30 calendar days following written notice of such breach, (ii) Executive has been convicted of, pled guilty to, or has entered a nolo contendere plea to a misdemeanor where imprisonment of greater than one month is imposed, other than for a traffic-related offense, or a felony, (iii) any act of material misconduct or gross negligence by Executive in the performance of his duties or any act of moral turpitude by Executive, (iv) Executive’s commission of any act of theft, fraud or material dishonesty, (v) Executive’s willful failure to perform any reasonable duties assigned to him by the Board or Executive’s refusal or willful failure to follow the lawful directives of the Board after written notice from the Company of, and 30 calendar days to cure, such refusal or failure, (vi) any material breach by Executive of the material terms set forth in this Agreement (including the Restrictive Covenant Agreement),

3

the Rollover Letter or the Stockholders Agreement that is not cured within 30 calendar days following written notice of such breach, and (vii) Executive’s unlawful appropriation of a material corporate opportunity.  “Cause” shall cease to exist for an event on the 60th day following the later of (A) its occurrence or (B) knowledge thereof by a majority of the Board (not including Executive or any other employee of the Company, if applicable) that the conduct has occurred and, if applicable, such conduct has resulted in the requisite consequences hereunder, unless the Company has given Executive a notice thereof prior to such date; provided that any waiver by the Company of any conduct, event or occurrence that otherwise would have constituted Cause shall not be a waiver of any subsequent conduct, event or occurrence of the same or any other type, and in addition may be considered by the Company for purposes of the Company’s right to terminate Executive’s employment for Cause in connection with such subsequent conduct, event or occurrence of the same or any other type.

Upon termination of Executive’s employment for Cause (i) the Company shall be under no further obligation to Executive, except to pay (A) all accrued but unpaid Base Salary to the date of termination within 30 days following such termination, less all applicable deductions, and (B) any earned and vested benefits and payments pursuant to the terms of any Benefit Plan (the payments and benefits described in subsections (A) and (B) herein shall be referred herein as the “Accrued Benefits”) and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(b)Without Cause; Good Reason.  The Company may terminate Executive’s employment at any time without Cause immediately upon written notice; and Executive may terminate Executive’s employment at any time for Good Reason.  Upon termination of Executive’s employment by the Company without Cause or by Executive for Good Reason during the Term, Executive shall be entitled to receive (i) an amount equal to three times the sum of (A) Executive’s Base Salary, plus (B) Executive’s target Bonus for the fiscal year in which the termination of employment occurs (the “Severance Amount”), one half of which Severance Amount shall be paid in equal installments over three years in accordance with the Company’s regular payroll schedule, and the remainder of which Severance Amount shall be payable in three annual installments (the first installment occurring on the 60th day following termination of employment and the remaining two installments payable on the next two anniversaries thereof), (ii) full vesting of all outstanding and then-unvested Options, (iii) payment of any earned but unpaid Bonus attributable to a previously completed fiscal year and (iv) continued coverage under the Company’s group health plans (or, to the extent such coverage is not permissible under the terms of such plan(s), comparable coverage) for Executive and Executive’s dependents (to the extent covered under such plan(s) immediately prior to such termination), at the Company’s sole expense until the earlier of (A) one year following the date of Executive’s termination of employment with the Company and (B) the date Executive is or becomes eligible for comparable coverage under health plans of another employer.  The foregoing payments and benefits shall commence on the 60th day following termination of employment (or, in the case of (iii) above, at the same time as such bonuses are paid to employees, generally, if later) provided that Executive has executed a release of claims against the Company substantially in the form attached hereto as Exhibit C (“Release”), and such release of claims has become effective, by such date and shall be contingent on Executive’s continued compliance with all post-termination restrictive covenants applicable to Executive, including, without limitation, the covenants contained in the Restrictive Covenant Agreement.  For purposes of the foregoing calculations in this Section 4(b),

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“Base Salary” shall mean the base salary in effect on the date of termination of employment without regard to any reduction that may have given rise to Good Reason.

A termination of Executive’s employment under this Section 4(b) does not include a termination of employment by reason of Executive’s Disability (as defined below) or upon the death of Executive.

“Good Reason” means the occurrence of any of the following events, without Executive’s consent, (i) a material reduction in Executive’s Base Salary, (ii) a material reduction in Executive’s title, or duties and responsibilities, (iii) relocation outside of Los Angeles County, or (iv) a material breach by the Company of any material term set forth in this Agreement (it being acknowledged and agreed that a material term of this Agreement includes, but is not limited to, Sections 2(a) and 2(b)(i)).  The occurrence of the events described in (i) through (iv) above only shall constitute Good Reason if (A) Executive provides the Company written notice within 90 days following the occurrence of the event that allegedly constitutes Good Reason (the “Good Reason Notice”); (B) the Company fails to cure such event within 30 days after receiving such Good Reason Notice; and (C) Executive resigns within 60 days following delivery of such Good Reason Notice.  For the avoidance of doubt, Executive’s job shall require significant travel outside of Los Angeles County, which shall not constitute Good Reason.

(c)Resignation.  Executive may resign his employment (without Good Reason) upon providing the Company 30 days prior written notice.  In the event of such resignation by Executive, upon the effective date of Executive’s resignation (i) the Company shall be under no further obligation to Executive, except to pay the Accrued Benefits and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(d)Disability; Death.  The Company may terminate Executive’s employment if Executive experiences a “Disability,” which for purposes of this Agreement means a “Total Disability” (or equivalent) as defined under the Company’s Long Term Disability Plan in effect at the time of the disability.  In the event that Executive’s employment is terminated by reason of Executive’s Disability or upon the death of Executive, (i) the Company shall be under no further obligation to Executive (or his estate), except to pay the Accrued Benefits and (ii) Options that would have vested in the 12 months following such termination of employment had Executive remained employed shall become immediately vested.  In addition, all Options that are vested as of the termination of Executive’s employment (including Options whose vesting accelerates pursuant to this paragraph) shall be exercisable for 12 months following the employment termination date (or, if earlier, the expiration date of the Options), after which time they shall immediately terminate and no longer be exercisable.

(e)Cooperation.  Following termination of employment for any reason, Executive shall (i) cooperate with the Company, as reasonably requested by the Company, to effect a transition of Executive’s responsibilities and to ensure that the Company is aware of all matters being handled by Executive and (ii) cooperate and provide assistance to the Company at its reasonable request in connection with any action, suit or proceeding brought by or against the Company or any of its Affiliates (or in which any of them is or may be a party) or that relates in any way to Executive’s acts or omissions while employed by the Company.  The Company

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agrees to reimburse Executive promptly for actual out-of-pocket expenses incurred by him in connection with assisting the Company in the manner described in the immediately preceding sentence in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.  Upon termination for any reason, Executive shall be deemed to have resigned from all offices and directorships then held with the Company or any of its subsidiaries.  Executive’s obligations under this Section 4(e) shall survive the termination of Executive’s employment and the expiration or termination of the Agreement.

(f)Company Property.  All assets, property and equipment and all tangible and intangible information relating to the Company, its Affiliates and their respective employees, customers or vendors furnished to, obtained by or prepared by Executive or any other person during the course of or incident to Executive’s employment by the Company or any of its subsidiaries are and shall remain the sole property of the Company (“Company Property”).  Company Property includes, but is not limited to, computer equipment, books, manuals, records, reports, notes, correspondence, contracts, customer lists, business cards, advertising, sales, financial, personnel, operations, and manufacturing materials and information, data processing reports, computer programs, software, customer information and records, business records, price lists or information, and samples, and in each case shall include all copies thereof in any medium, including paper, electronic and magnetic media and all other forms of information storage.  Executive shall further permanently delete any Company information from any computers or other electronic storage devices owned by Executive.  Upon request of the Company, Executive shall certify in writing that Executive has complied with the requirements of this Section 4(f).  Notwithstanding the foregoing, Executive shall be permitted to retain one or more copies of his contacts list and his appointment calendars.  Executive’s obligations under this Section 4(f) shall survive termination of Executive’s employment and the expiration or termination of the Agreement until Executive has returned all Company Property to the Company.

(g)Executive’s Put Right.  Certain capitalized terms used in this Section 4(g) are defined in clause (xi) below.

(i)Subject to the terms and conditions set forth in this Section 4(g), Executive shall have the right (the “Initial Put Right”), but not the obligation, during the Initial Put Period to cause Parent (or, at Parent’s election, one or more of its designees) to purchase Executive’s Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units, upon (A) the termination of his employment by the Company without Cause or (B) Executive’s termination of his employment with the Company for Good Reason.

(ii)Executive may exercise the Initial Put Right by delivering to Parent at any time during the Initial Put Period (1) a Put Notice, (2) certificates representing all shares of Common Stock included in the Put Units (the “Certificates”) duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).

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(iii)The per unit purchase price for the Put Units purchased pursuant to the exercise of the Initial Put Right shall be the Initial Purchase Price.

(iv)Parent shall not be required to repurchase any Put Units if, after giving pro forma effect to (A) such repurchase and all other repurchases pursuant to the exercise, prior to the repurchase of such Put Units, of “put” rights held by any Other Specified Employee (including the incurrence of any debt by the Company or any of its subsidiaries incurred or expected to be incurred to effect any such repurchases) and (B) any severance payments Parent or any of its subsidiaries has made or is obligated to make to Executive or any Other Specified Employee whose employment with the Company has been terminated as of the date of the repurchase of such Put Units, in each case, taking into account the timing such payments are required to be made (the transactions described in the foregoing clauses (A) and (B), the “Pro Forma Transactions”), (x) the Current Cushion or the Projected Cushion would be below 25%, (y) in the reasonable good faith judgment of the Board, such repurchase would be prohibited pursuant to applicable law or regulation or would result in a breach of the terms of any Applicable Contract or (z) the Company would not be permitted to make such repurchase either (1) pursuant to the exception contained in Section 4.07(b)(14) of the Senior Indenture or (2) with amounts then available to make Restricted Payments (as defined in the Senior Indenture) under Sections 4.07(a)(4)(C)(i), (iv) and (v) of the Senior Indenture (or, in each case, any similar clause in any amendment to, or replacement of, the Senior Indenture) (the occurrence of any matter described in the foregoing clause (x), (y) or (z), a “Restriction”).  All calculations and other determinations made in the reasonable good faith judgment of the Board, consistent with past practice, in connection with the determination of the Current Cushion or the Projected Cushion shall be binding on Executive.  If, following the date of this Agreement, Parent or any of its subsidiaries incurs additional indebtedness for borrowed money, Parent shall, or shall cause such subsidiary to, request its lenders to include provisions in any credit facilities or debt agreements governing such indebtedness to permit repurchases of equity as contemplated in this Section 4(g); provided that in no event shall Parent or any such subsidiary be required to accept any adverse term in exchange for such provisions.  Parent shall deliver a written notice to Executive within 5 business days following delivery of a Put Notice specifying whether a Restriction applies and, if so, providing reasonable detail (including relevant calculations) regarding such Restriction.  During the period from and after delivery of such notice through and including the expected Put Closing Date (the “Interim Period”), Parent shall not change its financial or capital budgeting forecasts included in the Internal Projections, including any change to the methodology or assumptions used in deriving such forecasts, for purposes of calculating the Projected Cushion, except to the extent reasonably necessary to reflect (x) the Company’s actual financial results for the fiscal quarter ending prior to delivery of the Put Notice or any fiscal period during the Interim Put Period, (y) the occurrence or discovery during the Interim Period of an event beyond the reasonable control of Parent that, in the reasonable good faith judgment of the Board, materially impairs the Company’s ability to meet the forecasts included in the Internal Projections or (z) changes to the assumptions underlying the forecasts included in the Internal Projections that, in the good faith judgment of the Board, are reasonably necessary to achieve a legitimate business objective and, in any event under clause (x), (y) and (z), any such changes are not for the purpose of avoiding Parent’s obligations under this Section 4(g).

(v)If, following the valid exercise of the Initial Put Right, Parent is not required to repurchase the Put Units due to the applicability of a Restriction, and at any time

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during the remainder of the Initial Put Period the Restrictions cease to apply, Parent will (A) promptly notify Executive that the Restrictions have ceased to apply and (B) repurchase the Put Units for the Initial Purchase Price (subject to the continued inapplicability of the Restrictions) on the Put Closing Date.

(vi)If, following the valid exercise of the Initial Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Initial Put Period or (B) on the expected Put Closing Date following the expiration of the Initial Put Period, then (A) the Put Notice exercising the Initial Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release, (B) Parent shall notify Executive within 10 days following the first date, if any, during the Extended Put Period, on which the Restrictions cease to apply, and (C) subject to the terms and conditions set forth in this Section 4(g), Executive will have the right (the “Second Put Right” and, together with the Initial Put Right, the “Put Rights”), but not the obligation, during the 30 days following receipt of such notice from Parent (the “Second Put Period”), to cause Parent (or, at Parent’s election, one or more of its designees) to purchase the Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units.  Executive may exercise the Second Put Right by delivering to Parent at any time during the Second Put Period (1) a Put Notice, (2) the Certificates, duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions are applicable on the expected Put Closing Date, the Executive may elect in his sole discretion to withdraw the Put Notice exercising the Second Put Right at any time that the Restrictions remain applicable, and if Executive so elects, Parent shall promptly return to Executive the Certificates and the Release.  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Extended Put Period or (B) on the expected Put Closing Date following the expiration of the Extended Put Period, then the Put Notice exercising the Second Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release.

(vii)The per unit purchase price for the Put Units to be purchased pursuant to the exercise of the Second Put Right shall be the fair market value of the Put Units as of the date of delivery of the Put Notice during the Second Put Period as determined by the Appraisal Process.

(viii)Notwithstanding any other provision in this Section 4(g), if the number of Put Units exceeds the Maximum Required Number, Parent may, at its election, purchase less than all of the Put Units; provided that Parent (or one or more of its designees) shall purchase at least the Maximum Required Number of Put Units.

(ix)The closing of the repurchase of the Put Units (the “Put Closing”) shall occur on the date (the “Put Closing Date”) that is the first business day following the later of (A) 45 days following the valid exercise of the Put Right, and (B) 5 business days following the determination of the fair market value of the Put Units in accordance with the Appraisal Process

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(or, if on the later of such dates the Restrictions are applicable, the first business day thereafter on which the Restrictions are no longer applicable).

(x)At the Put Closing, (A) Parent (or one or more of its designees) shall pay to Executive the purchase price by check or wire transfer of immediately available funds to an account designated by Executive in the Put Notice and (B) upon receipt of such funds, (x) the Certificates shall be deemed to be released to Parent and (y) the Release shall be deemed to be delivered to Parent and dated as of the Put Closing Date, and Parent shall be authorized to write such date into the Release, in each case, without any further action by Executive.  Executive shall further execute and deliver such further documents and take such other actions to effectuate the repurchase of the Put Units as Parent may reasonably request.

(xi)Certain Definitions:

“Applicable Contract” means any contract to which Parent or any of its subsidiaries is a party or by which any such Person is bound, including any credit facilities or debt agreements, other than a contract with the Company, any subsidiary of the Company, Ares, CPPIB or any of their respective controlled affiliates.

“Appraisal Process” means the following process which shall begin on the business day following delivery of the applicable Put Notice: (i) Executive and Parent shall negotiate to set a valuation in good faith; and (ii) if they cannot agree within 10 days following delivery of the Put Notice (or such longer period as Executive and Parent may agree), then (A) Parent and Executive shall mutually agree upon and promptly appoint an appraiser of national recognition (or, in the event Parent and Executive cannot agree on an appraiser, then Parent and Executive shall each select an appraiser of national recognition, and the appraisers chosen by Parent and Executive shall mutually agree upon and appoint an appraiser of national recognition), (B) each of Parent and Executive shall submit to each other and to such appraiser within 15 days following the engagement of the appraiser (x) its valuation of the fair market value of the Put Units and (y) reasonable documentation in support of such valuation, and (C) the appraiser shall select either Parent’s or Executive’s valuation of the fair market value of the Put Units.  Notwithstanding the foregoing, if Executive delivers a Put Notice during the final 45 days of the Initial Put Period and on such date a Restriction applies, the Appraisal Process described in clause (ii) of the foregoing sentence shall not commence unless and until such Restriction ceases to apply at any time during the remainder of the Initial Put Period.  The appraiser shall make such selection within 20 days after the receipt of both parties’ valuations and documentation with respect thereto, and Parent and Executive shall cooperate in all reasonable respects with the appraiser.  In determining which party’s valuation of the fair market value of the Put Units to select, the appraiser shall not discount the value of the Put Units for illiquidity or minority status or other similar status. The appraiser’s selection of either party’s valuation shall be final, conclusive and binding upon Executive and Parent, and the cost of such appraiser shall be borne entirely by the party whose valuation of the fair market value of the Put Units was not selected by the appraiser.  For the avoidance of doubt, the appraiser’s determination shall be limited solely to selecting Parent or Executive’s valuation of the fair market value of the Put Units.  Each of Parent and Executive shall, promptly following a written request by the other party, provide the other party and its representatives and advisors copies of all documents and other information in such party’s possession reasonably requested by the other party in connection with the Appraisal Process

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“Credit Facility” means the Credit Agreement, dated as of January 13, 2012, among the Company, Parent, Royal Bank of Canada, as administrative agent and collateral agent, and the other lenders party thereto (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

“Current Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level actually achieved by the Company for the most recent four fiscal quarter period ending prior to the delivery of the Put Notice (calculated after giving effect to the Pro Forma Transactions), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

“Extended Put Period” means the three year period following the last day of the Initial Put Period.

“Initial Purchase Price” means the greater of (x) $1,000 less the per unit amount of any distributions made with respect to the Put Units prior to the repurchase thereof, and (y) the fair market value of the Put Units as of the date of delivery of the Put Notice during the Initial Put Period as determined by the Appraisal Process.

“Initial Put Period” means the one year period following the termination of Executive’s employment with the Company without Cause or for Good Reason.

“Internal Projections” means the internal financial projections of the Company prepared in the ordinary course of business, as shared with the Board and, if applicable, the Company’s lenders.

“Maximum Required Number” means the whole number of Put Units that may be purchased for $12.5 million, at the price per unit determined in accordance with Section 4(g).

“Other Specified Employees” means Eric Schiffer and Howard Gold.

“Projected Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level the Company is expected to achieve for each of the four fiscal quarters ending on or after the delivery of the Put Notice (based on the Internal Projections as shared with the Board and lenders in the ordinary course of business and calculated after giving effect to the Pro Forma Transactions, it being agreed that in the event a replacement Chief Operating Officer and President has not been hired by the Company as of the date the Put Notice shall have been delivered such projections shall include estimated compensation for such person which shall not exceed 110% of Executive’s potential total compensation for the relevant period (including Executive’s Base Salary and target Bonus whether or not earned)), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

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“Put Notice” means a written, irrevocable notice delivered by Executive to Parent exercising the Put Rights. Such notice shall contain an express, unqualified representation and warranty by Executive to Parent (and its designee) that as of the date of delivery and through the Put Closing Date (A) Executive has, and will have, full right, title and interest in and to the Put Units, (B) Executive has, and will have, all necessary power and authority, and has taken, and will take, all necessary action to sell the Put Units as contemplated by this Section 4(g), and (C) the Put Units are and will be free and clear of any and all liens, claims, charges and encumbrances, other than those arising as a result of or under the terms of this Agreement, the Stockholders Agreement, or under securities laws.

“Put Units” means a number of units (each consisting of one share of Class A Common Stock and one share of Class B Common Stock) with respect to which Executive has elected to exercise the Put Right, as specified in the Put Notice; provided that Executive may not exercise the Put Right for more than the lesser of (A) 20,000 units (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) and (B) such number of units as Executive owns on the date the Put Notice is delivered.

“Senior Indenture” means the indenture, dated as of December 29, 2011, among the Company, the guarantors party thereto and Wilmington Trust National Association, as trustee (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

5.Other Agreements.  On the Effective Date, Executive shall execute and deliver to the Company the Restrictive Covenant Agreement.

6.Consent to Incurring Indebtedness for Stockholder Dividend.  From and after the time (if any) Eric Schiffer ceases to be the Chief Executive Officer of the Company, until the earlier of (i) an Initial Public Offering (as defined in the Stockholders Agreement), (ii) termination of Executive’s employment and (iii) five years after the closing date of the Merger, without the prior written consent of either Executive or Eric Schiffer, the Company will not incur indebtedness for borrowed money for the purpose of paying a dividend to its stockholders or repurchasing or redeeming shares of capital stock then held by Ares (as defined below) or CPPIB (as defined below) (whether such dividend, repurchase or redemption occurred prior to or after such incurrence) if:

(a)Immediately following such incurrence, and after giving effect thereto, the aggregate amount of Indebtedness (as defined below) of Parent and its subsidiaries on a consolidated basis on such date exceeds five times EBITDA (as defined below) (measured over the immediately preceding four fiscal quarters for which financial statements are available), and

(b)at the time of such incurrence, the Company’s EBITDA measured from the closing date of the Merger through the last date of the most recently ended fiscal quarter of the Company for which financial statements have been prepared is at least 80% of the budgeted level for EBITDA in the financing plan established in connection with the Merger.

For the avoidance of doubt, (i) the refinancing, repurchase or similar transaction in respect of any debt financing incurred in connection with the Merger shall not be deemed to be

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the payment of a dividend to the Company’s stockholders or the incurrence of indebtedness for purposes hereof; provided that the principal amount of any debt incurred to effect such refinancing, repurchase or similar transaction does not exceed the principal amount of the debt so refinanced or repurchased and any fees and expenses (including original issue discount, upfront fees or similar fees) paid or payable to unaffiliated third parties in connection therewith, and (ii) the repayment at par of bona fide indebtedness held by a stockholder of the Company shall not be considered a dividend for purposes hereof.

“EBITDA” shall have the meaning given to such term in the Senior Indenture, as in effect on the date hereof.

“Indebtedness” shall have the meaning given to such term in the Senior Indenture, as in effect on the date hereof.

7.Representations, Warranties and Agreements.

(a)Executive hereby represents and warrants, for himself and on behalf of his attorneys, heirs, assigns, successors, executors and administrators, that as of the date hereof:  (i) there are no agreements, oral or written, to which Executive is a party or by which Executive is bound that prevent or make unlawful Executive’s execution and delivery of, or performance under, this Agreement; (ii) to the best actual knowledge and belief of Executive, none of the information supplied by Executive to Company in connection with Executive’s employment by Company misstated a material fact or omitted material facts necessary to make the information supplied by Executive not materially misleading; (iii) Executive does not have any business or employment relationship that creates a conflict between the interests of Executive and the Company or any of its subsidiaries; (iv) Executive has no claim to, and no promise has been made by the Company or any of its subsidiaries to Executive for, incentive or any other kind of compensation prior to the Effective Date other than (A) accrued but unpaid salary and unreimbursed business expenses properly incurred by Executive in the ordinary course of business, (B) compensation and benefits disclosed in the Compensation Discussion and Analysis and the accompanying compensation tables in the Company’s definitive proxy statement filed with the Securities Exchange Commission on July 27, 2011, and (C) rental income generated by certain real property leased by Executive or his Affiliates to the Company as disclosed on Exhibit A to the lease letter agreement, dated October 11, 2011, among Parent, the Company, Executive and the other tenants party thereto; and (v) other than claims to enforce his rights under the Rollover Letter or the Stockholders Agreement, Executive has no claim, and Executive is not aware of any facts that exist to support any claim by Executive, against the Company or any of its subsidiaries of any nature whatsoever, whether in Executive’s capacity as an employee, officer, director, or shareholder of the Company.

(b)During the Term, Executive will not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others.

8.Section 409A.  Notwithstanding anything herein to the contrary:

(a)Although the Company does not guarantee to Executive any particular tax treatment relating to the payments and benefits under this Agreement, it is intended that such

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payments and benefits be exempt from, or comply with, Section 409A of the Internal Revenue Code (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), and all provisions of this Agreement shall be administered, interpreted and construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding any other provision hereof, in no event shall the Company be liable for, or be required to indemnify Executive for, any liability of Executive for taxes or penalties under Section 409A.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided, that this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

(d)Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within ten calendar days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.  If under this Agreement, an amount is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.

(e)Notwithstanding any other provision hereof, if Executive is, as of the date of termination, a “specified employee” for purposes of Treas.  Reg. § 1.409A-1(i), then any amount payable to Executive pursuant to Section 4 hereof that is neither a short-term deferral within the meaning of Treas.  Reg. § 1.409A-1(b)(4) nor within the involuntary separation pay limit under Treas.  Reg. § 1.409A-1(b)(9)(iii)(A) will not be paid before the date that is six months after the date of termination, or if earlier, the date of Executive’s death, to the extent such delay is necessary in order to avoid the imposition of taxes under Section 409A.  Any payments to which Executive would otherwise be entitled during such non-payment period will be accumulated and paid or otherwise provided to Executive on the first day of the seventh month following such date of termination, or if earlier, within 30 calendar days after Executive’s death to his surviving spouse (or to his estate if Executive’s spouse does not survive him).

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9.Miscellaneous.

(a)Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of law principles.

(b)Assignment and Transfer.  Executive’s rights and obligations under this Agreement shall not be transferable by assignment or otherwise, and any purported assignment, transfer or delegation thereof shall be void.  This Agreement shall inure to the benefit of, and be binding upon and enforceable by, any purchaser of substantially all of the Company’s assets, any corporate successor to the Company or any assignee thereof.

(c)Entire Agreement.  This Agreement and its Exhibits, together with the Stock Option Plan and any agreement under which the Options are granted, contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersede any prior or contemporaneous written or oral agreements, representations and warranties between them respecting the subject matter hereof.  Without limiting the foregoing, this Agreement expressly supersedes all prior agreements (written or oral) relating to Executive’s employment with the Company or any of its subsidiaries.

(d)Amendment and Waiver; Rights Cumulative.  This Agreement may be amended, waived or discharged only by a writing signed by Executive and by a duly authorized representative of the Company (other than Executive).  No failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance.  All waivers by either party hereto must be contained in a written instrument signed by the party to be charged and, in the case of the Company, by a duly authorized representative of the Company (other than Executive).  The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either party hereto (or by its successor), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies.

(e)Severability.  If any term, provision, covenant or condition of this Agreement, or the application thereof to any person, place or circumstance, shall be held to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and circumstances shall remain in full force and effect.

(f)Dispute Resolution.  Executive shall be bound by Parent’s mandatory dispute resolution procedures as may be in effect from time to time with respect to all matters pertaining to his employment (including termination of employment) with the Company, which procedures include mandatory arbitration to resolve all issues, and shall execute the Arbitration Agreement attached hereto as Exhibit B and incorporated herein.  This Section 9(f) shall survive the termination of Executive’s employment and the expiration or termination of this Agreement.

(g)Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made by (i) by nationally recognized overnight courier delivery for next business day

14

delivery, (ii) by hand delivery, or (iii) by facsimile or electronic mail transmission followed by overnight delivery the next business day to the addresses listed below, and shall be deemed given on the date of initial delivery.  Legal counsel for the respective parties may send to the other party any notices, requests, demands or other communications required or permitted to be given hereunder by such party.

If to Executive:

At the address listed in the Company’s personnel records.

If to the Company:

99 Cents Only Stores
4000 Union Pacific Avenue
Commerce, CA 90023
Telephone: (323) 980-8145
Facsimile: (323) 307-9611
Attention: General Counsel

with copies to:

Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Telephone: (310) 201-4100
Facsimile: (310) 201-4170
Attention: Adam Stein

and

Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Telephone: (310) 284-4582
Facsimile: (310) 557-2193 
Attention: Michael A. Woronoff, Esq.

(h)Further Assurances.  Executive shall, upon the Company’s reasonable request, execute such further documents and take such other actions as may be permitted or reasonably required by law to implement the purposes, objectives, terms, and provisions of this Agreement.

(i)Interpretation.  The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement.  The language in all parts of this Agreement shall be in all cases construed according to its fair meaning and not strictly for or against the Company or Executive.  As used herein: (i) reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (ii) reference to any law, rule or regulation means such law, rule or regulation as amended, modified,

15

codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any law, rule or regulation means that provision of such law, rule or regulation from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision; (iii) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular article, section or other provision hereof; (iv) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (v) “or” is used in the inclusive sense of “and/or”; and (vi) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

(j)Acknowledgement.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.

(k)Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be considered to have the force and effect of an original.

(l)Each Party the Drafter.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.  This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party to this Agreement because that party drafted or caused that party’s legal representative to draft any of its provisions.

(m)Time of Essence.  Time is and shall be of the essence in connection with this Agreement and the terms and conditions contained herein.

(n)Survival.  To the extent not otherwise expressly provided in this Agreement, all rights and obligations of any party in Sections 4, 6, 7 and 9 of this Agreement not fully satisfied or performed, as applicable, on the date Executive’s employment is terminated, shall survive the termination of Executive’s employment and the expiration or termination of this Agreement

(o)Defined Terms.  As used in this Agreement, the following terms shall have the meanings ascribed to them below:

“Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person.  The term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.  “Controlled” and “controlling” have meanings correlative to the foregoing.

“Ares” means Ares Corporate Opportunities Fund III, L.P. or any of its Affiliates.

“beneficial ownership” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

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“Change in Control” means the occurrence of any of the following:

(i)the acquisition (including any acquisition through purchase, reorganization, merger, consolidation or similar transaction), directly or indirectly, in one or more transactions by a Person (other than Ares or CPPIB, but not including any portfolio company of any of the foregoing) of beneficial ownership of shares or securities representing 50% or more of the total voting power of the Voting Securities, in each case calculated on a fully diluted basis after giving effect to such acquisition; provided, that none of the following shall constitute a Change in Control under this clause (i): (A) any acquisition by any Permitted Holder, (B) any acquisition that does not result in any Person (other than a Permitted Holder), beneficially owning shares or securities representing 50% or more of the total voting power of the Voting Securities, and (C) any acquisition, after which Parent or its Affiliates have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Parent Board.

(ii)after an Initial Public Offering, any election has occurred of Persons to the Parent Board that causes two-thirds of the Parent Board to consist of Persons other than (A) members of the Parent Board on the Effective Date, (B) Persons who were nominated for election as members of the Parent Board at a time when two-thirds of the Parent Board consisted of Persons who were members of the Parent Board on the Effective Date and (C) Persons who were designated for election as members of the Parent Board pursuant to the Stockholders Agreement;  provided that any Person nominated for election by a Parent Board at least two-thirds of whom constituted Persons described in clauses (A), (B) or (C) or by Persons who were themselves nominated by such board shall, for this purpose, be deemed to have been nominated by a Parent Board composed of Persons described in clause (A); or

(iii)(A) a complete liquidation or dissolution of Parent or (B) the sale or other disposition (including by means of a merger or consolidation), directly or indirectly, of all or substantially all of the assets of Parent and its subsidiaries, taken as a whole, to any Person other than a Person at least 50% of whose voting securities, measured by voting power rather than number of securities, are owned and controlled by one or more Permitted Holders.

“CPPIB” means Canada Pension Plan Investment Board or any of its Affiliates.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“group” shall have the meaning given thereto in Section 13(d)(3) or 14(d)(2) of the Exchange Act.

“Parent Board” means the board of directors of Parent.

“Permitted Holders” means the stockholders of Parent immediately following the consummation of the Merger and their respective Affiliates and Permitted Transferees, and any group consisting solely of such Persons.

“Permitted Transferees” shall have the meaning ascribed thereto in the Stockholders Agreement, but, in the case of any investment partnership, shall exclude the limited partners of such partnership and its portfolio companies.

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“Person” means any individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group.

“Restrictive Covenant Agreement” means the Non-Competition, Non-Solicitation and Confidentiality Agreement attached hereto as Exhibit A, as the same may be amended, modified, supplemented or replaced from time to time.

“Rollover Letter” means the agreement entered into simultaneously with the signing of the Merger Agreement by Parent, Executive and the other parties thereto, as the same may be amended, modified, supplemented or replaced from time to time.

“Stock Option Plan” means Parent’s stock option plan dated on or about the date hereof, as the same may be amended, modified, supplemented or replaced from time to time.

“Stockholders Agreement” means the Stockholders Agreement relating to Parent entered into simultaneously with the closing of the Merger, as the same may be amended, modified, supplemented or replaced from time to time.

“Voting Securities” means the securities of Parent entitled to vote in the election of directors of the Parent Board.

[Remainder of Page Intentionally Left Blank / Signatures on Next Page]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

99 CENTS ONLY STORES

By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary

NUMBER HOLDINGS, INC.

By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary

JEFF GOLD

/s/ Jeff Gold

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EXHIBIT A

NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT

20

EXHIBIT B

ARBITRATION AGREEMENT

21

EXHIBIT C

RELEASE

22

EX-10.33

Exhibit 10.33

Execution Version

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”), dated as of January 13, 2012 (the “Effective Date”), is entered into by and among 99 Cents Only Stores, a California corporation (the “Company”), Number Holdings, Inc., a Delaware Corporation (“Parent”), and Howard Gold (“Executive”).

RECITAL

WHEREAS, the Company and Executive are entering into this Agreement in connection with the consummation of the transactions (collectively, the “Merger”) contemplated by that certain Agreement and Plan of Merger (the “Merger Agreement”), dated October 11, 2011, among Parent, Number Merger Sub, Inc., a California Corporation, and the Company; and

WHEREAS, the Company, Parent and Executive desire to enter into this Agreement setting forth, among other matters, the terms and conditions of Executive’s employment with the Company.

AGREEMENT

NOW, THEREFORE, in consideration of Executive’s employment and the covenants and other obligations of the parties contained herein, the Company, Parent and Executive agree as follows:

1.Employment.

(a)Term.  Executive’s employment under this Agreement shall commence on the Effective Date and shall continue until the fifth anniversary of the Effective Date (“Term”), unless earlier terminated as set forth under Section 4.  After the Term, Executive’s continued employment with the Company shall be pursuant to such terms and conditions as Executive and the Company may agree.

(b)Duties and Responsibilities.  Executive shall serve as the full-time Executive Vice President, Special Projects of the Company and shall have the duties and responsibilities customarily associated with such position, and such additional duties and responsibilities as may from time to time be assigned to him by the Company’s Chief Executive Officer and Board of Directors (the “Board”) and that are ordinarily performed, undertaken and exercised by persons situated in a similar capacity at a company the size and nature of the Company.  Executive shall report directly to the Chief Executive Officer.  Executive shall (i) devote his full business time to the business and affairs of the Company and not engage in any other business activities, as a director, officer, employee or consultant or in any other capacity, whether or not he receives compensation therefor and (ii) observe and comply with all rules, regulations, policies and practices of the Company.  Notwithstanding the foregoing, Executive may serve on the boards of charitable organizations, engage in charitable and community affairs and activities, and manage his personal investments, provided that such activities do not adversely interfere with the performance of Executive’s duties and responsibilities hereunder.

2.Compensation.

(a)Base Salary.  So long as he remains employed by the Company, during the Term Executive shall be paid a base salary (“Base Salary”), which initially shall be at the annual rate of $200,000 (the “Initial Base Salary”), payable in installments consistent with the Company’s normal payroll practices.  Executive’s Base Salary shall be reviewed annually by the Board to determine, in the Board’s sole discretion, if such Base Salary should be changed, provided that during the Term, the Base Salary shall not be decreased below $200,000.

(b)Annual Incentive Bonus.

(i)So long as he remains employed by the Company, during the Term Executive shall be eligible to earn an annual incentive bonus (“Bonus”) for each fiscal year of the Company beginning on or after April 1, 2012.  Executive’s target Bonus shall be 200% of the Initial Base Salary, and the targeted range for the Bonus shall be from 162.5% to 237.5% of the Initial Base Salary, with the actual level of payment contingent upon the level of achievement of pre-established performance goals set by the Board.  The target and range for the Bonus described in the preceding sentence may be adjusted downward by the Board in the event that Executive’s Base Salary is increased from the Initial Base Salary, provided that during the Term, (x) the sum of Executive’s Base Salary and target Bonus shall not be decreased below the sum of such amounts as in effect on the Effective Date and (y) the targeted range for the Bonus shall not be adjusted downward if, as a result of such adjustment, either the low end or high end of the range of Executive’s total compensation opportunity (i.e., his Base Salary plus Bonus) is less than the low end or high end of such range as in effect on the Effective Date.

(ii)The Bonus shall not be earned until the date that it is paid, and Executive must be an employee in good standing on such date in order to receive any Bonus; provided, that if Executive’s employment is terminated without Cause (as defined below) or he resigns for Good Reason (as defined below) after the last day of the applicable fiscal year but before annual incentive bonuses are paid, generally, to employees of the Company, then Executive shall be entitled to receive the Bonus (if any) for such fiscal year based on the actual level of achievement of the applicable performance goals, and subject to the terms set forth in Section 4(b).  The Bonus (if any) shall be paid within 90 days following completion of the applicable fiscal year and in no event later than March 15th after each fiscal year end.  Payment of any Bonus will be at the sole discretion of Parent based on its evaluation of the level of achievement of performance goals.

(c)Option Grant.  Executive shall be granted non-qualified stock options (the “Options”) to purchase units consisting in the aggregate of up to 1.04167% of each of the Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”) and the Class B Common Stock, par value $0.001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”), of Parent on a fully-diluted basis as of the Effective Date, subject to the terms of the Stock Option Plan.  The Options with respect to each unit (consisting of one share of Class A Common Stock and one share of Class B Common Stock) shall have an exercise price equal to $1,000. All Options shall vest in equal annual installments over five years from the Effective Date.  If Executive’s employment is terminated by the Company without Cause or Executive resigns his employment for Good Reason, the

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vested and unexpired Options shall be exercisable by Executive in cash until (i) the later of (A) 18 months following such termination or resignation and (B) 42 months following the closing of the Merger or (ii) if earlier, the expiration thereof.  Upon the occurrence of a Change in Control (as defined below), all unexpired Options shall immediately vest and become exercisable.

(d)Payment.  Payment of all compensation and other amounts to Executive under this Agreement shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices, and shall be subject to applicable withholding requirements.

3.Employee Benefits.

(a)Business Expenses.  Upon timely submission of itemized expense statements and other documentation in accordance with the procedures specified by the Company, Executive shall be entitled to reimbursement for actual out of pocket business and travel expenses duly incurred by Executive in the course of his duties hereunder in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.

(b)Benefit Plans.  So long as he remains employed by the Company, during the Term Executive shall be entitled to participate in the Company’s employee benefit plans and programs (“Benefit Plans”) as they may exist from time to time, in each case as offered by the Company to its senior executives generally, subject to the terms and conditions thereof.  Nothing in this Agreement shall require the Company to maintain any Benefit Plan, or shall preclude the Company from terminating or amending any Benefit Plan from time to time.

(c)Vacation.  Executive shall be entitled to vacation time in accordance with the Company’s vacation policy for senior executives.  Executive acknowledges that given his position at the Company, Executive will remain generally available and accessible to the Company’s senior managers and the Board through an electronic means of communication when reasonably possible.

4.Termination of Employment.  This Agreement may be terminated prior to the expiration of the Term in accordance with this Section 4.

(a)For Cause.  The Company may terminate Executive’s employment for “Cause” immediately upon written notice for any of the following reasons: (i) Executive has been indicted for or charged with a felony, which causes a material disruption in Executive’s performance of his duties hereunder that is not cured within 30 calendar days following written notice of such breach, (ii) Executive has been convicted of, pled guilty to, or has entered a nolo contendere plea to a misdemeanor where imprisonment of greater than one month is imposed, other than for a traffic-related offense, or a felony, (iii) any act of material misconduct or gross negligence by Executive in the performance of his duties or any act of moral turpitude by Executive, (iv) Executive’s commission of any act of theft, fraud or material dishonesty, (v) Executive’s willful failure to perform any reasonable duties assigned to him by the Board or Executive’s refusal or willful failure to follow the lawful directives of the Board after written notice from the Company of, and 30 calendar days to cure, such refusal or failure, (vi) any material breach by Executive of the material terms set forth in this Agreement (including the Restrictive Covenant Agreement),

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the Rollover Letter or the Stockholders Agreement that is not cured within 30 calendar days following written notice of such breach, and (vii) Executive’s unlawful appropriation of a material corporate opportunity.  “Cause” shall cease to exist for an event on the 60th day following the later of (A) its occurrence or (B) knowledge thereof by a majority of the Board (not including Executive or any other employee of the Company, if applicable) that the conduct has occurred and, if applicable, such conduct has resulted in the requisite consequences hereunder, unless the Company has given Executive a notice thereof prior to such date; provided that any waiver by the Company of any conduct, event or occurrence that otherwise would have constituted Cause shall not be a waiver of any subsequent conduct, event or occurrence of the same or any other type, and in addition may be considered by the Company for purposes of the Company’s right to terminate Executive’s employment for Cause in connection with such subsequent conduct, event or occurrence of the same or any other type.

Upon termination of Executive’s employment for Cause (i) the Company shall be under no further obligation to Executive, except to pay (A) all accrued but unpaid Base Salary to the date of termination within 30 days following such termination, less all applicable deductions, and (B) any earned and vested benefits and payments pursuant to the terms of any Benefit Plan (the payments and benefits described in subsections (A) and (B) herein shall be referred herein as the “Accrued Benefits”) and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(b)Without Cause; Good Reason.  The Company may terminate Executive’s employment at any time without Cause immediately upon written notice; and Executive may terminate Executive’s employment at any time for Good Reason.  Upon termination of Executive’s employment by the Company without Cause or by Executive for Good Reason during the Term, Executive shall be entitled to receive (i) an amount equal to three times the sum of (A) Executive’s Base Salary, plus (B) Executive’s target Bonus for the fiscal year in which the termination of employment occurs (the “Severance Amount”), one half of which Severance Amount shall be paid in equal installments over three years in accordance with the Company’s regular payroll schedule, and the remainder of which Severance Amount shall be payable in three annual installments (the first installment occurring on the 60th day following termination of employment and the remaining two installments payable on the next two anniversaries thereof), (ii) full vesting of all outstanding and then-unvested Options, (iii) payment of any earned but unpaid Bonus attributable to a previously completed fiscal year and (iv) continued coverage under the Company’s group health plans (or, to the extent such coverage is not permissible under the terms of such plan(s), comparable coverage) for Executive and Executive’s dependents (to the extent covered under such plan(s) immediately prior to such termination), at the Company’s sole expense until the earlier of (A) one year following the date of Executive’s termination of employment with the Company and (B) the date Executive is or becomes eligible for comparable coverage under health plans of another employer.  The foregoing payments and benefits shall commence on the 60th day following termination of employment (or, in the case of (iii) above, at the same time as such bonuses are paid to employees, generally, if later) provided that Executive has executed a release of claims against the Company substantially in the form attached hereto as Exhibit C (“Release”), and such release of claims has become effective, by such date and shall be contingent on Executive’s continued compliance with all post-termination restrictive covenants applicable to Executive, including, without limitation, the covenants contained in the Restrictive Covenant Agreement.  For purposes of the foregoing calculations in this Section 4(b),

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“Base Salary” shall mean the base salary in effect on the date of termination of employment without regard to any reduction that may have given rise to Good Reason.

A termination of Executive’s employment under this Section 4(b) does not include a termination of employment by reason of Executive’s Disability (as defined below) or upon the death of Executive.

“Good Reason” means the occurrence of any of the following events, without Executive’s consent, (i) a material reduction in Executive’s Base Salary, (ii) a material reduction in Executive’s title, or duties and responsibilities, (iii) relocation outside of Los Angeles County, or (iv) a material breach by the Company of any material term set forth in this Agreement (it being acknowledged and agreed that a material term of this Agreement includes, but is not limited to, Sections 2(a) and 2(b)(i)).  The occurrence of the events described in (i) through (iv) above only shall constitute Good Reason if (A) Executive provides the Company written notice within 90 days following the occurrence of the event that allegedly constitutes Good Reason (the “Good Reason Notice”); (B) the Company fails to cure such event within 30 days after receiving such Good Reason Notice; and (C) Executive resigns within 60 days following delivery of such Good Reason Notice.  For the avoidance of doubt, Executive’s job shall require significant travel outside of Los Angeles County, which shall not constitute Good Reason.

(c)Resignation.  Executive may resign his employment (without Good Reason) upon providing the Company 30 days prior written notice.  In the event of such resignation by Executive, upon the effective date of Executive’s resignation (i) the Company shall be under no further obligation to Executive, except to pay the Accrued Benefits and (ii) all outstanding vested and unvested Options held by Executive shall immediately terminate and no longer be exercisable.

(d)Disability; Death.  The Company may terminate Executive’s employment if Executive experiences a “Disability,” which for purposes of this Agreement means a “Total Disability” (or equivalent) as defined under the Company’s Long Term Disability Plan in effect at the time of the disability.  In the event that Executive’s employment is terminated by reason of Executive’s Disability or upon the death of Executive, (i) the Company shall be under no further obligation to Executive (or his estate), except to pay the Accrued Benefits and (ii) Options that would have vested in the 12 months following such termination of employment had Executive remained employed shall become immediately vested.  In addition, all Options that are vested as of the termination of Executive’s employment (including Options whose vesting accelerates pursuant to this paragraph) shall be exercisable for 12 months following the employment termination date (or, if earlier, the expiration date of the Options), after which time they shall immediately terminate and no longer be exercisable.

(e)Cooperation.  Following termination of employment for any reason, Executive shall (i) cooperate with the Company, as reasonably requested by the Company, to effect a transition of Executive’s responsibilities and to ensure that the Company is aware of all matters being handled by Executive and (ii) cooperate and provide assistance to the Company at its reasonable request in connection with any action, suit or proceeding brought by or against the Company or any of its Affiliates (or in which any of them is or may be a party) or that relates in any way to Executive’s acts or omissions while employed by the Company.  The Company

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agrees to reimburse Executive promptly for actual out-of-pocket expenses incurred by him in connection with assisting the Company in the manner described in the immediately preceding sentence in accordance with the policies of the Company then in effect generally applicable to senior executives of the Company.  Upon termination for any reason, Executive shall be deemed to have resigned from all offices and directorships then held with the Company or any of its subsidiaries.  Executive’s obligations under this Section 4(e) shall survive the termination of Executive’s employment and the expiration or termination of the Agreement.

(f)Company Property.  All assets, property and equipment and all tangible and intangible information relating to the Company, its Affiliates and their respective employees, customers or vendors furnished to, obtained by or prepared by Executive or any other person during the course of or incident to Executive’s employment by the Company or any of its subsidiaries are and shall remain the sole property of the Company (“Company Property”).  Company Property includes, but is not limited to, computer equipment, books, manuals, records, reports, notes, correspondence, contracts, customer lists, business cards, advertising, sales, financial, personnel, operations, and manufacturing materials and information, data processing reports, computer programs, software, customer information and records, business records, price lists or information, and samples, and in each case shall include all copies thereof in any medium, including paper, electronic and magnetic media and all other forms of information storage.  Executive shall further permanently delete any Company information from any computers or other electronic storage devices owned by Executive.  Upon request of the Company, Executive shall certify in writing that Executive has complied with the requirements of this Section 4(f).  Notwithstanding the foregoing, Executive shall be permitted to retain one or more copies of his contacts list and his appointment calendars.  Executive’s obligations under this Section 4(f) shall survive termination of Executive’s employment and the expiration or termination of the Agreement until Executive has returned all Company Property to the Company.

(g)Executive’s Put Right.  Certain capitalized terms used in this Section 4(g) are defined in clause (xi) below.

(i)Subject to the terms and conditions set forth in this Section 4(g), Executive shall have the right (the “Initial Put Right”), but not the obligation, during the Initial Put Period to cause Parent (or, at Parent’s election, one or more of its designees) to purchase Executive’s Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units, upon (A) the termination of his employment by the Company without Cause or (B) Executive’s termination of his employment with the Company for Good Reason.

(ii)Executive may exercise the Initial Put Right by delivering to Parent at any time during the Initial Put Period (1) a Put Notice, (2) certificates representing all shares of Common Stock included in the Put Units (the “Certificates”) duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).

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(iii)The per unit purchase price for the Put Units purchased pursuant to the exercise of the Initial Put Right shall be the Initial Purchase Price.

(iv)Parent shall not be required to repurchase any Put Units if, after giving pro forma effect to (A) such repurchase and all other repurchases pursuant to the exercise, prior to the repurchase of such Put Units, of “put” rights held by any Other Specified Employee (including the incurrence of any debt by the Company or any of its subsidiaries incurred or expected to be incurred to effect any such repurchases) and (B) any severance payments Parent or any of its subsidiaries has made or is obligated to make to Executive or any Other Specified Employee whose employment with the Company has been terminated as of the date of the repurchase of such Put Units, in each case, taking into account the timing such payments are required to be made (the transactions described in the foregoing clauses (A) and (B), the “Pro Forma Transactions”), (x) the Current Cushion or the Projected Cushion would be below 25%, (y) in the reasonable good faith judgment of the Board, such repurchase would be prohibited pursuant to applicable law or regulation or would result in a breach of the terms of any Applicable Contract or (z) the Company would not be permitted to make such repurchase either (1) pursuant to the exception contained in Section 4.07(b)(14) of the Senior Indenture or (2) with amounts then available to make Restricted Payments (as defined in the Senior Indenture) under Sections 4.07(a)(4)(C)(i), (iv) and (v) of the Senior Indenture (or, in each case, any similar clause in any amendment to, or replacement of, the Senior Indenture) (the occurrence of any matter described in the foregoing clause (x), (y) or (z), a “Restriction”).  All calculations and other determinations made in the reasonable good faith judgment of the Board, consistent with past practice, in connection with the determination of the Current Cushion or the Projected Cushion shall be binding on Executive.  If, following the date of this Agreement, Parent or any of its subsidiaries incurs additional indebtedness for borrowed money, Parent shall, or shall cause such subsidiary to, request its lenders to include provisions in any credit facilities or debt agreements governing such indebtedness to permit repurchases of equity as contemplated in this Section 4(g); provided that in no event shall Parent or any such subsidiary be required to accept any adverse term in exchange for such provisions.  Parent shall deliver a written notice to Executive within 5 business days following delivery of a Put Notice specifying whether a Restriction applies and, if so, providing reasonable detail (including relevant calculations) regarding such Restriction.  During the period from and after delivery of such notice through and including the expected Put Closing Date (the “Interim Period”), Parent shall not change its financial or capital budgeting forecasts included in the Internal Projections, including any change to the methodology or assumptions used in deriving such forecasts, for purposes of calculating the Projected Cushion, except to the extent reasonably necessary to reflect (x) the Company’s actual financial results for the fiscal quarter ending prior to delivery of the Put Notice or any fiscal period during the Interim Put Period, (y) the occurrence or discovery during the Interim Period of an event beyond the reasonable control of Parent that, in the reasonable good faith judgment of the Board, materially impairs the Company’s ability to meet the forecasts included in the Internal Projections or (z) changes to the assumptions underlying the forecasts included in the Internal Projections that, in the good faith judgment of the Board, are reasonably necessary to achieve a legitimate business objective and, in any event under clause (x), (y) and (z), any such changes are not for the purpose of avoiding Parent’s obligations under this Section 4(g).

(v)If, following the valid exercise of the Initial Put Right, Parent is not required to repurchase the Put Units due to the applicability of a Restriction, and at any time

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during the remainder of the Initial Put Period the Restrictions cease to apply, Parent will (A) promptly notify Executive that the Restrictions have ceased to apply and (B) repurchase the Put Units for the Initial Purchase Price (subject to the continued inapplicability of the Restrictions) on the Put Closing Date.

(vi)If, following the valid exercise of the Initial Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Initial Put Period or (B) on the expected Put Closing Date following the expiration of the Initial Put Period, then (A) the Put Notice exercising the Initial Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release, (B) Parent shall notify Executive within 10 days following the first date, if any, during the Extended Put Period, on which the Restrictions cease to apply, and (C) subject to the terms and conditions set forth in this Section 4(g), Executive will have the right (the “Second Put Right” and, together with the Initial Put Right, the “Put Rights”), but not the obligation, during the 30 days following receipt of such notice from Parent (the “Second Put Period”), to cause Parent (or, at Parent’s election, one or more of its designees) to purchase the Put Units and, subject to the terms and conditions set forth in this Section 4(g), Parent shall be required to purchase such Put Units.  Executive may exercise the Second Put Right by delivering to Parent at any time during the Second Put Period (1) a Put Notice, (2) the Certificates, duly endorsed for transfer in blank, and (3) a duly executed and undated Release.  The Certificates and Release shall be held in escrow by Parent to be released and deemed delivered by Executive in accordance with Section 4(g)(x).  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions are applicable on the expected Put Closing Date, the Executive may elect in his sole discretion to withdraw the Put Notice exercising the Second Put Right at any time that the Restrictions remain applicable, and if Executive so elects, Parent shall promptly return to Executive the Certificates and the Release.  If, following the valid exercise of the Second Put Right, Parent does not repurchase the Put Units due to the fact that Restrictions remain applicable (A) through the remainder of the Extended Put Period or (B) on the expected Put Closing Date following the expiration of the Extended Put Period, then the Put Notice exercising the Second Put Right will be deemed withdrawn and Parent shall promptly return to Executive the Certificates and Release.

(vii)The per unit purchase price for the Put Units to be purchased pursuant to the exercise of the Second Put Right shall be the fair market value of the Put Units as of the date of delivery of the Put Notice during the Second Put Period as determined by the Appraisal Process.

(viii)Notwithstanding any other provision in this Section 4(g), if the number of Put Units exceeds the Maximum Required Number, Parent may, at its election, purchase less than all of the Put Units; provided that Parent (or one or more of its designees) shall purchase at least the Maximum Required Number of Put Units.

(ix)The closing of the repurchase of the Put Units (the “Put Closing”) shall occur on the date (the “Put Closing Date”) that is the first business day following the later of (A) 45 days following the valid exercise of the Put Right, and (B) 5 business days following the determination of the fair market value of the Put Units in accordance with the Appraisal Process

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(or, if on the later of such dates the Restrictions are applicable, the first business day thereafter on which the Restrictions are no longer applicable).

(x)At the Put Closing, (A) Parent (or one or more of its designees) shall pay to Executive the purchase price by check or wire transfer of immediately available funds to an account designated by Executive in the Put Notice and (B) upon receipt of such funds, (x) the Certificates shall be deemed to be released to Parent and (y) the Release shall be deemed to be delivered to Parent and dated as of the Put Closing Date, and Parent shall be authorized to write such date into the Release, in each case, without any further action by Executive.  Executive shall further execute and deliver such further documents and take such other actions to effectuate the repurchase of the Put Units as Parent may reasonably request.

(xi)Certain Definitions:

“Applicable Contract” means any contract to which Parent or any of its subsidiaries is a party or by which any such Person is bound, including any credit facilities or debt agreements, other than a contract with the Company, any subsidiary of the Company, Ares, CPPIB or any of their respective controlled affiliates.

“Appraisal Process” means the following process which shall begin on the business day following delivery of the applicable Put Notice: (i) Executive and Parent shall negotiate to set a valuation in good faith; and (ii) if they cannot agree within 10 days following delivery of the Put Notice (or such longer period as Executive and Parent may agree), then (A) Parent and Executive shall mutually agree upon and promptly appoint an appraiser of national recognition (or, in the event Parent and Executive cannot agree on an appraiser, then Parent and Executive shall each select an appraiser of national recognition, and the appraisers chosen by Parent and Executive shall mutually agree upon and appoint an appraiser of national recognition), (B) each of Parent and Executive shall submit to each other and to such appraiser within 15 days following the engagement of the appraiser (x) its valuation of the fair market value of the Put Units and (y) reasonable documentation in support of such valuation, and (C) the appraiser shall select either Parent’s or Executive’s valuation of the fair market value of the Put Units.  Notwithstanding the foregoing, if Executive delivers a Put Notice during the final 45 days of the Initial Put Period and on such date a Restriction applies, the Appraisal Process described in clause (ii) of the foregoing sentence shall not commence unless and until such Restriction ceases to apply at any time during the remainder of the Initial Put Period.  The appraiser shall make such selection within 20 days after the receipt of both parties’ valuations and documentation with respect thereto, and Parent and Executive shall cooperate in all reasonable respects with the appraiser.  In determining which party’s valuation of the fair market value of the Put Units to select, the appraiser shall not discount the value of the Put Units for illiquidity or minority status or other similar status. The appraiser’s selection of either party’s valuation shall be final, conclusive and binding upon Executive and Parent, and the cost of such appraiser shall be borne entirely by the party whose valuation of the fair market value of the Put Units was not selected by the appraiser.  For the avoidance of doubt, the appraiser’s determination shall be limited solely to selecting Parent or Executive’s valuation of the fair market value of the Put Units.  Each of Parent and Executive shall, promptly following a written request by the other party, provide the other party and its representatives and advisors copies of all documents and other information in such party’s possession reasonably requested by the other party in connection with the Appraisal Process

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“Credit Facility” means the Credit Agreement, dated as of January 13, 2012, among the Company, Parent, Royal Bank of Canada, as administrative agent and collateral agent, and the other lenders party thereto (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

“Current Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level actually achieved by the Company for the most recent four fiscal quarter period ending prior to the delivery of the Put Notice (calculated after giving effect to the Pro Forma Transactions), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

“Extended Put Period” means the three year period following the last day of the Initial Put Period.

“Initial Purchase Price” means the greater of (x) $1,000 less the per unit amount of any distributions made with respect to the Put Units prior to the repurchase thereof, and (y) the fair market value of the Put Units as of the date of delivery of the Put Notice during the Initial Put Period as determined by the Appraisal Process.

“Initial Put Period” means the one year period following the termination of Executive’s employment with the Company without Cause or for Good Reason.

“Internal Projections” means the internal financial projections of the Company prepared in the ordinary course of business, as shared with the Board and, if applicable, the Company’s lenders.

“Maximum Required Number” means the whole number of Put Units that may be purchased for $12.5 million, at the price per unit determined in accordance with Section 4(g).

“Other Specified Employees” means Eric Schiffer and Jeff Gold.

“Projected Cushion” means, with respect to any financial maintenance covenant in the Senior Indenture, the Credit Facility or any other agreement with unaffiliated third parties governing Parent’s or any of its subsidiaries’ indebtedness for borrowed money, the absolute value (expressed as a percentage) obtained by subtracting (i) the ratio of (A) the financial maintenance covenant level the Company is expected to achieve for each of the four fiscal quarters ending on or after the delivery of the Put Notice (based on the Internal Projections as shared with the Board and lenders in the ordinary course of business and calculated after giving effect to the Pro Forma Transactions, it being agreed that in the event a replacement Executive Vice President, Special Projects has not been hired by the Company as of the date the Put Notice shall have been delivered such projections shall include estimated compensation for such person which shall not exceed 110% of Executive’s potential total compensation for the relevant period (including Executive’s Base Salary and target Bonus whether or not earned)), to (B) the specified financial maintenance covenant level for such period, from (ii) one.

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“Put Notice” means a written, irrevocable notice delivered by Executive to Parent exercising the Put Rights. Such notice shall contain an express, unqualified representation and warranty by Executive to Parent (and its designee) that as of the date of delivery and through the Put Closing Date (A) Executive has, and will have, full right, title and interest in and to the Put Units, (B) Executive has, and will have, all necessary power and authority, and has taken, and will take, all necessary action to sell the Put Units as contemplated by this Section 4(g), and (C) the Put Units are and will be free and clear of any and all liens, claims, charges and encumbrances, other than those arising as a result of or under the terms of this Agreement, the Stockholders Agreement, or under securities laws.

“Put Units” means a number of units (each consisting of one share of Class A Common Stock and one share of Class B Common Stock) with respect to which Executive has elected to exercise the Put Right, as specified in the Put Notice; provided that Executive may not exercise the Put Right for more than the lesser of (A) 20,000 units (subject to appropriate adjustment for any stock split, stock dividend, reclassification, subdivision or reorganization, recapitalization or similar event) and (B) such number of units as Executive owns on the date the Put Notice is delivered.

“Senior Indenture” means the indenture, dated as of December 29, 2011, among the Company, the guarantors party thereto and Wilmington Trust National Association, as trustee (as the same may be amended, modified, supplemented, refinanced or replaced from time to time).

5.Other Agreements.  On the Effective Date, Executive shall execute and deliver to the Company the Restrictive Covenant Agreement.

6.Representations, Warranties and Agreements.

(a)Executive hereby represents and warrants, for himself and on behalf of his attorneys, heirs, assigns, successors, executors and administrators, that as of the date hereof:  (i) there are no agreements, oral or written, to which Executive is a party or by which Executive is bound that prevent or make unlawful Executive’s execution and delivery of, or performance under, this Agreement; (ii) to the best actual knowledge and belief of Executive, none of the information supplied by Executive to Company in connection with Executive’s employment by Company misstated a material fact or omitted material facts necessary to make the information supplied by Executive not materially misleading; (iii) Executive does not have any business or employment relationship that creates a conflict between the interests of Executive and the Company or any of its subsidiaries; (iv) Executive has no claim to, and no promise has been made by the Company or any of its subsidiaries to Executive for, incentive or any other kind of compensation prior to the Effective Date other than (A) accrued but unpaid salary and unreimbursed business expenses properly incurred by Executive in the ordinary course of business, (B) compensation and benefits disclosed in the Compensation Discussion and Analysis and the accompanying compensation tables in the Company’s definitive proxy statement filed with the Securities Exchange Commission on July 27, 2011, and (C) rental income generated by certain real property leased by Executive or his Affiliates to the Company as disclosed on Exhibit A to the lease letter agreement, dated October 11, 2011, among Parent, the Company, Executive and the other tenants party thereto; and (v) other than claims to enforce his rights under the Rollover Letter or the Stockholders Agreement, Executive has no claim, and Executive

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is not aware of any facts that exist to support any claim by Executive, against the Company or any of its subsidiaries of any nature whatsoever, whether in Executive’s capacity as an employee, officer, director, or shareholder of the Company.

(b)During the Term, Executive will not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others.

7.Section 409A.  Notwithstanding anything herein to the contrary:

(a)Although the Company does not guarantee to Executive any particular tax treatment relating to the payments and benefits under this Agreement, it is intended that such payments and benefits be exempt from, or comply with, Section 409A of the Internal Revenue Code (the “Code”) and the regulations and guidance promulgated thereunder (collectively, “Section 409A”), and all provisions of this Agreement shall be administered, interpreted and construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A.  Notwithstanding any other provision hereof, in no event shall the Company be liable for, or be required to indemnify Executive for, any liability of Executive for taxes or penalties under Section 409A.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided, that this clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred.

(d)Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within ten calendar days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.  If under this Agreement, an amount is to be paid in two or more installments, for purposes of Section 409A, each installment shall be treated as a separate payment.

(e)Notwithstanding any other provision hereof, if Executive is, as of the date of termination, a “specified employee” for purposes of Treas.  Reg. § 1.409A-1(i), then any amount payable to Executive pursuant to Section 4 hereof that is neither a short-term deferral within the

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meaning of Treas.  Reg. § 1.409A-1(b)(4) nor within the involuntary separation pay limit under Treas.  Reg. § 1.409A-1(b)(9)(iii)(A) will not be paid before the date that is six months after the date of termination, or if earlier, the date of Executive’s death, to the extent such delay is necessary in order to avoid the imposition of taxes under Section 409A.  Any payments to which Executive would otherwise be entitled during such non-payment period will be accumulated and paid or otherwise provided to Executive on the first day of the seventh month following such date of termination, or if earlier, within 30 calendar days after Executive’s death to his surviving spouse (or to his estate if Executive’s spouse does not survive him).

8.Miscellaneous.

(a)Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to conflict of law principles.

(b)Assignment and Transfer.  Executive’s rights and obligations under this Agreement shall not be transferable by assignment or otherwise, and any purported assignment, transfer or delegation thereof shall be void.  This Agreement shall inure to the benefit of, and be binding upon and enforceable by, any purchaser of substantially all of the Company’s assets, any corporate successor to the Company or any assignee thereof.

(c)Entire Agreement.  This Agreement and its Exhibits, together with the Stock Option Plan and any agreement under which the Options are granted, contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersede any prior or contemporaneous written or oral agreements, representations and warranties between them respecting the subject matter hereof.  Without limiting the foregoing, this Agreement expressly supersedes all prior agreements (written or oral) relating to Executive’s employment with the Company or any of its subsidiaries.

(d)Amendment and Waiver; Rights Cumulative.  This Agreement may be amended, waived or discharged only by a writing signed by Executive and by a duly authorized representative of the Company (other than Executive).  No failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of any other right, power or privilege or of the same right, power or privilege in any other instance.  All waivers by either party hereto must be contained in a written instrument signed by the party to be charged and, in the case of the Company, by a duly authorized representative of the Company (other than Executive).  The rights and remedies provided by this Agreement are cumulative, and the exercise of any right or remedy by either party hereto (or by its successor), whether pursuant to this Agreement, to any other agreement, or to law, shall not preclude or waive its right to exercise any or all other rights and remedies.

(e)Severability.  If any term, provision, covenant or condition of this Agreement, or the application thereof to any person, place or circumstance, shall be held to be invalid, unenforceable or void, the remainder of this Agreement and such term, provision, covenant or condition as applied to other persons, places and circumstances shall remain in full force and effect.

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(f)Dispute Resolution.  Executive shall be bound by Parent’s mandatory dispute resolution procedures as may be in effect from time to time with respect to all matters pertaining to his employment (including termination of employment) with the Company, which procedures include mandatory arbitration to resolve all issues, and shall execute the Arbitration Agreement attached hereto as Exhibit B and incorporated herein.  This Section 8(f) shall survive the termination of Executive’s employment and the expiration or termination of this Agreement.

(g)Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made by (i) by nationally recognized overnight courier delivery for next business day delivery, (ii) by hand delivery, or (iii) by facsimile or electronic mail transmission followed by overnight delivery the next business day to the addresses listed below, and shall be deemed given on the date of initial delivery.  Legal counsel for the respective parties may send to the other party any notices, requests, demands or other communications required or permitted to be given hereunder by such party.

If to Executive:

At the address listed in the Company’s personnel records.

If to the Company:

99 Cents Only Stores
4000 Union Pacific Avenue
Commerce, CA 90023
Telephone: (323) 980-8145
Facsimile: (323) 307-9611
Attention: General Counsel

with copies to:

Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Telephone: (310) 201-4100
Facsimile: (310) 201-4170
Attention: Adam Stein

and

Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Telephone: (310) 284-4582
Facsimile: (310) 557-2193
Attention: Michael A. Woronoff, Esq.

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(h)Further Assurances.  Executive shall, upon the Company’s reasonable request, execute such further documents and take such other actions as may be permitted or reasonably required by law to implement the purposes, objectives, terms, and provisions of this Agreement.

(i)Interpretation.  The headings and captions of this Agreement are provided for convenience only and are intended to have no effect in construing or interpreting this Agreement.  The language in all parts of this Agreement shall be in all cases construed according to its fair meaning and not strictly for or against the Company or Executive.  As used herein:  (i)  reference to any agreement, document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof; (ii) reference to any law, rule or regulation means such law, rule or regulation as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder, and reference to any section or other provision of any law, rule or regulation means that provision of such law, rule or regulation from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such section or other provision; (iii) “hereunder,” “hereof,” “hereto,” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular article, section or other provision hereof; (iv) “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; (v) “or” is used in the inclusive sense of “and/or”; and (vi) references to documents, instruments or agreements shall be deemed to refer as well to all addenda, exhibits, schedules or amendments thereto.

(j)Acknowledgement.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.

(k)Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be considered to have the force and effect of an original.

(l)Each Party the Drafter.  Executive understands the terms and conditions set forth in this Agreement and acknowledges having had adequate time to consider whether to agree to the terms and conditions and to consult a lawyer or other advisor of Executive’s choice.  This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party to this Agreement because that party drafted or caused that party’s legal representative to draft any of its provisions.

(m)Time of Essence.  Time is and shall be of the essence in connection with this Agreement and the terms and conditions contained herein.

(n)Survival.  To the extent not otherwise expressly provided in this Agreement, all rights and obligations of any party in Sections 4, 6 and 8 of this Agreement not fully satisfied or performed, as applicable, on the date Executive’s employment is terminated, shall survive the termination of Executive’s employment and the expiration or termination of this Agreement

(o)Defined Terms.  As used in this Agreement, the following terms shall have the meanings ascribed to them below:

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“Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person.  The term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.  “Controlled” and “controlling” have meanings correlative to the foregoing.

“Ares” means Ares Corporate Opportunities Fund III, L.P. or any of its Affiliates.

“beneficial ownership” has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

“Change in Control” means the occurrence of any of the following:

(i)the acquisition (including any acquisition through purchase, reorganization, merger, consolidation or similar transaction), directly or indirectly, in one or more transactions by a Person (other than Ares or CPPIB, but not including any portfolio company of any of the foregoing) of beneficial ownership of shares or securities representing 50% or more of the total voting power of the Voting Securities, in each case calculated on a fully diluted basis after giving effect to such acquisition; provided, that none of the following shall constitute a Change in Control under this clause (i): (A) any acquisition by any Permitted Holder, (B) any acquisition that does not result in any Person (other than a Permitted Holder), beneficially owning shares or securities representing 50% or more of the total voting power of the Voting Securities, and (C) any acquisition, after which Parent or its Affiliates have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Parent Board.

(ii)after an Initial Public Offering, any election has occurred of Persons to the Parent Board that causes two-thirds of the Parent Board to consist of Persons other than (A) members of the Parent Board on the Effective Date, (B) Persons who were nominated for election as members of the Parent Board at a time when two-thirds of the Parent Board consisted of Persons who were members of the Parent Board on the Effective Date and (C) Persons who were designated for election as members of the Parent Board pursuant to the Stockholders Agreement;  provided that any Person nominated for election by a Parent Board at least two-thirds of whom constituted Persons described in clauses (A), (B) or (C) or by Persons who were themselves nominated by such board shall, for this purpose, be deemed to have been nominated by a Parent Board composed of Persons described in clause (A); or

(iii)(A) a complete liquidation or dissolution of Parent or (B) the sale or other disposition (including by means of a merger or consolidation), directly or indirectly, of all or substantially all of the assets of Parent and its subsidiaries, taken as a whole, to any Person other than a Person at least 50% of whose voting securities, measured by voting power rather than number of securities, are owned and controlled by one or more Permitted Holders.

“CPPIB” means Canada Pension Plan Investment Board or any of its Affiliates.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

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“group” shall have the meaning given thereto in Section 13(d)(3) or 14(d)(2) of the Exchange Act.

“Parent Board” means the board of directors of Parent.

“Permitted Holders” means the stockholders of Parent immediately following the consummation of the Merger and their respective Affiliates and Permitted Transferees, and any group consisting solely of such Persons.

“Permitted Transferees” shall have the meaning ascribed thereto in the Stockholders Agreement, but, in the case of any investment partnership, shall exclude the limited partners of such partnership and its portfolio companies.

“Person” means any individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group.

“Restrictive Covenant Agreement” means the Non-Competition, Non-Solicitation and Confidentiality Agreement attached hereto as Exhibit A, as the same may be amended, modified, supplemented or replaced from time to time.

“Rollover Letter” means the agreement entered into simultaneously with the signing of the Merger Agreement by Parent, Executive and the other parties thereto, as the same may be amended, modified, supplemented or replaced from time to time.

“Stock Option Plan” means Parent’s stock option plan dated on or about the date hereof, as the same may be amended, modified, supplemented or replaced from time to time.

“Stockholders Agreement” means the Stockholders Agreement relating to Parent entered into simultaneously with the closing of the Merger, as the same may be amended, modified, supplemented or replaced from time to time.

“Voting Securities” means the securities of Parent entitled to vote in the election of directors of the Parent Board.

[Remainder of Page Intentionally Left Blank / Signatures on Next Page]

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

99 CENTS ONLY STORES
By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary
NUMBER HOLDINGS, INC.
By:	/s/ Russell Wolpert
Name:	Russell Wolpert
Title:	Secretary
HOWARD GOLD
/s/ Howard Gold

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EXHIBIT A

NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY
AGREEMENT

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EXHIBIT B

ARBITRATION AGREEMENT

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EXHIBIT C

RELEASE

21

EX-10.34

Exhibit 10.34

NUMBER HOLDINGS, INC.

2012 STOCK INCENTIVE PLAN

Adopted as of February 27, 2012

NUMBER HOLDINGS, INC.

2012 STOCK INCENTIVE PLAN

ARTICLE I

PURPOSE

This 2012 Stock Incentive Plan is established in connection with the merger (the “Merger”) of 99¢ Only Stores, a California corporation, with Number Merger Sub, Inc., a California corporation, to become a subsidiary of Number Holdings, Inc., a Delaware corporation.  The purpose of this 2012 Stock Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Employees, Consultants and Non-Employee Directors stock-based incentives in the Company to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders.

ARTICLE II

DEFINITIONS

For purposes of the Plan, the following terms shall have the following meanings:

2.1“Acquisition Event” means a merger or consolidation in which the Company is not the surviving entity, any transaction that results in the acquisition of all or substantially all of the Company’s outstanding common stock by a Person, or the sale or Transfer of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole.  The occurrence of an Acquisition Event shall be determined by the Committee.

2.2“Affiliate” of any specified Person means any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  No Person shall be deemed to be an Affiliate of another Person solely by virtue of the fact that both Persons own shares of the capital stock of the Company.

2.3“Ares” means Ares Corporate Opportunities Fund III, L.P. or any of its Affiliates.

2.4 “Award” means any award under the Plan of any Stock Option, any Restricted Stock or any Other Stock-Based Award.  All Awards shall be subject to the terms of a written or electronic agreement executed by the Company and the Participant. 

Any reference herein to an agreement in writing shall be deemed to include an electronic writing to the extent permitted by applicable law.

2.5“Board” means the Board of Directors of the Company.

2.6“Bylaws” means the Bylaws of the Company, as amended or amended and restated from time to time.

2.7“Business” means, at any time of determination, (a) the retail sale (including importing, distributing and other levels in the supply chain) of discount, “deep discount” or “extreme value” groceries and other consumer goods, or the private labeling of “deep discount” or “extreme value” groceries and other consumer goods, (b) any business or activity then conducted by the Company or any Subsidiary, and (c) any business that the Company or any Subsidiary has a bona fide intention to conduct and of which the Participant is aware at such time.

2.8“Certificate of Incorporation” means the Company’s Restated Certificate of Incorporation, as amended or amended and restated from time to time.

2.9“Cause” means with respect to a Participant’s Termination of Employment or Termination of Consultancy, the following: (a) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate of the Company and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import) or where it only applies upon the occurrence of a change in control and one has not yet taken place), termination due to: (i) the Participant’s (x) being indicted for or charged with a felony under United States or applicable state law or (y) conviction of, or plea of guilty or nolo contendere to a misdemeanor where imprisonment is imposed (other than for a traffic-related offense); (ii) perpetration by the Participant of an illegal act, dishonesty, or fraud that could cause economic injury to the Company or any Subsidiary or any act of moral turpitude by the Participant; (iii) the Participant’s insubordination, refusal to perform his or her duties or responsibilities for any reason other than illness or incapacity or unsatisfactory performance of his or her duties for the Company or any Subsidiary; (iv) willful and deliberate failure by the Participant to perform the Participant’s duties after the Participant has been given notice and an opportunity to effectuate a cure as determined by the Committee; (v) the Participant’s willful misconduct or gross negligence with regard to the Company or any Subsidiary; (vi) the Participant’s unlawful appropriation of a material corporate opportunity; or (vii) the Participant’s breach of agreement with the Company or any of its Affiliates, including any confidentiality or other restrictive covenant entered into between the Participant and the Company or any of its Affiliates or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate of the Company and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, that with regard to any agreement under which the definition of “cause” only applies upon an occurrence of a change in control, such definition of “cause” shall not apply until

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a change in control actually takes place and then only with regard to a termination thereafter.  With respect to a Participant’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Delaware law.

2.10“Change in Control” means, unless otherwise determined by the Committee in the applicable Award agreement, the occurrence of any of the following:

(a)the acquisition (including any acquisition through purchase, reorganization, merger, consolidation or similar transaction), directly or indirectly, in one or more transactions by a Person (other than Ares or CPPIB, but not including any portfolio company of any of the foregoing) of beneficial ownership of shares or securities representing 50% or more of the total voting power of the Voting Securities, in each case calculated on a fully diluted basis after giving effect to such acquisition; provided that none of the following shall constitute a Change in Control under this clause (a): (i) any acquisition by any Permitted Holder, (ii) any acquisition that does not result in any Person (other than a Permitted Holder), beneficially owning shares or securities representing 50% or more of the total voting power of the Voting Securities, and (iii) any acquisition, after which the Company or its Affiliates have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board;

(b)after an Initial Public Offering, any election has occurred of Persons to the Board that causes two-thirds of the Board to consist of Persons other than (i) members of the Board on the Effective Date, (ii) Persons who were nominated for election as members of the Board at a time when two-thirds of the Board consisted of Persons who were members of the Board on the Effective Date and (iii) Persons who were designated for election as members of the Board pursuant to the Stockholders Agreement;  provided that any Person nominated for election by a Board at least two-thirds of whom constituted Persons described in clauses (i), (ii) or (iii) or by Persons who were themselves nominated by such board shall, for this purpose, be deemed to have been nominated by a Board composed of Persons described in clause (i); or

(c)(i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition (including by means of a merger or consolidation), directly or indirectly, of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, to any Person other than a Person at least 50% of whose voting securities, measured by voting power rather than number of securities, are owned and controlled by one or more Permitted Holders.

Notwithstanding the foregoing, for purposes of the Plan, unless the Committee provides otherwise in an Award agreement, the completion of an Initial Public Offering shall not be considered a Change in Control.

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2.11“Chief Executive Officer” means the chief executive officer of the Company.

2.12“Class A Common Stock” means the Class A Common Stock of the Company, par value $0.001 per share.

2.13“Class B Common Stock” means the Class B Common Stock of the Company, par value $0.001 per share.

2.14“Code” means the Internal Revenue Code of 1986, as amended.  Any reference to any section of the Code shall also be a reference to any successor provision and any Treasury Regulation promulgated thereunder.

2.15“Committee” means (a) prior to a Registration Date, a committee or subcommittee of the Board appointed from time to time by the Board and (b) following a Registration Date, a committee or subcommittee of the Board appointed from time to time by the Board that may consist solely of two or more “non-employee directors” as defined in Rule 16b-3 and, to the extent required by applicable stock exchange rules, who are “independent” as defined under applicable stock exchange rules; provided that if for any reason the appointed Committee does not meet the requirements of Rule 16b-3, such noncompliance shall not affect the validity of grants, interpretations or other actions of the Committee.  With respect to the application of the Plan to Non-Employee Directors, the Committee shall mean the Board.  Notwithstanding the foregoing, if and to the extent that no Committee exists that has the authority to administer the Plan, the functions of the Committee shall be exercised by the Board and all references herein to the Committee shall be deemed references to the Board.

2.16“Common Stock” means the Class A Common Stock and the Class B Common Stock, collectively.

2.17“Company” means Number Holdings, Inc., a Delaware corporation, and its successors by operation of law.

2.18“Competitor” means any Person (other than the Company and its Affiliates) engaged in the Business.

2.19“Consultant” means any natural person who (a) provides bona fide consulting or advisory services to the Company or any of its Affiliates pursuant to a written agreement, which services are not in connection with the offer and sale of securities in a capital-raising transaction, and (b) who does not, directly or indirectly, promote or maintain a market for the Company’s or any of its Affiliates’ securities.

2.20“control” means, with respect to any Person, the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and words such as “controlled” and “controlling” have meanings correlative to the foregoing.

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2.21“CPPIB” means Canada Pension Plan Investment Board or any of its Affiliates.

2.22“Detrimental Activity” means:

(a)disclosing, divulging, furnishing or making available to any Person, except as necessary in the furtherance of Participant’s responsibilities to the Company or any of its Affiliates, either during or subsequent to Participant’s service relationship with the Company or any of its Affiliates, any knowledge or information with respect to confidential or proprietary information, methods, processes, plans or materials of the Company or any of its Affiliates, or with respect to any other confidential or proprietary aspects of the business of the Company or any of its Affiliates, acquired by the Participant at any time prior to the Participant’s Termination;

(b)any activity while employed by, or performing services for, the Company or any of its Affiliates that results, or if known could result, in the Participant’s Termination for Cause;

(c)(i) directly or indirectly soliciting, enticing or inducing any employee of the Company or any of its Affiliates to be employed by any Person that is, directly or indirectly, engaged in the Business; (ii) directly or indirectly approaching any such employee for these purposes; (iii) authorizing or knowingly approving the taking of such actions by other Persons on behalf of any such Person, or assisting any such Person in taking such action; or (iv) directly or directly soliciting Suppliers to provide products or services to support a Competitor; or

(d)a material breach of any agreement between the Participant and the Company or an Affiliate of the Company.

2.23“Disability” means with respect to a Participant’s Termination, a “Total Disability” as defined under the Company’s Long-Term Disability Plan in effect at the time of the disability.  Notwithstanding the foregoing, if the Company does not have a Long-Term Disability Plan in effect at the time of the Disability or, for Awards that are subject to Section 409A of the Code, if the foregoing definition does not comply with Section 409A of the Code, “Disability” shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

2.24“Effective Date” means the effective date of the Plan as defined in Article XV.

2.25“Eligible Employee” means each employee of the Company or one of its Affiliates.

2.26 “Exchange Act” means the Securities Exchange Act of 1934, as

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amended, and all rules and regulations promulgated thereunder.  Any references to any section of the Exchange Act shall also be a reference to any successor provision.

2.27“Exercisable Awards” has the meaning set forth in Section 4.2(d).

2.28“Fair Market Value” means, unless otherwise required by any applicable provision of the Code, with respect to a share of any class of Common Stock or other security, as of any date, (i) if such class of Common Stock or other security is not then traded on an established securities market, the fair market value of a share of such class of Common Stock or other security as determined by the Committee in whatever manner it considers appropriate, taking into account the requirements of Section 422 or 409A of the Code, as applicable, or (ii) if such class of Common Stock or other security is then traded on an established securities market, the closing price reported on the principal market on which such class or security is traded on such date or, if there is no sale of such class of Common Stock or other security on such date, then on the last previous date on which there was a sale.

2.29“Family Member” means “family member” as defined in Rule 701 under the Securities Act or, following the filing of a Form S-8 pursuant to the Securities Act with respect to the Plan, as defined in Section A.1.(5) of the general instructions of Form S-8, as may be amended from time to time.

2.30 “Good Reason” with respect to a Participant’s voluntary Termination of Employment shall have the meaning ascribed to such term under an employment or similar agreement in effect between the Company and the Participant; a Participant shall not have “Good Reason” in the absence of such an agreement defining such term.

2.31“Incentive Stock Option” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parent (if any) under the Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

2.32“Initial Public Offering” means an initial public offering of common stock of the Company pursuant to an effective registration statement filed under the 1933 Act (excluding registration statements filed on Form S-8, any similar successor form or another form used for a purpose similar to the intended use for such forms).

2.33“Joinder Agreement” means a joinder agreement to the Stockholders Agreement or any similar joinder agreement to a stockholders agreement (or similar agreement) entered into by the Company after the Effective Date.

2.34“Non-Employee Director” means a non-employee director of the Company as defined in Rule 16b-3.

2.35“Non-Qualified Stock Option” means any Stock Option awarded under the Plan that is not an Incentive Stock Option.

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2.36“Other Stock-Based Award” means an Award under Article VIII of this Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including an Award valued by reference to an Affiliate.

2.37“Parent” means any parent corporation of the Company within the meaning of Section 424(e) of the Code.

2.38“Participant” means an Eligible Employee, Consultant or Non-Employee Director to whom an Award has been granted pursuant to the Plan.

2.39“Permitted Holder” means the stockholders of the Company immediately following the consummation of the Merger and their respective Affiliates and Permitted Transferees, and any group consisting solely of such Persons.

2.40“Permitted Transferee” means:

(a)with respect to a Participant or any stockholder of the Company who is a natural person, (i) such person’s spouse, parents, parents-in-law, descendants, nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and children-in-law, (ii) such person’s heirs, legatees, beneficiaries or devisees and (iii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or other owners of which consist entirely of such person or such other persons referred to in clauses (i) and (ii) above;

(b)with respect to a trust that is a Permitted Transferee pursuant to section (a)(iii) above, any other trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners or other owners of which consist entirely of such trust or such trust’s beneficiaries;

(c)with respect to any stockholder of the Company that is an investment fund, an investment partnership or an investment account, any Related Person of such Stockholder; and

(d)with respect to any stockholder of the Company that is an entity and to which clause (c) above is not applicable, any controlled Affiliate of such Stockholder so long as such transferee remains a controlled Affiliate of such stockholder of the Company following the applicable Transfer;

provided that, in any of such cases, such Permitted Transferee is an accredited investor within the meaning of Regulation D under the 1933 Act.

2.41 “Person” means any individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision).

2.42“Plan” means this Number Holdings, Inc. 2012 Stock Incentive Plan, as amended from time to time.

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2.43“Registration Date” means the first date after the Effective Date (a) on which the Company consummates an Initial Public Offering or (b) any class of common equity securities of the Company is required to be registered under Section 12 of the Exchange Act.

2.44“Related Person” means, with respect to any Person, (a) an Affiliate of such Person, (b) any investment manager, investment advisor, managing member or general partner of such Person, (c) any investment fund, investment partnership, investment account or other investment Person whose investment manager, investment advisor, managing member or general partner is such Person or a Related Person of such Person, and (d) any equity investor, member, partner or officer of such Person.

2.45“Restricted Stock” means an Award of shares of Common Stock that is subject to restrictions under Article VII.

2.46“Restriction Period” has the meaning set forth in Section 7.1(b).

2.47“Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.

2.48“Section 4.2 Event” has the meaning set forth in Section 4.2(b).

2.49“Section 409A of the Code” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable Treasury Regulation or other official guidance promulgated thereunder.

2.50“Securities Act” means the Securities Act of 1933, and all rules and regulations promulgated thereunder.  Any reference to any section of the Securities Act shall also be a reference to any successor provision.

2.51“Stock Option” or “Option” means any option to purchase shares of Common Stock granted to Eligible Employees, Non-Employee Directors or Consultants pursuant to Article VI.

2.52“Stockholders Agreement” means the Stockholders Agreement, dated January 13, 2012, by and among the Company, Ares, CPPIB and the other stockholders party thereto, as the same may be amended, modified, supplemented or replaced from time to time.

2.53“Subsidiary” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.

2.54“Supplier” means any Person who supplies products or services to the Company or any Subsidiary and with whom a Participant had material business-related contact (whether in person, by telephone or by paper or electronic correspondence) on behalf of the Company or any of its Affiliates.

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2.55“Ten Percent Stockholder” means an individual described in Section 422(b) of the Code.

2.56“Termination” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.

2.57“Termination of Consultancy” means:  (a) that the Participant is no longer acting as a consultant to the Company or one of its Affiliates; or (b) that an entity that is retaining a Participant as a Consultant ceases to be an Affiliate of the Company unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another of its Affiliates at the time the entity ceases to be an Affiliate of the Company.  In the event that a Consultant becomes an Eligible Employee or a Non-Employee Director upon the termination of his or her consultancy, unless otherwise determined by the Committee, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible Employee or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Consultancy in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter.

2.58“Termination of Directorship” means that a Participant has ceased to be a Non-Employee Director; except that if such Participant becomes an Eligible Employee or a Consultant upon the termination of his or her directorship, his or her ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until such Participant has a subsequent Termination of Employment or Termination of Consultancy, as the case may be.

2.59“Termination of Employment” means: (a) a termination of employment (for reasons other than a military or personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) that an entity that is employing a Participant ceases to be an Affiliate of the Company, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate of the Company at the time the entity ceases to be an Affiliate of the Company.  In the event that an Eligible Employee becomes a Consultant or a Non-Employee Director upon the termination of his or her employment, unless otherwise determined by the Committee, no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non-Employee Director.  Notwithstanding the foregoing, the Committee may otherwise define Termination of Employment in the Award agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter.

2.60“Transfer” means: (a) when used as a noun, any direct or indirect transfer, offer, sale, assignment, pledge, lease, donation, grant, gift, bequest, hypothecation, encumbrance or other disposition (including the issuance of equity in a Person), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, offer, sell, assign, pledge, lease, donate, grant, gift, bequest, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in a Person) whether for value or

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for no value and whether voluntarily or involuntarily (including by operation of law).  “Transferable” and “Transferred” shall have a correlative meaning.

2.61“Voting Securities” means the securities of Parent entitled to vote in the election of directors of the Board.

ARTICLE III

ADMINISTRATION

3.1The Committee.  The Plan shall be administered and interpreted by the Committee.

3.2Grants of Awards.  The Committee shall have full authority to grant Awards pursuant to the terms of the Plan, to Eligible Employees, Consultants and Non-Employee Directors.  In particular, the Committee shall have the authority:

(a)to select the Eligible Employees, Consultants and Non-Employee Directors to whom Awards may from time to time be granted hereunder;

(b)to determine whether and to what extent Awards are to be granted hereunder to one or more Eligible Employees, Consultants or Non-Employee Directors;

(c)to determine, in accordance with the terms of the Plan, the number of shares, and class, of Common Stock to be covered by each Award granted hereunder;

(d)to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof), based on such factors, if any, as the Committee shall determine);

(e)to determine whether and under what circumstances the exercise price of any Stock Option may be paid in cash or Common Stock under Section 6.3(d);

(f)to determine whether, to what extent and under what circumstances to provide loans (which may be on a recourse basis and shall bear interest at the rate the Committee shall provide) to Participants in order to exercise Awards or to purchase or pay for shares of Common Stock issuable pursuant to Awards under the Plan; provided that (i) on and after the Registration Date executive officers and directors are not eligible to receive such loans, and (ii) all outstanding loans shall be repaid before the Registration Date;

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(g)to determine whether a Stock Option is an Incentive Stock Option or Non-Qualified Stock Option;

(h)to determine at the time of grant whether to require an Eligible Employee, Non-Employee Director or Consultant, as a condition of the granting of any Stock Option, not to Transfer shares of Common Stock acquired pursuant to the exercise of a Stock Option for a period of time as determined by the Committee, following the date of acquisition of such shares of Common Stock;

(i)to modify, extend or renew an Award, subject to Article XI and Section 6.3(f); and

(j)generally, to exercise such powers and to perform such acts as the Committee deems necessary or expedient to promote the best interests of the Company that are not in conflict with the provisions of the Plan.

The Committee may (i) designate employees of the Company and its Affiliates and advisors (including counsel and consultants) to assist the Committee in the administration of the Plan, (ii) rely upon any opinion received from any such advisor and (iii) (to the extent permitted by applicable law and applicable exchange rules) may grant authority to officers or employees of the Company and its Affiliates to grant Awards or execute agreements or other documents on behalf of the Committee.  Without limiting the foregoing, the Board or the Committee may (to the extent permitted by applicable law and applicable exchange rules) delegate to the Chief Executive Officer, to a committee of officers or employees of the Company or one of its Subsidiaries, or to a committee of one or more members of the Board, the authority to (a) grant Awards pursuant to the terms of the Plan covering up to such number of shares of Common Stock per individual, per year, as the Board or the Committee shall determine, to officers and employees of the Company and its Subsidiaries and Affiliates who are neither (i) subject to Section 16 of the Exchange Act, nor (ii) “covered employees” within the meaning of Code Section 162(m)(3) and (b) grant Awards pursuant to the terms of the Plan covering up to such number of shares of Common Stock per individual as the Board or the Committee shall determine, as an inducement to an individual to accept an offer of employment, including Awards to individuals who may become, upon accepting an offer of employment, (i) officers of the Company and its Subsidiaries and Affiliates who are subject to Section 16 of the Exchange Act, or (ii) “covered employees” within the meaning of Code Section 162(m)(3).  Any such delegation so made shall be consistent with recommendations made by the Committee to the Board regarding non-Chief Executive Officer compensation, incentive-compensation plans and equity-based plans.  When such delegation is so made by the Committee, the Chief Executive Officer or such committee shall have the authority of the Committee described in Sections 3.2(a), 3.2(b), 3.2(c) and 3.2(d) with respect to the granting of such Awards; provided that the Committee may limit or qualify the authority under any such delegation in any manner it deems appropriate.

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3.3Guidelines.  Subject to Article XI, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award granted under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan.  The Committee may adopt special guidelines and provisions for Persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions.  To the extent applicable, the Plan is intended to comply with the applicable requirements of Rule 16b-3 and shall be limited, construed and interpreted in a manner so as to comply therewith.

3.4Decisions Final.  Any decision, interpretation, determination, evaluation, election, approval, authorization, appointment, consent or other action made or taken by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with the Plan shall be within the sole and absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants, Permitted Transferees and their respective heirs, executors, administrators, successors and assigns.  Nothing in the Plan shall obligate the Company, the Board or the Committee (or any of its members) to treat any Participants alike, and the exercise of any power or discretion by any such Person with respect to any Participant shall not create any obligation on the part of such Person to take any similar action in the case of any other Participant; it being understood that any power or discretion of the Company, the Board or the Committee (or any of its members) shall be treated as having been so conferred as to each Participant separately.

3.5Procedures.  If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings, subject to the Bylaws of the Company, at such times and places as it shall deem advisable, including by telephone conference or by written consent to the extent permitted by applicable law.  A majority of the Committee members shall constitute a quorum.  All determinations of the Committee shall be made by a majority of its members.  Any decision or determination reduced to writing and signed by all the Committee members in accordance with the Bylaws of the Company, shall be as fully effective as if it had been made by a vote at a meeting duly called and held.  The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.

3.6Limitation of Liability; Indemnification.

(a)The Committee, its members and any Person designated pursuant to Section 3.3 shall not be liable for any action or determination made in good faith with respect to the Plan.  To the maximum extent permitted by applicable

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law, no officer or former officer of the Company or any of its Subsidiaries or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.

(b)To the maximum extent permitted by applicable law and the Certificate of Incorporation and Bylaws of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any of its Affiliates and member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of the Plan, except to the extent arising out of such officer’s, employee’s, member’s or former officer’s, employee’s or member’s own fraud or bad faith.  Such indemnification shall be in addition to any rights of indemnification the employees, officers, directors or members or former employees, officers, directors or members may have under applicable law or under the Certificate of Incorporation or Bylaws of the Company or any of its Affiliates.  Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to him or her under the Plan.

3.7Stockholders Agreement.  Notwithstanding anything herein to the contrary, the Plan and the operation and administration of the Plan (including any action taken by the Committee) shall be subject to the terms and conditions set forth in the Stockholders Agreement, including Sections 4.06(c) and 4.06(e) thereof, to the greatest extent permissible under applicable law.

ARTICLE IV

SHARE LIMITATIONS

4.1General Limitations.  The aggregate number of shares of Common Stock that may be issued or used for reference purposes under the Plan or with respect to which Awards may be granted under the Plan, including with respect to Incentive Stock Options, shall not exceed 74,603 shares of Class A Common Stock and 74,603 shares of Class B Common Stock (subject, in each case, to any increase or decrease pursuant to Section 4.2), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both.  If any Award granted under the Plan expires, terminates or, is canceled or is forfeited for any reason (in the case of any Stock Option, without having been exercised in full), the number of shares of Common Stock underlying such Award (in the case of any Stock Option, to the extent unexercised) shall again be available for issuance under the Plan.  To the extent that a distribution pursuant to a Stock Option is made in cash, the share reserve shall be reduced

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by the number of shares of Common Stock bearing a value equal to the amount of the cash distribution as of the time that such amount was determined.  No fractional shares of Common Stock shall be issued under the Plan.

4.2Changes.

(a)The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure, (ii) any merger or consolidation of the Company or any of its Affiliates, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any of its Affiliates, (v) any sale or Transfer of all or part of the assets or business of the Company or any of its Affiliates, (vi) any Section 4.2 Event or (vii) any other corporate act or proceeding.

(b)Subject to the provisions of this Section 4.2(d), in the event of any change in the capital structure of the Company by reason of any stock split, reverse stock split, stock dividend, combination or reclassification of shares, recapitalization, or other change in capital structure of the Company, or an extraordinary cash dividend (a “Section 4.2 Event”) then (i) the aggregate number and kind of shares that thereafter may be issued under the Plan, (ii) the number and kind of shares or other property (including cash) subject to any Award or to be issued upon exercise of an outstanding Stock Option granted under the Plan and (iii) the purchase or exercise price thereof, in each case, shall be appropriately adjusted consistent with such change in such manner as the Committee may determine.  Any such adjustment determined by the Committee shall be final, binding and conclusive on the Company and all Participants, Permitted Transferees and their respective heirs, executors, administrators, successors and assigns.  In connection with any Section 4.2 Event, the Committee may provide for the cancellation of any outstanding Awards and payment in cash or other property in exchange therefor, to the extent any such cancellation and payment does not cause any such Award to fail to comply with Section 409A of the Code.  Except as provided in this Section 4.2 or in the applicable Award agreement, a Participant shall have no rights by reason of any issuance by the Company of any class of securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend, any other increase or decrease in the number of shares of stock of any class, any sale or Transfer of all or part of the Company’s assets or business or any other change affecting the Company’s capital structure or business.

(c)Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to Section 4.2(a) or (b) shall be eliminated at the time of such adjustment by rounding-down for any fractional shares.  Notice of any adjustment shall be given by the Committee to each Participant whose Award has been

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adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.

(d)In the event of an Acquisition Event, the Committee may terminate all outstanding and unexercised Stock Options or other Awards that provide for a Participant elected exercise (“Exercisable Awards”), effective as of the date of the Acquisition Event, by delivering notice of termination to each Participant at least 10 days prior to the date of consummation of the Acquisition Event, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Acquisition Event, each such Participant shall have the right to exercise his or her Exercisable Awards that are then outstanding to the extent vested as of the date on which such notice of termination is delivered (or, at the discretion of the Committee, without regard to any limitations on exercisability otherwise contained in the Award agreements), but any such exercise shall be contingent upon and subject to the occurrence of the Acquisition Event, and, provided that, if the Acquisition Event does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.  If the Acquisition Event does take place after giving such notice, any Exercisable Awards not exercised prior to the date of the consummation of such Acquisition Event shall be forfeited simultaneous with the consummation of the Acquisition Event.  For the avoidance of doubt, in the event of an Acquisition Event, the Committee may terminate any Exercisable Award for which the exercise price is equal to or exceeds the Fair Market Value of the Common Stock subject to such Exercisable Award on the date of such termination, without payment of consideration therefor.

If an Acquisition Event occurs but the Committee does not terminate the outstanding Exercisable Awards pursuant to this Section 4.2(d), then the applicable provisions of Section 4.2(b) and Article X shall apply.

4.3Minimum Purchase Price.  Notwithstanding any provision of the Plan to the contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan, such shares shall not be issued for a consideration that is less than as permitted under applicable law.

ARTICLE V

ELIGIBILITY AND GENERAL REQUIREMENTS FOR AWARDS

5.1General Eligibility.  All current Eligible Employees, Non-Employee Directors and Consultants and prospective Eligible Employees, Consultants and Non-Employee Directors are eligible to be granted Non-Qualified Stock Options, Restricted Stock and Other Stock-Based Awards.  Eligibility for the grant of Awards and actual participation in the Plan shall be determined by the Committee.

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5.2Incentive Stock Options.  Notwithstanding anything herein to the contrary, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under the Plan.  Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee.

5.3General Requirement.  The granting, vesting and exercise of Awards granted to a prospective Eligible Employee, Consultant or Non-Employee Director are conditioned upon such individual actually becoming an Eligible Employee, Consultant or Non-Employee Director, provided that no Award may be granted to a prospective Eligible Employee, Consultant or Non-Employee Director unless the Company determines that the Award will comply with applicable laws, including the securities laws of all relevant jurisdictions.

5.4Unless the Committee provides otherwise in an Award agreement, (a) Awards shall be of an equal number of shares of Class A Common Stock and Class B Common Stock and (b) Options may be exercised only for units consisting of an equal number of shares of Class A Common Stock and Class B Common Stock.

ARTICLE VI

STOCK OPTIONS

6.1Stock Options.  Each Stock Option granted under the Plan shall be one of two types: (a) an Incentive Stock Option; or (b) a Non-Qualified Stock Option.

6.2Grants.  The Committee shall have the authority to grant to any Eligible Employee (subject to Section 5.2) Incentive Stock Options, Non-Qualified Stock Options or both types of Stock Options.  To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof that does not qualify, shall constitute a separate Non-Qualified Stock Option.  The Committee shall have the authority to grant any Consultant or Non-Employee Director one or more Non-Qualified Stock Options.

6.3Terms of Stock Options.  Stock Options granted under the Plan shall be subject to the following terms and conditions, and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall determine:

(a)Exercise Price.  The exercise price per share of Common Stock subject to a Stock Option shall be determined by the Committee on the date of the grant, provided that the per share exercise price of a Stock Option shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value of the Common Stock on the date of the grant.

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(b)Stock Option Term.  The term of each Stock Option shall be fixed by the Committee; provided, that (i) no Stock Option shall be exercisable more than ten years after the date such Stock Option is granted; and (ii) the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed five years.

(c)Exercisability.  Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant.  If the Committee provides, that any Stock Option is exercisable subject to certain limitations (including that such Stock Option is exercisable only in installments or within certain time periods or upon the attainment of certain financial results or other criteria), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine.  Unless otherwise determined by the Committee at grant, (i) in the event the Participant engages in Detrimental Activity prior to any exercise of the Stock Option, all Stock Options held by the Participant shall thereupon terminate, (ii) as a condition of the exercise of a Stock Option, the Participant shall be required to certify (or shall be deemed to have certified) at the time of exercise in a manner acceptable to the Company that the Participant is in compliance with the terms and conditions of the Plan and that the Participant has not engaged in, and does not intend to engage in, any Detrimental Activity, and (iii) in the event the Participant engages in Detrimental Activity during the one-year period (or such longer period as may be provided in the applicable Award agreement) commencing on the later of the date the Stock Option is exercised or the date of the Participant’s Termination, the Company shall be entitled to recover from the Participant at any time within one year after the end of such one-year period, and the Participant shall pay over to the Company, an amount equal to any gain realized as a result of the exercise of the Stock Option (whether at the time of exercise or thereafter).  In the event that a written employment agreement between the Company and a Participant provides for a vesting schedule that is more favorable than the vesting schedule provided in the form of Stock Option award agreement, the vesting schedule in such employment agreement shall govern, provided that such agreement is in effect on the date of grant and applicable to the specific Stock Option.

(d)Method of Exercise.  Subject to any installment exercise and waiting period provisions that apply under subsection (c) above, to the extent vested, a Stock Option may be exercised in whole or in part at any time and from time to time during the Stock Option term by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be acquired.  Such notice shall be accompanied by (x) at the Company’s request, a Joinder Agreement executed by the holder thereof and (y) payment in full of the exercise price as follows: (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the

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Common Stock is traded on a national securities exchange or quoted on a national quotation system, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the purchase price, to the extent authorized by the Committee; or (iii) on such other terms and conditions as may be acceptable to the Committee.  No shares of Common Stock shall be issued until payment therefor, as provided herein, has been made or provided for.

(e)Incentive Stock Option Limitations.  To the extent that the aggregate Fair Market Value (determined as of the date of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under the Plan or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options.  In addition, if an Eligible Employee does not remain employed by the Company, any Subsidiary or any Parent at all times from the time an Incentive Stock Option is granted until three months prior to the date of exercise thereof (or such other period as required by applicable law), such Stock Option shall be treated as a Non-Qualified Stock Option.  Should any provision of the Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.

(f)Form, Modification, Extension and Renewal of Stock Options.  Subject to the terms and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee may (i) modify, extend or renew outstanding Stock Options granted under the Plan (provided that (x) the rights of a Participant are not reduced or adversely affected without his or her consent and (y) such action does not subject the Stock Options to Section 409A of the Code), and (ii) accept the surrender of outstanding Stock Options (to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor.  Notwithstanding the foregoing, after the Registration Date an outstanding Option may not be modified to reduce the exercise price thereof and a new Option at a lower price may not be substituted for a surrendered Option (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.

(g)Early Exercise.  The Committee may provide that a Stock Option include a provision whereby the Participant may elect at any time before the Participant’s Termination to exercise the Stock Option as to any part or all of the shares of Common Stock subject to the Stock Option prior to the full vesting of the Stock Option and such shares shall be subject to certain restrictions as determined by the Committee and be treated as Restricted Stock.  Any unvested shares of Common Stock so purchased may be subject to a repurchase option in

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favor of the Company or to any other restriction the Committee determines to be appropriate.

(h)Other Terms and Conditions.  Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.

ARTICLE VII

RESTRICTED STOCK

7.1Awards of Restricted Stock.  (a)  Restricted Stock may be issued either alone or in addition to other Awards granted under the Plan.  The Committee shall determine the Eligible Employees, Consultants and Non-Employee Directors to whom, and the time or times within which, grants of Restricted Stock will be made, the number of shares to be awarded, the purchase price (if any) to be paid by the Participant (subject to Section 7.2), the time or times at which such Awards may be subject to forfeiture (if any), the vesting schedule (if any) and rights to acceleration thereof, and all other terms and conditions of the Awards.  The Committee may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets or such other factors as the Committee may determine.

Unless otherwise determined by the Committee at grant, each Award of Restricted Stock shall provide that in the event the Participant engages in Detrimental Activity prior to, or during the one-year period (or such longer period as may be provided in the applicable Award agreement) after, any vesting of Restricted Stock, the Committee may direct that all unvested Restricted Stock shall be immediately forfeited to the Company and that the Participant shall pay over to the Company an amount equal to the Fair Market Value on the date of vesting of any Restricted Stock that had vested in the period referred to above.

(b)Restriction Period.  The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under the Plan during a period set by the Committee (if any) (the “Restriction Period”) commencing with the date of such Award, as set forth in the applicable Award agreement and such agreement shall set forth a vesting schedule and any events that would accelerate vesting of the shares of Restricted Stock.  Within these limits, based on service or such other factors or criteria as the Committee may determine, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Restricted Stock Award.

7.2Awards and Certificates.  An Eligible Employee, Consultant and Non-Employee Director selected to receive Restricted Stock shall not have any rights with respect to such Award, unless and until such Participant has delivered a fully executed copy of the Award agreement evidencing the Award to the Company and has otherwise

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complied with the applicable terms and conditions of such Award.  Further, such Award shall be subject to the following conditions:

(a)Purchase Price.  The purchase price (if any) of Restricted Stock shall be determined by the Committee, but shall not be less than as permitted under applicable law.

(b)Acceptance.  Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the grant date, by executing an Award agreement and by paying whatever price (if any) the Committee has designated thereunder and all applicable withholding taxes due upon the granting and acceptance of the Award (if any) in accordance with the provisions of Section 14.4.

(c)Legend.  Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the transfer agent, as evidencing ownership of Restricted Stock.  Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Number Holdings Inc. (the “Company”) 2012 Stock Incentive Plan (as amended from time to time), and an Award agreement entered into between the registered owner and the Company dated                            .  Copies of such Plan and Award agreement are on file at the principal office of the Company.”

(d)Custody.  The Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such Award.

(e)Rights as Stockholder.  Except as provided in this subsection and subsection (d) above and as otherwise determined by the Committee, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of shares of Common Stock of the Company including the right to receive any dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares.  Notwithstanding the foregoing, the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period, unless the Committee specifies otherwise at the time of the Award.

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(f)Lapse of Restrictions.  If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, the certificates for such shares shall be delivered to the Participant.  The legend referred to in subsection (c) above shall be removed from said certificates at the time of delivery to the Participant except as otherwise required by applicable law.  Notwithstanding the foregoing, actual certificates shall not be issued to the extent that book entry recordkeeping is used.

ARTICLE VIII

OTHER STOCK-BASED AWARDS

8.1Other Awards.  The Committee is authorized to grant to Eligible Employees, Consultants and Non-Employee Directors Other Stock-Based Awards, including shares of Common Stock awarded purely as a bonus and not subject to any restrictions or conditions, shares of Common Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, deferred stock units, and Awards valued by reference to the value of shares of Common Stock.  The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified performance criteria or such other factors as the Committee may determine.  The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified performance period.  Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under this Plan.

Subject to the provisions of this Plan, the Committee shall have authority to determine the Eligible Employees, Consultants and Non-Employee Directors, to whom, and the time or times at which, such Awards shall be made, the number of shares, and class, of Common Stock to be awarded pursuant to such Awards, and all other conditions of the Awards.  To the extent permitted by law, the Committee may permit Eligible Employees or Non-Employee Directors to defer all or a portion of their cash compensation in the form of Other Stock-Based Awards granted under this Plan, subject to the terms and conditions of any deferred compensation arrangement established by the Company, which shall be in a manner intended to comply with Section 409A of the Code.

8.2Terms and Conditions.  Other Stock-Based Awards made pursuant to this Article VIII shall be subject to the following terms and conditions:

(a)Non-Transferability.  Subject to the applicable provisions of the Award agreement and this Plan, neither Other Stock-Based Awards nor the shares of Common Stock subject to them may be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.

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(b)Dividends.  Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award agreement and this Plan, the recipient of an Other Stock-Based Award shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents with respect to the number of shares of Common Stock covered by the Award.

(c)Vesting.  Any Other Stock-Based Award and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award agreement, as determined by the Committee.

(d)Price.  Common Stock issued on a bonus basis pursuant to an Other Stock-Based Award may be issued for no cash consideration; Common Stock purchased pursuant to a purchase right pursuant to an Other Stock-Based Award shall be priced, as determined by the Committee.

(e)Payment.  Form of payment for the Other Stock-Based Award shall be specified in the Award agreement.

ARTICLE IX

NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY/DIRECTORSHIP

9.1Non-Transferability

(a)Except as otherwise specifically provided herein, no Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution.  All Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant.  Any attempt to Transfer Stock Options other than in accordance with the provisions of this Section 9.1 shall be void, and no Award shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any Person who shall be entitled to such Award, or be subject to attachment or legal process for or against such Person.

(b)Notwithstanding the foregoing, the Committee may determine at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this Section 9.1 is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as specified by the Committee.  A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred other than by will or by the laws of descent and distribution and (ii) remains subject to the terms of the Plan and the Stock Option agreement.  Any shares of Common Stock acquired upon the exercise of a Stock Option by a Permitted Transferee of a Stock Option or a Permitted Transferee pursuant to a

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Transfer after the exercise of the Stock Option shall be subject to the terms of the Plan and the Stock Option agreement, including the provisions of Article XIII.

(c)In the event of a Participant’s death, the Committee may require the transferee of a Participant to supply it with written notice of the Participant’s death and to supply it with a copy of the will or such other evidence as the Committee deems necessary to establish the validity of the Transfer of a Stock Option.  The Committee may also require the agreement of the transferee to be bound by all of the terms and conditions of the Plan.

(d)Restrictions on Transfer applicable to shares of Common Stock acquired pursuant to Awards under the Plan are set forth in Section 13.2.

9.2Termination.  Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, the following shall apply in the event of a Termination of a Participant:

(a)Rules Applicable to Stock Options.

(i)Termination by Reason of Death or Disability.  If a Participant’s Termination is by reason of death or Disability, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant (or, in the case of death, by the legal representative of the Participant’s estate) at any time within a period of one year after the date of such Termination, but in no event later than the expiration of the stated term of such Stock Options, after which time such Stock Options automatically shall terminate.

(ii)Involuntary Termination Without Cause or for Good Reason.  If a Participant’s Termination is by involuntary termination without Cause or by the Participant for Good Reason, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of 90 days after the date of such Termination, but in no event later than the expiration of the stated term of such Stock Options, after which time such Stock Options automatically shall terminate.

(iii)Termination for Cause; Voluntary Termination without Good Reason.  If a Participant’s Termination: (1) is for Cause, (2) is a voluntary Termination by the Participant after the occurrence of an event that would be grounds for a Termination for Cause, (3) is a voluntary Termination by the Participant without Good Reason, all Stock Options, whether vested or not vested, that are held by such Participant shall automatically terminate on the date of such Termination.

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(iv)Unvested Stock Options.  Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate on the date of such Termination.

(b)Rules Applicable to Restricted Stock.  Unless otherwise determined by the Committee at grant or thereafter, during the relevant Restriction Period, upon a Participant’s Termination for any reason, all Restricted Stock still subject to restriction shall be forfeited.

(c)Rules Applicable to other Stock-Based Awards.  The effect of a Participant’s Termination on any Other Stock-Based Award shall be as provided in the applicable Award agreement.

ARTICLE X

CHANGE IN CONTROL PROVISIONS

10.1Except as otherwise provided by the Committee in an Award agreement, in the event of a Change in Control after the Effective Date, the Committee may, but shall not be obligated to:

(a)accelerate, vest or cause the restrictions to lapse with respect to all or any portion of an Award; or

(b)cancel Awards for fair value (as determined by the Committee) which, in the case of Options or other Exercisable Awards may equal the excess, if any, of the value of the consideration to be paid in the Change in Control transaction to holders of the same number of shares of Common Stock subject to such Options or other Exercisable Awards (or, if no consideration is paid in any such transaction, the Fair Market Value of the shares of Common Stock subject to such Options or other Exercisable Awards on the date of such cancellation) over the aggregate exercise price of such Options or Awards;

(c)provide for the issuance of substitute Awards that will substantially preserve the otherwise applicable terms of any affected Award previously granted hereunder as determined by the Committee; or

(d)if such Change in Control is an Acquisition Event, take any of the actions permitted by Section 4.2(d).

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ARTICLE XI

TERMINATION OR AMENDMENT

11.1Notwithstanding any other provision of the Plan, the Board or the Committee may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Article XIV or Section 409A of the Code as described below), or suspend or terminate it entirely, retroactively or otherwise; provided that if the Committee determines that the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may be adversely impaired, the consent of such Participant shall be required; and provided further, without the approval of the stockholders of the Company entitled to vote in accordance with applicable law, no amendment may be made that would:

(a)increase the aggregate number of shares of Common Stock that may be issued under the Plan (other than due to an adjustment under Section 4.2);

(b)change the classification of individuals eligible to receive Awards under the Plan;

(c)decrease the minimum exercise price of any Stock Option;

(d)extend the maximum Stock Option period under Section 6.3;

(e)award any Stock Option in replacement of a canceled Stock Option with a higher exercise price, except in accordance with Section 6.3(f); or

(f)require stockholder approval in order for the Plan to continue to comply with Section 422 of the Code to the extent applicable to Incentive Stock Options or the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company.

11.2The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, subject to Article IV, provided that no such amendment or other action by the Committee shall adversely impair the rights of any holder without the holder’s consent.  Notwithstanding anything herein to the contrary, the Board or the Committee may amend the Plan or any Award granted hereunder at any time without a Participant’s consent to comply with Section 409A of the Code or any other applicable law.  Nothing in the Plan is intended to provide a guarantee of particular tax treatment to any Participant.

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ARTICLE XII

UNFUNDED PLAN

12.1The Plan is intended to constitute an “unfunded” plan.  With respect to any payments as to which a Participant has a fixed and vested interest but that are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general unsecured creditor of the Company.

ARTICLE XIII

COMPANY’S RIGHT OF REPURCHASE; RIGHTS OF FIRST REFUSAL; RESTRICTIONS ON TRANSFER

13.1Repurchase Rights and Rights of First Refusal.  The Committee may provide in the applicable Award agreement repurchase rights or rights of first refusal or rights of first offer at the time of grant (or, thereafter, if no rights of the Participant are reduced) as it may decide.  If a Participant or Permitted Transferee is a party to the Stockholders Agreement or executes a Joinder Agreement (or is a party to or executes a joinder agreement to another stockholders agreement (or similar agreement), such Person shall also be subject to the terms and conditions of such agreement, including provisions with respect to repurchase rights, call rights or rights of first refusal and rights of first offer.

13.2Restrictions on Transfer.  No Participant shall, directly or indirectly, prior to the Registration Date or such other date determined by the Committee, Transfer any shares of Common Stock acquired pursuant to an Award under the Plan prior to the Participant’s Termination and the expiration of any applicable time period set forth in the applicable Award agreement and the Stockholders Agreement for the exercise of repurchase rights, call rights and rights of first refusal or rights of first offer provided therein.  Notwithstanding the foregoing, the Participant shall have the right to Transfer such shares of Common Stock to a Permitted Transferee who takes the shares subject to the terms of the Plan and applicable Award agreement, provided that such Transfer shall not be effective unless and until the Company shall have been furnished with information reasonably satisfactory to it demonstrating that such Transfer is exempt from or not subject to the provisions of Section 5 of the Securities Act and any other applicable securities laws.  Any attempt to Transfer any shares of Common Stock other than in accordance with the provisions of this Section 13.2 shall be void and immediately cancelled, and no Award shall in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any Person who shall be entitled to such Award, or be subject to attachment or legal process for or against such Person.

13.3Effect of Registration.  Notwithstanding the foregoing, unless otherwise determined by the Committee, the Company shall cease to have rights of first refusal or rights of first offer pursuant to this Article XIII on and after the Registration Date.

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ARTICLE XIV

GENERAL PROVISIONS

14.1Legend.  The Committee may require each Person receiving shares of Common Stock pursuant to an Award granted under the Plan to represent to and agree with the Company in writing that such Person is acquiring the shares without a view to distribution thereof and such other securities law related representations as the Committee shall request.  In addition to any legend required by the Plan, the certificates and book entry accounts for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on Transfer.

All certificates and book entry accounts for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national automated quotation system on which the Common Stock is then quoted, any applicable Federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

14.2Other Plans.  Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

14.3No Right to Employment/Consultancy/Directorship.  Neither the Plan nor the grant of any Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any of its Affiliates, or shall limit in any way the right of the Company or any of its Affiliates by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate his or her employment, consultancy or directorship at any time.

14.4Withholding of Taxes.  The Company shall have the right to deduct from any payment to be made to a Participant, or to otherwise require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any Federal, state or local taxes required by law to be withheld.  Upon the vesting of Restricted Stock, or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding taxes to the Company.  Any fraction of a share of Common Stock required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.

14.5Listing and Other Conditions.

(a)Unless otherwise determined by the Committee, if at any time the Common Stock is listed on a national securities exchange or national automated

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quotation system, the issuance of any shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system.  The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Award with respect to such shares shall be suspended until such listing has been effected.

(b)If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise with respect to shares of Common Stock or Awards, and the right to exercise any Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful and will not result in the imposition of excise taxes on the Company.

(c)Upon termination of any period of suspension under this Section 14.5, an Award affected by such suspension that shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares that would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.

(d)A Participant shall be required to supply the Company with any certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.

14.6Stockholders Agreement and Other Requirements.  Notwithstanding anything herein to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award granted under the Plan, the Participant shall execute and deliver a Joinder Agreement or such other documentation as required by the Committee which shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise or purchase, a right of first refusal or a right of first offer of the Company and other Persons with respect to shares, and such other terms or restrictions as the Board or Committee shall from time to time establish, including any drag along rights, tag along rights, transfer restrictions and registration rights.  The Stockholders Agreement or other documentation shall apply to the Common Stock acquired under the Plan and covered by the Stockholders Agreement or other documentation.  The Company may require, as a condition of exercise, the Participant or any Permitted Transferee to become a party to the Stockholders Agreement or any other existing stockholders agreement or other agreement.

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14.7Governing Law.  All matters arising out of or relating to the Plan, the actions taken in connection herewith and the transactions contemplated hereby, including its validity, interpretation, construction, performance and enforcement, 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.

14.8Construction.  Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply.  As used herein, (i) “or” shall mean “and/or” and (ii) “including” or “include” shall mean “including, without limitation.”

14.9Other Benefits.  No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefits under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.

14.10Costs.  The Company shall bear all expenses associated with administering the Plan, including expenses of issuing Common Stock pursuant to any Award granted hereunder.

14.11No Right to Same Benefits.  The provisions of Awards need not be the same with respect to each Participant, and Awards granted to individual Participants need not be the same.

14.12Section 16(b) of the Exchange Act.  On and after the Registration Date, all elections and transactions under the Plan by Persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3.  The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder.

14.13Severability of Provisions.  If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included; provided that if the Company’s call rights and rights of first refusal or rights of first offer set forth in the Stockholders Agreement or other agreement shall be held invalid or unenforceable, the Awards granted under the Plan shall be cancelled and terminated.

14.14Headings and Captions.  The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

14.15Securities Act Compliance.  Except as the Company or Committee shall otherwise determine, the Plan is intended to comply with Section 4(2) or Rule 701 of the

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Securities Act, and any provisions inconsistent with such Section or Rule of the Securities Act shall be inoperative and shall not affect the validity of the Plan.

14.16Successors and Assigns.  The Plan shall be binding on all successors and permitted assigns of a Participant, including the estate of such Participant and the executor, administrator or trustee of such estate.

14.17Payment to Minors, Etc.  Any benefit payable to or for the benefit of a minor, an incompetent person or other Person incapable of receipt thereof shall be deemed paid when paid to such Person’s guardian or to the party providing or reasonably appearing to provide for the care of such Person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.

14.18Agreement. As a condition to the grant of a Award, if requested by the Company or the lead underwriter of any public offering of the Common Stock (the “Lead Underwriter”), a Participant shall irrevocably agree not to sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise Transfer or dispose of, any interest in any Common Stock or any securities convertible into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after such offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that the Lead Underwriter shall specify (the “Lock-up Period”).  The Participant shall further agree to sign such documents as may be requested by the Lead Underwriter or the Company to effect the foregoing and agree that the Company may impose stop-transfer instructions with respect to Common Stock acquired pursuant to a Stock Option until the end of such Lock-up Period.

14.19No Rights as Stockholder.  Subject to the provisions of the Award agreement, no Participant or Permitted Transferee shall have any rights as a stockholder of the Company with respect to any Award until such individual becomes the holder of record of the shares of Common Stock underlying the Award.

14.20Section 409A of the Code.  To the extent applicable, the Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

14.21Consideration.  Awards may be awarded in consideration for past services actually rendered to the Company or an Affiliate of the Company for its benefit; provided that in the case of an Award to be made to a new Eligible Employee, Non-Employee Director, or Consultant who has not performed prior services for the Company or an Affiliate of the Company, the Company will require payment of the par value of the Common Stock by cash or check in order to ensure proper issuance of the shares in compliance with the Delaware General Corporation Law.

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ARTICLE XV

EFFECTIVE DATE OF PLAN

The Plan is effective February 27, 2012, the date of the Plan’s adoption by the Board and the approval of the Plan by the stockholders of the Company in compliance with the Delaware General Corporation Law.

ARTICLE XVI

TERM OF PLAN

No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but Awards granted prior to such tenth anniversary may, and the Committee’s authority to administer the terms of such Awards shall, extend beyond that date.

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EX-10.35

Exhibit 10.35

Award Number:       

NUMBER HOLDINGS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE
NUMBER HOLDINGS, INC.
2012 STOCK INCENTIVE PLAN

AGREEMENT (“Agreement”), dated as of [•], 2012 between Number Holdings, Inc., a Delaware corporation (the “Company”), and [•] (the “Participant”).

Preliminary Statement

The Committee hereby grants this non-qualified stock option (the “Option”) as of [•], 2012 (the “Grant Date”), pursuant to the Number Holdings, Inc. 2012 Stock Incentive Plan, as it may be amended from time to time (the “Plan”), to purchase the number of shares of Class A Common Stock, $0.001 par value per share of the Company (the “Class A Common Stock”), and Class B Common Stock, par value $0.001 per share, of the Company (the “Class B Common Stock,” and, together with the Class A Common Stock, the “Common Stock”), set forth below to the Participant, as an Eligible Employee of the Company or one of its Affiliates (collectively, the Company and all of its Affiliates shall be referred to as the “Employer”).  Except as otherwise indicated, any capitalized term used but not defined herein shall have the meaning ascribed to such term in the Plan.  A copy of the Plan has been delivered to the Participant.  By signing and returning this Agreement, the Participant acknowledges having received and read a copy of the Plan and agrees to comply with it, this Agreement and all applicable laws and regulations.

Accordingly, the parties hereto agree as follows:

1.Tax Matters.  No part of the Option is intended to qualify as an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

2.Common Stock Subject to Option;  Exercise Price.  Subject in all respects to the Plan and the terms and conditions set forth herein and therein, the Option entitles the Participant to purchase from the Company, upon exercise, [•] shares of Class A Common Stock and [•] shares of Class B Common Stock, provided that the Participant must exercise the Option with respect to an equal number of shares of Class A Common Stock and Class B Common Stock concurrently. The exercise price under the Option is $[•] for each unit consisting of one share of Class A Common Stock and one share of Class B Common Stock (the “Unit Exercise Price”).

3.Vesting;  Exercise.

(a)The Option shall vest and become exercisable on the dates and in the cumulative percentages provided in the table below (which percentages shall apply equally with respect to the Class A Common Stock and the Class B Common Stock subject to the Option), provided, with respect to each vesting date, that the Participant has not experienced a

Termination prior to such date.  There shall be no proportionate or partial vesting in the periods prior to each vesting date.

Vesting Date	Percent Vested
First Anniversary of Grant Date	20	%
Second Anniversary of Grant Date	20	%
Third Anniversary of Grant Date	20	%
Fourth Anniversary of Grant Date	20	%
Fifth Anniversary of the Grant Date	20	%

(b)To the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option in accordance with the Plan, provided that the Participant must exercise the Option with respect to an equal number of shares of Class A Common Stock and Class B Common Stock concurrently.  Notwithstanding the foregoing, the Participant may not exercise the Option unless the offering of shares of Common Stock issuable upon such exercise (a) is then registered under the Securities Act, or, if such offering is not then so registered, the Company has determined that such offering is exempt from the registration requirements of the Securities Act and (b) complies with all other applicable laws and regulations governing the Option, and the Participant may not exercise the Option if the Committee determines that such exercise would not be so registered or exempt and otherwise in compliance with such laws and regulations.

4.Option Term.  The term of the Option shall be until the tenth anniversary of the Grant Date, after which time it shall expire (the “Expiration Date”).  Upon the Expiration Date, the Option shall be canceled for no consideration and no longer shall be exercisable.  The Option is subject to termination prior to the Expiration Date to the extent provided in Sections 5 and 6 below.

5.Detrimental Activity.  The provisions in the Plan regarding Detrimental Activity shall apply to the Option.

6.Termination and Change in Control.  The provisions in the Plan regarding Termination and Change in Control shall apply to the Option, provided that if the Participant’s employment agreement expressly provides more favorable rights with respect to the Option in the event of Termination or Change in Control, such rights shall apply.

7.Restriction on Transfer of Option.  Unless otherwise determined by the Committee in accordance with the Plan, (a) no part of the Option shall be Transferable other than by will or by the laws of descent and distribution and (b) during the lifetime of the Participant, the Option may be exercised only by the Participant or the Participant’s guardian or

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legal representative.  Any attempt to Transfer the Option other than in accordance with the Plan shall be void.

8.Company’s Right to Repurchase; Other Restrictions.

(a)Company’s Right to Repurchase.  In the event of the Participant’s Termination, the Company shall have the right (the “Repurchase Right”), but not the obligation, to repurchase (or to cause one or more of its designees to repurchase) from the Participant (or his or her transferee) (X) any or all of the shares of Common Stock acquired upon the exercise of the Option and still held at the time of such repurchase by the Participant (or his or her transferee) or (Y) any vested but unexercised portion of the Option at the price determined in the manner set forth below (the “Repurchase Price”), during each period set forth below (each, a “Repurchase Period”) and to the extent set forth below:

(i)In the event of Termination for Cause, voluntary Termination without Good Reason, or the discovery that the Participant engaged in Detrimental Activity, the Company may exercise the Repurchase Right with respect to all shares previously acquired pursuant to the exercise of the Option.  The Repurchase Period under this Section 8(a)(i) shall be 180 days from the date of Termination.  The Repurchase Price under this Section 8(a)(i) shall be (1) with respect to each share of Class A Common Stock, the lesser of (A) the Unit Exercise Price or (B) the Fair Market Value of a share of Class A Common Stock on the date of Termination and (B) with respect to each share of Class B Common Stock, the par value thereof.

(ii)In the event of Termination for any reason other than (x) Termination for Cause or (y) voluntary Termination without Good Reason (including Termination due to retirement, death, Disability or involuntary Termination without Cause):

(A)The Company may exercise the Repurchase Right with respect to all shares acquired pursuant to the exercise of the Option on or prior to the date of Termination.  The Repurchase Period under this Section 8(a)(ii)(A) shall be 180 days from the date of Termination.  The Repurchase Price under this Section 8(a)(ii)(A) shall be (1) with respect to each share of Class A Common Stock, the Fair Market Value of a share of Class A Common Stock on the date of Termination and (2) with respect to each share of Class B Common Stock, the par value thereof.

(B)The Company may exercise the Repurchase Right with respect to all shares acquired pursuant to the exercise of the Option after the date of Termination.  The Repurchase Period under this Section 8(a)(ii)(B) shall be 90 days from the latest date on which the Option is permitted to be exercised under this Agreement.  The Repurchase Price under this Section 8(a)(ii)(B) shall be (1) with respect to each share of Class A Common Stock, the Fair Market Value of a share of Class A Common Stock on the date of repurchase and (2) with respect to each share of Class B Common Stock, the par value thereof.

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(C)the Company may exercise the Repurchase Right with respect to the vested but unexercised portion of the Option.  The Repurchase Period under this Section 8(a)(ii)(C) shall be the latest date on which the Option is permitted to be exercised under this Agreement.  The Repurchase Price under this Section 8(a)(ii)(C) shall be the product of (A) the excess (if any) of the Fair Market Value of a share of Class A Common Stock on the date of Termination over the Unit Exercise Price multiplied by (B) the number of shares of Class A Common Stock covered by the Option being repurchased.  For the avoidance of doubt, upon such repurchase such Option shall no longer be exercisable for any shares of Common Stock.

(iii)To exercise any Repurchase Right, the Company (or one or more of its designees) shall deliver a written notice to the Participant setting forth the securities to be repurchased and the applicable Repurchase Price thereof, and the date on which such repurchase is to be consummated, which date shall be not less than 15 days or more than 30 days after the date of such notice.  On the date of consummation of the repurchase, the Company will pay the Participant the applicable Repurchase Price in cash or, in the Company’s discretion and to the extent not prohibited by law, by cancellation of indebtedness of the Participant to the Company.  The Company may exercise its Repurchase Rights upon one or more occasions at any time during the Repurchase Periods set forth above.

(iv)Notwithstanding the foregoing, the Repurchase Period and the date on which any repurchase is to be consummated may be extended by the Company at any time when repurchase by the Company (A) is prohibited pursuant to applicable law, (B) is prohibited under any debt instrument of the Company or any of its Affiliates or (C) would result in adverse accounting consequences for the Company, in each case as determined by the Company.

(b)To ensure that the shares of Common Stock issuable upon exercise of the Option are not transferred in contravention of the terms of the Plan and this Agreement, and to ensure compliance with other provisions of the Plan and this Agreement, the Company may deposit any certificates evidencing such shares with an escrow agent designated by the Company.

(c)Notwithstanding anything in this Agreement to the contrary, the Option and any Common Stock purchased pursuant to the exercise thereof shall be subject to the terms of the Stockholders Agreement in addition to the provisions of this Section 8.

9.Securities Representations.  Upon the exercise of the Option prior to registration of the offering of the Common Stock subject to the Option pursuant to the Securities Act or other applicable securities laws, the Participant shall be deemed to acknowledge and make the representations and warranties as described below and as otherwise may be requested by the Company for compliance with applicable laws, and any issuances of Common Stock by the Company shall be made in reliance upon the express representations and warranties of the Participant.

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(a)The Participant is acquiring and will hold the shares of Common Stock for investment for his account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or other applicable securities laws.

(b)The Participant has been advised that offerings of the shares of Common Stock have not been registered under the Securities Act or other applicable securities laws, on the ground that no public offering of the shares of Common Stock is to be effected (it being understood, however, that the shares of Common Stock are being offered in reliance on the exemption provided under Rule 701 under the Securities Act), and that the shares of Common Stock must be held indefinitely, unless they are subsequently registered under the applicable securities laws or the Participant obtains an opinion of counsel (in the form and substance satisfactory to the Company and its counsel) that registration is not required.  In connection with the foregoing, the Company is relying in part on the Participant’s representations set forth in this Section.  The Participant further acknowledges and understands that the Company is under no obligation hereunder to register offerings of the shares of Common Stock.

(c)The Participant is aware of the adoption of Rule 144 by the Securities and Exchange Commission under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions.  The Participant acknowledges that he is familiar with the conditions for resale set forth in Rule 144, and acknowledges and understands that the conditions for resale set forth in Rule 144 have not been satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future.

(d)The Participant will not sell, transfer or otherwise dispose of the shares of Common Stock in violation of the Plan, this Agreement, the Securities Act (or the rules and regulations promulgated thereunder) or under any other applicable securities laws.  The Participant agrees that he will not dispose of the Common Stock unless and until he has complied with all requirements of this Agreement applicable to the disposition of the shares of Common Stock.

(e)The Participant has been furnished with, and has had access to, such information as he considers necessary or appropriate for deciding whether to invest in the shares of Common Stock, and the Participant has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Common Stock.

(f)The Participant is aware that his investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss.  The Participant is able, without impairing his financial condition, to hold the Common Stock for an indefinite period and to suffer a complete loss of his investment in the Common Stock.

10.No Rights as Stockholder.  The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall

5

be made for dividends (whether in cash, in kind or other property), distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan.

11.Provisions of Plan Control.  This Agreement is subject to all the terms, conditions and provisions of the Plan, including the amendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time.  The Plan is incorporated herein by reference.  If and to the extent that this Agreement conflicts or is inconsistent with the Plan, the Plan shall control, and this Agreement shall be deemed to be modified accordingly.

12.Notices.  All notices, demands or requests made pursuant to, under or by virtue of this Agreement must be in writing and sent to the party to which the notice, demand or request is being made:

(a)unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 12, any notice required to be delivered to the Company shall be properly delivered if delivered to:

Number Holdings, Inc.
c/o Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
Attention:	Adam Stein
Telephone:	(310) 201-4100
Facsimile:	(310) 201-4170
with a copy (which shall not constitute notice) to:
Proskauer Rose LLP
2049 Century Park East, Suite 3200
Los Angeles, CA 90067
Attention:	Michael A. Woronoff, Esq.
Telephone:	(310) 284-4550
Facsimile:	(310) 557-2193

(b)if to the Participant, to the address on file with the Company.

Any notice, demand or request, if made in accordance with this Section 12 shall be deemed to have been duly given:  (i) when delivered in person; (ii) three days after being sent by United States mail; or (iii) on the first business day following the date of deposit if delivered by a nationally recognized overnight delivery service.

13.No Right to Employment.  This Agreement is not an agreement of employment.  None of this Agreement, the Plan or the grant of the Option hereunder shall (a) guarantee that the Employer will employ the Participant for any specific time period or (b) modify or limit in any respect the Employer’s right to terminate or modify the Participant’s employment or compensation.

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14.Stockholders Agreement.  As a condition to the receipt of shares of Common Stock when the Option is exercised, the Participant shall execute and deliver a Joinder Agreement or such other documentation as required by the Committee which shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise, a right of first refusal or a right of first offer of the Company and other Persons with respect to shares, and such other terms or restrictions as the Board or Committee shall from time to time establish, including any drag along rights, tag along rights, transfer restrictions and registration rights.  The Stockholders Agreement or other documentation shall apply to the Common Stock acquired when the Option is exercised and covered by the Stockholders Agreement or other documentation.

15.Dispute Resolution.  All controversies and claims arising out of or relating to this Agreement, or the breach hereof, shall be settled by the Employer’s mandatory dispute resolution procedures as may be in effect from time to time with respect to matters arising out of or relating to Participant’s employment with the Employer, including the procedures set forth in the Arbitration Agreement attached hereto as Exhibit A (or any amendment or replacement of such agreement).

16.Severability of Provisions.  If any provision of this Agreement shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Agreement shall be construed and enforced as if such provisions had not been included; provided that if the Company’s call rights and rights of first refusal or rights of first offer set forth in the Stockholders Agreement or other agreement shall be held invalid or unenforceable, the Option shall be cancelled and terminated.

17.Governing Law.  All matters arising out of or relating to this Agreement and the transactions contemplated hereby, including its validity, interpretation, construction, performance and enforcement, 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.

18.Construction.  Wherever any words are used in this Agreement in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply.  As used herein, (i) “or” shall mean “and/or” and (ii) “including” or “include” shall mean “including, without limitation.”

19.Other Shares.  Notwithstanding anything in this Agreement or the Plan to the contrary, none of the shares of Common Stock owned from time to time by a Participant that were not acquired in connection with the grant of an Award to such Participant shall be subject to any of the terms, conditions or provisions of this Agreement or the Plan.

[Remainder of Page Left Intentionally Blank]

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.

	NUMBER HOLDINGS, INC.
	By:
	Name:
	Title:
Employee Name:
Employee ID number:

8

EX-12.1

Exhibit 12.1

Computation of Ratio of Earnings to Fixed Charges

	Periods Ended					Years Ended
	January 15, 2012toMarch 31, 2012			April 3, 2011 toJanuary 14, 2012		April 2, 2011		March 27, 2010		March 28, 2009		March 29, 2008
	(Successor)			(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)		(Predecessor)
	(Amounts in thousands, except ratios)
(Loss) income before provision for income taxes and income attributed to noncontrolling interest	$	(3,190	)	$	83,447	$	118,224	$	93,551	$	13,907	$	288
Add fixed charges:
Interest expense (a)	16,223			381		77		174		937		953
Estimate of interest within rental expense	1,320			4,472		5,759		6,150		6,171		5,498
Income before income taxes, noncontrolling interest and fixed charges	$	14,353		$	88,300	$	124,060	$	99,875	$	21,015	$	6,739
Fixed charges:
Interest expense	16,223			381		77		174		937		953
Estimate of interest within rental expense	1,320			4,472		5,759		6,150		6,171		5,498
Total fixed charges	$	17,543		$	4,853	$	5,836	$	6,324	$	7,108	$	6,451
Ratio of earnings to fixed charges	0.8x			18.2x		21.3x		15.8x		3.0x		1.0x

(a)Interest expense consists of interest expenses on all indebtedness plus amortization of debt discount and deferred financing fees.

EX-21.0

EXHIBIT 21.0

Subsidiaries of the Company

	State or Other Jurisdiction of
Name of Entity	Incorporation or Organization
99¢ Only Stores Texas, Inc.	Delaware
99¢ Only Stores	Nevada

All subsidiaries are 100% owned unless otherwise noted.

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

99¢ Only Stores

City of Commerce, California

We hereby consent to the use in the Prospectus constituting a part of this Registration Statement of our report dated July 9, 2012, relating to the consolidated financial statements and schedules and the effectiveness of internal control over financial reporting of 99¢ Only Stores, which is contained in that Prospectus.

We also consent to the reference to us under the caption “Experts” in the Prospectus.

/s/ BDO USA, LLP

BDO USA, LLP

Los Angeles, California

July 9, 2012

EX-25.1

Exhibit 25.1

File No.            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939

OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

o CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A

TRUSTEE PURSUANT TO SECTION 305(b)(2)

WILMINGTON TRUST, NATIONAL ASSOCIATION

(Exact name of trustee as specified in its charter)

16-1486454

(I.R.S. employer identification no.)

1100 North Market Street

Wilmington, DE 19890

(Address of principal executive offices)

Robert C. Fiedler

Vice President and Counsel

1100 North Market Street

Wilmington, Delaware 19890

(302) 651-8541

(Name, address and telephone number of agent for service)

99¢ ONLY STORES(1)

(Exact name of obligor as specified in its charter)

California	95-2411605
(State of incorporation)	(I.R.S. employer identification no.)
4000 East Union Pacific Avenue
City of Commerce, California	90023
(Address of principal executive offices)	(Zip Code)

11% Senior Notes due 2019

(Title of the indenture securities)

(1)  SEE TABLE OF ADDITIONAL OBLIGORS

TABLE OF ADDITIONAL OBLIGORS

Exact Name Specified in Charter*	State or other  Jurisdiction of  Organization	Primary Standard  Industrial  Classification  Number	I.R.S. Employer  Identification Number
99 Cents Only Stores	Nevada	5331	94-3391842
99 Cents Only Stores Texas, Inc.	Delaware	5331	54-2091229

*Address and telephone number of principal executive offices are the same as 99¢ Only Stores.

Item 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.

Comptroller of Currency, Washington, D.C.

Federal Deposit Insurance Corporation, Washington, D.C.

(b)Whether it is authorized to exercise corporate trust powers.

Yes.

Item  2.AFFILIATIONS WITH THE OBLIGOR.  If the obligor is an affiliate of the trustee, describe each affiliation:

Based upon an examination of the books and records of the trustee and upon information furnished by the obligor, the obligor is not an affiliate of the trustee.

Item 16.LIST OF EXHIBITS.  Listed below are all exhibits filed as part of this Statement of Eligibility and Qualification.

1.A copy of the Charter for Wilmington Trust, National Association, incorporated by reference to Exhibit 1 of Form T-1.

2.The authority of Wilmington Trust, National Association to commence business was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 of Form T-1.

3.The authorization to exercise corporate trust powers was granted under the Charter for Wilmington Trust, National Association, incorporated herein by reference to Exhibit 1 of Form T-1.

4.A copy of the existing By-Laws of Trustee, as now in effect, incorporated herein by reference to Exhibit 4 of form T-1.

5.Not applicable.

6.The consent of Trustee as required by Section 321(b) of the Trust Indenture Act of 1939, incorporated herein by reference to Exhibit 6 of Form T-1.

7.Current Report of the Condition of Trustee, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

8.Not applicable.

9.Not applicable.

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Wilmington Trust, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Minneapolis and State of Minnesota on the 9th day of July, 2012.

WILMINGTON TRUST,
NATIONAL ASSOCIATION
By:	/s/ Jane Schweiger
Name:	Jane Schweiger
Title:	Vice President

EXHIBIT 1

CHARTER OF WILMINGTON TRUST, NATIONAL ASSOCIATION

ARTICLES OF ASSOCIATION

OF

WILMINGTON TRUST, NATIONAL ASSOCIATION

For the purpose of organizing an association to perform any lawful activities of national banks, the undersigned do enter into the following articles of association:

FIRST.The title of this association shall be Wilmington Trust, National Association.

SECOND.The main office of the association shall be in the City of Wilmington, County of New Castle, State of Delaware. The general business of the association shall be conducted at its main office and its branches.

THIRD.The board of directors of this association shall consist of not less than five nor more than twenty-five persons, unless the OCC has exempted the bank from the 25-member limit. The exact number is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the association or of a holding company owning the association, with an aggregate par, fair market or equity value $1,000. Determination of these values may be based as of either (i) the date of purchase or (ii) the date the person became a director, whichever value is greater. Any combination of common or preferred stock of the association or holding company may be used.

Any vacancy in the board of directors may be filled by action of a majority of the remaining directors between meetings of shareholders. The board of directors may not increase the number of directors between meetings of shareholders to a number which:

(1) exceeds by more than two the number of directors last elected by shareholders where the number was 15 or less; or

(2) exceeds by more than four the number of directors last elected by shareholders where the number was 16 or more, but in no event shall the number of directors exceed 25, unless the OCC has exempted the bank from the 25-member limit.

Directors shall be elected for terms of one year and until their successors are elected and qualified. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director’s term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated.

Honorary or advisory members of the board of directors, without voting power or power of final decision in matters concerning the business of the association, may be appointed by

resolution of a majority of the full board of directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory directors shall not be counted to determine the number of directors of the association or the presence of a quorum in connection with any board action, and shall not be required to own qualifying shares.

FOURTH.There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefor in the bylaws, or, if that day falls on a legal holiday in the state in which the association is located, on the next following banking day. If no election is held on the day fixed, or in the event of a legal holiday on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. In all cases at least 10 days advance notice of the time, place and purpose of a shareholders’ meeting shall be given to the shareholders by first class mail, unless the OCC determines that an emergency circumstance exists. The sole shareholder of the bank is permitted to waive notice of the shareholders’ meeting.

In all elections of directors, the number of votes each common shareholder may cast will be determined by multiplying the number of shares such shareholder owns by the number of directors to be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner selected by the shareholder. If, after the first ballot, subsequent ballots are necessary to elect directors, a shareholder may not vote shares that he or she has already fully cumulated and voted in favor of a successful candidate. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held by him or her.

Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for election of directors. Nominations other than those made by or on behalf of the existing management shall be made in writing and be delivered or mailed to the president of the association not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days notice of the meeting is given to shareholders, such nominations shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder:

(1)The name and address of each proposed nominee.

(2)The principal occupation of each proposed nominee.

(3)The total number of shares of capital stock of the association that will be voted for each proposed nominee.

(4)The name and residence address of the notifying shareholder.

(5)The number of shares of capital stock of the association owned by the notifying shareholder.

Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and the vote tellers may disregard all votes cast for each such nominee. No bylaw may unreasonably restrict the nomination of directors by shareholders.

A director may resign at any time by delivering written notice to the board of directors, its chairperson, or to the association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date.

A director may be removed by shareholders at a meeting called to remove the director, when notice of the meeting stating that the purpose or one of the purposes is to remove the director is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause; provided, however, that a director may not be removed if the number of votes sufficient to elect the director under cumulative voting is voted against the director’s removal.

FIFTH.The authorized amount of capital stock of this association shall be three million (3,000,000) shares of common stock of the par value of one dollar ($1.00) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the association, whether now or hereafter authorized, or to any obligations convertible into stock of the association, issued, or sold, nor any right of subscription to any thereof other than such, if any, as the board of directors, in its discretion, may from time to time determine and at such price as the board of directors may from time to time fix. Preemptive rights also must be approved by a vote of holders of two-thirds of the bank’s outstanding voting shares.

Unless otherwise specified in these articles of association or required by law, (1) all matters requiring shareholder action, including amendments to the articles of association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share.

Unless otherwise specified in these articles of association or required by law, all shares of voting stock shall be voted together as a class, on any matters requiring shareholder approval. If a proposed amendment would affect two or more classes or series in the same or a substantially similar way, all the classes or series so affected must vote together as a single voting group on the proposed amendment.

Shares of one class or series may be issued as a dividend for shares of the same class or series on a pro rata basis and without consideration. Shares of one class or series may be issued

as share dividends for a different class or series of stock if approved by a majority of the votes entitled to be cast by the class or series to be issued, unless there are no outstanding shares of the class or series to be issued. Unless otherwise provided by the board of directors, the record date for determining shareholders entitled to a share dividend shall be the date authorized by the board of directors for the share dividend.

Unless otherwise provided in the bylaws, the record date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting.

If a shareholder is entitled to fractional shares pursuant to a stock dividend, consolidation or merger, reverse stock split or otherwise, the association may: (a) issue fractional shares; (b) in lieu of the issuance of fractional shares, issue script or warrants entitling the holder to receive a full share upon surrendering enough script or warrants to equal a full share; (c) if there is an established and active market in the association’s stock, make reasonable arrangements to provide the shareholder with an opportunity to realize a fair price through sale of the fraction, or purchase of the additional fraction required for a full share; (d) remit the cash equivalent of the fraction to the shareholder; or (e) sell full shares representing all the fractions at public auction or to the highest bidder after having solicited and received sealed bids from at least three licensed stock brokers; and distribute the proceeds pro rata to shareholders who otherwise would be entitled to the fractional shares. The holder of a fractional share is entitled to exercise the rights for shareholder, including the right to vote, to receive dividends, and to participate in the assets of the association upon liquidation, in proportion to the fractional interest. The holder of script or warrants is not entitled to any of these rights unless the script or warrants explicitly provide for such rights. The script or warrants may be subject to such additional conditions as: (1) that the script or warrants will become void if not exchanged for full shares before a specified date; and (2) that the shares for which the script or warrants are exchangeable may be sold at the option of the association and the proceeds paid to scriptholders.

The association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. Obligations classified as debt, whether or not subordinated, which may be issued by the association without the approval of shareholders, do not carry voting rights on any issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part of securities into securities of another class or series.

SIXTH.The board of directors shall appoint one of its members president of this association, and one of its members chairperson of the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors’ and shareholders’ meetings and be responsible for authenticating the records of the association, and such other officers and employees as may be required to transact the business of this association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the bylaws.

The board of directors shall have the power to:

(1)Define the duties of the officers, employees, and agents of the association.

(2)Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the association.

(3)Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law.

(4)Dismiss officers and employees.

(5)Require bonds from officers and employees and to fix the penalty thereof.

(6)Ratify written policies authorized by the association’s management or committees of the board.

(7)Regulate the manner in which any increase or decrease of the capital of the association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the association in accordance with law, and nothing shall raise or lower from two-thirds the percentage required for shareholder approval to increase or reduce the capital.

(8)Manage and administer the business and affairs of the association.

(9)Adopt initial bylaws, not inconsistent with law or the articles of association, for managing the business and regulating the affairs of the association.

(10)Amend or repeal bylaws, except to the extent that the articles of association reserve this power in whole or in part to shareholders.

(11)Make contracts.

(12)Generally perform all acts that are legal for a board of directors to perform.

SEVENTH.The board of directors shall have the power to change the location of the main office to any other place within the limits of Wilmington, Delaware, without the approval of the shareholders, or with a vote of shareholders owning two-thirds of the stock of such association for a relocation outside such limits and upon receipt of a certificate of approval from the Comptroller of the Currency, to any other location within or outside the limits of Wilmington Delaware, but not more than 30 miles beyond such limits. The board of directors shall have the power to establish or change the location of any branch or branches of the association to any other location permitted under applicable law, without approval of shareholders, subject to approval by the Comptroller of the Currency.

EIGHTH.The corporate existence of this association shall continue until termination according to the laws of the United States.

NINTH.The board of directors of this association, or any one or more shareholders owning, in the aggregate, not less than 50 percent of the stock of this association, may call a special meeting of shareholders at any time. Unless otherwise provided by the bylaws or the laws of the United States, a notice of the time, place, and purpose of every annual and special meeting of the shareholders shall be given at least 10 days prior to the meeting by first-class mail, unless the OCC determines that an emergency circumstance exists. If the association is a wholly-owned subsidiary, the sole shareholder may waive notice of the shareholders’ meeting. Unless otherwise provided by the bylaws or these articles, any action requiring approval of shareholders must be effected at a duly called annual or special meeting.

TENTH.For purposes of this Article Tenth, the term “institution-affiliated party” shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).

Any institution-affiliated party (or his or her heirs, executors or administrators) may be indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or other payments incurred. The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.

Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from

participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association. In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these articles of association and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders. To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.

In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.

In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Article Tenth have been met. If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.

To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these articles of association, (b) shall continue to exist after any restrictive amendment of these articles of association with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.

The rights of indemnification and to the advancement of expenses provided in these articles of association shall not, to the extent permitted under applicable law, be deemed

exclusive of any other rights to which any such institution affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in these articles of association, the bylaws, a resolution of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized. Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these articles of association shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.

If this Article Tenth or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Article Tenth shall remain fully enforceable.

The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these articles of association; provided, however, that no such insurance shall include coverage to pay or reimburse any institution-affiliated party for the cost of any judgment or civil money penalty assessed against such person in an administrative proceeding or civil action commenced by any federal banking agency. Such insurance may, but need not, be for the benefit of all institution-affiliated parties.

ELEVENTH. These articles of association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The association’s board of directors may propose one or more amendments to the articles of association for submission to the shareholders

EXHIBIT 4

BY-LAWS OF WILMINGTON TRUST, NATIONAL ASSOCIATION

AMENDED AND RESTATED BYLAWS

OF

WILMINGTON TRUST, NATIONAL ASSOCIATION

ARTICLE I

Meetings of Shareholders

Section 1.  Annual Meeting.  The annual meeting of the shareholders to elect directors and transact whatever other business may properly come before the meeting shall be held at the main office of the association, Rodney Square North, 1100 Market Street, City of Wilmington, State of Delaware, at 1:00 o’clock p.m. on the first Tuesday in March of each year, or at such other place and time as the board of directors may designate, or if that date falls on a legal holiday in Delaware, on the next following banking day.  Notice of the meeting shall be mailed by first class mail, postage prepaid, at least 10 days and no more than 60 days prior to the date thereof, addressed to each shareholder at his/her address appearing on the books of the association.  If, for any cause, an election of directors is not made on that date, or in the event of a legal holiday, on the next following banking day, an election may be held on any subsequent day within 60 days of the date fixed, to be designated by the board of directors, or, if the directors fail to fix the date, by shareholders representing two-thirds of the shares.  In these circumstances, at least 10 days’ notice must be given by first class mail to shareholders.

Section 2.  Special Meetings.  Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the board of directors or by any one or more shareholders owning, in the aggregate, not less than fifty percent of the stock of the association.  Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than 10 days nor more than 60 days prior to the date fixed for the meeting, to each shareholder at the address appearing on the books of the association a notice stating the purpose of the meeting.

The board of directors may fix a record date for determining shareholders entitled to notice and to vote at any meeting, in reasonable proximity to the date of giving notice to the shareholders of such meeting.  The record date for determining shareholders entitled to demand a special meeting is the date the first shareholder signs a demand for the meeting describing the purpose or purposes for which it is to be held.

A special meeting may be called by shareholders or the board of directors to amend the articles of association or bylaws, whether or not such bylaws may be amended by the board of directors in the absence of shareholder approval.

If an annual or special shareholders’ meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time or place, if the new date, time or place is announced at the meeting before adjournment, unless any additional items of business are to be considered, or the association becomes aware of an intervening event materially affecting any matter to be voted on more than 10 days prior to the date to which the meeting is adjourned.  If a new record date for the adjourned meeting is fixed, however, notice of the adjourned meeting must be given to persons who are shareholders as of the new record date.  If, however, the meeting to elect the directors is adjourned before the election takes place, at least ten days’ notice of the new election must be given to the shareholders by first-class mail.

Section 3.  Nominations of Directors.  Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the association entitled to vote for the election of directors.  Nominations, other than those made by or on behalf of the existing management of the association, shall be made in writing and shall be delivered or mailed to the president of the association and the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors; provided, however, that if less than 21 days’ notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the president of the association not later than the close of business on the seventh day following the day on which the notice of meeting was mailed.  Such notification shall contain the following information to the extent known to the notifying shareholder:

(1)The name and address of each proposed nominee;

(2)The principal occupation of each proposed nominee;

(3)The total number of shares of capital stock of the association that will be voted for each proposed nominee;

(4)The name and residence of the notifying shareholder; and

(5)The number of shares of capital stock of the association owned by the notifying shareholder.

Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the chairperson of the meeting, and upon his/her instructions, the vote tellers may disregard all votes cast for each such nominee.

Section 4.  Proxies.  Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this association shall act as proxy.  Proxies shall be valid only for one meeting, to be specified therein, and any adjournments of such meeting.  Proxies shall be dated and filed with the records of the meeting.  Proxies with facsimile signatures may be used and unexecuted proxies may be counted upon receipt of a written confirmation from the shareholder.  Proxies meeting the above requirements submitted at any time during a meeting shall be accepted.

Section 5.  Quorum.  A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law, or by the shareholders or directors pursuant to Article IX, Section 2, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice.  A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the articles of association, or by the shareholders or directors pursuant to Article IX, Section 2.  If a meeting for the election of directors is not held on the fixed date, at least 10 days’ notice must be given by first-class mail to the shareholders.

ARTICLE II

Directors

Section 1.  Board of Directors.  The board of directors shall have the power to manage and administer the business and affairs of the association.  Except as expressly limited by law, all corporate powers of the association shall be vested in and may be exercised by the board of directors.

Section 2.  Number.  The board of directors shall consist of not less than five nor more than twenty-five members, unless the OCC has exempted the bank from the 25-member limit.  The exact number within such minimum and maximum limits is to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any meeting thereof.

Section 3.  Organization Meeting.  The secretary or treasurer, upon receiving the certificate of the judges of the result of any election, shall notify the directors-elect of their election and of the time at which they are required to meet at the main office of the association, or at such other place in the cities of Wilmington, Delaware or Buffalo, New York, to organize the new board of directors and elect and appoint officers of the association for the succeeding year.  Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within 30 days thereof.  If, at the time fixed for such meeting, there shall not be a quorum, the directors present may adjourn the meeting, from time to time, until a quorum is obtained.

Section 4.  Regular Meetings.  The Board of Directors may, at any time and from time to time, by resolution designate the place, date and hour for the holding of a regular meeting, but in the absence of any such designation, regular meetings of the board of directors shall be held, without notice, on the first Tuesday of each March, June and September, and on the second Tuesday of each December at the main office or other such place as the board of directors may designate.  When any regular meeting of the board of directors falls upon a holiday, the meeting shall be held on the next banking business day unless the board of directors shall designate another day.

Section 5.  Special Meetings.  Special meetings of the board of directors may be called by the Chairman of the Board of the association, or at the request of two or more directors.  Each member of the board of directors shall be given notice by telegram, first class mail, or in person stating the time and place of each special meeting.

Section 6.  Quorum.  A majority of the entire board then in office shall constitute a quorum at any meeting, except when otherwise provided by law or these bylaws, but a lesser number may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice.  If the number of directors present at the meeting is reduced below the number that would constitute a quorum, no business may be transacted, except selecting directors to fill vacancies in conformance with Article II, Section 7.  If a quorum is present, the board of directors may take action through the vote of a majority of the directors who are in attendance.

Section 7.  Meetings by Conference Telephone.  Any one or more members of the board of directors or any committee thereof may participate in a meeting of such board or committees by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time.  Participation in a meeting by such means shall constitute presence in person at such meeting.

Section 8.  Procedures.  The order of business and all other matters of procedure at every meeting of the board of directors may be determined by the person presiding at the meeting.

Section 9.  Removal of Directors.  Any director may be removed for cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by vote of the stockholders.  Any director may be removed without cause, at any meeting of stockholders notice of which shall have referred to the proposed action, by the vote of the holders of a majority of the shares of the Corporation

entitled to vote.  Any director may be removed for cause, at any meeting of the directors notice of which shall have referred to the proposed action, by vote of a majority of the entire Board of Directors.

Section 10.  Vacancies.  When any vacancy occurs among the directors, a majority of the remaining members of the board of directors, according to the laws of the United States, may appoint a director to fill such vacancy at any regular meeting of the board of directors, or at a special meeting called for that purpose at which a quorum is present, or if the directors remaining in office constitute fewer than a quorum of the board of directors, by the affirmative vote of a majority of all the directors remaining in office, or by shareholders at a special meeting called for that purpose in conformance with Section 2 of Article I.  At any such shareholder meeting, each shareholder entitled to vote shall have the right to multiply the number of votes he or she is entitled to cast by the number of vacancies being filled and cast the product for a single candidate or distribute the product among two or more candidates.  A vacancy that will occur at a specific later date (by reason of a resignation effective at a later date) may be filled before the vacancy occurs but the new director may not take office until the vacancy occurs.

ARTICLE III

Committees of the Board

The board of directors has power over and is solely responsible for the management, supervision, and administration of the association.  The board of directors may delegate its power, but none of its responsibilities, to such persons or committees as the board may determine.

The board of directors must formally ratify written policies authorized by committees of the board of directors before such policies become effective.  Each committee must have one or more member(s), and who may be an officer of the association or an officer or director of any affiliate of the association, who serve at the pleasure of the board of directors.  Provisions of the articles of association and these bylaws governing place of meetings, notice of meeting, quorum and voting requirements of the board of directors, apply to committees and their members as well.  The creation of a committee and appointment of members to it must be approved by the board of directors.

Section 1.  Loan Committee.  There shall be a loan committee composed of not less than 2 directors, appointed by the board of directors annually or more often.  The loan committee, on behalf of the bank, shall have power to discount and purchase bills, notes and other evidences of debt, to buy and sell bills of exchange, to examine and approve loans and discounts, to exercise authority regarding loans and discounts, and to exercise, when the board of directors is not in session, all other powers of the board of directors that may lawfully be delegated.  The loan committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.

Section 2.  Investment Committee.  There shall be an investment committee composed of not less than 2 directors, appointed by the board of directors annually or more often.  The investment committee, on behalf of the bank, shall have the power to ensure adherence to the investment policy, to recommend amendments thereto, to purchase and sell securities, to exercise authority regarding investments and to exercise, when the board of directors is not in session, all other powers of the board of directors regarding investment securities that may be lawfully delegated.  The investment committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the board of directors at which a quorum is present, and any action taken by the board of directors with respect thereto shall be entered in the minutes of the board of directors.

Section 3.  Examining Committee.  There shall be an examining committee composed of not less than 2 directors, exclusive of any active officers, appointed by the board of directors annually or more often.  The duty of that committee shall be to examine at least once during each calendar year and within 15 months of the last examination the affairs of the association or cause suitable examinations to be made by auditors responsible only to the board of directors and to report the result of such examination in writing to the board of directors at the next regular meeting thereafter.  Such report shall state whether the association is in a sound condition, and whether adequate internal controls and procedures are being maintained and shall recommend to the board of directors such changes in the manner of conducting the affairs of the association as shall be deemed advisable.

Notwithstanding the provisions of the first paragraph of this section 3, the responsibility and authority of the Examining Committee may, if authorized by law, be given over to a duly constituted audit committee of the association’s parent corporation by a resolution duly adopted by the board of directors.

Section 4.  Trust Audit Committee.  There shall be a trust audit committee in conformance with Section 1 of Article V.

Section 5.  Other Committees.  The board of directors may appoint, from time to time, from its own members, compensation, special litigation and other committees of one or more persons, for such purposes and with such powers as the board of directors may determine.

However, a committee may not:

(1)Authorize distributions of assets or dividends;

(2)Approve action required to be approved by shareholders;

(3)Fill vacancies on the board of directors or any of its committees;

(4)Amend articles of association;

(5)Adopt, amend or repeal bylaws; or

(6)Authorize or approve issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares.

Section 6.  Committee Members’ Fees.  Committee members may receive a fee for their services as committee members and traveling and other out-of-pocket expenses incurred in attending any meeting of a committee of which they are a member.  The fee may be a fixed sum to be paid for attending each meeting or a fixed sum to be paid quarterly, or semiannually, irrespective of the number of meetings attended or not attended.  The amount of the fee and the basis on which it shall be paid shall be determined by the Board of Directors.

ARTICLE IV

Officers and Employees

Section 1.  Chairperson of the Board.  The board of directors shall appoint one of its members to be the chairperson of the board to serve at its pleasure.  Such person shall preside at all meetings of the

board of directors.  The chairperson of the board shall supervise the carrying out of the policies adopted or approved by the board of directors; shall have general executive powers, as well as the specific powers conferred by these bylaws; and shall also have and may exercise such further powers and duties as from time to time may be conferred upon or assigned by the board of directors.

Section 2.  President.  The board of directors shall appoint one of its members to be the president of the association.  In the absence of the chairperson, the president shall preside at any meeting of the board of directors.  The president shall have general executive powers and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice to the office of president, or imposed by these bylaws.  The president shall also have and may exercise such further powers and duties as from time to time may be conferred or assigned by the board of directors.

Section 3.  Vice President.  The board of directors may appoint one or more vice presidents.  Each vice president shall have such powers and duties as may be assigned by the board of directors.  One vice president shall be designated by the board of directors, in the absence of the president, to perform all the duties of the president.

Section 4.  Secretary.  The board of directors shall appoint a secretary, treasurer, or other designated officer who shall be secretary of the board of directors and of the association and who shall keep accurate minutes of all meetings.  The secretary shall attend to the giving of all notices required by these bylaws; shall be custodian of the corporate seal, records, documents and papers of the association; shall provide for the keeping of proper records of all transactions of the association; shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of treasurer, or imposed by these bylaws; and shall also perform such other duties as may be assigned from time to time, by the board of directors.

Section 5.  Other Officers.  The board of directors may appoint one or more assistant vice presidents, one or more trust officers, one or more assistant secretaries, one or more assistant treasurers, one or more managers and assistant managers of branches and such other officers and attorneys in fact as from time to time may appear to the board of directors to be required or desirable to transact the business of the association.  Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon or assigned to them by the board of directors, the chairperson of the board, or the president.  The board of directors may authorize an officer to appoint one or more officers or assistant officers.

Section 6.  Tenure of Office.  The president and all other officers shall hold office for the current year for which the board of directors was elected, unless they shall resign, become disqualified, or be removed; and any vacancy occurring in the office of president shall be filled promptly by the board of directors.

Section 7.  Resignation.  An officer may resign at any time by delivering notice to the association.  A resignation is effective when the notice is given unless the notice specifies a later effective date.

ARTICLE V

Fiduciary Activities

Section 1.  Trust Audit Committee.  There shall be a Trust Audit Committee composed of not less than 2 directors, appointed by the board of directors, which shall, at least once during each calendar year make suitable audits of the association’s fiduciary activities or cause suitable audits to be made by

auditors responsible only to the board, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles.  Such committee: (1) must not include any officers of the bank or an affiliate who participate significantly in the administration of the bank’s fiduciary activities; and (2) must consist of a majority of members who are not also members of any committee to which the board of directors has delegated power to manage and control the fiduciary activities of the bank.

Notwithstanding the provisions of the first paragraph of this section 1, the responsibility and authority of the Trust Audit Committee may, if authorized by law, be given over to a duly constituted audit committee of the association’s parent corporation by a resolution duly adopted by the board of directors.

Section 2.  Fiduciary Files.  There shall be maintained by the association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged.

Section 3.  Trust Investments.  Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and applicable law.  Where such instrument does not specify the character and class of investments to be made, but does vest in the association investment discretion, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under applicable law.

ARTICLE VI

Stock and Stock Certificates

Section 1.  Transfers.  Shares of stock shall be transferable on the books of the association, and a transfer book shall be kept in which all transfers of stock shall be recorded.  Every person becoming a shareholder by such transfer shall in proportion to such shareholder’s shares, succeed to all rights of the prior holder of such shares.  The board of directors may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the association with respect to stock transfers, voting at shareholder meetings and related matters and to protect it against fraudulent transfers.

Section 2. Stock Certificates.  Certificates of stock shall bear the signature of the president (which may be engraved, printed or impressed) and shall be signed manually or by facsimile process by the secretary, assistant secretary, treasurer, assistant treasurer, or any other officer appointed by the board of directors for that purpose, to be known as an authorized officer, and the seal of the association shall be engraved thereon.  Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the association properly endorsed.

The board of directors may adopt or use procedures for replacing lost, stolen, or destroyed stock certificates as permitted by law.

The association may establish a procedure through which the beneficial owner of shares that are registered in the name of a nominee may be recognized by the association as the shareholder.  The procedure may set forth:

(1)The types of nominees to which it applies;

(2)The rights or privileges that the association recognizes in a beneficial owner;

(3)How the nominee may request the association to recognize the beneficial owner as the shareholder;

(4)The information that must be provided when the procedure is selected;

(5)The period over which the association will continue to recognize the beneficial owner as the shareholder;

(6)Other aspects of the rights and duties created.

ARTICLE VII

Corporate Seal

Section 1.  Seal.  The seal of the association shall be in such form as may be determined from time to time by the board of directors.  The president, the treasurer, the secretary or any assistant treasurer or assistant secretary, or other officer thereunto designated by the board of directors shall have authority to affix the corporate seal to any document requiring such seal and to attest the same.  The seal on any corporate obligation for the payment of money may be facsimile.

ARTICLE VIII

Miscellaneous Provisions

Section 1.  Fiscal Year.  The fiscal year of the association shall be the calendar year.

Section 2.  Execution of Instruments.  All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted on behalf of the association by the chairperson of the board, or the president, or any vice president, or the secretary, or the treasurer, or, if in connection with the exercise of fiduciary powers of the association, by any of those offices or by any trust officer.  Any such instruments may also be executed, acknowledged, verified, delivered or accepted on behalf of the association in such other manner and by such other officers as the board of directors may from time to time direct.  The provisions of this section 2 are supplementary to any other provision of these bylaws.

Section 3.  Records.  The articles of association, the bylaws and the proceedings of all meetings of the shareholders, the board of directors, and standing committees of the board of directors shall be recorded in appropriate minute books provided for that purpose.  The minutes of each meeting shall be signed by the secretary, treasurer or other officer appointed to act as secretary of the meeting.

Section 4.  Corporate Governance Procedures.  To the extent not inconsistent with federal banking statutes and regulations, or safe and sound banking practices, the association may follow the Delaware General Corporation Law, Del. Code Ann. tit. 8 (1991, as amended 1994, and as amended thereafter) with respect to matters of corporate governance procedures.

Section 5.  Indemnification.  For purposes of this Section 5 of Article VIII, the term “institution-affiliated party” shall mean any institution-affiliated party of the association as such term is defined in 12 U.S.C. 1813(u).

Any institution-affiliated party (or his or her heirs, executors or administrators) may be

indemnified or reimbursed by the association for reasonable expenses actually incurred in connection with any threatened, pending or completed actions or proceedings and appeals therein, whether civil, criminal, governmental, administrative or investigative, in accordance with and to the fullest extent permitted by law, as such law now or hereafter exists; provided, however, that when an administrative proceeding or action instituted by a federal banking agency results in a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association, then the association shall require the repayment of all legal fees and expenses advanced pursuant to the next succeeding paragraph and may not indemnify such institution-affiliated parties (or their heirs, executors or administrators) for expenses, including expenses for legal fees, penalties or other payments incurred.  The association shall provide indemnification in connection with an action or proceeding (or part thereof) initiated by an institution-affiliated party (or by his or her heirs, executors or administrators) only if such action or proceeding (or part thereof) was authorized by the board of directors.

Expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding under 12 U.S.C. 164 or 1818 may be paid by the association in advance of the final disposition of such action or proceeding upon (a) a determination by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding that the institution-affiliated party (or his or her heirs, executors or administrators) has a reasonable basis for prevailing on the merits, (b) a determination that the indemnified individual (or his or her heirs, executors or administrators) will have the financial capacity to reimburse the bank in the event he or she does not prevail, (c) a determination that the payment of expenses and fees by the association will not adversely affect the safety and soundness of the association, and (d) receipt of an undertaking by or on behalf of such institution-affiliated party (or by his or her heirs, executors or administrators) to repay such advancement in the event of a final order or settlement pursuant to which such person: (i) is assessed a civil money penalty, (ii) is removed from office or prohibited from participating in the conduct of the affairs of the association, or (iii) is required to cease and desist from or to take any affirmative action described in 12 U.S.C. 1818(b) with respect to the association.  In all other instances, expenses incurred by an institution-affiliated party (or by his or her heirs, executors or administrators) in connection with any action or proceeding as to which indemnification may be given under these articles of association may be paid by the association in advance of the final disposition of such action or proceeding upon (a) receipt of an undertaking by or on behalf of such institution-affiliated party (or by or on behalf of his or her heirs, executors or administrators) to repay such advancement in the event that such institution-affiliated party (or his or her heirs, executors or administrators) is ultimately found not to be entitled to indemnification as authorized by these bylaws and (b) approval by the board of directors acting by a quorum consisting of directors who are not parties to such action or proceeding or, if such a quorum is not obtainable, then approval by stockholders.  To the extent permitted by law, the board of directors or, if applicable, the stockholders, shall not be required to find that the institution-affiliated party has met the applicable standard of conduct provided by law for indemnification in connection with such action or proceeding.

In the event that a majority of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the remaining members of the board may authorize independent legal counsel to review the indemnification request and provide the remaining members of the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met.  If independent legal counsel opines that said conditions have been met, the remaining members of the board of directors may rely on such opinion in authorizing the requested indemnification.

In the event that all of the members of the board of directors are named as respondents in an administrative proceeding or civil action and request indemnification, the board shall authorize independent legal counsel to review the indemnification request and provide the board with a written opinion of counsel as to whether the conditions delineated in the first four paragraphs of this Section 5 of Article VIII have been met.  If legal counsel opines that said conditions have been met, the board of directors may rely on such opinion in authorizing the requested indemnification.

To the extent permitted under applicable law, the rights of indemnification and to the advancement of expenses provided in these articles of association (a) shall be available with respect to events occurring prior to the adoption of these bylaws, (b) shall continue to exist after any restrictive amendment of these bylaws with respect to events occurring prior to such amendment, (c) may be interpreted on the basis of applicable law in effect at the time of the occurrence of the event or events giving rise to the action or proceeding, or on the basis of applicable law in effect at the time such rights are claimed, and (d) are in the nature of contract rights which may be enforced in any court of competent jurisdiction as if the association and the institution-affiliated party (or his or her heirs, executors or administrators) for whom such rights are sought were parties to a separate written agreement.

The rights of indemnification and to the advancement of expenses provided in these bylaws shall not, to the extent permitted under applicable law, be deemed exclusive of any other rights to which any such institution-affiliated party (or his or her heirs, executors or administrators) may now or hereafter be otherwise entitled whether contained in the association’s articles of association, these bylaws, a resolution of stockholders, a resolution of the board of directors, or an agreement providing such indemnification, the creation of such other rights being hereby expressly authorized.  Without limiting the generality of the foregoing, the rights of indemnification and to the advancement of expenses provided in these bylaws shall not be deemed exclusive of any rights, pursuant to statute or otherwise, of any such institution-affiliated party (or of his or her heirs, executors or administrators) in any such action or proceeding to have assessed or allowed in his or her favor, against the association or otherwise, his or her costs and expenses incurred therein or in connection therewith or any part thereof.

If this Section 5 of Article VIII or any part hereof shall be held unenforceable in any respect by a court of competent jurisdiction, it shall be deemed modified to the minimum extent necessary to make it enforceable, and the remainder of this Section 5 of Article VIII shall remain fully enforceable.

The association may, upon affirmative vote of a majority of its board of directors, purchase insurance to indemnify its institution-affiliated parties to the extent that such indemnification is allowed in these bylaws; provided, however, that no such insurance shall include coverage for a final order assessing civil money penalties against such persons by a bank regulatory agency.  Such insurance may, but need not, be for the benefit of all institution-affiliated parties.

ARTICLE IX

Inspection and Amendments

Section 1.  Inspection.  A copy of the bylaws of the association, with all amendments, shall at all times be kept in a convenient place at the main office of the association, and shall be open for inspection to all shareholders during banking hours.

Section 2.  Amendments.  The bylaws of the association may be amended, altered or repealed, at any regular meeting of the board of directors, by a vote of a majority of the total number of the directors except as provided below, and provided that the following language accompany any such change.

I,                                , certify that:  (1) I am the duly constituted (secretary or treasurer) of and secretary of its board of directors, and as such officer am the official custodian of its records;  (2) the foregoing bylaws are the bylaws of the association, and all of them are now lawfully in force and effect.

I have hereunto affixed my official signature on this                            day of                                .

(Secretary or Treasurer)

The association’s shareholders may amend or repeal the bylaws even though the bylaws also may be amended or repealed by the board of directors.

EXHIBIT 6

Section 321(b) Consent

Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, Wilmington Trust, National Association hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.

	WILMINGTON TRUST,
	NATIONAL ASSOCIATION
Dated: July 9, 2012	By:	/s/ Jane Schweiger
	Name: Jane Schweiger
	Title: Vice President

EXHIBIT 7

REPORT  OF  CONDITION

WILMINGTON TRUST, NATIONAL ASSOCIATION

As of the close of business on March 31, 2012:

ASSETS	Thousands of Dollars
Cash and balances due from depository institutions:	596,917
Securities:	22,187
Federal funds sold and securities purchased under agreement to resell:	0
Loans and leases held for sale:	0
Loans and leases net of unearned income, allowance:	617,823
Premises and fixed assets:	14,422
Other real estate owned:	0
Investments in unconsolidated subsidiaries and associated companies:	0
Direct and indirect investments in real estate ventures:	0
Intangible assets:	10,708
Other assets:	69,318
Total Assets:	1,331,375

LIABILITIES	Thousands of Dollars
Deposits	571,973
Federal funds purchased and securities sold under agreements to repurchase	167,200
Other borrowed money:	0
Other Liabilities:	200,773
Total Liabilities	939,946

EQUITY CAPITAL	Thousands of Dollars
Common Stock	1,000
Surplus	381,049
Retained Earnings	20,143
Accumulated other comprehensive income	(10,763	)
Total Equity Capital	391,429
Total Liabilities and Equity Capital	1,331,375

EX-99.1

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Exhibit 99.1

99¢ ONLY STORES

LETTER OF TRANSMITTAL

OFFER TO EXCHANGE
$250,000,000 PRINCIPAL AMOUNT OF 11% SENIOR NOTES DUE 2019,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), FOR ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2019

        THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                    , 2012 (THE "EXPIRATION DATE") UNLESS THE EXCHANGE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON                    , 2012. 

The Exchange Agent for the Exchange Offer is:

WILMINGTON TRUST, NATIONAL ASSOCIATION

By Registered Mail or
Overnight Carrier:
Wilmington Trust, National
Association, as Exchange Agent
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1626
Attention: Sam Hamed By Facsimile Transmission:
(302) 636-4139
 
To Confirm by Telephone:
(302) 636-6181
 
For Information Call:
(302) 636-6181 By Hand Delivery:
Wilmington Trust, National
Association, as Exchange Agent
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1626
Attention: Sam Hamed

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

        Holders of Outstanding Notes (as defined below) should complete this Letter of Transmittal either if Outstanding Notes are to be forwarded herewith or if tenders of Outstanding Notes are to be made by book-entry transfer to an account maintained by the Exchange Agent at the book-entry transfer facility specified by the holder pursuant to the procedures set forth in "The Exchange Offer—Book-Entry Delivery Procedures" and "The Exchange Offer—Procedures for Tendering Outstanding Notes" in the Prospectus (as defined below) and an "Agent's Message" (as defined below) is not delivered. If tender is being made by book-entry transfer, the holder must have an Agent's Message delivered in lieu of this Letter of Transmittal.

        Holders of Outstanding Notes whose certificates for such Outstanding Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Outstanding Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" in the Prospectus.

        Unless the context otherwise requires, the term "holder" for purposes of this Letter of Transmittal means any person in whose name Outstanding Notes are registered or any other person who has obtained a properly completed bond power from the registered holder or any person whose Outstanding Notes are held of record by The Depository Trust Company ("DTC").

        The undersigned acknowledges receipt of the Prospectus dated            , 2012 (as it may be amended or supplemented from time to time, the "Prospectus") of 99¢ Only Stores, a California corporation (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 $250,000,000 of its 11% Senior Notes due 2019 which have been registered under the Securities Act (the "Exchange Notes"), for any and all of its outstanding 11% Senior Notes due 2019 (the "Outstanding Notes"). The Outstanding Notes have CUSIP numbers 67053MAA4 and U66984AA0. The Outstanding Notes are unconditionally guaranteed (the "Old Guarantees") by certain of the Company's subsidiaries (each, a "Guarantor" and

collectively, the "Guarantors") and the Exchange Notes will be unconditionally guaranteed (the "New Guarantees") by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and this Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this Letter of Transmittal, unless the context otherwise requires and whether so expressed or not, references to the "Exchange Offer" include the Guarantors' offer to exchange the New Guarantees for the Old Guarantees, references to the "Exchange Notes" include the related New Guarantees and references to the "Outstanding Notes" include the related Old Guarantees.

        For each Outstanding Note accepted for exchange, the holder of such Outstanding Note will receive an Exchange Note having a principal amount equal to that of the surrendered Outstanding Note. The Exchange Notes will bear interest at a rate of 11% per annum, payable on June 15 and December 15 of each year. The Exchange Notes will bear different CUSIP numbers from the Outstanding Notes.

        Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus.

        YOUR BANK OR BROKER CAN ASSIST YOU IN COMPLETING THIS FORM. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT, WHOSE ADDRESS AND TELEPHONE NUMBER APPEAR ON THE FRONT PAGE OF THIS LETTER OF TRANSMITTAL.

        The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action that the undersigned desires to take with respect to the Exchange Offer.

2

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW.

        List below the Outstanding Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and aggregate principal amounts of the Outstanding Notes should be listed on a separate signed schedule affixed hereto.

All Tendering Holders Complete Box 1:
Box 1*
Description of Outstanding Notes Tendered Herewith

TYPE OF NOTE	NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)	CERTIFICATE NUMBER(S)**	AGGREGATE PRINCIPAL AMOUNT REPRESENTED	PRINCIPAL AMOUNT TENDERED***
11% Senior Notes due 2019
	Total Principal Amount of Outstanding Notes

*

If the space provided is inadequate, list the certificate numbers and principal amount of Outstanding Notes on a separate signed schedule and attach the list to this Letter of Transmittal.

**

Need not be completed by book-entry holders.

***

The minimum permitted tender is $2,000 in principal amount. All tenders must be in integral multiples of $1,000 in principal amount in excess thereof. Unless otherwise indicated in this column, the holder will be deemed to have tendered the full aggregate principal amount represented by such Outstanding Notes. See instruction 2.

Box 2
Book-Entry Transfer

o

CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

        Name of Tendering Institution:

        Account Number:

        Transaction Code Number:

        Holders of Outstanding Notes that are tendering by book-entry transfer to the Exchange Agent's account at DTC can execute the tender through DTC's Automated Tender Offer Program ("ATOP") for which the transaction will be eligible. DTC participants that are accepting the Exchange Offer must transmit their acceptances to DTC, which will verify the acceptance and execute a book-entry delivery to the Exchange Agent's account at DTC. DTC will then send a computer-generated message (an "Agent's Message") to the Exchange Agent for its acceptance in which the holder of the Outstanding Notes acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, and the DTC participant confirms on behalf of itself and the beneficial owners of such Outstanding Notes all provisions of this Letter of Transmittal (including any representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent. Each DTC participant transmitting an acceptance of the Exchange Offer

3

through the ATOP procedures will be deemed to have agreed to be bound by the terms of this Letter of Transmittal. Delivery of an Agent's Message by DTC will satisfy the terms of the Exchange Offer as to execution and delivery of a Letter of Transmittal by the participant identified in the Agent's Message. DTC participants may also accept the Exchange Offer by submitting a Notice of Guaranteed Delivery through ATOP.

Box 3
Notice of Guaranteed Delivery
(See Instruction 1)

o

CHECK HERE IF TENDERED OUTSTANDING NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

        Name(s) of Registered Holder(s):

        Window Ticket Number (if any):

        Name of Eligible Guarantor Institution that Guaranteed Delivery:

        Date of Execution of Notice of Guaranteed Delivery:

        IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER:

        Name of Tendering Institution:

        Account Number:

        Transaction Code Number:

Box 4
Return of Non-Exchanged Outstanding Notes
Tendered by Book-Entry Transfer

o

CHECK HERE IF OUTSTANDING NOTES TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OUTSTANDING NOTES ARE TO BE RETURNED BY CREDITING THE ACCOUNT NUMBER SET FORTH ABOVE.

4

Box 5
Participating Broker-Dealer

o

CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OUTSTANDING NOTES FOR YOUR OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE TEN (10) ADDITIONAL COPIES OF THE PROSPECTUS AND OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

        Name:

        Address:

        If the undersigned is not a broker-dealer, the undersigned represents that it is acquiring the Exchange Notes in the ordinary course of business and has no arrangement or understanding with any person to participate in a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Outstanding Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale or transfer of such Exchange Notes received pursuant to the Exchange Offer; 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. A broker-dealer may not participate in the Exchange Offer with respect to Outstanding Notes acquired other than as a result of market-making activities or other trading activities. Any broker-dealer who purchased Outstanding Notes from the Company to resell pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act must comply with the registration and prospectus delivery requirements under the Securities Act.

5

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 the Outstanding Notes indicated above. Subject to, and effective upon, the acceptance for exchange of all or any portion of the Outstanding Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the applicable Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby exchanges, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to such Outstanding Notes as are being tendered herewith.

        The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its true and lawful agent and attorney-in-fact of the undersigned (with full knowledge that the Exchange Agent also acts as the agent of the Company, in connection with the Exchange Offer) with respect to the tendered Outstanding Notes, with full power of substitution and resubstitution (such power of attorney being deemed an irrevocable power coupled with an interest) to (1) deliver certificates representing such Outstanding Notes, or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility specified by the holder(s) of the Outstanding Notes, together, in each such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, (2) present and deliver such Outstanding Notes for transfer on the books of the Company and (3) receive all benefits or otherwise exercise all rights and incidents of beneficial ownership of such Outstanding Notes, all in accordance with the terms of the Exchange Offer.

        The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, exchange, assign and transfer the Outstanding Notes tendered hereby, (b) when such tendered Outstanding Notes are accepted for exchange, the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and (c) the Outstanding Notes tendered for exchange are not subject to any adverse claims or proxies when accepted by the Company.

        The undersigned hereby further represents that any Exchange Notes acquired in exchange for Outstanding Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, that neither the holder of such Outstanding Notes nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes, and that neither the holder of such Outstanding Notes nor any such other person is an "affiliate," as such term is defined in Rule 405 under the Securities Act, of the Company or any Guarantor. If the undersigned is a person in the United Kingdom, the undersigned represents that its ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business.

        The undersigned also acknowledges that these Exchange Offer are being made based on the Company's understanding of an interpretation by the staff of the Securities and Exchange Commission (the "SEC") as set forth in no-action letters issued to third parties, including Morgan Stanley & Co. Incorporated (available June 5, 1991), Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC's letter to Shearman & Sterling, dated July 2, 1993, or similar no-action letters, that the Exchange Notes issued in exchange for the Outstanding Notes pursuant to the Exchange Offer may be offered for resale, resold and otherwise transferred by each holder thereof (other than a broker-dealer who acquires such Exchange Notes directly from the Company for resale pursuant to Rule 144A under the Securities Act or any other available exemption under the Securities Act or any such holder that is an "affiliate" of the Company or the Guarantors within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such Exchange Notes are acquired in the ordinary course of such

6

holder's business and such holder is not engaged in, and does not intend to engage in, a distribution of such Exchange Notes and has no arrangement or understanding with any person to participate in the distribution of such Exchange Notes. If a holder of the Outstanding Notes is an affiliate of the Company or the Guarantors, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such holder (x) may not rely on the applicable interpretations of the staff of the SEC and (y) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any secondary resale transaction. If the undersigned is a broker-dealer that will receive the Exchange Notes for its own account in exchange for the Outstanding Notes, it represents that the Outstanding Notes to be exchanged for the Exchange Notes were acquired by it for its own account as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale or transfer of such Exchange Notes received pursuant to the Exchange Offer; 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 will, upon request, execute and deliver any additional documents deemed by the Company or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the tendered Outstanding Notes or transfer ownership of such Outstanding Notes on the account books maintained by the book-entry transfer facility. The undersigned further agrees that acceptance of any and all validly tendered Outstanding Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Registration Rights Agreement, dated as of December 29, 2011, as amended by the counterpart signature page to the Registration Rights Agreement, dated as of January 13, 2012, among the Company, the Guarantors and RBC Capital Markets, LLC, as representative of the Initial Purchasers (the "Registration Rights Agreement") governing each series of Outstanding Notes, and that the Company shall have no further obligations or liabilities thereunder except as provided in Section 6 of the Registration Rights Agreement. The undersigned will comply with its obligations under the applicable Registration Rights Agreement.

        The Exchange Offer is subject to certain conditions as set forth in the Prospectus under the caption "The Exchange Offer—Conditions to the Exchange Offer." The undersigned recognizes that as a result of these conditions (which may be waived, in whole or in part, by the Company), as more particularly set forth in the Prospectus, the Company may not be required to exchange any of the Outstanding Notes tendered hereby and, in such event, the Outstanding Notes not exchanged will be returned to the undersigned at the address shown above, promptly following the expiration or termination of the Exchange Offer. In addition, the Company may amend the Exchange Offer at any time prior to the Expiration Date if any of the conditions set forth under "The Exchange Offer—Conditions to the Exchange Offer" occur.

        All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, administrators, trustees in bankruptcy and legal representatives of the undersigned. Tendered Outstanding Notes may be withdrawn at any time prior to the Expiration Date in accordance with the procedures set forth in the terms of this Letter of Transmittal.

        Unless otherwise indicated herein in the box entitled "Special Registration Instructions" below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of the Outstanding Notes, please credit the account indicated above. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below,

7

please send the Exchange Notes (and, if applicable, substitute certificates representing the Outstanding Notes for any Outstanding Notes not exchanged) to the undersigned at the address shown above in the box entitled "Description of Outstanding Notes Tendered Herewith."

THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OUTSTANDING NOTES TENDERED HEREWITH" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OUTSTANDING NOTES AS SET FORTH IN SUCH BOX.

Box 6
Special Registration Instructions
(See Instructions 4 and 5)

        To be completed ONLY if (i) certificates for Outstanding Notes in a principal amount not tendered are to be issued in the name of, or Exchange Notes issued pursuant to the Exchange Offer are to be issued in the name of, someone other than the person or persons whose name(s) appear(s) within this Letter of Transmittal or issued to an address different from that shown in the box entitled "Description of Outstanding Notes Tendered Herewith" within this Letter of Transmittal, (ii) Outstanding Notes not tendered, but represented by certificates tendered by this Letter of Transmittal, are to be returned by credit to an account maintained at DTC other than the account indicated above or (iii) Exchange Notes issued pursuant to the Exchange Offer are to be issued by book-entry transfer to an account maintained at DTC other than the account indicated above.

Issue: o Outstanding Notes not tendered to:
o Exchange Notes to:

Name(s):
	(Please Print or Type)

Address:
	(Include Zip Code)

Daytime Area Code and Telephone Number:

Taxpayer Identification or Social Security Number:

DTC Account Number:

8

Box 7
Special Delivery Instructions
(See Instructions 4 and 5)

        To be completed ONLY if certificates for Outstanding Notes in a principal amount not tendered, or Exchange Notes, are to be sent to someone other than the person or persons whose name(s) appear(s) within this Letter of Transmittal to an address different from that shown in the box entitled "Description of Outstanding Notes Tendered Herewith" within this Letter of Transmittal.

Issue: o Outstanding Notes not tendered to:
o Exchange Notes to:

Name(s):
	(Please Print or Type)

Address:
	(Include Zip Code)

Daytime Area Code and Telephone Number:

Taxpayer Identification or Social Security Number:

9

Box 8
Tendering Holders Sign Here
(Complete accompanying substitute form W-9)

        Must be signed by the registered holder(s) (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of the Outstanding Notes exactly as their name(s) appear(s) on the Outstanding Notes hereby tendered or by any person(s) authorized to become the registered holder(s) by properly completed bond powers or endorsements and documents transmitted herewith. If 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, please set forth the full title of such person. See Instruction 4.

(Signature(s) of Holder(s))

Date:

Name(s):
	(Please Print or Type)

Capacity (full title):

Address:
	(Include Zip Code)

Daytime Area Code and Telephone Number:

Taxpayer Identification or Social Security Number:

10

Guarantee of Signatures
(If Required—See Instruction 4)

Authorized Signature:

Date:

Name:
	(Please Print or Type)

Title:

Name of Firm:

Capacity (full title):

Address of Firm:
	(Include Zip Code)

Daytime Area Code and Telephone Number:

Taxpayer Identification or Social Security Number:

11

PAYER'S NAME: GENERAL NUTRITION CENTERS, INC.
SUBSTITUTE Form W-9 Department of the Treasury Internal Revenue Service Payer's Request for Taxpayer Identification Number (TIN)	In Part I—PLEASE PROVIDE YOUR TIN IN THE BOX AT THE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Name Business Name (if different) Please check appropriate box:     o    Individual/Sole Proprietor     o    Corporation     o    Partnership     o    Other:                                            Address City, State, and Zip Code	Part I—Social Security Number OR Employer Identification Number (If awaiting TIN, write "Applied For") Part II—For Payees exempt from backup withholding, see the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9, check the exempt box below and complete the Form W-9. Exempt o Part III—Awaiting TIN—If you have not been issued a TIN but have applied for one, or intend to apply for one in the near future, please check the box provided and certify by signing and dating Part IV and the "CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER" below. Awaiting TIN  o

Part IV Certification—Under penalties of perjury, I certify that:
(1)	The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me),
(2)	I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding,
(3)	I am a U.S. person (including a U.S. Resident alien), and
(4)	all other information provided on this form is true, correct and complete in all material respects.
Certification Instructions—You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9).

SIGNATURE:
DATE:
, 2012

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YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART III OF THE 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 that I mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office (or 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 payer, the payer is required to withhold up to 28% of all reportable payments made to me.
Signature:	Date:

NOTE:

FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF A STATUTORILY IMPOSED PERCENTAGE (CURRENTLY 28%) OF ANY REPORTABLE PAYMENTS MADE TO YOU WITH RESPECT TO THE EXCHANGE NOTES ISSUED 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.

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9

***Guidelines for Determining the Proper Identification Number for the payee (You) to Give the Payer.—Social security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employee 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. All "Section" references are to the Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue Service.

For this type of account:			Give the SOCIAL SECURITY number of—
1.	Individual		The individual
2.	Two or more individuals (joint account)		The actual owner of the or, if combined account fund, the first individual on the account(1)
3.	Custodian account of a minor (Uniform Gift to Minors Act)		The minor(2)
4.	a.	The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)
	b.	So-called trust that is not a legal or valid trust under state law	The actual owner(1)
5.	Sole proprietorship or single-owner LLC		The owner(3)

For this type of account:		Give the EMPLOYER IDENTIFICATION number of
6.	Sole proprietorship or single-owner LLC	The owner(3)
7.	A valid trust, estate, or pension trust	The legal entity(4)
8.	Corporate or LLC electing corporate status on Form 8832	The corporation
9.	Association, club, religious, charitable, educational, or other tax-exempt organization	The organization
10.	Partnership or multi-member LLC	The partnership
11.	A broker or registered nominee	The broker or nominee
12.	Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments	The public entity

(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 the minor's social security number.

(3)

You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number or your employer identification number (if you have one). If you are a sole proprietor, the IRS encourages you to use your social security number.

(4)

List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

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.

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9

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 Card (for resident individuals) or Form SS-4, Application for Employer Identification Number (for businesses and all other entities), or Form W-7, Application for IRS Individual Taxpayer Identification Number (for resident alien individuals required to file U.S. tax returns). You may obtain Form SS-5 from your local Social Security Administration Office, online at www.socialsecurity.gov, or by calling 1-800-772-1213, and Forms SS-4 and W-7 from the IRS by calling 1-800-TAX-FORM or from the IRS's Internet Web Site at www.irs.gov.

        To complete Substitute Form W-9 if you do not have a TIN, check the "Applied For" box in Part I, sign and date the form, and give it to the payer. Generally, you will then have 60 days to obtain a TIN and furnish it to the payer. If the payer does not receive your TIN prior to payment, backup withholding, if applicable, will begin and will continue until you furnish your TIN to the payer. Note: Checking "Applied For" means that you have already applied for a TIN OR that you intend to apply for one soon.

Payees Exempt from Backup Withholding

Payees specifically exempted from backup withholding on all payments include:

•

An organization exempt from tax under Section 501(a), an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

•

The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly-owned agency or instrumentality of any one or more of the foregoing.

•

An international organization or any agency or instrumentality thereof.

•

A foreign government and any political subdivision, agency or instrumentality thereof.

Other Payees that may be exempt from backup withholding include:

•

A corporation.

•

A financial institution.

•

A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

•

A real estate investment trust.

•

A common trust fund operated by a bank under Section 584(a).

•

An entity registered at all times during the tax year under the Investment Company Act of 1940.

•

A middleman known in the investment community as a nominee or custodian.

•

A futures commission merchant registered with the Commodity Futures Trading Commission.

•

A foreign central bank of issue.

•

A trust exempt from tax under Section 664 or described in Section 4947.

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        Exempt payees described above must file Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER IN PART I, WRITE "EXEMPT" IN PART II OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

        Certain payments that are exempt from information reporting are also exempt from backup withholding. For details, see the regulations under sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N and their regulations.

Privacy Act Notice.—Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and to help verify the accuracy of your tax return. The IRS also may provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia and U.S. federal possessions to carry out their tax laws. The IRS may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism.

        You must provide your taxpayer identification number whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to payer. Certain penalties may also apply.

Penalties

(1)

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 Withholding.—If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(3)

Criminal Penalty for Falsifying Information.—Willfully 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.

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

General

        Please do not send certificates for Outstanding Notes directly to the Company. Your certificates for Outstanding Notes, together with your signed and completed Letter of Transmittal and any required supporting documents, should be mailed or otherwise delivered to the Exchange Agent at the address set forth on the first page hereof. The method of delivery of Outstanding Notes, this Letter of Transmittal and all other required documents is at your sole option and risk 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, or overnight or hand delivery service is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

        1.    Delivery of this Letter of Transmittal and Certificates; Guaranteed Delivery Procedures.    A holder of Outstanding Notes (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) may tender the same by (i) properly completing and signing this Letter of Transmittal or a facsimile hereof (all references in the Prospectus to the Letter of Transmittal shall be deemed to include a facsimile thereof) and delivering the same, together with the certificate or certificates, if applicable, representing the Outstanding Notes being tendered and any required signature guarantees and any other documents required by this Letter of Transmittal, to the Exchange Agent at its address set forth above on or prior to the Expiration Date, (ii) complying with the procedure for book-entry transfer described below or (iii) complying with the guaranteed delivery procedures described below.

        Holders who wish to tender their Outstanding Notes and (i) whose Outstanding Notes are not immediately available or (ii) who cannot deliver their Outstanding Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot comply with the book-entry transfer procedures on a timely basis, must tender their Outstanding Notes pursuant to the guaranteed delivery procedure set forth in "The Exchange Offer—Guaranteed Delivery Procedures" in the Prospectus and by completing Box 3. Holders may tender their Outstanding Notes if: (i) the tender is made by or through an Eligible Guarantor Institution (as defined below); (ii) the Exchange Agent receives (by facsimile transmission, mail or hand delivery), on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form provided with this Letter of Transmittal that (a) sets forth the name and address of the holder of Outstanding Notes, if applicable, the certificate number(s) of the Outstanding Notes to be tendered and the principal amount of Outstanding Notes tendered; (b) states that the tender is being made thereby; and (c) guarantees that, within three New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal, or a facsimile thereof, together with the Outstanding Notes or a book-entry confirmation, and any other documents required by the Letter of Transmittal, will be deposited by the Eligible Guarantor Institution with the Exchange Agent; or (iii) the Exchange Agent receives a properly completed and executed Letter of Transmittal, or facsimile thereof and the certificate(s) representing all tendered Outstanding Notes in proper form or a confirmation of book-entry transfer of the Outstanding Notes into the Exchange Agent's account at the appropriate book-entry transfer facility and all other documents required by this Letter of Transmittal within three New York Stock Exchange trading days after the Expiration Date.

        Any Holder who wishes to tender Outstanding Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery relating to such Outstanding Notes prior to the Expiration Date. 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 procedures.

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        No alternative, conditional, irregular or contingent tenders will be accepted. Each tendering holder, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Outstanding Notes for exchange.

        2.    Partial Tenders; Withdrawals.    Tenders of Outstanding Notes will be accepted only in the principal amount with a minimum denomination of $2,000 and integral multiples of $1,000 in excess thereof. If less than the entire principal amount of Outstanding Notes evidenced by a submitted certificate is tendered, the tendering holder(s) must fill in the aggregate principal amount of Outstanding Notes tendered in the column entitled "Description of Outstanding Notes Tendered Herewith" in Box 1 above. A newly issued certificate for the Outstanding Notes submitted but not tendered will be sent to such holder promptly after the Expiration Date, unless otherwise provided in the appropriate box on this Letter of Transmittal. All Outstanding Notes delivered to the Exchange Agent will be deemed to have been tendered in full unless otherwise clearly indicated. Outstanding Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date, after which tenders of Outstanding Notes are irrevocable.

        To be effective with respect to the tender of Outstanding Notes, a written notice of withdrawal (which may be by telegram, telex, facsimile or letter) must: (i) be received by the Exchange Agent at the address for the Exchange Agent set forth above before the Company notifies the Exchange Agent that it has accepted the tender of Outstanding Notes pursuant to the Exchange Offer; (ii) specify the name of the person who tendered the Outstanding Notes to be withdrawn; (iii) identify the Outstanding Notes to be withdrawn (including the principal amount of such Outstanding Notes, or, if applicable, the certificate numbers shown on the particular certificates evidencing such Outstanding Notes and the principal amount of Outstanding Notes represented by such certificates); (iv) include a statement that such holder is withdrawing its election to have such Outstanding Notes exchanged; (v) specify the name in which any such Outstanding Notes are to be registered, if different from that of the withdrawing holder; and (vi) be signed by the holder in the same manner as the original signature on this Letter of Transmittal (including any required signature guarantee). The Exchange Agent will return the properly withdrawn Outstanding Notes promptly following receipt of notice of withdrawal. If Outstanding Notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn Outstanding Notes or otherwise comply with the book-entry transfer facility's procedures. All questions as to the validity, form and eligibility of notices of withdrawals, including time of receipt, will be determined by the Company, and such determination will be final and binding on all parties.

        Any Outstanding Notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer. Any Outstanding Notes which have been tendered for exchange but which are not accepted for exchange for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Outstanding Notes tendered by book-entry transfer into the Exchange Agent's account at the book entry transfer facility pursuant to the book-entry transfer procedures described above, such Outstanding Notes will be credited to an account with such book-entry transfer facility specified by the holder) promptly after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Outstanding Notes may be retendered by following one of the procedures described under the caption "The Exchange Offer—Procedures for Tendering Outstanding Notes" in the Prospectus at any time prior to the Expiration Date.

        Neither the Company, any affiliate or assigns of the Company, the Exchange Agent nor any other person will be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give such notification (even if such notice is given to other persons).

        3.    Beneficial Owner Instructions.    Only a holder of Outstanding Notes (i.e., a person in whose name Outstanding Notes are registered on the books of the registrar or, or, in the case of Outstanding Notes held through book-entry, such book-entry transfer facility specified by the holder), or the legal

18

representative or attorney-in-fact of a holder, may execute and deliver this Letter of Transmittal. Any beneficial owner of Outstanding Notes who wishes to accept the Exchange Offer must arrange promptly for the appropriate holder to execute and deliver this Letter of Transmittal on his or her behalf through the execution and delivery to the appropriate holder of the "Instructions to Registered Holder from Beneficial Owner."

        4.    Signature on this Letter of Transmittal; Written Instruments and Endorsements; Guarantee of Signatures.    If this Letter of Transmittal is signed by the registered holder(s) (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) of the Outstanding Notes tendered hereby, the signature must correspond exactly with the name(s) as written on the face of the certificates (or on such security listing) without alteration, addition, enlargement or any change whatsoever.

        If any of the Outstanding Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

        If a number of Outstanding Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal (or facsimiles thereof) as there are different registrations of Outstanding Notes.

        When this Letter of Transmittal is signed by the registered holder(s) of Outstanding Notes (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) listed and tendered hereby, no endorsements of certificates or separate written instruments of transfer or exchange are required. If, however, this Letter of Transmittal is signed by a person other than the registered holder(s) of the Outstanding Notes listed or the Exchange Notes are to be issued, or any untendered Outstanding Notes are to be reissued, to a person other than the registered holder(s) of the Outstanding Notes, such Outstanding Notes must be endorsed or accompanied by separate written instruments of transfer or exchange in form satisfactory to the Company and duly executed by the registered holder, in each case signed exactly as the name or names of the registered holder(s) appear(s) on the Outstanding Notes and the signatures on such certificates must be guaranteed by an Eligible Guarantor Institution. If this Letter of Transmittal, any certificates or separate written instruments of transfer or exchange 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, submit proper evidence satisfactory to the Company, in its sole discretion, of such persons' authority to so act.

Endorsements on certificates for the Outstanding Notes or signatures on bond powers required by this Instruction 4 must be guaranteed by 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 another "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (an "Eligible Guarantor Institution").

Signatures on this Letter of Transmittal must be guaranteed by an Eligible Guarantor Institution, unless Outstanding Notes are tendered: (i) by a registered holder (which term, for the purposes described herein, shall include the book-entry transfer facility whose name appears on a security listing as the owner of the Outstanding Notes) who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on this Letter of Transmittal; or (ii) for the account of an Eligible Guarantor Institution.

        5.    Special Registration and Delivery Instructions.    Tendering holders should indicate, in the applicable Box 6 or Box 7, the name and address in/to which the Exchange Notes and/or certificates for Outstanding Notes not exchanged are to be issued or sent, if different from the name(s) and address(es) of the person signing this Letter of Transmittal. In the case of issuance in a different name, the tax identification number or social security number of the person named must also be indicated. A

19

holder tendering the Outstanding Notes by book-entry transfer may request that the Outstanding Notes not exchanged be credited to such account maintained at the book-entry transfer facility as such holder may designate. See Box 4.

        If no such instructions are given, the Exchange Notes (and any Outstanding Notes not tendered or not accepted) will be issued in the name of and sent to the holder signing this Letter of Transmittal or deposited into such holder's account at the applicable book-entry transfer facility.

        6.    Transfer Taxes.    The Company shall pay all transfer taxes, if any, applicable to the transfer and exchange of the Outstanding Notes to it or its order pursuant to the Exchange Offer. If, however, the Exchange Notes are delivered to or issued in the name of a person other than the registered holder, or if a transfer tax is imposed for any reason other than the transfer and exchange of Outstanding Notes to the Company or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith the amount of such transfer taxes will be billed directly to such tendering holder.

        Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Outstanding Notes listed in this Letter of Transmittal.

        7.    Waiver of Conditions.    The Company reserves the absolute right to waive, in whole or in part, any of the conditions to the Exchange Offer set forth in the Prospectus.

        8.    Mutilated, Lost, Stolen or Destroyed Securities.    Any holder whose Outstanding Notes have been mutilated, lost, stolen or destroyed, should promptly contact the Exchange Agent at the address set forth on the first page hereof for further instructions. The holder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificate(s) have been completed.

        9.    No Conditional Tenders; No Notice of Irregularities.    No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Outstanding Notes for exchange. The Company reserves the right, in its reasonable judgment, to waive any defects, irregularities or conditions of tender as to particular Outstanding Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Outstanding Notes must be cured within such time as the Company shall determine. Although the Company intends to notify holders of defects or irregularities with respect to tenders of Outstanding Notes, neither the Company, the Exchange Agent nor any other person is under any obligation to give such notice nor shall they incur any liability for failure to give such notification. Tenders of Outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Outstanding 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 will be returned by the Exchange Agent to the tendering holder promptly following the Expiration Date.

        10.    Requests for Assistance or Additional Copies.    Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent at the address and telephone number set forth on the first page hereof.

IMPORTANT:    THIS LETTER OF TRANSMITTAL OR A FACSIMILE OR COPY THEREOF (TOGETHER WITH CERTIFICATES OF OUTSTANDING NOTES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE.

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IMPORTANT TAX INFORMATION

        Under U.S. federal income tax law, reportable payments made with respect to the Exchange Notes issued to a tendering holder of Outstanding Notes whose Outstanding Notes are accepted for exchange may be subject to backup withholding unless the tendering holder of Outstanding Notes provides The Bank of New York as Paying Agent (the "Paying Agent"), with either (i) such holder's correct taxpayer identification number ("TIN") on the Substitute Form W-9 attached hereto, certifying (A) that the TIN provided on Substitute Form W-9 is correct (or that such tendering holder of Outstanding Notes is awaiting a TIN), (B) that the tendering holder of Outstanding Notes is not subject to backup withholding because (x) such tendering holder of Outstanding Notes is exempt from backup withholding, (y) such tendering holder of Outstanding Notes has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of a failure to report all interest or dividends or (z) the Internal Revenue Service has notified the tendering holder of Outstanding Notes that he or she is no longer subject to backup withholding and (C) that the tendering holder of Outstanding Notes is a U.S. person (including a U.S. resident alien); or (ii) an adequate basis for exemption from backup withholding. If such tendering holder of Outstanding Notes is an individual, the TIN is such holder's social security number. If the Paying Agent is not provided with the correct TIN, the tendering holder of Outstanding Notes may also be subject to certain penalties imposed by the Internal Revenue Service and any reportable payments that are made to such holder may be subject to backup withholding (see below).

        Certain tendering holders of Outstanding Notes (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. However, exempt tendering holders of Outstanding Notes should indicate their exempt status on the Substitute Form W-9. For example, a corporation should complete the Substitute Form W-9, providing its TIN and indicating that it is exempt from backup withholding in Part II of the Substitute Form W-9. In order for a foreign individual to qualify as an exempt recipient, the holder must submit a Form W-8BEN, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8BEN can be obtained from the Paying Agent. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. Holders are encouraged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements.

        If backup withholding applies, the Paying Agent is required to withhold 28% of any reportable payments made to the tendering holder of Outstanding Notes or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service, provided the required information is furnished. The Paying Agent cannot refund amounts withheld by reason of backup withholding.

        A holder who does not have a TIN may check the box in Part III of the Substitute Form W-9 if the tendering holder of Outstanding Notes has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part III is checked, the tendering holder of Outstanding Notes or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below (the Part IV Certification) in order to avoid backup withholding. Notwithstanding that the box in Part III is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Paying Agent will withhold 28% of all reportable payments made prior to the time a properly certified TIN is provided to the Paying Agent and, if the Paying Agent is not provided with a TIN within 60 days, such amounts will be paid over to the Internal Revenue Service. The tendering holder of Outstanding Notes is required to give the Paying Agent the TIN (e.g., social security number or employer identification number) of the record owner of the Exchange Notes. If the Exchange Notes will be in more than one name or will not be in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report.

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QuickLinks

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW.
All Tendering Holders Complete Box 1: Box 1* Description of Outstanding Notes Tendered Herewith
Box 2 Book-Entry Transfer
Box 3 Notice of Guaranteed Delivery (See Instruction 1)
Box 4 Return of Non-Exchanged Outstanding Notes Tendered by Book-Entry Transfer
Box 5 Participating Broker-Dealer
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Box 6 Special Registration Instructions (See Instructions 4 and 5)
Box 7 Special Delivery Instructions (See Instructions 4 and 5)
Box 8 Tendering Holders Sign Here (Complete accompanying substitute form W-9)
Guarantee of Signatures (If Required—See Instruction 4)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
IMPORTANT TAX INFORMATION

EX-99.2

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Exhibit 99.2

99¢ ONLY STORES

OFFER TO EXCHANGE
$250,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11% SENIOR NOTES DUE 2019, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), FOR ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2019

, 2012

To Brokers, Dealers, Commercial Banks,
Trust Companies and other Nominees:

        As described in the enclosed Prospectus, dated                , 2012 (as the same may be amended or supplemented from time to time, the "Prospectus"), and Letter of Transmittal (the "Letter of Transmittal"), 99¢ Only Stores, a California corporation (the "Company") is offering to exchange (the "Exchange Offer") an aggregate principal amount of up to $250,000,000 of its 11% Senior Notes due 2019, which have been registered under the Securities Act (the "Exchange Notes"), for any and all of its outstanding 11% Senior Notes due 2019 (the "Outstanding Notes") in integral multiples of $1,000, with a minimum permitted tender of $2,000, upon the terms and subject to the conditions of the enclosed Prospectus and related Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof. The Outstanding Notes are unconditionally guaranteed (the "Old Guarantees") by certain of the Company's subsidiaries (each, a "Guarantor" and collectively, the "Guarantors"), and the Exchange Notes will be unconditionally guaranteed (the "New Guarantees") by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the "Exchange Offer" include the Guarantors' offer to exchange the New Guarantees for the Old Guarantees, references to the "Exchange Notes" include the related New Guarantees and references to the "Outstanding Notes" include the related Old Guarantees. The Company will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

WE URGE YOU TO PROMPTLY CONTACT YOUR CLIENTS FOR WHOM YOU HOLD OUTSTANDING NOTES REGISTERED IN YOUR NAME OR IN THE NAME OF YOUR NOMINEE. PLEASE BRING THE EXCHANGE OFFER TO THEIR ATTENTION AS PROMPTLY AS POSSIBLE.

        Enclosed are copies of the following documents:

1.

The Prospectus;



2.

The Letter of Transmittal for your use in connection with the tender of Outstanding Notes and for the information of your clients, including a Substitute Form W-9 and Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 (providing information relating to U.S. federal income tax backup withholding);



3.

A form of Notice of Guaranteed Delivery; and



4.

A form of letter, including a letter of instructions to a registered holder from a beneficial owner, which you may use to correspond with your clients for whose accounts you hold Outstanding Notes that are registered in your name or the name of your nominee, with space provided for obtaining such clients' instructions regarding the Exchange Offer.

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        Your prompt action is requested. Please note that the Exchange Offer will expire at 5:00 p.m., New York City time, on                , 2012 (the "Expiration Date"), unless the Company otherwise extends the Exchange Offer.

        To participate in the Exchange Offer, certificates for Outstanding Notes, together with a duly executed and properly completed Letter of Transmittal or facsimile thereof, or a timely confirmation of a book-entry transfer of such Outstanding Notes into the account of Wilmington Trust, National Association (the "Exchange Agent"), at the book-entry transfer facility, with any required signature guarantees, and any other required documents, must be received by the Exchange Agent by the Expiration Date as indicated in the Prospectus and the Letter of Transmittal.

        The Company will not pay any fees or commissions to any broker or dealer or to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of the Outstanding Notes pursuant to the Exchange Offer. However, the Company will pay or cause to be paid any transfer taxes, if any, applicable to the tender of the Outstanding Notes to it or its order, except as otherwise provided in the Prospectus and Letter of Transmittal.

        If holders of the Outstanding Notes wish to tender, but it is impracticable for them to forward their Outstanding Notes prior to the Expiration Date 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 and in the Letter of Transmittal. Any inquiries you may have with respect to the Exchange Offer should be addressed to the Exchange Agent at its address and telephone number set forth in the enclosed Prospectus and Letter of Transmittal. Additional copies of the enclosed materials may be obtained from the Exchange Agent.

Very truly yours,

99¢ ONLY STORES

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM IN CONNECTION WITH THE EXCHANGE OFFER, OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS EXPRESSLY CONTAINED THEREIN.

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Exhibit 99.2

EX-99.3

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Exhibit 99.3

99¢ ONLY STORES

OFFER TO EXCHANGE
$250,000,000 AGGREGATE PRINCIPAL AMOUNT OF 11% SENIOR NOTES DUE 2019,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), FOR ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2019

                    , 2012

To Our Clients:

        Enclosed for your consideration are a Prospectus, dated                    , 2012 (as the same may be amended or supplemented from time to time, the "Prospectus"), and Letter of Transmittal (the "Letter of Transmittal") relating to the offer (the "Exchange Offer") by 99¢ Only Stores, a California corporation (the "Company") to exchange an aggregate principal amount of up to $250,000,000 of its 11% Senior Notes due 2019 which have been registered under the Securities Act (the "Exchange Notes"), for any and all of its outstanding 11% Senior Notes due 2019 (the "Outstanding Notes") in integral multiples of $1,000, with a minimum permitted tender of $2,000, upon the terms and subject to the conditions of the enclosed Prospectus and related Letter of Transmittal. The terms of the Exchange Notes are identical in all material respects (including principal amount, interest rate and maturity) to the terms of the Outstanding Notes for which they may be exchanged pursuant to the Exchange Offer, except that the Exchange Notes are freely transferable by holders thereof, upon the terms and subject to the conditions of the enclosed Prospectus and enclosed Letter of Transmittal. The Outstanding Notes are unconditionally guaranteed (the "Old Guarantees") by certain of the Company's subsidiaries (each, a "Guarantor" and collectively, the "Guarantors"), and the Exchange Notes will be unconditionally guaranteed (the "New Guarantees") by the Guarantors. Upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal, the Guarantors offer to issue the New Guarantees with respect to all Exchange Notes issued in the Exchange Offer in exchange for the Old Guarantees of the Outstanding Notes for which such Exchange Notes are issued in the Exchange Offer. Throughout this letter, unless the context otherwise requires and whether so expressed or not, references to the "Exchange Offer" include the Guarantors' offer to exchange the New Guarantees for the Old Guarantees, references to the "Exchange Notes" include the related New Guarantees and references to the "Outstanding Notes" include the related Old Guarantees. The Company will accept for exchange any and all Outstanding Notes properly tendered according to the terms of the Prospectus and the Letter of Transmittal. Consummation of the Exchange Offer is subject to certain conditions described in the Prospectus.

PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                    , 2012 (THE "EXPIRATION DATE"), UNLESS THE COMPANY EXTENDS THE EXCHANGE OFFER.

        The enclosed materials are being forwarded to you as the beneficial owner of the Outstanding Notes held by us for your account but not registered in your name. A tender of such Outstanding Notes may only be made by us as the registered holder and pursuant to your instructions. Therefore, the Company urges beneficial owners of Outstanding Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee to contact such registered holder promptly if such beneficial owners wish to tender its Outstanding Notes in the Exchange Offer.

        Accordingly, we request instructions as to whether you wish to tender any or all such Outstanding Notes held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal. If you wish to have us tender any or all of your outstanding notes, please so instruct us by completing, signing and returning to us the "Instructions to Registered Holder from Beneficial Owner" form that appears below. We urge you to read the Prospectus and the

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Letter of Transmittal carefully before instructing us as to whether or not to tender your Outstanding Notes.

        The accompanying Letter of Transmittal is furnished to you for your information only and may not be used by you to tender Outstanding Notes held by us and registered in our name for your account or benefit.

        If we do not receive written instructions in accordance with the below and the procedures presented in the Prospectus and the Letter of Transmittal, we will not tender any of the Outstanding Notes on your account.

INSTRUCTIONS TO REGISTERED HOLDER FROM BENEFICIAL OWNER

        The undersigned beneficial owner acknowledges receipt of your letter and the accompanying Prospectus and Letter of Transmittal, relating to the Exchange Offer made by the Company to exchange an aggregate principal amount of up to $250,000,000 of its Exchange Notes for any and all of its Outstanding Notes, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal. Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus.

        This will instruct you, the registered holder, to tender the principal amount of the Outstanding Notes indicated below held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal.

        The aggregate face amount of the Outstanding Notes held by you for the account of the undersigned is (fill in amount):

$            of 11% Senior Notes due 2019.

        With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box):

o

To TENDER ALL of the outstanding 11% Senior Notes due 2019 held by you for the account of the undersigned.



o

To TENDER the following outstanding 11% Senior Notes due 2019 held by you for the account of the undersigned (insert principal amount of outstanding 11% Senior Notes due 2019 to be tendered, if any):

$            of 11% Senior Notes due 2019.

o

NOT to TENDER any outstanding 11% Senior Notes due 2019 held by you for the account of the undersigned.

        If the undersigned instructs you to tender the Outstanding Notes held by you for the account of the undersigned, it is understood that you are authorized (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner of the Outstanding Notes, including but not limited to the representations that the undersigned (i) is not an "affiliate," as defined in Rule 405 under the Securities Act, of the Company or the Guarantors, (ii) is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of Exchange Notes, (iii) is acquiring the Exchange Notes in the ordinary course of its business and (iv) is not a broker-dealer tendering Outstanding Notes acquired for its own account directly from the Company. If a holder of the Outstanding Notes is an affiliate of the Company or the Guarantors, is not acquiring the Exchange Notes in the ordinary course of its business, is engaged in or intends to engage in a distribution of the Exchange Notes or has any arrangement or understanding with respect to the distribution of the Exchange Notes to be acquired pursuant to the Exchange Offer, such holder may not rely on the

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applicable interpretations of the staff of the Securities and Exchange Commission relating to exemptions from the registration and prospectus delivery requirements of the Securities Act and must comply with such requirements in connection with any secondary resale transaction.

SIGN HERE

Date:

Signature(s):

Print Name(s):

Address:
	(Include Zip Code)

Telephone Number:

Tax Identification Number or Social Security Number:

My Account Number With You:

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INSTRUCTIONS TO REGISTERED HOLDER FROM BENEFICIAL OWNER

EX-99.4

Exhibit 99.4

99¢ ONLY STORES

NOTICE OF GUARANTEED DELIVERY

OFFER TO EXCHANGE
$250,000,000 PRINCIPAL AMOUNT OF 11% SENIOR NOTES DUE 2019,
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), FOR ANY AND ALL OUTSTANDING 11% SENIOR NOTES DUE 2019

        This form, or one substantially equivalent hereto, must be used to accept the Exchange Offer made by 99¢ Only Stores, a California corporation (the "Company") pursuant to the Prospectus, dated                  , 2012 (the "Prospectus"), and the enclosed Letter of Transmittal (the "Letter of Transmittal"), if the certificates for the Outstanding Notes 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 of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to Wilmington Trust, National Association (the "Exchange Agent") as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender the Outstanding Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must also be received by the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Capitalized terms not defined herein have the meanings ascribed to them in the Letter of Transmittal.

The Exchange Agent is

WILMINGTON TRUST, NATIONAL ASSOCIATION

By Registered Mail or
Overnight Carrier:
Wilmington Trust, National
Association, as Exchange Agent
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1626
Attention: Sam Hamed By Facsimile Transmission:
(302) 636-4139
 
To Confirm by Telephone:
(302) 636-6181
 
For Information Call:
(302) 636-6181 By Hand Delivery:
Wilmington Trust, National
Association, as Exchange Agent
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-1626
Attention: Sam Hamed

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

        This Notice of Guaranteed Delivery 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 (as defined in the Letter of Transmittal), such signature guarantee must appear in the applicable space in Box 8 provided on the Letter of Transmittal for Guarantee of Signatures.

Ladies and Gentlemen:

        Upon the terms and subject to the conditions set forth in the Prospectus and the accompanying Letter of Transmittal, the undersigned hereby tenders to the Company the principal amount of Outstanding Notes indicated below, pursuant to the guaranteed delivery procedures described in "The Exchange Offer—Guaranteed Delivery Procedures" section of the Prospectus.

Type of Note	Certificate Number(s) (if known) of Outstanding Notes or Account Number at Book-Entry Transfer Facility	Aggregate Principal Amount Represented by Outstanding Notes	Aggregate Principal Amount of Outstanding Notes Being Tendered
11% Senior Notes due 2019

PLEASE COMPLETE AND SIGN

(Signature(s) of Record Holder(s))

(Please Type or Print Name(s) of Record Holder(s))

Dated:

Address:
	(Zip Code)

(Daytime Area Code and Telephone No.)

o Check this Box if the Outstanding Notes will be delivered by book-entry transfer to The Depository Trust Company.

Account Number:

THE ACCOMPANYING GUARANTEE MUST BE COMPLETED.

GUARANTEE OF DELIVERY

(Not to be used for signature guarantee)

        The undersigned, a member of a recognized signature medallion program or an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), hereby (a) represents that the above person(s) "own(s)" the Outstanding Notes tendered hereby within the meaning of Rule 14e-4(b)(2) under the Exchange Act, (b) represents that the tender of those Outstanding Notes complies with Rule 14e-4 under the Exchange Act, and (c) guarantees to deliver to the Exchange Agent, at its address set forth in the Notice of Guaranteed Delivery, the certificates representing all tendered Outstanding Notes, in proper form for transfer, or a book-entry confirmation (a confirmation of a book-entry transfer of the Outstanding Notes into the Exchange Agent's account at The Depository Trust Company), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, and any other documents required by the Letter of Transmittal within three (3) New York Stock Exchange trading days after the Expiration Date.

Name of Firm:
	(Authorized Signature)

Address:

(Include Zip Code)

Area Code and Telephone Number:

Name:
	(Please Print or Type)

Title:

Dated:

NOTE: DO NOT SEND OUTSTANDING NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. OUTSTANDING NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.

INSTRUCTIONS FOR NOTICE OF GUARANTEED DELIVERY

1.     Delivery of this Notice of Guaranteed Delivery.

        A properly completed and duly executed copy of this Notice of Guaranteed Delivery and any other documents required by this Notice of Guaranteed Delivery must be received by the Exchange Agent at its address set forth on the cover page hereof prior to the Expiration Date of the Exchange Offer. The method of delivery of this Notice of Guaranteed Delivery and any other required documents to the Exchange Agent is at the election and risk of the holders and the delivery will be deemed made only when actually received by the Exchange Agent. Instead of delivery by mail, it is recommended that the holders use an overnight or hand delivery service, properly insured. If such delivery is by mail, it is recommended that the holders use properly insured, registered mail with return receipt requested. In all cases, sufficient time should be allowed to assure timely delivery. For a description of the guaranteed delivery procedure, see Instruction 1 of the Letter of Transmittal. No notice of Guaranteed Delivery should be sent to the Company.

2.     Signatures on this Notice of Guaranteed Delivery.

        If this Notice of Guaranteed Delivery is signed by the registered holder(s) of the Outstanding Notes referred to herein, the signatures must correspond with the name(s) written on the face of the Outstanding Notes without alteration, addition, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed by a person other than the registered holder(s) of any Outstanding Notes listed, this Notice of Guaranteed Delivery must be accompanied by appropriate bond powers, signed as the name of the registered holder(s) appear(s) on the Outstanding Notes without alteration, addition, enlargement or any change whatsoever. If this Notice of Guaranteed Delivery is signed 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 should so indicate when signing and, unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Notice of Guaranteed Delivery.

3.     Questions and Requests for Assistance or Additional Copies.

        Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address set forth on the cover hereof. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer.