IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE WILMINGTON DIVISION

IN THE MATTER OF: MERVYNS HOLDINGS, LLC, ET AL, DEBTOR

CASE NO. 08-11586(KG)

CHAPTER 11

NOTICE OF REQUIREMENT TO SET ASIDE PROCEEDS OF SALE

NOW COMES Midland Central Appraisal District, a Texas Ad Valorem Taxing Jurisdiction and secured tax creditor herein, and hereby provides notice as required by paragraph 5.3 of the Final Order (A) Authorizing Debtors to Obtain Interim Postpetition Financing and Grant Security Interests and Superpriority Administrative Expense Status(Final DIP Order) entered by the court on August 26, 2008. The Order approving the GOB sale at the Midland store having also been entered by the Court on August 26, 2008, this notice is to specifically inform the Agent and the Debtor of the requirement that proceeds in the amount of $55,915.10 be segregated in the Tax Lien Reserve as adequeate protection for the secured tax claim of Midland Central Appraisal District as provided in the above referenced Final DIP Order. Dated: September 4, 2008 McCREARY, VESELKA, BRAGG & ALLEN, P.C. Attorneys for Midland Central Appraisal District P. O. Box 1269 Round Rock, Texas 78680 (512) 323-3200 /s/ Michael Reed Michael Reed State Bar Number 16685400

0q/v()$

0811586080904000000000009

)s

CERTIFICATE OF SERVICE I hereby certify that I have placed a copy of the above Notice to the following parties via facsimile, and via electronic notification, as well as to all other parties on the electronic matrix via electronic notification, on September 4, 2008: Counsel to the Debtors: Morgan, Lewis & Brockius, LLP 101 Park Avenue New York, NY 10178 Attn: Howard S. Beltzer, Esq. Fax: (212) 309-6001 Richards, Layton & Finger, P.A. One Rodney Square 920 North King Street Wilmington, DE 19801 Attn: Mark Collins, Esq. Fax: (302) 651-7701 Counsel to the Subordinated Note Agent: Kirkland & Ellis LLP 153 East 53rd St. New York, NY 10022 Attn: Paul M. Basta, Esq. -andJoshua A. Sussberg, Esq. Fax: (212) 446-4900 Counsel for the Agent: Otterbourg, Steindler, Houston & Rosen, P.C. 230 Park Avenue New York, NY 10169-0075 Attn: Jonathan N. Helfat, Esq. -andDaniel F. Fiorillo, Esq. Fax: (212) 682-6104

/s/ Michael Reed Michael Reed