Exhibit
10.5


 


SALE
PARTICIPATION AGREEMENT


 


July 6, 2007


 


To:   The Person whose name is 

set forth on the signature page hereof


 


Dear Sir or Madam:


 


You have entered into an Exchange Agreement
with Buck Holdings, L.P., a Delaware limited partnership and the parent entity
of the Company (“Parent”), and/or a Management Stockholder’s Agreement,
dated as of the date hereof, among Dollar General Corporation, a Tennessee
corporation (the “Company”), Parent and you (the “Stockholder’s
Agreement”) relating to (i) Rollover Stock (as defined in the
Stockholder’s Agreement); (ii) Rollover Options (as defined in the
Stockholder’s Agreement); (iii) the purchase by you of Purchased Stock (as
defined in the Stockholder’s Agreement); and/or (iv) the grant by the
Company to you of new options (together with the Rollover Options, “Options”)
to purchase shares of common stock, par value $0.50 per share, of the Company (“Common
Stock”, which includes Rollover Stock and Purchased Stock).  Parent hereby agrees with you as follows,
effective as of the Closing Date (as defined in the Stockholder’s Agreement):


 


1.     (a)   In the event that at
any time on or after the Closing Date 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 10 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 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 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
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 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 


 


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owned by the Management Stockholder Entities and all
other Persons participating in such sale 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.  The 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 


 


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and Power of Attorney”).  The Custody Agreement and Power of Attorney
will contain 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 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) 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 Proposed
Sale or Drag Transaction, assuming that you receive a payment in respect of
such Option.


 


(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:


 


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: David J. Sorkin, Esq.


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) 855-5180


 


with a copy to:


 


Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: David J. Sorkin, Esq.


Marni J. Lerner, Esq.


Telecopy: (212) 455-2502


 


If to you, to you at the address first set
forth above herein;


 


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 by 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:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


[signature page to Sale Participation Agreement]


 

















 


 


 


Accepted and agreed this           
day of


 


                          
2007.


 


 


	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
			



 


[signature page to Sale Participation Agreement]