Exhibit 10.25


 


	
  DOLLAR GENERAL CORPORATION

  	
   

  	
  BUCK HOLDINGS, L.P.

  
	
  100 Mission Ridge

  	
   

  	
  c/o KKR 2006 Fund, L.P.

  
	
  Goodlettesville, Tennessee
  37072

  	
   

  	
  2800 Sand Hill Road, Suite 200

  
	
   

  	
   

  	
  Menlo Park, California 94025

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  July 6, 2007

  



 


 


Kohlberg
Kravis Roberts & Co L.P.


2800
Sand Hill Road, Suite 200


Menlo
Park, CA 94025


 


and


 


Goldman,
Sachs & Co.


85
Broad Street


New
York, NY 10004


 


Ladies and Gentlemen:


 


This letter serves to confirm the retention by Dollar General (the “Company”)
of Kohlberg Kravis Roberts & Co. L.P. (the “KKR Manager”) and
Goldman, Sachs & Co. (the “GS Manager” and together with the
KKR Manager, the “Managers” and each a “Manager”) to provide
management, consulting and financial services to the Company and its divisions,
subsidiaries and affiliates (collectively, the “Company Group”), as
follows:


 


1.     The Company has retained the Managers, and each Manager hereby
agrees to accept such retention, to provide to the Company Group, when and if
called upon, certain management, consulting and financial services of the type
customarily performed by such Managers. 
Commencing on the date hereof (the “Effective Date”), the Company
agrees to pay the Managers an aggregate annual fee (the “Advisory Fee”)
in an amount equal to five million dollars ($5,000,000), which amount shall
increase by 5.0% annually, payable in quarterly installments in arrears at the
end of each calendar quarter.  The
initial Advisory Fee shall be pro rated to reflect the portion of the current
fiscal year which has elapsed prior to the Effective Date.  The Managers shall split the Advisory Fee so
that (i) the GS Manager shall receive a portion of the Advisory Fee equal
to the product of (x) the Advisory Fee and (y) a fraction the
numerator of which is 600,000,000 (the “Original Investment Amount”) and
the denominator of which is 2,775,000,000 (such fraction, the “GS Share”)
and (ii) the KKR Manager shall receive the remaining portion of the
Advisory Fee.  The GS Share of the
Advisory Fee shall be adjusted downward in proportion to any reduction in the
Original Investment Amount owned in the aggregate by the investment funds
affiliated the GS Manager on the last business day in the applicable calendar
quarter for which such Advisory Fee is required to be paid.


 

















 


 


2.     In consideration for the Managers structuring services rendered
in connection with the acquisition of the outstanding shares of the Company by
Parent pursuant to the Merger Agreement, dated as of March 11, 2007, by
and among Buck Holdings, L.P. (“Parent”), Buck Acquisition Corp. and the
Company (the “Merger Agreement”), which services included, but were not
limited to, financial advisory services and capital structure review (the “Initial
Services”), the Company agrees to also pay the Managers a one-time
transaction fee to in an aggregate amount equal to seventy-five million dollars
($75,000,000) (the “Merger Fee”), payable immediately upon the Closing
(as defined in the Merger Agreement), which Merger Fee shall be apportioned so
that the GS Manager receives the GS Share of such Merger Fee and the KKR
Manager receives the remainder of such Merger Fee.


 


3.     The Company shall, with respect to each proposed transaction,
including, without limitation, any proposed acquisition, merger, full or
partial recapitalization, structural reorganization (including any divestiture
of one or more subsidiaries or operating divisions of any member of the Company
Group), reorganization of the shareholdings or other ownership structure of the
Company Group, sales or dispositions of assets or equity interests or any other
similar transaction (each, a “Transaction”) directly or indirectly
involving the members of the Company Group, pay to the Managers an aggregate
fee (a “Transaction Fee”) equal to 1.0% of the Transaction Value, or
such lesser amount as the Managers and the Company may agree, any such
Transaction Fee to be apportioned so that the GS Manager receives the GS Share
of such Transaction Fee and the KKR Manager receives the remainder of such
Transaction Fee.  The Company, on behalf
of the members of the Company Group, may agree to pay a Transaction Fee in
excess of 1.0% of the Transaction Value of a Transaction, subject to the
consent of the board of directors of the Company.  As used herein, “Transaction Value”
means the total value of the applicable Transaction, including, without
limitation, the aggregate amount of the cash funds and the aggregate value of
the other securities or obligations required to complete such Transaction
(excluding any fees payable pursuant to this paragraph 3), including any
indebtedness, guarantees, capital stock or similar items issued or made to
facilitate, and the amount of any revolving credit or other liquidity
facilities or arrangements established in connection with, such Transaction or
assumed, refinanced or left outstanding in connection with or immediately
following such Transaction.  For purposes
of calculating a Transaction Fee, the value of any securities included in the
Transaction Value will be determined by the average of the last sales prices
for such securities on the five trading days ending five days prior to the
consummation of the applicable Transaction, provided that if such securities do
not have an existing public trading market, the value of the securities shall
be their fair market value as mutually reasonably agreed between the Managers
and the Company, on behalf of the members of the Company Group, on the day
prior to consummation of such Transaction. 
For the avoidance of doubt, no Transaction Fee (other than the Merger
Fee) shall be payable to any Manager in respect of the Initial Services.


 


4.     In addition to any fees that may be payable to the Managers
under this agreement, the Company shall, or shall cause one or more of its
affiliates to, on behalf of itself and the other members of the Company Group
(subject to paragraph 5), reimburse the Managers and their affiliates and their
respective employees and agents, from time to time upon request, for all
reasonable out-of-pocket expenses incurred, including unreimbursed expenses
incurred to the date hereof, in connection with this retention and/or
transactions contemplated by the Merger Agreement, including travel expenses
and expenses of any legal, accounting or other 


 


2

















 


professional advisors to us or our
affiliates.  The Managers may submit
monthly expense statements to the Company or any other member of the Company
Group, which statements shall be payable within thirty days.  Nothing in this paragraph 4 shall limit any
obligations of Parent to reimburse any costs and expenses to the Managers,
their subsidiaries or affiliates as provided in the Amended and Restated
Limited Partnership Agreement of Parent, dated as of the date hereof, among the
parties thereto, as the same may be amended from time to time (the “Partnership
Agreement”), or in the Amended and Restated Limited Liability Company
Agreement of Buck Holdings, LLC, dated as of the date hereof, among the parties
thereto.


 


5.     Parent and the Company (on behalf of itself and the other
members of the Company Group) hereby acknowledge and agree that the obligations
of the Company under paragraphs 1- 4 shall be borne jointly and severally by
each member of the Company Group.


 


6.     Parent and the Company (on behalf of itself and the other
members of the Company Group) hereby acknowledge and agree that the services
provided by the Managers hereunder are being provided subject to the terms of
the Indemnification Agreement, dated as of the date hereof, between Parent, the
Company, and the Managers (as the same may be amended from time to time, the “Indemnification
Agreement”).


 


7.     Any advice or opinions provided by the Managers may not be
disclosed or referred to publicly or to any third party (other than the Company
Group’s legal, tax, financial or other advisors), except in accordance with our
prior written consent.


 


8.     Each Manager shall act as an independent contractor, with duties
solely to the Company Group.  The
provisions hereof shall inure to the benefit of and shall be binding upon the
parties hereto and their respective successors and assigns.  Nothing in this agreement, expressed or
implied, is intended to confer on any person other than the parties hereto or
their respective successors and assigns, any rights or remedies under or by
reason of this agreement.  Without
limiting the generality of the foregoing, the parties acknowledge that nothing
in this agreement, expressed or implied, is intended to confer on any present
or future holders of any securities of the Company or its subsidiaries or affiliates,
or any present or future creditor of the Company or its subsidiaries or
affiliates, any rights or remedies under or by reason of this agreement or any
performance hereunder.


 


9.     This agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.


 


10.   All notices and other communications provided for hereunder shall
be in writing and shall be sent by first class mail, telex, telecopier or hand
delivery:


 


	
   

  	
  If
  to Parent:

  	
   

  	
  Buck Holdings, L.P. 

  c/o Kohlberg Kravis
  Roberts & Co. L.P.  

  2800 Sand Hill Road, Suite 200 
 Menlo Park, CA 94025 

  Attention: Michael Calbert 

  Facsimile: (650)233-6548

  



 


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  with
  a copy to: 

  (which shall not 

  constitute notice)

  	
   

  	
  Simpson
  Thacher & Bartlett LLP 

  425 Lexington Avenue 

  New York, New York 10017 

  Attention:Marni Lerner, Esq. 

  Facsimile:(212) 455-2502

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If
  to the Company:

  	
   

  	
  Dollar
  General Corporation 

  100 Mission Ridge  

  Goodlettsville, Tennessee
  37072  
 Attention: Susan S. Lanigan, Esq.
  

  Facsimile: (615) 855-5180

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  a copy to: 

  (which shall not 

  constitute notice)

  	
   

  	
  Simpson
  Thacher & Bartlett LLP 

  425 Lexington Avenue 

  New York, New York 10017 

  Attention:Marni Lerner, Esq. 

  Facsimile:(212) 455-2502

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If
  to the KKR Manager:

  	
   

  	
  Kohlberg
  Kravis Roberts & Co. L.P.  

  2800 Sand Hill Road, Suite 200 

  Menlo Park, CA 94025 

  Attention: Michael Calbert 

  Facsimile: (650)233-6548

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  copies to: 

  (which shall not 

  constitute notice)

  	
   

  	
  Simpson
  Thacher & Bartlett LLP 

  425 Lexington Avenue 

  New York, New York 10017 

  Attention:Marni Lerner, Esq. 

  Facsimile:(212) 455-2502

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If
  to the GS Manager:

  	
   

  	
  Goldman,
  Sachs & Co.  
 85 Broad Street  
 New York, New York 10004  
 Attention: Adrian Jones  
 Tel: (212) 357-5505

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  with
  copies to: 

  (which shall not 

  constitute notice)

  	
   

  	
  Fried,
  Frank, Harris, Shriver & Jacobson LLP  
 One New York Plaza  
 New York, New York 10004  
 Attention: Robert C. Schwenkel, Esq.
  

                   Brian Mangino, Esq.  
 Tel: (212) 859-4000

  



 


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or to such
other address as any of the above shall have designated in writing to the other
above.  All such notices and
communications shall be deemed to have been given or made (i) when
delivered by hand, (ii) five business days after being deposited in the
mail, postage prepaid or (iii) when telecopied, receipt acknowledged.


 


11.   This agreement shall continue in effect from year to year
unless amended or terminated by mutual consent. 
In addition, in connection with the consummation of a Change of Control
(as defined in the Partnership Agreement) or a Qualified IPO (as defined in the
Partnership Agreement), the Company may terminate this agreement by delivery of
a written notice of termination to the Managers.  In the event of such a termination by the
Company of this agreement, the Company shall pay in cash to the Managers (i) all
unpaid Advisory Fees payable to such Manager hereunder, all unpaid fees payable
to such Manager pursuant to Section 3 of this agreement and all expenses
due under this agreement to such Manager with respect to periods prior to the
termination date, plus (ii) the net present value (using a discount rate
equal to the yield as of such termination date on U.S. Treasury securities of
like maturity based on the times such payments would have been due) of the
Advisory Fees that would have been payable with respect to the period from the
termination date through the twelfth anniversary of the Effective Date, or, if
terminated following the twelfth anniversary of the Effective Date, through the
first anniversary of the Effective Date occurring after the termination date,
any such fees payable pursuant to this clause (ii) to be apportioned so
that the GS Manager receives the GS Share of such fee and the KKR Manager receives
the remainder of such fee.


 


12.   Each party hereto represents and warrants that the execution and
delivery of this agreement by such party has been duly authorized by all
necessary action of such party.


 


13.   If any term or provision of this agreement or the application
thereof shall, in any jurisdiction and to any extent, be invalid and
unenforceable, such term or provision shall be ineffective, as to such
jurisdiction, solely to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable any remaining terms or provisions
hereof or affecting the validity or enforceability of such term or provision in
any other jurisdiction.  To the extent
permitted by applicable law, the parties hereto waive any provision of law that
renders any term or provision of this agreement invalid or unenforceable in any
respect.


 


14.   Each party hereto waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of our retention pursuant to, or our performance of
the services contemplated by this agreement.


 


15.   It is expressly understood that the foregoing paragraphs 2-6, 9
and 13 - 17, in their entirety, survive any termination of this agreement.


 


16.   Except in cases of gross negligence or willful misconduct, none of
the Managers, their respective affiliates or any of their respective employees,
officers, directors, partners, consultants, members, stockholders or their
respective affiliates shall have any liability of any kind whatsoever to any
member of the Company Group for any damages, losses or expenses (including,
without limitation, special, punitive, incidental or consequential damages and
interest, penalties and fees and disbursements of attorneys, accountants,
investment bankers and other professional advisors) with respect to the
provision of services hereunder.


 


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17.   This letter agreement, the Partnership Agreement and the
Indemnification Agreement contain the complete and entire understanding and
agreement between the Managers and the Company with respect to the subject
matter hereof and supersede all prior and contemporaneous understandings,
conditions and agreements, whether written or oral, express or implied, in
respect of the subject matter hereof. 
The Company acknowledges and agrees that neither Manager makes any
representations or warranties in connection with this letter agreement or its
provision of services pursuant hereto. 
The Company agrees that any acknowledgment or agreement made by the
Company in this letter agreement is made on behalf of the Company and the other
members of the Company Group.


 


18.   This agreement may be executed in counterparts, each of which
shall be deemed an original agreement, but all of which together shall
constitute one and the same instrument.


 


[Remainder of page intentionally
left blank.]


 


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If the foregoing sets forth the understanding
between us, please so indicate on the enclosed signed copy of this letter in
the space provided therefor and return it to us, whereupon this letter shall
constitute a binding agreement among us.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  DOLLAR GENERAL CORPORATION
  

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ David Tehle

  	
   

  
	
   

  	
   

  	
  Name:  David Tehle

  
	
   

  	
   

  	
  Title:   Executive Vice President and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUCK HOLDINGS, L.P.
  

  
	
   

  	
   

  
	
   

  	
  By: Buck Holdings, LLC,
  its general 

  partner  

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Michael H.
  Calbert

  	
   

  
	
   

  	
   

  	
  Name:  Michael H. Calbert

  
	
   

  	
   

  	
  Title:

  
					



 


 


	
  AGREED TO AND ACCEPTED BY:

  	
   

  
	
   

  	
   

  
	
  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