Exhibit 10.26


 


 


This
INDEMNIFICATION AGREEMENT, dated as of July 6, 2007 (the “Agreement”),
is among Buck Holdings, L.P., a Delaware limited partnership (“Parent”),
Dollar General Corporation, a Tennessee corporation (the “Company” and
together with Parent, the “Company Entities”) and Kohlberg Kravis Roberts & Co. L.P.,
a New York limited partnership, and Goldman, Sachs & Co., a New
York limited partnership (the “Managers” and each, a “Manager”).  Capitalized terms used herein without
definition have the meanings set forth in Section 1 of this Agreement.


 


RECITALS


 


A.                                   The
Company, Parent and Buck Acquisition Corp., a Tennessee corporation and wholly
owned subsidiary of Parent (“Merger Sub”) have entered into a Merger
Agreement, dated as of March 11, 2007 (as the same may be amended from
time to time in accordance with its terms, the “Merger Agreement”),
pursuant to which Merger Sub will be merged with and into the Company, with the
Company being the surviving corporation of the merger (the “Merger”).


 


B.                                     In
connection with the Merger, Affiliates of each of the Managers (such
Affiliates, the “Investors”) have entered into equity commitment letters
with Parent or one of its Affiliates, pursuant to which they have agreed to
purchase limited partnership interests in Parent.


 


C.                                     The
Investors, along with certain co-investors, have entered into an Amended and
Restated Limited Partnership Agreement of Parent (as the same may be amended
from time to time in accordance with the terms thereof, the “Partnership
Agreement”), dated as the date hereof, setting forth certain agreements
with respect to, among other things, the management of Parent and transfers of
its limited partnership units in various circumstances.


 


D.                                    In
order to finance the Merger and related transactions, the Managers have
assisted Parent in arranging to sell limited partnership units to the Investors
and to certain co-investors, including such other limited partners of Parent as
are listed in the signature pages of the Partnership Agreement (the “Equity
Offering”).


 


E.                                      In
order to finance the Merger, the Company and/or one or more of its wholly-owned
Subsidiaries intend to (i) enter into a senior secured asset-based
revolving credit facility, (ii) enter into a senior secured term loan
facility, and (iii) to issue senior cash-pay notes, senior toggle notes
and senior subordinated notes (the “Notes Offering”) (collectively, the “Financings”),
which Financings have been facilitated and arranged with the assistance of the
Managers.


 


F.                                      The
Company or one or more of its Subsidiaries or Affiliates from time to time in
the future may (i) offer and sell or cause to be offered and sold equity
or debt 


 

















 


securities (such offerings, collectively, the “Subsequent
Offerings”), including without limitation (a) offerings of shares of
capital stock of the Company or any of its Subsidiaries, and/or options to
purchase such shares to employees, directors and consultants of and to the
Company or any of its Subsidiaries (any such offering, a “Management
Offering”), and (b) one or more offerings of debt securities for the
purpose of refinancing any indebtedness of the Company or any of its
Subsidiaries or for other corporate purposes, and (ii) repurchase, redeem
or otherwise acquire certain securities of the Company or any of its
Subsidiaries or engage in recapitalization or structural reorganization
transactions relating thereto (any such repurchase, redemption, acquisition,
recapitalization or reorganization, a “Redemption”), in each case subject to
the terms and conditions of the Partnership Agreement and any other applicable
agreement, which offerings and/or Redemptions are expected to be arranged and
facilitated through the services of the Managers as provided herein and
pursuant to the terms of that certain letter agreement between the Managers and
the Company Entities, dated as of the date hereof (the “Management Agreement”).


 


G.                                     The
parties hereto recognize the possibility that claims might be made against and
liabilities incurred by the Managers or related Persons or Affiliates under
applicable securities laws or otherwise in connection with the Transactions or
the Securities Offerings, or relating to other actions or omissions of or by
members of the Company Group, or relating to the provision of financial
advisory, investment banking, monitoring and management consulting services
(the “Transaction Services”) to the Company Group by the Managers or
Affiliates thereof, and the parties hereto accordingly wish to provide for the
Managers and related Persons and Affiliates to be indemnified in respect of any
such claims and liabilities.


 


H.                                    The
parties hereto recognize that claims might be made against and liabilities
incurred by directors and officers of any member of the Company Group in
connection with their acting in such capacity, and accordingly wish to provide
for such directors and officers to be indemnified to the fullest extent
permitted by law in respect of any such claims and liabilities.


 


NOW,
THEREFORE, in consideration of the foregoing premises, and the mutual agreements
and covenants and provisions herein set forth, the parties hereto hereby agree
as follows:


 


1.                                       Definitions.


 


(a)                                 “Affiliate”
means, with respect to any Person, (i) any other Person directly or
indirectly Controlling, Controlled by or under common Control with, such
Person, (ii) any Person directly or indirectly owning or Controlling 10%
or more of any class of outstanding voting securities of such Person or (iii) any
officer, director, general partner, limited partner or trustee of any such
Person described in clause (i) or (ii). 
“Control” of 


 


2

















 


any Person shall
consist of the power to direct the management and policies of such Person
(whether through the ownership of voting securities, by contract, as trustee or
executor, or otherwise).


 


(b)                                “Change
in Control” means (i) the sale of all or substantially all of the
assets of Parent to any Person (or group of Persons acting in concert), other
than to (x) the Investors or their Affiliates or (y) any employee
benefit plan (or trust forming a part thereof) maintained by Parent or its
Affiliates or other Person of which a majority of its voting power or other
equity securities is owned, directly or indirectly, by Parent; or (ii) a
merger, recapitalization or other sale by Parent, the Investors or any of their
respective Affiliates, to a Person (or group of Persons acting in concert) of
equity interests that results in more than 50% of the equity interests of
Parent (or any resulting company after a merger) being held by a Person (or
group of Persons acting in concert) that does not include (x) the
Investors or their Affiliates or (y) an employee benefit plan (or trust
forming a part thereof) maintained by Parent or its Affiliates or other Person
of which a majority of its voting power or other equity securities is owned,
directly or indirectly, by Parent; in any event, which results in the Investors
and their Affiliates or such employee benefit plan ceasing to hold the ability
to elect a majority of the members of the board of managers of the general
partner of Parent holding a majority of the votes thereon.


 


(c)                                 “Claim”
means, with respect to any Indemnitee, any claim by or against such Indemnitee
involving any Obligation with respect to which such Indemnitee may be entitled
to be indemnified by any member of the Company Group under this Agreement.


 


(d)                                “Commission”
means the United States Securities and Exchange Commission or any successor
entity thereto.


 


(e)                                 “Company
Group” means Buck Holdings, LLC, Parent, the Company and any of their
Subsidiaries or Affiliates.


 


(f)                                   “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.


 


(g)                                “Expenses”
means all attorneys’ fees and expenses, retainers, court, arbitration and
mediation costs, transcript costs, fees of experts, bonds, witness fees, costs
of collecting and producing documents, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees and
all other disbursements or expenses of the types customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, appealing or otherwise
participating in a Proceeding.


 


(h)                                “Indemnitee”
means each of the Managers,  their
respective Affiliates, their respective successors and assigns, and the
respective directors, officers, partners, 


 


3

















 


members,
employees, agents, advisors, consultants, representatives and controlling
persons (within the meaning of the Securities Act) of each of them, or of their
partners, members and controlling persons, and each other person who is or
becomes a director or an officer of any member of the Company Group, in each
case irrespective of the capacity in which such person acts.


 


(i)                                    “Obligations”
means, collectively, any and all claims, obligations, liabilities, causes of
actions, Proceedings, investigations, judgments, decrees, losses, damages (including
punitive and exemplary damages), fees, fines, penalties, amounts paid in
settlement, costs and Expenses (including without limitation interest,
assessments and other charges in connection therewith and disbursements of
attorneys, accountants, investment bankers and other professional advisors), in
each case whether incurred, arising or existing with respect to third parties
or otherwise at any time or from time to time.


 


(j)                                    “Person”
means an individual, corporation, limited liability company, limited or general
partnership, trust or other entity, including a governmental or political
subdivision or an agency or instrumentality thereof.


 


(k)                                 “Proceeding”
means a threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, including without limitation
a claim, demand, discovery request, formal or informal investigation, inquiry,
administrative hearing, arbitration or other form of alternative dispute
resolution, including an appeal from any of the foregoing.


 


(l)                                    “Public
Offering” means the first day as of which (i) sales of shares of
Registrable Securities of the IPO Corporation (as such terms are defined in the
Partnership Agreement) are made to the public in the United States pursuant to
an underwritten public offering led by one or more underwriters at least one of
which is an underwriter of nationally recognized standing or (ii) the
board of directors of the Company has determined that such shares otherwise
have become publicly-traded for this purpose.


 


(m)                              “Related
Document” means any agreement, certificate, instrument or other document to
which any member of the Company Group may be a party or by which it or any of
its properties or assets may be bound or affected from time to time relating in
any way to the Transactions or any Securities Offering or any of the
transactions contemplated thereby, including without limitation, in each case
as the same may be amended from time to time, (i) any registration
statement filed by or on behalf of any member of the Company Group with the
Commission in connection with the Transactions or any Securities Offering,
including all exhibits, financial statements and schedules appended thereto,
and any submissions to the Commission in connection therewith, (ii) any
prospectus, preliminary, free-writing or otherwise, included in such 


 


4

















 


registration
statements or otherwise filed by or on behalf of any member of the Company
Group in connection with the Transactions or any Securities Offering or used to
offer or confirm sales of their respective securities in any Securities
Offering, (iii) any private placement or offering memorandum or circular,
information statement or other information or materials distributed by or on
behalf of any member of the Company Group or any placement agent or underwriter
in connection with the Transactions or any Securities Offering, (iv) any
federal, state or foreign securities law or other governmental or regulatory
filings or applications made in connection with any Securities Offering, the
Transactions or any of the transactions contemplated thereby, (v) any
dealer-manager, underwriting, subscription, purchase, stockholders, option or
registration rights agreement or plan entered into or adopted by any member of
the Company Group in connection with any Securities Offering, (vi) any
purchase, repurchase, redemption, recapitalization or reorganization or other
agreement entered into by any member of the Company Group in connection with
any Redemption, or (vii) any quarterly, annual or current reports or other
filing filed, furnished or supplementally provided by any member of the Company
Group with or to the Commission or any securities exchange, including all
exhibits, financial statements and schedules appended thereto, and any
submission to the Commission or any securities exchange in connection
therewith.


 


(n)                                “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.


 


(o)                                “Securities
Offerings” means the Equity Offering, the Notes Offering, any Management
Offering, and any Subsequent Offering.


 


(p)                                “Subsidiary”
means each corporation or other Person in which a Person owns or Controls,
directly or indirectly, capital stock or other equity interests representing
more than 50% of the outstanding voting stock or other equity interests.


 


(q)                                “Transactions”
means the Merger, the Equity Offering, the Financings and transactions for
which Transaction Services  are provided.


 


2.                                       Indemnification.


 


(a)                                 Each
of the Company Entities (each an “Indemnifying Party” and collectively
the “Indemnifying Parties”), jointly and severally, agrees to indemnify,
defend and hold harmless each Indemnitee:


 


(i)                                     from
and against any and all Obligations, whether incurred with respect to third
parties or otherwise, in any way resulting from, arising out of or in
connection with, based upon or relating to (A) the Securities Act, the
Exchange Act or any other applicable securities or other laws, in connection
with any Securities Offering, the Financings, any Related Document or any of
the 


 


5

















 


transactions contemplated thereby, (B) any other
action or failure to act of any member of the Company Group or any of their predecessors,
whether such action or failure has occurred or is yet to occur or any
obligation of any member of the Company Group or any of their predecessors, or (C) the
performance by the Managers or any of their respective Affiliates of
Transaction Services for any member of the Company Group (whether performed
prior to the date hereof, hereafter, pursuant to the Management Agreement or
otherwise);


 


(ii)                                  to
the fullest extent permitted by the law specified herein as governing this
Agreement, by the law of the place of organization of an Indemnifying Party, or
by any other applicable law in effect as of the date hereof or as amended to
increase the scope of permitted indemnification, whichever is greater (except,
with respect to any Indemnifying Party, to the extent that such indemnification
may be prohibited by the law of the place of organization of such Indemnifying
Party), from and against any and all Obligations whether incurred with respect
to third parties or otherwise, in any way resulting from, arising out of or in
connection with, based upon or relating to (A) the fact that such
Indemnitee is or was a director or an officer of any member of the Company
Group or is or was serving at the request of such corporation as a director,
officer, member, employee or agent of or advisor or consultant to another
corporation, partnership, joint venture, trust or other enterprise or (B) any
breach or alleged breach by such Indemnitee of his or her fiduciary duty as a
director or an officer of any member of the Company Group; and


 


(iii)                               to
the fullest extent permitted by the law specified herein as governing this
Agreement, by the law of the place of organization of an Indemnifying Party, or
by any other applicable law in effect as of the date hereof or as amended to
increase the scope of permitted indemnification, whichever is greater (except,
with respect to any Indemnifying Party, to the extent that such indemnification
may be prohibited by the law of the place of organization of such Indemnifying
Party), 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 (including any action by or in the
right of, or relating to, the Company Group, including any past, current or
future litigation relating to the Transactions or its equity ownership in the
Company Group), by reason of any actions or omissions or alleged acts or
omissions arising out of such Indemnitee’s activities either on behalf of the
Company Group or in furtherance of the interests of the Company Group or
arising out of or in connection with its purchase and/or ownership of equity
interests in the Company Group or its involvement in the Transactions, from and
against any and all Obligations; provided, that
such Indemnitee was not guilty of gross negligence, fraud, a willful breach of
this Agreement or a willful illegal act;


 


6

















 


in each case including but not limited to any and all fees, costs and
Expenses (including without limitation fees and disbursements of attorneys and
other professional advisers) incurred by or on behalf of any Indemnitee in
asserting, exercising or enforcing any of its rights, powers, privileges or
remedies in respect of this Agreement or the Management Agreement.


 


(b)                                Without
in any way limiting the foregoing Section 2(a), each of the Indemnifying
Parties agrees, jointly and severally, to indemnify, defend and hold harmless
each Indemnitee from and against any and all Obligations resulting from,
arising out of or in connection with, based upon or relating to liabilities
under the Securities Act, the Exchange Act or any other applicable securities
or other laws, rules or regulations in connection with (i) the inaccuracy
or breach of or default under any representation, warranty, covenant or
agreement in any Related Document, (ii) any untrue statement or alleged
untrue statement of a material fact contained in any Related Document or (iii) any
omission or alleged omission to state in any Related Document a material fact
required to be stated therein or necessary to make the statements therein not
misleading.  Notwithstanding the
foregoing, the Indemnifying Parties shall not be obligated to indemnify such
Indemnitee from and against any such Obligation to the extent that such
Obligation arises out of or is based upon an untrue statement or omission made
in such Related Document in reliance upon and in conformity with written
information furnished to the Indemnifying Parties, as the case may be, in an
instrument duly executed by such Indemnitee and specifically stating that it is
for use in the preparation of such Related Document.


 


(c)                                 Without
limiting the foregoing, in the event that any Proceeding is initiated by an Indemnitee
or any member of the Company Group to enforce or interpret this Agreement or
any rights of such Indemnitee to indemnification or advancement of expenses (or
related Obligations of such Indemnitee) under any member of the Company Group’s
certificate of incorporation or bylaws (or similar organizational documents),
any other agreement to which such Indemnitee and any member of the Company
Group are party, any vote of directors of any member of the Company Group, the
Tennessee Business Corporation Act, any other applicable law or any liability
insurance policy, the Indemnifying Parties shall indemnify such Indemnitee
against all costs and Expenses incurred by such Indemnitee or on such
Indemnitee’s behalf in connection with such Proceeding, whether or not such
Indemnitee is successful in such Proceeding, except to the extent that the
court presiding over such Proceeding determines that material assertions made
by such Indemnitee in such proceeding were in bad faith or were frivolous.


 


3.                                       Contribution.


 


(a)                                 If
for any reason the indemnity provided for in Section 2(a) is
unavailable or is insufficient to hold harmless any Indemnitee from any of the
Obligations covered by 


 


7

















 


such indemnity,
then the Indemnifying Parties, jointly and severally, shall contribute to the
amount paid or payable by such Indemnitee as a result of such Obligation in
such proportion as is appropriate to reflect (i) the relative fault of
each member of the Company Group, on the one hand, and such Indemnitee, on the
other, in connection with the state of facts giving rise to such Obligation, (ii) if
such Obligation results from, arises out of, is based upon or relates to the
Transactions or any Securities Offering, the relative benefits received by each
member of the Company Group, on the one hand, and such Indemnitee, on the
other, from such Transaction or Securities Offering and (iii) if required
by applicable law, any other relevant equitable considerations.


 


(b)                                If
for any reason the indemnity specifically provided for in Section 2(b) is
unavailable or is insufficient to hold harmless any Indemnitee from any of the
Obligations covered by such indemnity, then the Indemnifying Parties, jointly
and severally, shall contribute to the amount paid or payable by such
Indemnitee as a result of such Obligation in such proportion as is appropriate
to reflect (i) the relative fault of each of the members of the Company
Group, on the one hand, and such Indemnitee, on the other, in connection with
the information contained in or omitted from any Related Document, which
inclusion or omission resulted in the inaccuracy or breach of or default under
any representation, warranty, covenant or agreement therein, or which
information is or is alleged to be untrue, required to be stated therein or
necessary to make the statements therein not misleading, (ii) the relative
benefits received by the members of the Company Group, on the one hand, and
such Indemnitee, on the other, from such Transaction or Securities Offering and
(iii) if required by applicable law, any other relevant equitable
considerations.


 


(c)                                 For
purposes of Section 3(a), the relative fault of each member of the Company
Group, on the one hand, and of an Indemnitee, on the other, shall be determined
by reference to, among other things, their respective relative intent,
knowledge, access to information and opportunity to correct the state of facts
giving rise to such Obligation.  For
purposes of Section 3(b), the relative fault of each of the members of the
Company Group, on the one hand, and of an Indemnitee, on the other, shall be
determined by reference to, among other things, (i) whether the included
or omitted information relates to information supplied by the members of the
Company Group, on the one hand, or by such Indemnitee, on the other, (ii) their
respective relative intent, knowledge, access to information and opportunity to
correct such inaccuracy, breach, default, untrue or alleged untrue statement,
or omission or alleged omission, and (iii) applicable law.  For purposes of Section 3(a) or
3(b), the relative benefits received by each member of the Company Group, on
the one hand, and an Indemnitee, on the other, shall be determined by weighing
the direct monetary proceeds to the Company Group, on the one hand, and such
Indemnitee, on the other, from such Transaction or Securities Offering.


 


8

















 


(d)                                The
parties hereto acknowledge and agree that it would not be just and equitable if
contributions pursuant to Section 3(a) or 3(b) were determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in such respective
Section.  No Indemnifying Party shall be
liable under Section 3(a) or 3(b), as applicable, for contribution to
the amount paid or payable by any Indemnitee except to the extent and under
such circumstances such Indemnifying Party would have been liable to indemnify,
defend and hold harmless such Indemnitee under the corresponding Section 2(a) or
2(b), as applicable, if such indemnity were enforceable under applicable
law.  No Indemnitee shall be entitled to
contribution from any Indemnifying Party with respect to any Obligation covered
by the indemnity specifically provided for in Section 2(b) in the
event that such Indemnitee is finally determined to be guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such Obligation and the Indemnifying Parties
are not guilty of such fraudulent misrepresentation.


 


4.                                       Indemnification
Procedures.


 


(a)                                 Whenever
any Indemnitee shall have actual knowledge of the assertion of a Claim against
it, such Indemnitee shall notify the appropriate member of the Company Group in
writing of the Claim (the “Notice of Claim”) with reasonable promptness
after such Indemnitee has such knowledge relating to such Claim; provided
the failure or delay of such Indemnitee to give such Notice of Claim shall not
relieve any Indemnifying Party of its indemnification obligations under this
Agreement except to the extent that such omission results in a failure of
actual notice to it and it is materially injured as a result of the failure to
give such Notice of Claim.  The Notice of
Claim shall specify all material facts known to such Indemnitee relating to
such Claim and the monetary amount or an estimate of the monetary amount of the
Obligation involved if such Indemnitee has knowledge of such amount or a
reasonable basis for making such an estimate. 
The Indemnifying Parties shall, at their expense, undertake the defense
of such Claim with attorneys of their own choosing reasonably satisfactory in
all respects to such Indemnitee, subject to the right of such Indemnitee to
undertake such defense as hereinafter provided. 
An Indemnitee  may
participate in such defense with counsel of such Indemnitee’s choosing at the
expense of the Indemnifying Parties.  In
the event that the Indemnifying Parties do not undertake the defense of the
Claim within a reasonable time after such Indemnitee has given the Notice of
Claim, or in the event that such Indemnitee shall in good faith determine that
the defense of any claim by the Indemnifying Parties is inadequate or may
conflict with the interest of any Indemnitee (including without limitation,
Claims brought by or on behalf of any member of the Company Group), such
Indemnitee may, at the expense of the Indemnifying Parties and after giving
notice to the Indemnifying Parties of such action, undertake the defense of the
Claim and compromise or settle the Claim, all for the account of and at the
risk of the Indemnifying Parties.  In the
defense of any Claim against an Indemnitee, no Indemnifying Party shall, except
with the prior written consent of such Indemnitee, consent to entry of any
judgment or enter 


 


9

















 


into any
settlement that includes any injunctive or other non-monetary relief or any
payment of money by such Indemnitee, or that does not include as an unconditional
term thereof the giving by the Person or Persons asserting such Claim to such
Indemnitee of an unconditional release from all liability on any of the matters
that are the subject of such Claim and an acknowledgement that such Indemnitee
denies all wrongdoing in connection with such matters.  The Indemnifying Parties shall not be
obligated to indemnify an Indemnitee against amounts paid in settlement of a
Claim if such settlement is effected by such Indemnitee without the prior
written consent of the Company (on behalf of all Indemnifying Parties), which
shall not be unreasonably withheld.  In
each case, each Indemnitee seeking indemnification hereunder will cooperate
with the Indemnifying Parties, so long as an Indemnifying Party is conducting the
defense of the Claim, in the preparation for and the prosecution of the defense
of such Claim, including making available evidence within the control of such
Indemnitee, as the case may be, and persons needed as witnesses who are
employed by such Indemnitee, as the case may be, in each case as reasonably
needed for such defense and at cost, which cost, to the extent reasonably
incurred, shall be paid by the Indemnifying Parties.


 


(b)                                An
Indemnitee shall notify the Indemnifying Parties in writing of the amount
requested for advances (“Notice of Advances”).  The Indemnifying Parties hereby agree to
advance reasonable costs and Expenses incurred by any Indemnitee in connection
with any Claim (but not for any Claim initiated or brought voluntarily by an
Indemnitee other than a Proceeding pursuant to Section 2(c)) in advance of
the final disposition of such Claim without regard to whether such Indemnitee
will ultimately be entitled to be indemnified for such costs and expenses upon
receipt of an undertaking by or on behalf of such Indemnitee to repay amounts
so advanced if it shall ultimately be determined in a decision of a court of
competent jurisdiction from which no appeal can be taken that such Indemnitee
is not entitled to be indemnified by the Indemnifying Parties as authorized by
this Agreement.  The Indemnifying Parties
shall make payment of such advances no later than 10 days after the receipt of
the Notice of Advances.


 


(c)                                 An
Indemnitee shall notify the Indemnifying Parties in writing of the amount of
any Claim actually paid by such Indemnitee (the “Notice of Payment”).  The amount of any Claim actually paid by such
Indemnitee shall bear simple interest at the rate equal to the JPMorgan Chase
Bank, N.A. prime rate as of the date of such payment plus 2% per annum, from
the date the Indemnifying Parties receive the Notice of Payment to the date on
which any Indemnifying Party shall repay the amount of such Claim plus interest
thereon to such Indemnitee.  The Indemnifying
Parties shall make indemnification payments to such Indemnitee no later than 30
days after receipt of the Notice of Payment.


 


(d)                                Independent
Legal Counsel.  If there has not been
a Change in Control, independent legal counsel shall be selected by the
board of directors of the Company and approved by such Indemnitee (which
approval shall not be unreasonably 


 


10

















 


withheld
or delayed).  If there has been
a Change in Control, independent legal counsel shall be selected by such
Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld or delayed).  The
Indemnifying Parties shall pay the fees and expenses of independent legal
counsel and indemnify independent legal counsel against any and all Expenses,
claims, liabilities and damages arising out of or relating to its engagement.


 


5.                                       Certain
Covenants.  The rights of each
Indemnitee to be indemnified under any other agreement, document, certificate
or instrument or applicable law are independent of and in addition to any
rights of such Indemnitee to be indemnified under this Agreement.  The rights of each Indemnitee and the
obligations of the Indemnifying Parties hereunder shall remain in full force
and effect regardless of any investigation made by or on behalf of such
Indemnitee.  Following the Transactions,
each of the Company Entities, and each of their corporate successors, shall
implement and maintain in full force and effect any and all corporate charter
and by-law (or similar organizational document) provisions that may be
necessary or appropriate to enable it to carry out its obligations hereunder to
the fullest extent permitted by applicable law, including without limitation a
provision of its certificate of incorporation (or similar organizational
document) eliminating liability of a director for breach of fiduciary duty to
the fullest extent permitted by applicable law, as amended from time to
time.  So long as the Company or any
other member of the Company Group maintains liability insurance for any
directors, officers, employees or agents of any such Person, the Indemnifying
Parties shall ensure that each Indemnitee serving in such capacity is covered
by such insurance in such a manner as to provide such Indemnitee the same
rights and benefits as are accorded to the most favorably insured of the
Company’s and the Company Group’s then current directors and officers.


 


6.             Notices.  All notices and other communications
hereunder shall be in writing and shall be delivered by certified or registered
mail (first class postage prepaid and return receipt requested), telecopier,
overnight courier or hand delivery, as follows:


 


(a)  If to Parent, to:


 


Buck Holdings, L.P.


c/o KKR 2006 Fund, L.P.


2800 Sand Hill Road, Suite 200


Menlo Park,
California  94025


Attention:  Michael Calbert


Fax: (650) 233-6548


 


with a copy (which shall
not constitute notice) to:


 


Simpson Thacher &
Bartlett LLP


 


11

















 


425 Lexington Avenue


New York, New York 10017


Attention: Marni Lerner, Esq.


Fax: (212) 455-2502


 


(b) If to the Company:


 


Dollar General Corporation


100 Mission Ridge


Goodlettsville, Tennessee 37072


Attention: Susan S. Lanigan Esq.


Fax: (615) 855-5180


 


(c)   If to the
Managers, as applicable, to:


 


Kohlberg Kravis Roberts &
Co. L.P.


2800 Sand Hill Road, Suite 200


Menlo Park,
California  94025


Attention:  Michael Calbert


Fax: (650) 233-6548


 


with a
copy (which shall not constitute notice) to:


 


Simpson
Thacher & Bartlett LLP


425
Lexington Avenue


New
York, New York 10017


Attention:
Marni Lerner, Esq.


Fax:
(212) 455-2502


 


or


 


Goldman,
Sachs & Co.


85
Broad Street


New
York, New York 10004


Attention:
Adrian Jones


Fax:
(212) 357-5505


 


12

















 


with a copy (which shall not
constitute notice) to:


 


Fried, Frank, Harris, Shriver &
Jacobson LLP


One New York Plaza


New York, New York 10004


Attention:  Robert C. Schwenkel, Esq.


Brian Mangino, Esq.


Fax: (212) 859-4000


 


or to such other address or such other person as the Company Entities
or the applicable Manager shall have designated by notice to the other parties
hereto.  All communications hereunder
shall be effective upon receipt by the party to which they are addressed.


 


7.                                       Governing
Law; Jurisdiction, Waiver of Jury Trial. 
This Agreement shall be governed in all respects, including validity,
interpretation and effect, by the law of the State of New York, regardless of
the law that might be applied under principles of conflict of laws to the
extent such principles would require or permit the application of the laws of
another jurisdiction.  Each of the parties hereto irrevocably and
unconditionally (a) agrees that any legal suit, action or proceeding
brought by any party hereto arising out of or based upon this Agreement or the
transactions contemplated hereby may be brought in any court of the State of
New York or Federal District Court for the Southern District of New York
located in the City, County and State of New York (each, a “New York Court”), (b) waives,
to the fullest extent that it may effectively do so, any objection that it may
now or hereafter have to the laying of venue of any such proceeding brought in
a New York Court, and any claim that any such action or proceeding brought in a
New York Court has been brought in an inconvenient forum, (c) submits to
the non-exclusive jurisdiction of any New York Court in any suit, action or
proceeding and (d) ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE HEREBY WAIVES ANY RIGHT THAT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS
AGREEMENT.  With respect to clause (d) of
the immediately preceding sentence, each of the parties hereto
acknowledges and certifies that (i) no representative, agent or attorney
of any other party has represented, expressly or otherwise, that such other
party would not, in the event of litigation, seek to enforce the waiver
contained therein, (ii) it understands and has considered the implications
of such waiver, (iii) it makes such waiver voluntarily and (iv) it
has been induced to enter into this Agreement by, among other things, the
mutual waivers and certifications contained in this Section 7.


 


13

















 


8.                                       Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.


 


9.                                       Successors;
Binding Effect.  Each Indemnifying
Party will require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all
of the business and assets of such Indemnifying Party, by agreement in form and
substance satisfactory to the Managers and their counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that such Indemnifying Party would be required to perform if no such succession
had taken place.  This Agreement shall be
binding upon and inure to the benefit of each party hereto and its successors
and permitted assigns, and each other Indemnitee, but neither this Agreement
nor any right, interest or obligation hereunder shall be assigned, whether by
operation of law or otherwise, by the Company without the prior written consent
of the Managers.


 


10.                                 Miscellaneous.  The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.  This
Agreement is not intended to confer any right or remedy hereunder upon any Person
other than each of the parties hereto and their respective successors and
permitted assigns and each other Indemnitee. 
No amendment, modification, supplement or discharge of this Agreement,
and no waiver hereunder shall be valid and binding unless set forth in writing
and duly executed by the party or other Indemnitee against whom enforcement of
the amendment, modification, supplement or discharge is sought.  Neither the waiver by any of the parties
hereto or any other Indemnitee of a breach of or a default under any of the
provisions of this Agreement, nor the failure by any party hereto or any other
Indemnitee on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right, powers or privilege hereunder, shall be
construed as a waiver of any other breach or default of a similar nature, or as
a waiver of any provisions hereof, or any rights, powers or privileges
hereunder.  The rights, indemnities and
remedies herein provided are cumulative and are not exclusive of any rights,
indemnities or remedies that any party or other Indemnitee may otherwise have
by contract, at law or in equity or otherwise. 
This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument.


 


[The remainder of this page has been left blank
intentionally.]


 


14

















 


IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their
authorized representatives as of the date first above written.


 


	
   

  	
  KOHLBERG KRAVIS
  ROBERTS & CO. 

  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael H.
  Calbert

  	
   

  
	
   

  	
   

  	
  Name: Michael H.
  Calbert

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GOLDMAN,
  SACHS & CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John E. Bowman

  	
   

  
	
   

  	
   

  	
  Name: John E.
  Bowman

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUCK HOLDINGS, L.P.

  
	
   

  	
   

  
	
   

  	
  By: Buck Holdings, LLC,
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael H.
  Calbert

  	
   

  
	
   

  	
   

  	
  Name: Michael H.
  Calbert

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOLLAR GENERAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Tehle

  	
   

  
	
   

  	
   

  	
  Name: David Tehle

  
	
   

  	
   

  	
  Title:   Executive Vice President and Chief
  Financial Officer

  
							



 


Indemnification
Agreement – Signature Page