Document:

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 

 

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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 PageExhibit 10.27

 

August 15,
2007

 

Principal
Life Insurance Company

c/o
Principal Real Estate Investors, LLC

801
Grand Avenue

Des
Moines, IA  50392

 

Re:                               Sale and Purchase of
Interests

 

Ladies
and Gentlemen:

 

Pursuant
to this Agreement, Principal Life Insurance Company (“Seller”) hereby agrees to
sell, and DC Financial, LLC (“Purchaser”) does hereby agree to purchase,
all of Seller’s right, title and interest in, to and under the Loan described
on Exhibit A attached hereto and made a part hereof.  The Loan will be delivered to Purchaser on August 16,
2007, effective August 15, 2007 (the “Closing Date”) along with executed
allonge or endorsement to the note (issued in connection with the Loan) in
favor of Purchaser, as well as any other sale and transfer documentation
necessary to absolutely transfer all of Seller’s interest in the Loan, against
payment, by wire transfer of immediately available funds, to the account listed
on the attached Schedule I, consisting of (i) the aggregate principal
amounts due under the Loan as of the Closing Date plus (ii) accrued interest up to, but not including, the
Closing Date, plus (iii) a
purchase premium equal to eight percent (8%) of the then outstanding principal
amount of the Loan.  The amount
consisting (in the aggregate) of the foregoing (i), (ii) and (iii) is
hereinafter referred to as the “Purchase Price.” The Closing Date may be
changed by mutual consent of Seller and Purchaser, such consent not to be
unreasonably withheld.

 

For purposes of this Agreement, the term “Loan Documents” means those
documents reflected on Exhibit A to Exhibit E hereto which is
intended to include, as applicable, all original documents, agreements and
instruments relating to the Loan, including, without limitation, any promissory
note evidencing the Loan (the “Note”), any loan agreement, each original
executed collateral document or account or security securing the Loan (as
applicable), including, without limitation, the Lease, any mortgage, deed of
trust, security agreement, UCC financing statement, regulatory agreement,
assignment of rents and leases, pledge agreement, guaranty, indemnification
agreement, assignment of management agreement, assignment of stock or
partnership units, title insurance policy, tax or insurance escrow agreement,
letter of credit, certificate of deposit or any deposit or escrow of any kind,
fire or casualty insurance policy, flood hazard insurance policy, other
insurance (including, without limitation, any residual value insurance policy,
if any), or other document, agreement or instrument under which legal rights or
obligations are created or exist, if any, provided to Seller to secure the Loan
and held by Seller, and any amendments, restatements, endorsements,
confirmatory recordations, supplements, corrections, or other modifications
thereof, including, without limitation, as any of the foregoing were amended by
that certain Amendment of Documents, dated effective as of January 1,
2004, by and between DG Ardmore, L.L.C. and Principal Life Insurance
Company.

 

 

In
connection with the foregoing, Seller hereby represents and warrants to
Purchaser as follows:

 

1.               Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Iowa, has the necessary power and authority to execute and
deliver this Agreement and to perform in accordance herewith, and is duly
authorized to execute this Agreement and perform in accordance with the terms
hereof.  This Agreement has been duly
executed and delivered by Seller.  This
Agreement is enforceable against Seller in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
creditors’ rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).

 

2.               Seller is the sole beneficial owner of the
Loan acting solely on its own behalf and for its own account, and not as agent
or broker, in selling the Loan to Purchaser.

 

3.               The interests of Seller being sold and
transferred by Seller under this Agreement represents (in the aggregate, if
applicable) 100% of the outstanding interest in the Note and Loan Documents.

 

4.               Seller owns the Loan free and clear of any lien, pledge, participation interest, security
interest or any other encumbrance whatsoever.

 

5.               The outstanding principal balance of the Loan
is as set forth on Exhibit A, as of the date reflected thereon within a
variance of $100.00.

 

6.               Scheduled interest and principal payments
have been received through the date reflected on Exhibit A.  The next date upon which the payment of
principal and interest is due is as reflected on Exhibit A.

 

7.               Since the origination
of the Note by Seller, Seller (i) has neither satisfied, cancelled,
rescinded or subordinated any of the Loan which is the subject of sale under
this Agreement, in whole or in part, nor has any actual knowledge of any such
satisfaction, cancellation, rescission or subordination; (ii) has neither
released any of the interests in the Property from the lien of the deed of
trust/mortgage, nor has any actual knowledge of any such release; and (iii) has
neither executed any instrument that would evidence or result in any
satisfaction, cancellation, rescission, subordination or release of the Loan
which are the subject of sale under this Agreement, in whole or in part, nor
has any actual knowledge of the existence of any such instrument.

 

8.               Other than as amended
by that certain Amendment of Documents, dated effective as of January 1,
2004, by and between DG Ardmore, L.L.C. and Principal Life Insurance Company,
since the origination of the Note by Seller, (i) Seller has not knowingly
and voluntarily impaired, waived, altered, amended or modified in any respect
any Loan Document which is the subject of sale under this Agreement; and (ii) to
Seller’s actual knowledge, the terms of the Loan Documents have not been
impaired, waived, altered, amended or modified in any respect.

 

9.               The information set forth on Exhibit A
and Schedule I is true and correct.

 

10.         Seller’s representations and warranties as expressly set forth herein
shall (a) extend to Purchaser and its successors and/or assigns, and
Seller acknowledges and agrees that any such successor and/or assign shall be
entitled to rely upon Seller’s representations and warranties as if the
representations and warranties had been given directly to Purchaser’s
successors and/or assigns by Seller, and (b) not be limited by any
restrictive endorsement in the Note, any allonge to the Note, or any assignment
document.

 

 

Purchaser hereby represents and warrants to Seller
as follows:

 

1.               Purchaser is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Tennessee, has the necessary power and authority to execute
and deliver this Agreement and to perform in accordance herewith, and is duly
authorized to execute this Agreement and perform in accordance with the terms
hereof.  This Agreement has been duly
executed and delivered by Purchaser. 
This Agreement is enforceable against Purchaser in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting creditors’ rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law).

 

2.               Purchaser understands that the Loan (and the
Note evidencing the same) has not been and will not be registered under the
Securities Act of 1933, as amended (the “Securities Act”) and may be resold
only if registered pursuant to the provisions of the Act or if an exemption
from such registration is available; that neither the issuer nor Seller is
required to register the Loan or the Note, and that any transfer must comply
with the agreements and documents that govern the Loan or the Note.

 

3.               Purchaser does not consider the acquisition
of any Loan as the “purchase” or “sale” of a “security” within the meaning of
the Securities Act of 1933, the Securities Exchange Act of 1934 or Rule 10b-5
promulgated thereunder, the Trust Indenture Act of 1939, or any state
securities laws.

 

4.               Purchaser has made such examination, review
and investigation of the facts and circumstances necessary to evaluate the Loan
as it has deemed necessary or appropriate.

 

5.               Purchaser has not received from Seller any
investment advice or any opinion as to whether the purchase of the Loan is
prudent, and Purchaser is not relying on any representation or warranty by
Seller except as expressly set forth herein.

 

6.               Purchaser has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of an investment in the Loan, and Purchaser has concluded on the
basis of information available to it that it is able to bear the risks associated
with such an investment for an indefinite period of time.

 

7.               Purchaser has received a copy of the Loan
Documents and such other documents and information that it has requested, and
has been afforded an ample opportunity to review such materials.  Purchaser acknowledges that it has conducted
an independent investigation of such matters and any other matter it deems
necessary and has had the opportunity to receive such information as in its
judgment is necessary for it to make an informed investment decision, and has
not relied upon Seller for any investigation or assessment to evaluate the
transaction contemplated hereby, and Purchaser is not relying on any
representation or warranty, express or implied, by Seller except as expressly
set forth herein.

 

Seller
and Purchaser hereby agree as follows:

 

1.               Each party hereto shall execute and deliver
further documents or instruments as may be reasonably requested by the other
party in order to effect the intent and purposes of transactions represented by
this Agreement.  Purchaser shall
reimburse Seller for all reasonable costs incurred by Seller for any such
requests.  This Agreement shall be
binding on, and inure to the benefit of, the parties hereto and their
respective successors and assigns.

 

 

2.               The sale of the Loan to Purchaser shall
constitute a reaffirmation by Seller and Purchaser on and as of the date of
such sale of the foregoing representations and warranties, which shall survive
the signing, and delivery of this Agreement and the sale of the Loan.

 

3.               Upon payment of the Purchase Price at
Closing, Seller shall:  (i) deliver
executed originals of Exhibits B through F inclusive, or that form of said
exhibits deemed necessary by a nationally recognized title insurance company to
effect an absolute assignment and transfer of the Note and Loan Documents from
Seller to Purchaser, as well as such other sale and transfer documents as may
be customary and reasonable; (ii) execute such documents and take such
actions as are necessary to deliver any funds in, or transfer control over, any
escrow accounts held in connection with the Loan; and (iii) deliver the
original Note and all other original Loan Documents in Seller’s possession or
control.

 

4.               With respect to any and all payments received
by Seller on or after the Closing Date on account of the Loan, including any
insurance proceeds or condemnation awards, Seller shall remit such payments
promptly to Purchaser via wire transfer without interest and without any
deduction or withholding of any kind.

 

5.               Each of Seller and Purchaser hereby
represents and warrants to the other that it has not dealt with any broker in
connection with this Agreement (or any other party for whom a commission or
other such payment shall be due in connection with this Agreement).

 

6.               All notices and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered (or delivery refused), if sent by registered
or certified mail (return receipt requested), (b) when delivered (or
delivery refused), if delivered personally, (c) when transmitted, if sent
by facsimile if a confirmation of transmission is produced by the sending
machine, or (d) when delivered (or delivery refused), if sent by overnight
mail or overnight courier, in each case to the parties at the following
addresses or facsimile numbers (or at such other addresses or facsimile numbers
as shall be specified by like notice):

 

(1)                                  If to Purchaser, at

 

DC Financial, LLC

c/o Dollar General Corporation

100 Mission Ridge

Goodlettsville, TN 37072

Attn:  Law Department

Telecopier No. 615-855-5180

 

(2)                                  If to Seller, at

Principal Life Insurance Company

c/o Principal Real Estate Investors, LLC

801 Grand Avenue

Des Moines, IA  50392

Attn:  Darin Bennigsdorf

Telecopier No. 866-850-4022

The giving of any notice required hereunder may be waived in writing by
the party entitled to receive such notice. 
Failure or delay in delivering copies of any notice, demand, request,
consent, approval, 

 

 

declaration or other communication within any corporation or firm to
the persons designated to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.

 

7.               This Agreement may not be amended,
supplemented or modified except by an instrument in writing signed on behalf of
each of the parties hereto.  Any term,
condition or provision of this Agreement may be waived in writing at any time
by the party which is entitled to the benefits thereof.

 

8.               Except as provided herein, Purchaser and
Seller shall each be responsible for payment of their own costs and expenses
(including legal fees) incurred in connection with the purchase of the
Loan.  Notwithstanding the foregoing,
Purchaser shall pay all governmental, documentary and transfer fees, recording
costs, title insurance premiums and any other closing costs.

 

9.               Purchaser acknowledges and agrees that any
appraisal delivered to Purchaser in conjunction herewith was performed for the
benefit of Seller and that Seller in no way guarantees the appraisal’s accuracy
or sufficiency, and that Purchaser will not rely upon such document.

 

10.         THIS AGREEMENT SHALL BE
CONSTRUED, AND THE RIGHTS AND OBLIGATIONS OF SELLER AND PURCHASER HEREUNDER
DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF IOWA.  EACH OF PURCHASER AND SELLER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY
APPLICABLE LAWS) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  DC
  FINANCIAL, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wade Smith

  	
   

  
	
   

  	
   

  	
  Name: Wade Smith

  
	
   

  	
   

  	
  Title:

  

 

Agreed to and accepted by:

 

	
  PRINCIPAL
  LIFE INSURANCE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  	
   

  	
   

  
	
   

  	
  Its authorized signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Steven Traynor

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Steven Traynor

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Darin Benningsdorf

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Darin Benningsdorf

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

 

EXHIBIT A

 

1)              Principal Balance of Loan after the
application of the August 1, 2007 payment is $34,302,507.42.

 

2)              Interest on the Loan has been paid thru July 31,
2007.

 

3)              The next scheduled payment of principal and
interest due under the note is September 1, 2007.

 

 

SCHEDULE I

 

	
  Name and Address of Seller

  	
   

  	
  Principal Life Insurance Company

  
	
   

  	
   

  	
  c/o Principal Real Estate Investors, LLC

  
	
   

  	
   

  	
  801 Grand Avenue

  
	
   

  	
   

  	
  Des Moines, IA  50392

  
	
   

  	
   

  	
   

  
	
  Payment Instructions

  	
   

  	
  Wells Fargo Bank, N.A.

  
	
   

  	
   

  	
  420 Montgomery Street

  
	
   

  	
   

  	
  San Francisco, CA  94104

  
	
   

  	
   

  	
  ABA Number 121000248

  
	
   

  	
   

  	
  Account No. 8785453476

  
	
   

  	
   

  	
  Name of Account:  PGI Serviced Mtge. Pymts.

  
	
   

  	
   

  	
  OBI (Special Instructions) Field:

  
	
   

  	
   

  	
  PFGCR(S)752112

  
	
   

  	
   

  	
   

  
	
  Federal Tax ID No.

  	
   

  	
   

  

 

 

EXHIBIT
B

 

ALLONGE

 

To Secured Promissory
Note dated as of January 19, 1999,
in the original principal amount of FORTY-SIX MILLION ONE HUNDRED SIXTY-THREE
THOUSAND SIX HUNDRED SIXTY-SIX DOLLARS ($46,163,666.00)
from DG Ardmore, L.L.C., a
Delaware limited liability company, to Principal Life Insurance Company,
an Iowa corporation, as amended by that
certain Amendment of Documents, dated effective as of January 1, 2004, by
and between DG Ardmore, L.L.C. and Principal Life Insurance Company.

 

For value received, pay to the order of DC
FINANCIAL, LLC, a Tennessee limited liability company, without recourse.

 

	
   

  	
   

  	
  PRINCIPAL LIFE
  INSURANCE COMPANY,

  
	
   

  	
   

  	
  an Iowa corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
   

  	
  its authorized signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  

Dated: 
August         , 2007

 

 

EXHIBIT C

 

ASSIGNMENT OF MORTGAGE

 

Dated as of 
August       , 2007

 

PRINCIPAL LIFE
INSURANCE COMPANY, an
Iowa corporation (“Assignor”),
having an address at c/o Principal Real Estate Investors, LLC, 801 Grand
Avenue, Des Moines, Iowa  50392, is the legal and equitable owner and
holder of that certain Secured Promissory Note
dated as of January 19, 1999, made
by DG Ardmore, L.L.C., a Delaware limited liability company (“Borrower”), in the principal amount of
Forty-Six Million One Hundred Sixty-Three Thousand Six Hundred Sixty-Six
Dollars ($46,163,666.00) (the “Original Note”), which Original Note is
secured by, among other things, that certain Mortgage
and Security Agreement from Borrower to Assignor dated as of January 19, 1999 (the “Original Indenture”), which encumbers
that certain real property more fully described on Exhibit A (the “Mortgaged Property”).

 

WHEREAS,
the Original Indenture was recorded on January 25, 1999 in Book 3357, Page 19
of the records of the County Clerk of Carter County, Oklahoma; and

 

WHEREAS,
the Original Note and the Original Indenture were amended by that certain
Amendment of Documents (the “Amendment”)
dated effective as of January 1, 2004, made by and between Borrower and
Assignor, and recorded on February 4, 2004 in Book 4094, Page 147 of
the records of the County Clerk of Carter County, Oklahoma (the Original Note
as amended by the Amendment is hereinafter the “Note” and the Original Indenture as amended by the
Amendment is hereinafter the “Indenture”);
and

 

WHEREAS,
Assignor has simultaneously herewith endorsed the Note without recourse to DC
FINANCIAL, LLC, a Tennessee limited liability company (“Assignee”), having an address at c/o
Dollar General Corporation, 100 Mission Ridge, Goodlettsville,
Tennessee  37072, and the parties hereto now desire that the
Indenture be assigned to Assignee;

 

NOW THEREFORE,
in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged and intending to be
legally bound hereby, Assignor does hereby sell, assign, grant, transfer, set
over and convey to Assignee, its successors and assigns, without recourse, all
of Assignor’s interest in, to and under the following: the Indenture;

 

Together, without recourse, all of Assignor’s
right, title, and interest in and to the notes, bonds or other obligations
described in said Indenture and secured thereby.  To have and to hold the same unto the
Assignee, its successors and assigns, forever.

 

This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

This Assignment shall be governed by and
construed in accordance with the laws of the State of Oklahoma.

 

 

WITNESS
the execution hereof as of the date and year first
above written.

 

	
   

  	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY,

  
	
   

  	
   

  	
  an Iowa corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
   

  	
  its authorized signatory

  

 

 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 

	
  STATE OF
  IOWA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF
  POLK

  	
  )

  

 

On this           
day of August, 2007, before me, the undersigned, a Notary Public in and for the
said State, personally appeared                                                             
and                                                             ,
to me personally known to be the identical persons whose names are subscribed
to the foregoing instrument, who being by me duly sworn, did say that they are
the                                                             
and                                                             ,
respectively, of PRINCIPAL REAL ESTATE INVESTORS, LLC, a Delaware limited
liability company, authorized signatory of PRINCIPAL LIFE INSURANCE COMPANY, an
Iowa corporation, and that the seal affixed to the instrument is the seal of
Principal Real Estate Investors, LLC; that the instrument was signed and sealed
on behalf of the corporation by Principal Real Estate Investors, LLC, as
authorized signatory of Principal Life Insurance Company, by authority of the
Board of Directors of Principal Life Insurance Company; and that the aforesaid
individuals each acknowledged the execution of the foregoing instrument to be
the voluntary act and deed of Principal Real Estate Investors, LLC, as
authorized signatories of said corporation, by it and by them voluntarily
executed.

 

 

	
   

  	
   

  	
   

  
	
  Notary Public in and for said State

  	
   

  
	
  My Commission Expires:

  	
   

  
	
  [Affix Notarial Stamp or Seal]

  	
   

  

 

EXHIBIT D

 

ASSIGNMENT OF

ASSIGNMENT OF LEASES AND RENTS

 

Dated as of August       ,
2007

 

PRINCIPAL LIFE
INSURANCE COMPANY, an
Iowa corporation (“Assignor”),
having an address at c/o Principal Real Estate Investors, LLC, 801 Grand Avenue,
Des Moines, Iowa  50392, is the legal and equitable owner and holder
of that certain Secured Promissory Note
dated as of January 19, 1999, made
by DG Ardmore, L.L.C., a Delaware limited liability company (“Borrower”), in the principal amount of
Forty-Six Million One Hundred Sixty-Three Thousand Six Hundred Sixty-Six
Dollars ($46,163,666.00) (the “Original Note”), which Original Note is
secured by, among other things, that certain Assignment
of Leases and Rents from Borrower to Assignor dated as of January 19, 1999  (the “Original
Assignment of Lease”), which encumbers that certain real
property more fully described on Exhibit A
(the “Mortgaged Property”).

 

WHEREAS,
the Original Assignment of Lease was recorded on January 25, 1999 in Book
3357, Page 53 of the records of the County Clerk of Carter County,
Oklahoma; and

 

WHEREAS,
the Original Note and the Original Assignment of Lease were amended by that
certain Amendment of Documents (the “Amendment”)
dated effective as of January 1, 2004, made by and between Borrower and
Assignor, and recorded on February 4, 2004 in Book 4094, Page 147 of
the records of the County Clerk of Carter County, Oklahoma (the Original Note
as amended by the Amendment is hereinafter the “Note” and the Original Assignment of Lease as amended by
the Amendment is hereinafter the “Assignment
of Lease”); and

 

WHEREAS,
Assignor has endorsed the Note without recourse to DC FINANCIAL, LLC,
a Tennessee limited liability company (“Assignee”), having an address at c/o Dollar General
Corporation, 100 Mission Ridge, Goodlettsville, Tennessee  37072, and
the parties hereto now desire that Assignment of Lease be assigned to Assignee;

 

NOW THEREFORE,
in consideration of the foregoing and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged and intending to be
legally bound hereby, Assignor does hereby sell, assign, grant, transfer, set
over and convey to Assignee, its successors and assigns, without recourse, all
of Assignor’s interest in, to and under the following: the Assignment of Lease;

 

Together, without recourse, all of Assignor’s
right, title, and interest in and to the notes, bonds or other obligations
described in said Assignment of Leases and secured thereby.  To have and to hold the same unto the Assignee,
its successors and assigns, forever.

 

This Assignment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

This Assignment shall be governed by and
construed in accordance with the laws of the State of Oklahoma.

 

 

WITNESS
the execution hereof as of the date and year first
above written.

 

	
   

  	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY,

  
	
   

  	
   

  	
  an Iowa corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  
	
   

  	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
   

  	
  its authorized signatory

  

 

 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
						

 

 

	
  STATE OF
  IOWA

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF
  POLK

  	
  )

  

 

On this           
day of August, 2007, before me, the undersigned, a Notary Public in and for the
said State, personally appeared                                                             
and                                                             ,
to me personally known to be the identical persons whose names are subscribed
to the foregoing instrument, who being by me duly sworn, did say that they are
the                                                             
and                                                             ,
respectively, of PRINCIPAL REAL ESTATE INVESTORS, LLC, a Delaware limited
liability company, authorized signatory of PRINCIPAL LIFE INSURANCE COMPANY, an
Iowa corporation, and that the seal affixed to the instrument is the seal of
Principal Real Estate Investors, LLC; that the instrument was signed and sealed
on behalf of the corporation by Principal Real Estate Investors, LLC, as
authorized signatory of Principal Life Insurance Company, by authority of the
Board of Directors of Principal Life Insurance Company; and that the aforesaid
individuals each acknowledged the execution of the foregoing instrument to be
the voluntary act and deed of Principal Real Estate Investors, LLC, as
authorized signatories of said corporation, by it and by them voluntarily
executed.

 

	
   

  	
   

  	
   

  
	
  Notary Public in and for said State

  	
   

  
	
  My Commission Expires:

  	
   

  
	
  [Affix Notarial Stamp or Seal]

  	
   

  

 

7

 

EXHIBIT E

 

GENERAL
ASSIGNMENT OF LOAN DOCUMENTS

 

THIS GENERAL
ASSIGNMENT OF LOAN DOCUMENTS,
dated as of August         ,
2007, is made by PRINCIPAL LIFE
INSURANCE COMPANY, an Iowa
corporation (“Assignor”),
to DC FINANCIAL, LLC, a Tennessee
limited liability company (“Assignee”).

 

RECITALS

 

WHEREAS, Assignor was the holder of a certain Secured Promissory Note
dated as of January 19, 1999 (the “Original Note”) from DG Ardmore, L.L.C., a Delaware limited liability company (“Borrower”), and various security and
other documents executed in connection therewith (collectively, the “Original Security Documents”), as listed in
Exhibit A attached
hereto and made a part hereof, all dated as of January 19,
1999 (the Original Note and the Original Security Documents are
sometimes collectively referred to herein as the “Original Loan Documents”); and

 

WHEREAS, the Original Loan Documents were amended by
that certain Amendment of Documents (the “Amendment”) dated effective as of January 1, 2004, made
by and between Borrower and Assignor (the Original Note as amended by the
Amendment is hereinafter the “Note,”
the Original Security Documents as amended by the Amendment are hereinafter the
“Security Documents,” and the
Original Loan Documents as amended by the Amendment and otherwise as listed in Exhibit A are hereinafter the “Loan Documents”); and

 

WHEREAS, the interests of Assignor in the Note were
endorsed, without recourse, by Allonge attached thereto, to Assignee herein;
and

 

WHEREAS, Assignor desires to assign all of its right,
title and interest in and to the Loan Documents to Assignee;

 

NOW THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Assignor does hereby sell, assign, grant, transfer, set over and
convey to Assignee, its successors and assigns, without recourse, all of
Assignor’s right, title and interest in the Loan Documents.

 

Together, without recourse, all of Assignor’s right,
title, and interest in and to the notes, bonds or other obligations described
therein.  To have and to hold the same
unto the Assignee, its successors and assigns, forever.  All capitalized terms used and not otherwise
defined herein shall have the meanings set forth in the Note.

 

This Assignment shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State of Oklahoma.

 

8

 

IN WITNESS WHEREOF, the undersigned hereby affixes its
signature as of the day and year first above written.

 

	
  WITNESS:

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  PRINCIPAL LIFE INSURANCE COMPANY,

  
	
   

  	
  an Iowa
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  
	
   

  	
   

  	
  a Delaware limited
  liability company,

  
	
   

  	
   

  	
  its authorized signatory

  

 

 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

9

 

EXHIBIT A

 

(to General Assignment)

 

Original Loan Documents:

 

1.               Secured Promissory Note, dated January 19, 1999, issued
by DG Ardmore, L.L.C. and payable to the order of Principal Life Insurance
Company

 

2.               Mortgage and Security Agreement, dated January 19,
1999, by DG Ardmore, L.L.C. to and for the benefit of Principal Life Insurance
Company, recorded on January 25,
1999 in Book 3357, Page 19 of the records of the County Clerk of Carter
County, Oklahoma

 

3.               Assignment of
Leases and Rents, dated January 19, 1999, by DG Ardmore, L.L.C. to and for
the benefit of Principal Life Insurance Company, recorded on January 25, 1999 in Book 3357, Page 53 of the
records of the County Clerk of Carter County, Oklahoma

 

4.               Environmental
Indemnity Agreement, dated January 19, 1999, by DG Ardmore, L.L.C. to and
for the benefit of Principal Life Insurance Company

 

5.               Original UCC-1
Financing Statement filed January 25, 1999 with the Secretary of State of
Oklahoma, file #0003009

 

6.               Original UCC-1
Financing Statement (in lieu of continuation statement for #5 above) filed December 16,
2003 with the Secretary of State of Delaware, file #3330506

 

7.               Lender’s Title
Insurance Policy issued by First American Title Insurance Company, Policy
Number C 276843, with all endorsements thereto

 

8.               Opinion of
Goldberg, Kohn, Bell, Black, Rosenbloom & Moritz, Ltd., counsel to
Borrower, dated as of January 19, 1999

 

9.               Opinion of Andrews
Davis Legg Bixler Milsten & Price, Inc., special Oklahoma counsel
to Borrower, dated as of January 19, 1999

 

10.         Certificate of Garry W.
Cohen, Executive Vice President of Mesirow Realty Sale-Leaseback, Inc.
(sole member of Borrower), dated as of January 19, 1999

 

11.         Lease Agreement dated January 19,
1999, by and between DG Ardmore, L.L.C., as landlord, and Dollar General
Corporation, as tenant, as evidenced by a Memorandum of Lease recorded on January 25, 1999 in Book
3357, Page 63 of the records of the County Clerk of Carter County,
Oklahoma, and assigned by Dollar General Corporation to Dolgencorp, Inc.
by an Assignment of Lease effective as of January 28, 2000 (which
Assignment of Lease was recorded on January 31, 2000 in Book 3487, Page 154
of the records of the County Clerk of Carter County, Oklahoma), and any other
modifications, assignments, etc., thereof

 

12.         Subordination,
Non-Disturbance and Attornment Agreement, dated January 19, 1999, by and
among Dollar General Corporation, DG Ardmore, L.L.C., and Principal Life 

 

 

Insurance Company, recorded on January 25, 1999 in Book 3357, Page 67 of the
records of the County Clerk of Carter County, Oklahoma

 

13.         Evidence of Property and
Casualty Insurance

 

14.         Evidence of Liability
Insurance

 

15.         MAI Appraisal

 

Amendments:

 

1.               Consent to Transfer
of One Hundred Percent (100%) of the Membership Interests in DG Ardmore,
L.L.C., dated effective as of July 14, 2000, by and among Principal Life
Insurance Company, an Iowa corporation, as Lender, Mesirow Realty
Sale-Leaseback, Inc., as original member of DG Ardmore, L.L.C., and
Daniel G. Kamin, as purchaser of the membership interests in DG Ardmore,
L.L.C.

 

2.               Letter issued by
Principal Life Insurance Company to DG Ardmore, L.L.C., Dolgencorp, Inc.,
and Dollar General Corporation, dated January 13, 2004

 

3.               Amendment of
Documents, effective as of January 1, 2004, by and between
DG Ardmore, L.L.C. and Principal Life Insurance Company, recorded on February 4, 2004 in Book 4094,
Page 147 of the records of the County Clerk of Carter County, Oklahoma

 

4.               Endorsements to
First American Title Insurance Company Policy No. C 276843, issued
effective as of February 4, 2004

 

5.               Sub-Lease Agreement
between the Ardmore Development Authority, as landlord, and DG Ardmore, L.L.C.,
as tenant, effective as of January 1, 2004, as evidenced by a memorandum
of lease recorded on February 4, 2004 in Book 4094, Page 141 of
the records of the County Clerk of Carter County, Oklahoma

 

6.               Sub-Lease Agreement
between DG Ardmore, L.L.C., as sub-lessor, and Dolgencorp, Inc., as
sub-lessee, effective as of January 1, 2004

 

7.               Estoppel
Certificate and Agreement, effective as of January 1, 2004, by and among
the Ardmore Development Authority, as sublessor, DG Ardmore, L.L.C., as
sublessee, and Principal Life Insurance Company, as lender

 

 

EXHIBIT F

 

August       ,
2007

 

VIA
FACSIMILE and FEDERAL EXPRESS

 

First American Title Insurance Company

133 N.W. 8th

Oklahoma City, OK  73102

Attention:  Pilar A. Beare

 

Re:                             Lender’s Title Insurance
Policy Number C 276843 issued by First American Title Insurance Company (the “Policy”) relating to a mortgage loan
(the “Loan”) from Principal Life Insurance Company (the “Original Lender”) to
DG Ardmore, L.L.C. (as Borrower) relating to property located in Ardmore,
Oklahoma

 

Ladies and Gentlemen:

 

All of the Original Lender’s rights, title and interest in and to the
above captioned Loan was sold to DC FINANCIAL, LLC, a Tennessee limited
liability company (“Assignee”).  You have been provided with copies of various
documents which evidence the sale of the Loan to Assignee.  We instruct you to endorse the Policy to
reflect Assignee as the sole Insured thereunder.

 

	
   

  	
  Very truly yours,

  
	
   

  	
  DC FINANCIAL, LLC,

  
	
   

  	
  a Tennessee limited liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

By our
execution below, we herby instruct you

to issue the
above described endorsement.

 

	
  PRINCIPAL
  LIFE INSURANCE COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  PRINCIPAL REAL ESTATE
  INVESTORS, LLC,

  	
   

  	
   

  
	
   

  	
  Its authorized signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

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