Exhibit 10.31


 


SALE
PARTICIPATION AGREEMENT


 


January  21, 2008


 


To: The Person whose
name is 

set forth on the signature page hereof


 


Dear Sir or Madam:


 


You have entered into a Management
Stockholder’s Agreement, dated as of the date hereof, between Dollar General
Corporation, a Tennessee corporation (the “Company”), Buck Holdings,
L.P. (“Parent”) and you (the “Stockholder’s Agreement”) relating
to (i) the purchase by you of Purchased Stock (as defined in the
Stockholder’s Agreement); and/or (ii) the grant by the Company to you of (x) options
(“Options”) to purchase shares of common stock, par value $0.50 per
share, of the Company (“Common Stock”) and (y) restricted shares of
Common Stock (“Restricted Stock”). 
Parent hereby agrees with you as follows, effective as of the date
hereof:


 


1.     (a)  In the event that at any time on or after the
date hereof Parent or any of its Affiliates (as defined in the Stockholder’s
Agreement) proposes to sell directly for cash or any other consideration any
shares of Common Stock owned by Parent or any such Affiliate, in any
transaction other than a Public Offering (as defined in the Stockholder’s
Agreement) or a sale, directly or indirectly, to an Affiliate of Parent, then,
unless Parent is entitled to and does exercise the drag-along rights pursuant
to Paragraph 7 below and the Drag Transaction is consummated, solely to the
extent you are a Senior Management Stockholder (as defined in the Stockholder’s
Agreement) or the provisions hereof are otherwise applicable to you pursuant to
and in accordance with Section 9 of the Stockholder’s Agreement or as a
result of a decision by the Board (as defined in the Stockholder’s Agreement),
after consultation with the Chief Executive Officer, Chief Operating Officer
and Chief Financial Officer of the Company, to extend the rights under this Section 1
to you, Parent will notify you or your Management Stockholder’s Estate or
Management Stockholder’s Trust (as such terms are defined in the Stockholder’s
Agreement, and collectively with you, the “Management Stockholder Entities”),
as the case may be, in writing (a “Notice”) of such proposed sale (a “Proposed
Sale”) specifying the principal terms and conditions of the Proposed Sale
(the “Material Terms”) including (A) the amount of Common Stock to
be included in the Proposed Sale, (B) the percentage of the outstanding
Common Stock at the time the Notice is given that is represented by the number
of shares to be included in the Proposed Sale, (C) the price per share of
Common Stock subject to the Proposed Sale, including a description of any
pricing formulae and of any non-cash consideration sufficiently detailed to
permit valuation thereof, (D) the Tag Along Sale Percentage (as defined
below) of Parent and (E) the name and address of the Person (as defined in
the Stockholder’s Agreement) to whom the offered Common Stock is proposed to be
issued.


 


(b)   If, within 10 business
days after the delivery of Notice under Section 1(a), Parent receives from
a Management Stockholder Entity a written request (a “Request”) to
include Common Stock held by the Management Stockholder Entity in the Proposed
Sale (which


 

















 


Request shall be irrevocable except (a) as
set forth in clauses (c) and (d) of this Section 1 below or (b) if
otherwise mutually agreed to in writing by the Management Stockholder Entity
and Parent), the Common Stock held by you (not in any event to exceed the Tag
Along Sale Percentage multiplied by the total number of shares of Common Stock
held by the Management Stockholder Entities in the aggregate) will be so
included as provided herein.  Promptly
after the execution of the Sale Agreement, Parent will furnish each Management
Stockholder Entity with a copy of the Sale Agreement, if any.  For purposes of this Agreement, the “Tag
Along Sale Percentage” shall mean the fraction, expressed as a percentage,
determined by dividing the number of shares of Common Stock to be purchased
from Parent by the total number of shares of Common Stock owned directly or
indirectly by Parent.


 


(c)   Notwithstanding anything to the
contrary contained in this Agreement, if any of the economic terms of the
Proposed Sale change, including without limitation if the per share price will
be less than the per share price disclosed in the Notice, or any of the other
principal terms or conditions will be materially less favorable to the selling
Management Stockholder Entities than those described in the Notice, Parent will
provide written notice thereof to each such Management Stockholder Entity who
has made a Request and each such Management Stockholder Entity will then be
given an opportunity to withdraw the offer contained in such holder’s Request
(by providing prompt (and in any event within five (5) business days;
provided that, notwithstanding the foregoing, if the proposed closing with
respect to the Proposed Sale is to occur within five (5) business days or
less, no later than three (3) business days prior to such closing) written
notice of such withdrawal to Parent), whereupon such withdrawing Management
Stockholder Entity will be released from all obligations thereunder.


 


(d)   If Parent does not complete the
Proposed Sale by the end of the 120th day following the date of the
effectiveness of the Notice, each selling Management Stockholder Entity may
elect to be released from all obligations under the applicable Request by
notifying the Parent in writing of its desire to so withdraw.  Upon receipt of that withdrawal notice, the
Notice of the relevant Management Stockholder Entity shall be null and void,
and it will then be necessary for a separate Notice to be furnished, and the
terms and provisions of clauses (a) and (b) of this Section 1
separately complied with, in order to consummate such Proposed Sale pursuant to
this Section 1, unless the failure to complete such proposed sale resulted
from any failure by any selling Management Stockholder Entity to comply with
the terms of this Section 1.


 


2.     (a)   The number of shares of Common Stock that you will
be permitted to include in a Proposed Sale pursuant to a Request will be the lesser
of (A) the number of shares of Common Stock that you have offered to sell
in the Proposed Sale as set forth in the Request (it being understood that you
may not offer to sell any unvested shares of Restricted Stock) and (B) the
number of shares of Common Stock determined by multiplying (i) the number
of shares of Common Stock to be included in the Proposed Sale by (ii) a
fraction the numerator of which is the number of shares of Common Stock owned
by you plus all shares of Common Stock which you are then entitled to
acquire under any unexercised portion of Options, to the extent such Option is
then exercisable or would become exercisable as a result of the consummation of
the Proposed Sale, and the denominator of which is the total number of shares of
Common Stock owned by the Management Stockholder Entities and all other Persons
participating in such sale 


 


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as tag-along sellers pursuant to Other Management
Stockholder Agreements (as defined in the Stockholder’s Agreement) or other
agreements (all such participants, the “Tag Along Sellers”) plus
all shares of Common Stock which you and such Persons are then entitled to
acquire under any unexercised portion of Options, to the extent such Options
are then exercisable or would become exercisable as a result of the
consummation of the Proposed Sale, plus all shares of Common Stock owned
by Parent.


 


(b)  If
one or more Tag Along Sellers elect not to include the maximum number of shares
of Common Stock which such holders would have been permitted to include in a
Proposed Sale pursuant to paragraph 2(a) (such non-included shares, the “Eligible
Shares”), then each of Parent or the remaining Tag Along Sellers, or any of
them, will have the right to sell in the Proposed Sale a number of additional
shares of their Common Stock equal to their pro rata portion of the number of
Eligible Shares, based on the relative number of shares of Common Stock then
held by each such holder, plus all shares of Common Stock which you are
then entitled to acquire under any unexercised portion of the Option, to the
extent such Option is then exercisable or would become exercisable as a result
of the consummation of the Proposed Sale, and such additional shares of Common
Stock which any such holder or holders propose to sell shall not be included in
any calculation made pursuant to paragraph 2(a) for the purpose of
determining the number of shares of Common Stock which the Management
Stockholder Entities will be permitted to include in a Proposed Sale.  Parent will have the right to sell in the
Proposed Sale additional shares of Common Stock owned by it equal to the
number, if any, of remaining Eligible Shares which will not be included in the
Proposed Sale pursuant to the foregoing.


 


3.     Except as may otherwise be
provided herein, shares of Common Stock subject to a Request will be included
in a Proposed Sale pursuant hereto and in any agreements with purchasers
relating thereto on the same terms and subject to the same conditions applicable
to the shares of Common Stock which Parent proposes to sell in the Proposed
Sale.  Such terms and conditions shall
include, without limitation: the sale price; the payment of fees, commissions
and expenses; the provision of, and customary representations and warranties as
to, information reasonably requested by Parent covering matters regarding the
Management Stockholder Entities’ ownership of shares; and the provision of
requisite indemnification; provided that any indemnification provided by
the Management Stockholder Entities shall be pro rata in proportion with the
number of shares of Common Stock to be sold; provided, further,
that no Management Stockholder Entity shall be required to indemnify any Person
for an amount, in the aggregate, in excess of the gross proceeds received in
such Proposed Sale.  Notwithstanding
anything to the contrary in the foregoing, if the consideration payable for
shares of Common Stock is securities and the acquisition of such securities by
a Management Stockholder Entity would reasonably be expected to be prohibited
under U.S., foreign or state securities laws, such Management Stockholder
Entity shall be entitled to receive an amount in cash equal to the value of any
such securities such Person would otherwise be entitled to receive.


 


4.     Upon delivering a Request,
the Management Stockholder Entities will, if requested by Parent, execute and
deliver a custody agreement and power of attorney in form and substance
reasonably satisfactory to Parent with respect to the shares of Common Stock
which are to be sold by the Management Stockholder Entities pursuant hereto (a “Custody
Agreement and Power of Attorney”). 
The Custody Agreement and Power of Attorney will contain 


 


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customary provisions and will provide, among other
things, that the Management Stockholder Entities will deliver to and deposit in
custody with the custodian and attorney-in-fact named therein a certificate or
certificates (if such shares are certificated) representing such shares of
Common Stock (duly endorsed in blank by the registered owner or owners thereof)
and irrevocably appoint said custodian and attorney-in-fact as the Management
Stockholder Entities’ agent and attorney-in-fact with full power and authority
to act under the Custody Agreement and Power of Attorney on the Management
Stockholder Entities’ behalf with respect to the matters specified therein.


 


5.     Your right pursuant hereto to
participate in a Proposed Sale shall be contingent on your material compliance
with each of the provisions hereof and your willingness to execute such
documents in connection therewith as may be reasonably requested by Parent.


 


6.     If the consideration to be
paid in exchange for shares of Common Stock in a Proposed Sale pursuant to Section 1
includes any securities, and the receipt thereof by Parent and a Management
Shareholder Entity would require under applicable law (a) the registration
or qualification of such securities or of any Person as a broker or dealer or
agent with respect to such securities or (b) the provision to any selling
Management Shareholder Entity of any information regarding the Company, its
subsidiaries, such securities or the issuer thereof that would not be required
to be delivered in an offering solely to a limited number of “accredited
investors” under Regulation D promulgated under the Securities Act of 1933, as
amended, and the rules and regulations in effect thereunder, Parent and
such Management Shareholder Entity shall not, subject to the following
sentence, have the right to sell shares of Common Stock in such proposed
sale.  In such event, Parent shall have
the right to cause to be paid to such selling Management Shareholder Entity in
lieu thereof, against surrender of the shares of Common Stock which would have
otherwise been sold by such selling Management Shareholder Entity to the
prospective buyer in the proposed sale, an amount in cash equal to the Fair
Market Value (as defined in the Stockholder’s Agreement) of such shares of
Common Stock as of the date such securities would have been issued in exchange
for such shares of Common Stock.


 


7.     (a)  If Parent or any of
its Affiliates that directly owns shares of Common Stock proposes to transfer,
directly or indirectly, a number of shares of Common Stock equal to 50% or more
of the outstanding shares of Common Stock (such Person, the “Drag-Along
Purchaser”), then if requested by Parent, the Management Stockholder
Entities shall be required to sell a number of shares of Common Stock equal to
the aggregate number of shares of Common Stock held by the Management
Stockholder Entities (including shares of Common Stock underlying exercisable
Options and unvested shares of Restricted Stock that would vest upon
consummation of such transaction) multiplied by the Tag Along Sale Percentage
(such transaction, a “Drag Transaction”).


 


(b)   Shares
of Common Stock held by the Management Stockholder Entities included in a Drag
Transaction will be included in any agreements with the Drag-Along Purchaser
relating thereto on the same terms and subject to the same conditions
applicable to the shares of Common Stock which Parent proposes to sell in the
Drag Transaction.  Such terms and
conditions shall include, without limitation: 
the pro rata reduction of the number of shares of Common Stock to be
sold by Parent and the Management Stockholder Entities to be included in the
Drag Transaction if required by the Drag-Along Purchaser; the sale price; the
payment of 


 


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fees, commissions and expenses; the provision of, and representation
and warranty as to, information reasonably requested by Parent covering matters
regarding the Management Stockholder Entities’ ownership of shares; and the
provision of requisite indemnification; provided that any
indemnification provided by the Management Stockholder Entities shall be pro
rata in proportion with the number of shares of Common Stock to be sold; provided,
further, that no Management Stockholder Entity shall be required to
indemnify any Person for an amount, in the aggregate, in excess of the gross
proceeds received in such Proposed Sale.


 


(c)   Your
pro rata share of any amount to be paid pursuant to Paragraph 3 or 7(b) shall
be based upon the number of shares of Common Stock intended to be transferred
by the Management Stockholder Entities plus the number of shares of Common
Stock you would have the right to acquire under any unexercised portion of the
Option which is then vested or would become vested as a result of the
consummation of the Proposed Sale or Drag Transaction, assuming that you
receive a payment in respect of such Option, plus the number of unvested shares
of Restricted Stock that would vest as a result of the consummation of the
Proposed Sale or Drag Transaction.


 


(d)   Notwithstanding
anything to the contrary in the foregoing, if the consideration payable for
shares of Common Stock is securities and the acquisition of such securities by
a Management Stockholder Entity would reasonably be expected to be prohibited
under U.S., foreign or state securities laws, such Management Stockholder
Entity shall be entitled to receive an amount in cash equal to the value of any
such securities such Person would otherwise be entitled to receive.


 


8.     The obligations of Parent
hereunder shall extend only to you and your transferees (“Permitted
Transferees”) who (a) are Other Management Stockholders (as defined in
the Stockholder’s Agreement), (b) are party to a Management Stockholder’s
Agreement with the Company and (c) have acquired Common Stock pursuant to
a Permitted Transfer (as defined in the Stockholder’s Agreement), and none of
the Management Stockholder Entities’ successors or assigns, with the exception
of any Permitted Transferee and only with respect to the Common Stock acquired
by such Permitted Transferee pursuant to a Permitted Transfer, shall have any
rights pursuant hereto.


 


9.     This Agreement shall
terminate and be of no further force and effect on the occurrence of the
earlier of the consummation of a Qualified Public Offering (as defined in the
Stockholder’s Agreement) or a Change in Control (as defined in the Stockholder’s
Agreement).


 


10.   All notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be
notified, (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid or (d) one (1) business day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. 
All communications shall be sent to such party’s address as set forth
below or at such other address or to such other person as the party shall have
furnished to each other party in writing in accordance with this provision:


 


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  If to Parent, at the following address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Buck Holdings, L.P.

  	
   

  
	
   

  	
  c/o KKR 2006 Fund, L.P.

  	
   

  
	
   

  	
  2800 Sand Hill Road

  	
   

  
	
   

  	
  Menlo Park, CA 94025

  	
   

  
	
   

  	
  Attention:  Michael Calbert

  	
   

  
	
   

  	
  Telecopy:  (650) 233-6553

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Simpson
  Thacher & Bartlett LLP

  	
   

  
	
   

  	
  425
  Lexington Avenue

  	
   

  
	
   

  	
  New York,
  New York 10017

  	
   

  
	
   

  	
  Attention:
  Marni J. Lerner, Esq.

  	
   

  
	
   

  	
  Telecopy:
  (212) 455-2502

  	
   

  
	
   

  	
   

  	
   

  
	
  If to the Company, to the Company at the following address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Dollar General Corporation

  	
   

  
	
   

  	
  100 Mission Ridge

  	
   

  
	
   

  	
  Goodlettsville, TN 37202

  	
   

  
	
   

  	
  Attention: General Counsel

  	
   

  
	
   

  	
  Telecopy: (615) 85-5180

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  	
   

  
	
   

  	
  Simpson Thacher & Bartlett LLP

  	
   

  
	
   

  	
  425 Lexington Avenue

  	
   

  
	
   

  	
  New York, New York 10017

  	
   

  
	
   

  	
  Attention:  Marni J. Lerner, Esq.

  	
   

  
	
   

  	
  Telecopy:  (212) 455-2502

  	
   

  



 


If to you, to you at the address first set forth
on the corresponding signature page hereto;


 


If to your Management Stockholder’s Estate or
Management Stockholder’s Trust, to the address provided to the Company by such
entity.


 


11.   The laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement.  In the event of any
controversy among the parties hereto arising out of, or relating to, this
Agreement which cannot be settled amicably by the parties, such controversy
shall be finally, exclusively and conclusively settled by mandatory arbitration
conducted expeditiously in accordance with the American Arbitration Association
rules, by a single independent arbitrator. 
Such arbitration process shall take place in Nashville, Tennessee.  The decision of the arbitrator shall be final
and binding upon all parties hereto and shall be rendered pursuant to a written
decision, which contains a detailed recital of the arbitrator’s reasoning.  Judgment upon the award rendered may be
entered in any court having 


 


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jurisdiction thereof.  Each party
shall bear its own legal fees and expenses, unless otherwise determined by the
arbitrator; provided that if the Management Stockholder substantially prevails
on any of his or her substantive legal claims, then the Investors shall
reimburse all legal fees and arbitration fees incurred by the Management
Stockholder to arbitrate the dispute. 
Each party hereto hereby irrevocably waives any right that it may have
had to bring an action in any court, domestic or foreign, or before any similar
domestic or foreign authority with respect to this Agreement.


 


12.   This Agreement may be executed
in counterparts, and by different parties on separate counterparts, each of
which shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.


 


13.   It is the understanding of the
undersigned that you are aware that no Proposed Sale is contemplated and that
such a sale may never occur.


 


14.   This Agreement may be amended
by Parent at any time upon notice to the Management Stockholder thereof; provided
that any amendment (i) that materially disadvantages the Management
Stockholder shall not be effective unless and until the Management Stockholder
has consented thereto in writing and (ii) that disadvantages a class of
stockholders in more than a de minimis way but less than a material way shall
require the consent of a majority of the equity interests held by such affected
class of stockholders.


 


15.   Capitalized terms used but not
defined herein shall have the meaning ascribed to such terms in the Stockholder’s
Agreement.


 


[Signatures on following pages]


 


7

















 


If the
foregoing accurately sets forth our agreement, please acknowledge your
acceptance thereof in the space provided below for that purpose.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  BUCK HOLDINGS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  BUCK HOLDINGS, LLC

  
	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  M. Calbert

  
	
   

  	
   

  	
  Name: Michael M. Calbert

  
	
   

  	
   

  	
  Title: 

  



 


[signature page to Sale Participation Agreement]


 

















 


	
  Accepted and agreed this 21 day of

  
	
   

  
	
  January 2008.

  
	
   

  
	
   

  
	
  /s/ Richard Dreiling

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Address:

  	
  1749 Via Di Salerno

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					



 


[signature page to Sale Participation
Agreement]