Exhibit 10.1

                            INDEMNIFICATION AGREEMENT

      THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into effective
as of July ___, 2003, between COST-U-LESS, INC., a Washington (the "Company"),
and ___________________, a director and/or officer of the Company
("Indemnitee").

                                    RECITALS

      A. Indemnitee is a director and/or officer of the Company and/or one or
more subsidiaries of the Company and in such capacity is performing valuable
services for the Company.

      B. Section 10.1 of the bylaws of the Company ("Bylaws") provides a right
to indemnification of the directors and officers of the Company against all
expense, liability and loss reasonably incurred by such director or officer in
connection with such officer's service to the Company.

      C. Section 10.6 of the Bylaws provides that the right to indemnification
pursuant to the Bylaws shall not be exclusive of any other right to
indemnification a director or officer of the Company may from to time acquire,
including by agreement.

      D. Section 23B.08.510 of the Washington Business Corporation Act (the
"Statute"), under which the Company is organized, empowers the Company to
indemnify its directors and officers by agreement.

      E. The Company desires and has requested Indemnitee to serve or to
continue to serve as a director and/or officer of the Company and/or one or more
subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company, and Indemnitee is willing to serve, or to continue
to serve, the Company and/or one or more subsidiaries of the Company, provided
that he is furnished with the indemnification rights provided for herein.

      NOW, THEREFORE, in consideration of the recitals above, the mutual
covenants and agreements set forth in this Agreement, and Indemnitee's service
as a director and/or officer after the date hereof, the Company and Indemnitee
agree as follows:

<PAGE>

      1. Indemnification

            1.1 Scope. Subject to Section 1.3 below, the Company agrees to hold
harmless and indemnify Indemnitee to the full extent permitted by law against
any Damages (as defined in Section 1.4) incurred by Indemnitee with respect to
any Proceeding (as defined in Section 1.5) to which Indemnitee is or is
threatened to be made a party or witness, notwithstanding that such
indemnification is not specifically authorized by this Agreement, the Company's
Articles of Incorporation ("Articles") or Bylaws, the Statute or otherwise. Such
right to indemnification shall be without regard to the limitations in RCW
23B.08.510 through 23B.08.550; provided, however, that Indemnitee shall have no
right to indemnification on account of (a) acts or omissions of Indemnitee
finally adjudged to be intentional misconduct or a knowing violation of law; (b)
conduct of Indemnitee finally adjudged to be in violation of RCW 23B.08.310; or
(c) any transaction with respect to which it is finally adjudged that Indemnitee
personally received a benefit in money, property or services to which Indemnitee
was not legally entitled. In the event of any change, after the date of this
Agreement, in any applicable law, statute or rule regarding the right of a
Washington corporation to indemnify a member of its board of directors or an
officer, such changes, to the extent that they would expand Indemnitee's rights
hereunder, shall be within the scope of Indemnitee's rights and the Company's
obligations hereunder, and, to the extent that they would narrow Indemnitee's
rights hereunder, shall be excluded from this Agreement; provided, however, that
any change that is required by applicable laws, statutes or rules to be applied
to this Agreement shall be so applied regardless of whether the effect of such
change is to narrow Indemnitee's rights hereunder.

            1.2 Proceedings Relating to Officer's Failure to Discharge Duties.
If Indemnitee is an officer of the Company and/or of one or more subsidiaries of
the Company, the indemnification and other rights and benefits provided to
Indemnitee by this Agreement shall apply fully with respect to any Proceeding in
which it is claimed or adjudicated that Indemnitee is liable to the Company
and/or one or more subsidiaries of the Company by reason of having failed to
discharge the duties of Indemnitee's office, which claims and liabilities are
hereby released; provided, however, that the foregoing indemnification and
release obligations of the Company shall have no application with respect to
claims and liabilities by or to the Company to the extent that they are based
upon or arise out of Indemnitee's actions or omissions described in clauses (a),
(b) or (c) of Section 1.1.

            1.3 Nonexclusivity. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any rights to which Indemnitee may be entitled under any provision
of law, the Company's Articles or Bylaws, any vote of the Company's shareholders
or disinterested directors, other agreements, the Statute or otherwise, whether
as to actions or omissions by Indemnitee in Indemnitee's official capacity or
otherwise.

            1.4 Included Coverage. If Indemnitee is made a party (or is
threatened to be made a party) to, or is otherwise involved (including, but not
limited to, as a witness) in any Proceeding, the Company shall hold harmless and
indemnify Indemnitee from and against any and all losses, claims, damages and
liabilities incurred in connection with such Proceeding, including but not
limited to attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
amounts paid in settlement and other expenses (collectively, "Damages").

            1.5 Definition of Proceeding. For purposes of this Agreement,
"Proceeding" shall mean any actual, pending, threatened or completed action,
suit, claim or proceeding (whether civil, criminal, administrative or
investigative and whether formal or informal) in which Indemnitee is, has been
or becomes involved by reason of the fact that Indemnitee is or has been a
director, officer, employee or agent of the Company or any of its subsidiaries
or that, being or having been such a director, officer, employee or agent,
Indemnitee is or was serving at the request of the Company as a director,
officer, employee, trustee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (collectively, a "Related Company"),
including but not limited to service with respect to any employee benefit plan,
whether the basis of such action, suit, claim or proceeding is alleged action or
omission by Indemnitee in an official capacity as a director, officer, employee,
trustee or agent or in any other capacity while serving as a director, officer,
employee, trustee or agent; provided, however, that, except with respect to an
action to enforce this Agreement, "Proceeding" shall not include any action,
suit, claim or proceeding instituted by or at the direction of Indemnitee unless
such action, suit, claim or proceeding is or was authorized by the Board.


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            1.6 Notification. Promptly after receipt by Indemnitee of notice of
the commencement of any Proceeding, Indemnitee will, if a claim in respect
thereof is to be made against the Company under this Agreement, notify the
Company of the commencement thereof (which notice shall be in the form of
Exhibit A hereto); provided, however, that failure to so notify the Company will
relieve the Company from any liability that it may otherwise have to Indemnitee
under this Agreement only if and to the extent that such failure can be shown to
have prejudiced the Company's ability to defend the Proceeding.

            1.7 Determination of Entitlement. If a determination of Indemnitee's
entitlement to indemnification is required pursuant to RCW 23B.08.550 or a
successor statute or pursuant to other applicable law, the appropriate decision
maker shall make such determination; provided, however, that (a) Indemnitee
shall initially be presumed in all cases to be entitled to indemnification, and
(b) unless the Company shall deliver to Indemnitee written notice of a
determination that Indemnitee may not be entitled to indemnification within
twenty (20) days after the Company's receipt of Indemnitee's notice pursuant to
Section 1.6, Indemnitee shall conclusively be deemed to be entitled to such
indemnification and the Company hereby agrees not to assert otherwise.
Indemnitee may establish a conclusive presumption of any fact necessary to such
a determination by delivering to the Company a declaration made under penalty of
perjury that such fact is true.

            1.8 Survival. The indemnification and release provided under this
Agreement shall apply to any and all Proceedings, notwithstanding that
Indemnitee has ceased to be a director, officer, employee, trustee or agent of
the Company or any of its subsidiaries or a Related Company, and Indemnitee's
rights hereunder shall continue after Indemnitee has ceased acting as agent of
the Company or any its subsidiaries and shall inure to the benefit of the heirs,
executors, and administrators of Indemnitee.

      2. Expense Advances

            2.1 Generally. The right to indemnification conferred by Section 1
shall include the right to have the Company pay all of Indemnitee's
out-of-pocket costs of any type or nature whatsoever (including, without
limitation, all attorneys' fees and related disbursements) and other expenses in
connection with any Proceeding or establishing or enforcing a right to
indemnification under this Agreement or the Statute or otherwise as such
expenses are actually and reasonably incurred by Indemnitee and in advance of
such Proceeding's final disposition; provided, however, that "expenses" shall
not include any judgments, fines, ERISA excise taxes or penalties, or amounts
paid in settlement of a Proceeding (such right is referred to hereinafter as an
"Expense Advance").


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<PAGE>

            2.2 Conditions to Expense Advance. The Company's obligation to
provide an Expense Advance is subject to the following conditions:

                  (a) Undertaking. If required under applicable law, Indemnitee
or his representative shall have executed and delivered to the Company an
undertaking (in the form of Exhibit B hereto), which need not be secured and
shall be accepted without reference to Indemnitee's financial ability to make
repayment, by or on behalf of Indemnitee, to repay all Expense Advances if and
to the extent that it shall ultimately be determined, by a final decision not
subject to appeal rendered by a court having proper jurisdiction, that
Indemnitee is not entitled to be indemnified for such Expense Advance under this
Agreement or otherwise.

                  (b) Cooperation. Indemnitee shall give the Company such
information and cooperation as the Company may reasonably request.

                  (c) Affirmation. If required under applicable law, Indemnitee
shall furnish a written affirmation of Indemnitee's good faith belief that
Indemnitee has met all applicable standards of conduct.

      3. Agreement to Serve. Indemnitee agrees to serve and/or continue to serve
as an agent of the Company or any of its subsidiaries, at its will (or under
separate agreement, if such agreement exists), in the capacity Indemnitee
currently serves as an agent of the Company or any of its subsidiaries, so long
as he is duly approved or elected and qualified in accordance with the
applicable provisions of the Bylaws of the Company or any subsidiary of the
Company or until such time as he tenders his resignation in writing; provided,
however, that nothing contained in this Agreement is intended to create any
right to continued employment by Indemnitee.

      4. Procedures for Enforcement

            4.1 Enforcement. If a claim for indemnification made by Indemnitee
hereunder is not paid in full within sixty (60) days, or a claim for an Expense
Advance made by Indemnitee hereunder is not paid in full within twenty (20)
days, after written notice of such claim is delivered to the Company, Indemnitee
may, but need not, at any time thereafter bring suit against the Company to
recover the unpaid amount of the claim (an "Enforcement Action").

            4.2 Presumptions in Enforcement Action. In any Enforcement Action
the following presumptions (and limitations on presumptions) shall apply:

                  (a) The Company shall conclusively be presumed to have entered
into this Agreement and assumed the obligations imposed hereunder in order to
induce Indemnitee to serve or to continue to serve as an director and/or officer
of the Company or any of its subsidiaries;

                  (b) Neither (i) the failure of the Company (including but not
limited to the Board, independent or special legal counselor the Company's
shareholders) to make a determination prior to the commencement of the
Enforcement Action that indemnification of Indemnitee is proper in the
circumstances because Indemnitee has met the applicable standard of conduct, nor
(ii) an actual determination by the Company, the Board, independent or special
legal counselor the Company's shareholders that Indemnitee has not met such
applicable standard of conduct shall be a defense to the Enforcement Action or
create a presumption that Indemnitee has not met the applicable standard of
conduct; and


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<PAGE>

                  (c) If Indemnitee is or was serving as a director, officer,
employee, trustee or agent of a corporation of which a majority of the shares
entitled to vote in the election of its directors is held by the Company or in
an executive or management capacity in a partnership, joint venture, trust or
other enterprise of which the Company or a wholly-owned subsidiary of the
Company is a general partner or has a majority ownership, then such corporation,
partnership, joint venture, trust or enterprise shall conclusively be deemed a
Related Company and Indemnitee shall conclusively be deemed to be serving such
Related Company at the request of the Company.

            4.3 Attorneys' Fees and Expenses for Enforcement Action. If
Indemnitee is required to bring an Enforcement Action, the Company shall hold
harmless and indemnify Indemnitee against all of Indemnitee's attorneys' fees
and expenses in bringing and pursuing the Enforcement Action (including but not
limited to attorneys' fees at any stage, and on appeal) if and to the extent
that it shall ultimately be determined, by a final decision not subject to
appeal rendered by a court having proper jurisdiction, that Indemnitee is
entitled to indemnification pursuant to this Agreement.

      5. Defense of Claim. With respect to any Proceeding as to which Indemnitee
has provided notice to the Company pursuant to Section 1.6:

            5.1 The Company may participate therein at its own expense.

            5.2 The Company, jointly with any other indemnifying party similarly
notified, may assume the defense thereof, with counsel reasonably satisfactory
to Indemnitee. After notice from the Company to Indemnitee of its election to so
assume the defense thereof, the Company shall not be liable to Indemnitee under
this Agreement for any legal fees or other expenses (other than reasonable costs
of investigation) subsequently incurred by Indemnitee in connection with the
defense thereof unless (a) the employment of counsel by Indemnitee or the
incurring of such expenses has been authorized by the Company, (b) Indemnitee
shall have reasonably concluded that there may be a conflict of interest between
the Company and Indemnitee in the conduct of the defense of such Proceeding, or
(c) the Company shall not in fact have employed counsel to assume the defense of
such Proceeding, in each of which cases the legal fees and other expenses of
Indemnitee shall be at the expense of the Company. The Company shall not be
entitled to assume the defense of a Proceeding brought by or on behalf of the
Company or as to which Indemnitee shall have reached the conclusion described in
clause (b) above.

            5.3 The Company shall not be liable for any amounts paid in
settlement of any Proceeding effected without its written consent.

            5.4 The Company shall not settle any Proceeding in any manner which
would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent.

            5.5 Neither the Company nor Indemnitee will unreasonably withhold
its or his consent to any proposed settlement of any Proceeding.


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<PAGE>

      6. Maintenance of D&O Insurance

            6.1 Subject to Section 6.3 below, during the period (the "Coverage
Period") beginning as soon as practicable following the date of this Agreement
and ending not less than four (4) years following the time Indemnitee is no
longer serving as either a director or officer of the Company or any of its
subsidiaries or any Related Company, or, if later, such time as Indemnitee shall
no longer be reasonably subject to any possible Proceeding, the Company shall
maintain a directors' and officers' liability insurance policy in full force and
effect or shall have purchased or otherwise provided for a run-off or tail
policy or endorsement to such existing policy ("D&O Insurance"), providing in
all respects coverage at least comparable to and in similar amounts as that
obtained by other comparable companies.

            6.2 Under all policies of D&O Insurance, Indemnitee shall during the
Coverage Period be named as an insured in such a manner as to provide Indemnitee
the same rights and benefits, subject to the same limitations, as are accorded
to the Company's directors or officers most favorably insured by such policy,
and each insurer under a policy of D&O Insurance shall be required to provide
Indemnitee written notice at least thirty (30) days prior to the effective date
of termination of the policy.

            6.3 The Company shall have no obligation to obtain or maintain D&O
Insurance if the Board determines in good faith that such insurance is not
reasonably available, the premium costs for such insurance are disproportionate
to the amount of coverage provided, or the coverage provided by such insurance
is so limited by exclusions as to provide an insufficient benefit.

            6.4 It is the intention of the parties in entering into this
Agreement that the insurers under the D&O Insurance, if any, shall be obligated
ultimately to pay any claims by Indemnitee which are covered by D&O Insurance,
and nothing herein shall be deemed to diminish or otherwise restrict the
Company's or Indemnitee's right to proceed or collect against any insurers under
D&O Insurance or to give such insurers any rights against the Company or
Indemnitee under or with respect to this Agreement, including but not limited to
any right to be subrogated to the Company's or Indemnitee's rights hereunder,
unless otherwise expressly agreed to by the Company and Indemnitee in writing.
The obligation of such insurers to the Company and Indemnitee shall not be
deemed reduced or impaired in any respect by virtue of the provisions of this
Agreement.

            6.5 The Company shall be subrogated to Indemnitee's rights under D&O
Insurance with respect to claims for Damages and Expense Advances that have been
paid to Indemnitee under this Agreement.

      7. Limitations on Indemnification; Mutual Acknowledgment

            7.1 Limitation on Indemnity. No indemnification pursuant to this
Agreement shall be provided by the Company:

                  (a) On account of any suit in which a final, unappealable
judgment is rendered against Indemnitee for an accounting of profits made from
the purchase or sale by Indemnitee of securities of the Company in violation of
the provisions of Section 16(b) of the Securities Exchange Act of 1934 and
amendments thereto; or


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<PAGE>

                  (b) For Damages or Expense Advances that have been paid
directly to Indemnitee by an insurance carrier under a policy of D&O Insurance
or other insurance maintained by the Company.

            7.2 Mutual Acknowledgment. The Company and Indemnitee acknowledge
that, in certain instances, federal law or public policy may override applicable
state law and prohibit the Company from indemnifying Indemnitee under this
Agreement or otherwise. For example, the Company and Indemnitee acknowledge that
the Securities and Exchange Commission (the "SEC") has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Furthermore, Indemnitee understands and acknowledges that the
Company has undertaken or may be required in the future to undertake with the
SEC to submit for judicial determination the issue of the Company's power to
indemnify Indemnitee in certain circumstances.

      8. Severability. Nothing in this Agreement is intended to require or shall
be construed as requiring the Company to take or fail to take any action in
violation of applicable law. The Company's inability to perform its obligations
under this Agreement pursuant to court order shall not constitute a breach of
this Agreement. The provisions of this Agreement shall be severable, as provided
in this Section 8. If a court of competent jurisdiction should decline to
enforce any of the provisions of this Agreement, the Company and Indemnitee
agree that such provisions shall be deemed to be reformed to provide Indemnitee
indemnification by the Company to the maximum extent permitted by the other
portions of this Agreement that are not unenforceable, and the remainder of this
Agreement shall not be affected, and this Agreement shall continue in force.

      9. Governing Law; Binding Effect; Amendment and Termination

            9.1 This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Washington.

            9.2 This Agreement shall be binding upon Indemnitee and upon the
Company, its successors and assigns, and shall inure to the benefit of
Indemnitee, Indemnitee's heirs, personal representatives and assigns and to the
benefit of the Company, its successors and assigns.

            9.3 No amendment, modification, termination or cancellation of this
Agreement shall be effective unless in writing signed by both parties hereto.

            9.4 Nothing in this Agreement shall confer upon Indemnitee the right
to continue to serve as a director and\or officer of the Company or any of its
subsidiaries. If Indemnitee is an officer of the Company, then, unless otherwise
expressly provided in a written employment agreement between the Company and
Indemnitee, the employment of Indemnitee with the Company shall be terminable at
will by either party.


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            9.5 This Agreement shall remain in full force and effect so long as
Indemnitee is a director or officer of the Company or any of its subsidiaries,
or is serving at the request of the Company in any of the capacities specified
in Section 1.5. Rights arising with respect to any such office or position held
prior to the termination hereof shall survive the termination of such office or
position. The Company shall require any successor to the Company (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.

      IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
effective as of the day and year first set forth above.

        "Company"                           COST-U-LESS, INC.


                                            By
                                               ---------------------------------
                                               J. Jeffrey Meder, President & CEO


        "Indemnitee"
                                            ------------------------------------


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                                    EXHIBIT A

                                 NOTICE OF CLAIM

      1. Notice is hereby given by the undersigned,
____________________________, pursuant to Section 1.6 of the Indemnification
Agreement ("Agreement") dated as of __________________, between Cost-U-Less,
Inc., a Washington corporation (the "Company"), and the undersigned, of the
commencement of a Proceeding, as defined in the Agreement.

      2. The undersigned hereby requests indemnification with respect to the
Proceeding by the Company under the terms of the Agreement.

      3. [Add brief description of the Proceeding]

      Dated: _____________________, _________.


                                                --------------------------------


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                                    EXHIBIT B

                            STATEMENT OF UNDERTAKING

STATE OF _____________________ )
                               ) ss.
COUNTY OF ____________________ )

      I, _____________________, being first duly sworn, do depose and say as
follows:

      1. This Statement is submitted pursuant to the Indemnification Agreement
(the "Agreement") dated as of ___________________________ between Cost-U-Less,
Inc., a Washington corporation (the "Company"), and me.

      2. I am requesting an Expense Advance, as defined in the Agreement.

      3. I believe in good faith that I have met the standard of conduct
described in RCW 23B.08.510.

      4. I hereby undertake to repay the Expense Advance if and to the extent it
is ultimately determined by a final, unappealable decision rendered by a court
having proper jurisdiction that I am not entitled to be indemnified by the
Company.

      5. The expenses for which advancement is requested are as follows:

            [Add brief description of expenses]

      DATED: ______________________, _________.


                                                --------------------------------

SUBSCRIBED AND SWORN TO before me this ____ day of ________________,


(Seal or stamp)
                               -------------------------------------------------
                               Notary Signature


                               -------------------------------------------------
                               Print/Type Name
                               Notary Public in and for the State of Washington,
                               residing at _____________________________________
                               My appointment expires __________________________