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## Minimum and Contingent Rentals 

Rental expense for store, distribution center and former corporate headquarters operating leases (including payments to related parties) included in the accompanying consolidated statements of operations are as follows: 

<img src='content_image/61677.jpg'>

## Non-Operating Facilities 

The Company is responsible for payments under leases for two former distribution center and certain closed stores. The leases for the two distribution centers expire in June 2005 and September 2005. The Company accounts for abandoned lease facilities in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities . Facilities are considered abandoned on the date that the Company ceases to use the facility. On this date, the Company records an expense for the present value of the total remaining costs for the abandoned facility reduced by any actual or probable sublease income. Due to the uncertainty regarding the ultimate recovery of the future lease and related payments, the Company recorded charges of $1,472, $470 and $364 in 2004, 2003 and 2002, respectively. There was no charge recorded in the month ended February 1, 2003. The total accrual for these vacated facilities was $1,472 and $2,171 at January 29, 2005 and January 31, 2004, respectively. 

## Related Parties 

The Company also leases properties for six of its stores from partnerships owned by related parties. The total rental payments related to these leases were $484, $469, $31 and $1,222 for the years ended January 29, 2005 and January 31, 2004, the month ended February 1, 2003 and the year ended December 31, 2002, respectively. 

## Freight Services 

The Company has contracted outbound freight services from various contract carriers with contracts expiring through January 2007. The total amount of these commitments is approximately $35,500, of which approximately $25,500 is committed in 2005 and $10,000 is committed in 2006. 

## Technology Assets 

The Company has commitments totaling approximately $5,831 to purchase store technology assets for its stores during 2005. 

## Letters of Credit 

In March 2001, the Company entered into a Letter of Credit Reimbursement and Security Agreement. The agreement provides $125,000 for letters of credit, which are generally issued for the routine purchase of imported merchandise. Approximately $88,941 of this agreement was committed to letters of credit at January 29, 2005. 

The Company also has approximately $37,735 in letters of credit that serve as collateral for its high- deductible insurance programs and expire in fiscal 2005. 

## Surety Bonds 

The Company has issued various surety bonds that primarily serve as collateral for utility payments at the Company’s stores. The total amount of the commitment is approximately $2,275, which is committed through various dates through 2008. 

## Contingencies 

The Company was sued in California in 2003 by a former employee who alleged that employees did not properly receive sufficient meal period breaks and paid rest periods. He also alleged other wage and hourly violations. The suit requests that the California state court certify the case as a class action. In 2005, the Company was threatened with a suit by former employees in Oregon who allege that they did not properly receive sufficient meal period breaks and paid rest periods. They also allege other wage and hour violations. The Company anticipates that they will request the Oregon state court to certify the case as a class action. 

