Document:

EXHIBIT 10.1

                   [LETTERHEAD - SUNTRUST ROBINSON HUMPHREY]

COMMITMENT LETTER
-----------------

March 11, 2002

Dollar General Corporation
100 Mission Ridge
Goodlettsville, TN 37072

Attention:        Mr. James J. Hagan
                  Executive Vice President and
                     Chief Financial Officer

                  Mr. Wade Smith
                  Treasurer

         Re:   $450,000,000 Revolving Credit Facilities for Dollar General
               Corporation (the "Credit Facilities")

Ladies and Gentlemen:

     SunTrust  Bank is pleased to commit to provide  $450,000,000  in  revolving
credit facilities (the "Credit Facilities") described in the summary of term and
conditions  attached as Annex I (the "Term Sheet") to Dollar General Corporation
(the  "Company"),  subject to the terms and  conditions set forth in this letter
and in the Term Sheet (collectively,  this "Commitment Letter"), the proceeds of
which  shall be used for (i)  refinancing  all  amounts  outstanding  under  the
Company's existing $175,000,000 revolving credit facility, and the two synthetic
lease  facilities  totaling  $383,000,000,  and (ii)  working  capital and other
general  corporate  purposes  of the Company  (including  funding of draws under
trade letters of credit issued for its account).

     SunTrust  Bank agrees to act as sole agent for the Credit  Facilities,  and
SunTrust Capital Markets,  Inc.  ("SunTrust  Capital Markets" and, together with
SunTrust Bank,  "SunTrust")  agrees to act as lead arranger and book manager for
the Credit Facilities,  in each case subject to the terms and conditions of this
Commitment  Letter.  In  consideration  for the  undertakings and obligations of
SunTrust  under this  Commitment  Letter,  the Company agrees that SunTrust Bank
will  act as the  sole and  exclusive  agent  for the  Credit  Facilities,  that
SunTrust  Capital  Markets will act as the sole and exclusive  arranger and book
manager  for the  Credit  Facilities,  and that no other  agents,  co-agents  or
arrangers  will be  appointed,  or other  titles  conferred,  without  the prior
written consent Of SunTrust Capital Markets.

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Dollar General Corporation
--------------------------
March 11, 2002
Page 2

A.   Terms and Conditions of the Credit Facilities

     The Credit  Facilities will consist of a $300,000,000  three year revolving
credit  facility and a  $150,000,000  364-day  revolving  credit  facility.  The
principal terms and conditions of the Credit  Facilities shall include those set
forth in the Term Sheet. In addition, SunTrust Capital Markets, on behalf of the
Lenders,  may require  certain other  customary  terms and  conditions  found in
credit  facilities  of this  type,  and  substantially  similar  to those in the
Company's  existing  $175,000,000  revolving credit  facility,  which may not be
specifically listed in the Term Sheet.

B.   Syndication
     -----------

     Although  SunTrust Bank has,  subject to the terms and  conditions  hereof,
provided a commitment for the entire amount of the Credit Facilities,  it is the
intent of SunTrust Bank to syndicate the Credit  Facilities,  and, as a material
inducement to SunTrust  Bank's  issuing its  commitment  hereunder,  the Company
hereby agrees to provide its reasonable cooperation in such syndication process.
The Company's assistance shall include (but not be limited to) (i) making senior
management and  representatives  of the Company and its affiliates  available to
participate in meetings and to provide  information  to potential  lenders under
the Credit  Facilities (the "Lenders") at such time as SunTrust  Capital Markets
may reasonably request,  (ii) using the Company's existing lending relationships
to assist in the syndication  process,  and (iii) providing to SunTrust  Capital
Markets all information  reasonably deemed necessary to SunTrust Capital Markets
to complete the syndication, including an information memorandum with respect to
the Credit  Facilities and the Company and projected  financial  statements with
respect to the  Company and the  transactions  contemplated  by this  Commitment
Letter (the "Projections").

     SunTrust  Capital Markets will manage all aspects of the syndication of the
Credit Facilities in consultation with SunTrust Bank and the Company,  including
the timing of all offers to potential  Lenders,  the allocation of  commitments,
and the  determination  of compensation  and titles (such as co-agent,  managing
agent,  etc.) given, if any, to such Lenders.  The Company agrees that no Lender
will receive any compensation  for its commitment to, or  participation  in, the
Credit  Facilities  except as  expressly  set forth in the Term Sheet or the Fee
Letter (as defined  below),  or as  otherwise  agreed to and offered by SunTrust
Capital Markets.

     In addition,  until the  commitment  of SunTrust Bank is reduced to no more
than $100,000,000  before or after closing of the Credit Facilities,  SunTrust's
obligations  pursuant to this Commitment  Letter shall be further subject to the
terms and conditions set forth in the Fee Letter.

     To ensure an orderly and effective  syndication  of the Credit  Facilities,
the Company  further  agrees that until the earlier of the  termination  of this
Commitment

                                       2
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Dollar General Corporation
--------------------------
March 11, 2002
Page 3

Letter and the reduction of SunTrust Bank's commitment before
or after the closing of the Credit Facilities to no more than $100,000,000,  the
Company will not, and will not cause or permit any of its  affiliates  or agents
to, syndicate or issue, attempt to syndicate or issue, announce or authorize the
announcement  of the  syndication  or  issuance  of, or  engage  in  discussions
concerning  the  syndication  or issuance of, any debt facility or debt security
(including  any  renewals  thereof)  except  with the prior  written  consent of
SunTrust Capital Markets.

C.   Fees.
     -----

     The  fees  payable  to  SunTrust  Bank  and  SunTrust  Capital  Markets  in
connection with their obligations hereunder are set forth in that certain letter
agreement  dated as of the date  hereof,  among the Company,  SunTrust  Bank and
SunTrust  Capital  Markets  (the "Fee  Letter").  The  obligations  of  SunTrust
pursuant to this Commitment  Letter are subject to the execution and delivery of
the Fee Letter by the Company,  which Fee Letter constitutes an integral part of
this Commitment Letter.

D.   Conditions Precedent.
     ---------------------

     The undertakings  and obligations of SunTrust under this Commitment  Letter
are  subject  to:  (i) the  preparation,  execution  and  delivery  of  mutually
acceptable  loan  documentation,  including  a  credit  agreement  incorporating
substantially the terms and conditions  outlined in this Commitment Letter; (ii)
the  absence of (A) a material  adverse  change in the  assets,  operations,  or
financial  condition  of the  Company and its  subsidiaries  or  affiliates,  as
reflected in its  consolidated  financial  statements as of February 2, 2002 and
(B) any change after the date hereof in loan  syndication,  financial or capital
market conditions generally that, in the reasonable judgment of SunTrust Capital
Markets, would materially impair syndication of the Credit Facilities,  (iii) no
withdrawal  of the  Company's  debt  ratings  from either  Moody's or S&P having
occurred  after  the date of this  Commitment  Letter,  (iv)  completion  to the
satisfaction  of the Lead  Arranger and the Agent of due diligence as to pending
and  threatened  litigation  and  regulatory   investigations  and  proceedings,
including  but not limited to, class action  lawsuits,  shareholder  derivative,
third party  claims,  and  Securities  and  Exchange  Commission  investigations
arising in connection with the Company's restatement of its financial statements
and other  related  matters  (which due  diligence  as to such  matters the Lead
Arranger and the Agent expect to complete  within ten  business  days  following
their receipt from the Company or its counsel of all requested  information with
respect  thereto),  (v) the Company's actual EBITDAR (as such term is defined in
the Term Sheet) for its fiscal year ending in February 2002, as reflected in its
audited year-end financial statements, being equal to or exceeding $669,000,000,
(vi) the accuracy of all  representations in all material respects that you make
to us (including  those in Section E below) and all information that you furnish
to us and your compliance with the terms of this  Commitment  Letter;  (vii) the
payment in full of all fees,  expenses and other amounts  payable  hereunder and

                                       3
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Dollar General Corporation
--------------------------
March 11, 2002
Page 4

under the Fee Letter;  and (viii) a closing of the Credit Facilities on or prior
to June 30, 2002.

E.   Representations
     ---------------

     You represent and warrant that (i) all information that has been or will be
made available to SunTrust by you or any of your  representatives  in connection
with the  transactions  contemplated by this  Commitment  Letter (other than the
Projections)  (the  "Information")  is or will be, when furnished,  complete and
correct  in all  material  respects  and does not or will not,  when  furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary  in order to make the  statements  contained  therein  not  materially
misleading in light of the  circumstances  under which such  statements  were or
will be made,  and (ii) the  Projections  have been or will be  prepared in good
faith based upon reasonable assumptions. You agree to supplement the Information
and the Projections  from time to time prior to completion of syndication of the
Credit Facilities  (whether before or after closing) so that the representations
and  warranties  contained  in this  paragraph  remain  correct.  In issuing the
commitments  and  undertakings  hereunder and in arranging and  syndicating  the
Credit  Facilities,  you  acknowledge  that SunTrust  Bank and SunTrust  Capital
Markets  are  relying on the  accuracy of the  Information  and the  Projections
without independent verification thereof.

F.   Indemnities, Expenses, Etc.
     ---------------------------

     1.  Indemnification.  You agree to  indemnify  and hold  harmless  SunTrust
Capital Markets,  SunTrust Bank, each other Lender, their respective  affiliates
and their respective directors,  officers,  employees, agents,  representatives,
legal counsel,  and consultants (each, an "Indemnified  Person") against, and to
reimburse  each  Indemnified  Person  upon its demand for,  any losses,  claims,
damages,  liabilities or other reasonable  expenses  ("Losses") incurred by such
Indemnified  Person  insofar as such Losses arise out of or in any way relate to
or  result  from  this  Commitment   Letter,  the  Fee  Letter,  the  financings
contemplated  by this  Commitment  Letter or the proposed use of the proceeds of
the Credit Facilities,  including, without limitation, all Losses arising out of
any legal  proceeding  relating  to any of the  foregoing  (whether  or not such
Indemnified  Person is a party thereto);  provided that the Company shall not be
liable to any  Indemnified  Person  pursuant to this indemnity for any Losses to
the extent that a court having competent jurisdiction shall have determined by a
final judgment (not subject to further appeal) that such Loss resulted primarily
from the gross negligence or willful misconduct of such Indemnified Person.

     2.  CONSEQUENTIAL  DAMAGES.  NO  INDEMNIFIED  PARTY SHALL BE RESPONSIBLE OR
LIABLE TO THE COMPANY OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE,  EXEMPLARY
OR  CONSEQUENTIAL  DAMAGES  THAT MAY BE ALLEGED  AS A RESULT OF THIS  COMMITMENT
LETTER, THE

                                       4
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Dollar General Corporation
--------------------------
March 11, 2002
Page 5

FEE  LETTER,  THE  CREDIT  FACILITIES  OR  ANY  OF  THE  LOAN  DOCUMENTS  OR ANY
TRANSACTION CONTEMPLATED BY THIS COMMITMENT LETTER.

     3. Expenses.  In further  consideration of the commitments and undertakings
of SunTrust hereunder, and recognizing that in connection herewith SunTrust will
be incurring certain costs and expenses (including, without limitation, fees and
disbursements of counsel, and costs and expenses for due diligence, syndication,
transportation, duplication, mailings, messenger services, dedicated web page on
the  internet  for the  transactions  contemplated  by this  Commitment  Letter,
appraisal,  audit and  insurance),  you  hereby  agree to pay,  or to  reimburse
SunTrust on demand for, all such reasonable costs and expenses (whether incurred
before or after the date hereof),  regardless of whether any of the transactions
contemplated  hereby  are  consummated.  You  also  agree to pay all  costs  and
expenses  of  SunTrust  (including,  without  limitation,  reasonable  fees  and
disbursements of counsel)  incurred in connection with the enforcement of any of
their rights and remedies hereunder.

G.   Special Disclosure.
     -------------------

     SunTrust  Capital  Markets is a wholly owned  subsidiary of SunTrust Banks,
Inc.  ("STBI") and an affiliate of SunTrust Bank.  SunTrust Capital Markets is a
broker/dealer  registered  with the  Securities  and Exchange  Commission  and a
member  of  the  National  Association  of  Securities  Dealers,  Inc.  and  the
Securities Investor Protection Corporation ("SIPC"). Although it is a subsidiary
of STBI,  SunTrust  Capital  Markets is not a bank and is separate from SunTrust
Bank or any banking  affiliate of SunTrust  Bank.  SunTrust  Capital  Markets is
solely responsible for its contractual obligations and commitments.

     Securities  and financial  instruments  sold,  offered,  or  recommended by
SunTrust  Capital Markets are not bank deposits,  are not insured by the Federal
Deposit  Insurance  Corporation,  SIPC or any  governmental  agency  and are not
obligations of or endorsed or guaranteed in any way by any bank  affiliated with
SunTrust Capital Markets or any other bank unless otherwise stated.

     The  Company  authorizes  SunTrust  Capital  Markets  and  its  affiliates,
including  SunTrust Bank, to share with each other, and to use, credit and other
confidential  or  non-public  information  regarding  the  Company to the extent
permitted  by  applicable  laws and  regulations  and solely for the  purpose of
performing  their  obligations  under  this  Commitment  Letter  and the  Credit
Facilities.  It is the policy of SunTrust Bank and SunTrust  Capital  Markets to
strictly protect  confidential  non-public client  information.  Therefore,  any
information shared within SunTrust will be on a limited basis and only to people
within  the  organization  who are  part of our  relationship  team,  except  as
otherwise provided in this Commitment Letter.

                                       5
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Dollar General Corporation
--------------------------
March 11, 2002
Page 6

H.   Miscellaneous.
     --------------

     1.  Effectiveness.  This  Commitment  Letter  shall  constitute  a  binding
obligation of SunTrust for all purposes  immediately upon the acceptance  hereof
by  the  Company  in the  manner  specified  below.  Notwithstanding  any  other
provision  of this  Commitment  Letter,  the  commitments  and  undertakings  of
SunTrust  set forth  herein  shall not be or become  effective  for any  purpose
unless and until this Commitment  Letter shall have been accepted by the Company
in the manner specified below.

     2.  Acceptance by the Company.  If you are in agreement with the foregoing,
please sign and return the enclosed  copy of this  Commitment  Letter by fax and
overnight courier service to

                  SunTrust Capital Markets, Inc.
                  303 Peachtree Street, 24th Floor
                  Atlanta, GA 30308

                  Attention: Jeff Titus
                  Fax:  (404) 827-6514
                  Telephone:  (404) 575-2865

     3.  Termination.  Unless you have signed and returned the enclosed  copy of
this Commitment Letter and the Fee Letter, and paid the  non-refundable  deposit
due upon such  signing and  acceptance  as provided in the Fee Letter,  prior to
5:00 p.m.,  Atlanta,  Georgia time, on March 18, 2002,  then the commitments and
obligations of SunTrust  under this  Commitment  Letter shall  terminate on such
date.  If this  Commitment  Letter is executed  and  delivered by the Company to
SunTrust  Capital  Markets  in  accordance  with the  preceding  sentence,  this
Commitment  Letter,  and the  commitments and obligations of SunTrust under this
Commitment  Letter,  shall  terminate  on June 30, 2002,  unless the  definitive
credit agreement and other legal documents related to the Credit Facilities have
been  executed  and  delivered  on or prior to such  date.  In  addition  to the
foregoing,  this  Commitment  Letter  may be  terminated  at any time by  mutual
agreement.  Furthermore,  by acceptance  of this  Commitment  Letter,  any other
commitments  outstanding with respect to the Credit  Facilities by SunTrust will
be terminated.

     4. No Third-Party  Beneficiaries.  This Commitment Letter is solely for the
benefit of the Company and  SunTrust;  no  provision  hereof  shall be deemed to
confer rights on any other person or entity.

     5. No Assignment. This Commitment Letter may not be assigned by the Company
to any  other  person  or  entity,  but all of the  obligations  of the  Company
hereunder shall be binding upon the successors and assigns of the Company.

                                       6
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Dollar General Corporation
--------------------------
March 11, 2002
Page 7

     6. Tombstone Advertisements. Upon closing and initial funding of the Credit
Facilities,   SunTrust  or  any  affiliate  of  SunTrust  may  place   customary
"tombstone" advertisements in publications of their choice at their own expense.

     7. GOVERNING LAW. THIS COMMITMENT  LETTER WILL BE GOVERNED BY AND CONSTRUED
IN  ACCORDANCE  WITH THE LAWS OF THE  STATE OF  GEORGIA  WITHOUT  REGARD  TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

     8. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE COMPANY,  SUNTRUST BANK AND SUNTRUST CAPITAL MARKETS WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING  ARISING OUT OF OR RELATED TO THIS COMMITMENT LETTER
OR ANY OTHER DOCUMENTS CONTEMPLATED HEREBY.

     9. Survival.  The obligations and agreements of the Company with respect to
changes in the terms and  conditions  of the Credit  Facilities  under the third
paragraph  of  Section  B,  indemnification  provisions  and costs  and  expense
provisions  under Section F, the sharing of information  under Section G and the
confidentiality  provisions  of paragraph 10 of this Section H shall survive the
expiration and termination of this Commitment Letter.

     10. Confidentiality. Neither this Commitment Letter, the Fee Letter nor any
of their terms or substance may be disclosed by you, directly or indirectly,  to
any other person or entity except (i) to your officers,  agents and advisors who
are directly involved in the transactions  contemplated hereby or (ii) as may be
compelled in a judicial or administrative proceeding or as otherwise required by
law (in which case you agree to inform us promptly thereof),  provided, that the
foregoing restrictions shall cease to apply (except in respect of the Fee Letter
and its terms and substance)  after this Commitment  Letter has been accepted by
you or has been terminated or expires by its terms.

     11.  Counterparts.  This Commitment Letter may be executed in any number of
separate   counterparts,   each  of  which  shall  collectively  and  separately
constitute one agreement.

                                       7
<PAGE>

Dollar General Corporation
--------------------------
March 11, 2002
Page 8

     12.  Entire  Agreement.  Upon  acceptance by you as provided  herein,  this
Commitment  Letter and the Fee Letter  referenced  herein  shall  supersede  all
understandings  and agreements  between the parties to this Commitment Letter in
respect of the transactions contemplated hereby.

         We look forward to working with you on this important transaction.

                                              Very truly yours,

                                              SUNTRUST BANK

                                              By:    /S/ Scott Corley
                                                     ------------------
                                                     Name:  Scott Corley
                                                     Title: Director

                                              SUNTRUST CAPITAL MARKETS, INC.

                                              By:    /S/ Jeffrey R. Titus
                                                     ----------------------
                                                     Name:  Jeffrey R. Titus
                                                     Title: Managing Director

ACCEPTED AND AGREED
this 18 day of March, 2002;

DOLLAR GENERAL CORPORATION

By:   /S/ James J. Hagan
      --------------------
      Name:  James J. Hagan
      Title: Executive Vice President and Chief Financial Officer

                                       8
<PAGE>

                    [LETTERHEAD-SUNTRUST ROBINSON HUMPHREY]

                  SUMMARY OF PRINCIPAL TERMS AND CONDITIONS OF
                  --------------------------------------------
                $450,000,000 SENIOR REVOLVING CREDIT FACILITIES 1
                -------------------------------------------------

I.   DESCRIPTION OF THE CREDIT FACILITIES
     ------------------------------------

Credit Facilities:      $450,000,000  revolving credit facilities  (together the
                        "Revolvers") as follows:

                        (1)  $300,000,000   3-year  revolving  credit  facility,
                             including   a   $20,000,000    letter   of   credit
                             subfacility (the "3-Year Revolver"); and

                        (2)  $150,000,000 364-day revolving credit facility (the
                             "364-Day Revolver").

Borrower:               Dollar General Corporation (the "Borrower").

Guarantors:             All present and future direct and indirect  Subsidiaries
                        of the Borrower (the "Guarantors").

Agent:                  SunTrust Bank ("SunTrust" or the "Agent").

Lead Arranger:          SunTrust Robinson  Humphrey Capital Markets,  a division
                        of SunTrust Capital Markets, Inc. (the "Lead Arranger").

Lenders:                SunTrust  and  a  syndicate  of  financial  institutions
                        acceptable to the  Borrower,  the Arranger and SunTrust,
                        as Agent (together, the "Lenders").

Letter of Credit
Issuing Bank:           SunTrust Bank (in such capacity, the "Issuing Bank").

Purpose:                Proceeds  of  the  Revolvers   shall  be  used  for  (1)
                        refinancing all amounts outstanding under the Borrower's
                        existing $175,000,000 revolving credit facility, and the
                        two synthetic lease  facilities  totaling  $383,000,000,
                        and (2)  working  capital  and other  general  corporate
                        purposes  of the  Borrower  (including  funding of draws
                        under trade letters of credit issued for its account).

------------------------

1 Note: Italicized terms are defined in the attached Annex I ("Selected
        Definitions")

<PAGE>

Maturity:               (1)  The 3-Year Revolver will terminate and be payable
                             in full three years from closing.

                        (2)  The 364-Day  Revolver will terminate and be payable
                             in  full  364  days   from   closing.

Collateral:              Unsecured,  with a negative  pledge on all  present and
                         future assets (subject to existing liens as approved by
                         the Lead Arranger, the Agent and the Lenders).

II.  PRICING AND PAYMENT TERMS FOR THE FACILITIES
     --------------------------------------------

Interest Rate           The  Borrower  shall  be entitled to select  between the
Options:                following  interest rate options:

                        (i)  Base  Rate or (ii)  LIBOR,  in each  case  plus the
                             Applicable Margin.

Interest Payments:      Interest  shall be  calculated on the basis of a 365-day
                        year for Base Rate  advances  and on a 360-day  year for
                        LIBOR  advances  and  shall be  payable  on  outstanding
                        advances as follows:

                        (i)  Base Rate advances - On the last day of each fiscal
                             quarter, in arrears.

                        (ii) LIBOR advances - At the expiration of each Interest
                             Period,  and  with  respect  to  loans  made for an
                             Interest  Period longer than three  months,  on the
                             last day of each three  month  period  prior to the
                             expiration of the Interest Period.

Letter of Credit Fees:  Fees on  outstanding  Letters of Credit shall be charged
                        at a per annum rate equal to the  Applicable  Margin for
                        LIBOR Advances as then in effect for the 3-Year Revolver
                        as set  forth in Annex  II. In  addition,  the  Borrower
                        shall  pay the  Issuing  Bank an  issuance  fee for each
                        Letter of Credit  as agreed to by the  Issuing  Bank and
                        the  Borrower,  together with  customary  administrative
                        charges.

 Default Rate:          If any Event of Default has occurred and is  continuing,
                        the otherwise  then  applicable  interest rates shall be
                        increased by 2% per annum;  provided that, for any LIBOR

                                       2

<PAGE>

                        advances,  at the end of the applicable Interest Period,
                        interest  shall accrue  thereafter at the Base Rate plus
                        2% per  annum.  Default  interest  shall be  payable  on
                        demand.

Facility Fee:           A facility fee, payable quarterly in arrears for the pro
                        rata account of the Lenders,  on the total amount of the
                        Revolvers, in the amount designated in Annex II based on
                        the Borrower's Applicable Debt Rating.

Mandatory               Mandatory prepayment  provisions  comparable to those in
Prepayments:            the  credit   agreement  for  the  Borrower's   existing
                        $175,000,000   revolving   credit   facility.

Funding; Payments;      Customary   provisions  with  respect  to:  notices  for
Pricing/Yield           borrowing  and  minimum/multiple  amounts  required  for
Protection              various borrowings and letters of credit; payment terms;
Provisions:             voluntary  reductions of  commitments  and  prepayments;
                        payment   of   withholding   tax   "gross-up"   amounts;
                        suspension of LIBOR pricing options due to illegality or
                        inability to ascertain funding costs; payment of reserve
                        requirements,   increased   funding  costs  and  capital
                        adequacy  compensation;  and  payment  of  breakage  and
                        redeployment  costs  in  connection  with  fundings  and
                        repayments of LIBOR advances.

III. CONDITIONS TO FUNDINGS
     ----------------------

Funding will be subject to  conditions  customary in credit  facilities  of this
type, including, but not limited to, the following:

Conditions to Initial   (1) Execution   and   delivery   of  credit   agreement,
Borrowing:                  promissory notes,  guarantee  agreements,  and other
                            loan documents.

                        (2) Delivery of  certified  articles  of  incorporation,
                            good standing  certificates  and certified copies of
                            other  organizational  documents,  including bylaws,
                            authorizing  resolutions of board of directors,  and
                            incumbency  certificates  for the  Borrower  and all
                            Guarantors.

                        (3) No  withdrawal of the  Borrower's  debt ratings from
                            either  Moody's or S&P having  occurred  after March
                            11, 2002.

                        (4) Delivery  of  favorable  opinion of counsel  for the
                            Borrower and all Guarantors.

                                       3
<PAGE>

                        (5) Delivery  of  certificates  of  insurance  issued on
                            behalf  of   insurers  of  the   Borrower   and  all
                            Guarantors,  describing  in  reasonable  detail  the
                            types  and  amounts  of  insurance   (property   and
                            liability) maintained by such parties.

                        (6) Payment in full of all fees and expenses  related to
                            the Revolvers.

                        (7) Completion to the  satisfaction of the Lead Arranger
                            and the Agent of due diligence (as  contemplated  by
                            the Commitment  Letter) as to pending and threatened
                            litigation   and   regulatory   investigations   and
                            proceedings,  including  but not limited  to,  class
                            action  lawsuits,  shareholder  derivative  actions,
                            third party  claims,  and  Securities  and  Exchange
                            Commission investigations arising in connection with
                            the   Borrower's   restatement   of  its   financial
                            statements and related matters.

                        (8) The  Borrower's  actual  EBITDAR for its fiscal year
                            ending in February 2002, as reflected in its audited
                            year-end  financial  statements,  shall  be not less
                            than $669,000,000.

Conditions to All       (1) No Default  or Event of Default  shall then exist or
Borrowings:                 would result from such borrowing.

                        (2) All representations and warranties shall continue to
                            be true and correct in all material  respects on and
                            as of the date of each borrowing.

                        (3) Since  February  1, 2002,  there  shall have been no
                            change that has had or could be reasonably  expected
                            to have a  material  adverse  effect on the  assets,
                            operations,  or financial  condition of the Borrower
                            and its Subsidiaries taken as a whole.

IV.  REPRESENTATIONS AND WARRANTIES
     ------------------------------

Representations  and  warranties  customary for credit  facilities of this type,
including but not limited to, the  following  matters in respect of the Borrower
and  Guarantors,  as the  case  may be:  due  organization,  qualification,  and
licensing;  due authorization and  enforceability of loan documents;  receipt of
necessary governmental and third party approvals for loan documents, and absence

                                       4

<PAGE>

of conflict of loan documents with applicable law, organizational documents, and
material contractual  obligations;  accuracy of financial statements and absence
of material adverse change in financial  condition;  absence of material pending
or threatened  litigation  (except as previously  disclosed to, and approved by,
the Lead Arranger,  the Agent,  and the Lenders) or  environmental  liabilities;
ownership  of  all  material  properties  (including   intellectual   property);
compliance with laws and material agreements;  payment of taxes; compliance with
ERISA and absence of liability for unfunded or underfunded plans; maintenance of
customary insurance; and accuracy of disclosures.

V.   COVENANTS
     ---------

Financial Covenants:    The  following  financial  covenants  shall be  measured
                        on a consolidated basis, including all Subsidiaries:

                        Adjusted Funded Debt/EBITDAR
                        ----------------------------
                        The  Borrower  shall  maintain  at all  times a ratio of
                        Adjusted Funded Debt to EBITDAR less than 2.00:1.00. The
                        Borrower's   compliance  with  this  covenant  shall  be
                        calculated on a rolling four quarter basis.

                        EBITR/Interest and Rent Expense Ratio
                        -------------------------------------
                        The  Borrower  shall  maintain  a  ratio of EBITR to the
                        sum of Interest  Expenses plus Rent Expense greater than
                        2.00:1.00.  The Borrower's compliance with this covenant
                        shall be calculated on a quarterly basis.

                        Asset Coverage Ratio
                        --------------------
                        The  Borrower  shall  maintain,  as of the  end of  each
                        month,  a ratio of Eligible  Inventory to Funded Debt of
                        not  less  than  1.25:1.00;   provided,   however,   the
                        foregoing covenant shall no longer be applicable at such
                        times as Borrower's  Applicable Debt Rating shall, for a
                        period of at least 90 consecutive  days,  have been BBB-
                        or higher from S&P and Baa3 or higher from Moody's.

                        Consolidated Net Worth
                        ----------------------
                        The Borrower shall maintain at all times a Net Worth not
                        less  than the sum of (i)  $[TBD],  (ii)  fifty  percent
                        (50%) of Consolidated Net Income for each fiscal quarter
                        (beginning with the fiscal quarter ending [May 3,] 2002)
                        for  which   Consolidated   Net   Income  is   positive,

                                       5

<PAGE>

                        calculated  quarterly  at the  end of each  such  fiscal
                        quarter,  and (iii) 100% of the  cumulative net proceeds
                        of  capital  stock  received  during  any  period  after
                        closing.

                        Capital Expenditures
                        --------------------
                        The Borrower shall not make capital  expenditures,  on a
                        consolidated  basis,  in any  fiscal  year in an  amount
                        greater  than  $200,000,000;   provided,   however,  the
                        foregoing covenant shall no longer be applicable at such
                        times as Borrower's  Applicable Debt Rating shall, for a
                        period of at least 90 consecutive  days,  have been BBB-
                        or higher from S&P and Baa3 or higher from Moody.

Reporting               The Borrower  shall  deliver (i) its annual  unqualified
Requirements:           audited consolidated financial statements within 90 days
                        after the end of each fiscal  year;  (ii) its  quarterly
                        unaudited  consolidated  financial  statements within 45
                        days after the end of each  fiscal  quarter  that is not
                        the  end of a  fiscal  year;  (iii)  together  with  the
                        financial  statements  described in clauses (i) and (ii)
                        above, a certificate from the chief financial officer or
                        treasurer  (a)  certifying  as to whether there exists a
                        Default  or  Event  of  Default  on  the  date  of  such
                        certificate,  and if a Default  or an Event of  Default,
                        specifying the details  thereof and the action which the
                        Borrower  has taken or  proposes  to take  with  respect
                        thereto,  and (b)  setting  forth in  reasonable  detail
                        calculations demonstrating compliance with the financial
                        covenants,  and  (iv) its  monthly  report  of  Eligible
                        Inventory  and Funded Debt for  purposes of  determining
                        compliance  with  the  Asset  Coverage  Ratio  described
                        above, so long as such covenant shall be applicable.

Affirmative             Customary affirmative covenants for credit facilities of
Covenants:              this type, including but not limited to, covenants as to
                        maintenance  of existence  and material  franchises  and
                        intellectual  property;   payment  of  taxes  and  other
                        obligations;   maintenance   of   customary   insurance;
                        maintenance  of fixed  assets in good order and  repair;
                        compliance  with applicable  laws;  maintenance of books
                        and records,  with  visitation and inspection  rights of
                        the Lenders;  and further  assurances  as to delivery of
                        guarantee  agreements  by newly  organized  or  acquired
                        Subsidiaries.

                                       6

<PAGE>

Negative Covenants:     Customary  negative  covenants for credit  facilities of
                        this  type  and  substantially  similar  to those in the
                        Borrower's   existing   $175,000,000   revolving  credit
                        facility,   including  but  not  limited  to,  covenants
                        restricting (subject to qualifications and exceptions as
                        agreed by the Lenders and the  Borrower) as to incurring
                        of  additional   indebtedness;   granting  of  liens  or
                        security   interests  on  real  or  personal   property;
                        engaging in mergers,  consolidations,  or sales or other
                        dispositions  of assets  outside the ordinary  course of
                        business;   engaging  in   businesses   other  than  the
                        businesses   conducted   by   the   Borrower   and   its
                        Subsidiaries on the closing date;  investments in, loans
                        to, or guarantees of the indebtedness of, third parties;
                        acquisitions;    payments   of    dividends   or   other
                        distributions  on capital  stock,  redemption of capital
                        stock,   prepayment  of  subordinated  debt,  and  other
                        restricted  payments;  affiliate  transactions  on other
                        than an arm's length  basis;  entering  into  agreements
                        that prohibit or limit destructions or loans that may be
                        made to the  Borrower  or any  Subsidiary  by any  other
                        Subsidiary;  agreements  limiting  the  ability  of  the
                        Borrower  or any of its  Subsidiaries  to grant liens or
                        security  interests on any of their  respective  assets;
                        sales/leaseback  transactions;  certain modifications of
                        material agreements and documents; and changes in fiscal
                        year or accounting practices.

VI.  EVENTS OF DEFAULT
     -----------------

Customary   events  of  default  for  credit   facilities  of  this  type,   and
substantially similar to those in the Borrower's existing $175,000,000 revolving
credit facility,  including but not limited to, the following (subject to normal
and customary cure periods, where applicable:)  Non-payment of interest, fees or
other  amounts  when  due;  representations  or  warranties  shall be  untrue or
incorrect in any material respect;  breach of any financial  covenant,  negative
covenant, or reporting  requirement;  breach of any other covenant or obligation
that  remains   uncured  for  30  days  after   notice  or  knowledge   thereof;
cross-default  to other  Indebtedness  of the Borrower or any  Subsidiary  which
individually or in the aggregate exceeds $10,000,000,  or breach of any covenant
contained in any agreement  relating to such Indebtedness  causing or permitting
its acceleration;  voluntary or involuntary  bankruptcy  proceedings;  any final
judgments  or orders  rendered  against  the  Borrower or any  Subsidiary  in an
aggregate amount exceeding  $10,000,000  remaining in effect for 30 days without
being stayed or discharged;  occurrence of an ERISA event resulting in liability
in an aggregate amount exceeding  $10,000,000;  termination or invalidity of any
guarantee  agreement of any Guarantor;  or the aggregate  amounts required to be
paid by the Borrower pursuant to any settlement arrangement(s), judgment(s) or

                                       7

<PAGE>

order(s)  agreed by or entered  against the Borrower in respect of litigation or
regulatory   investigations  or  proceedings   arising  out  of  the  Borrower's
restatement of its financial  statements shall exceed those amounts to be agreed
upon by the Borrower,  the Lead Arranger and the Agent  following  completion of
due  diligence  with  respect  thereto  by the Lead  Arranger  and the  Agent as
provided in the Commitment Letter.

VII. OTHER TERMS
     -----------

Participations and      Assignments to other banks and financial institutions of
Assignments:            the  Revolvers  will be permitted by any Lender with the
                        written  approval  of the  Borrower  and the Agent (such
                        approval not to be unreasonably withheld or delayed, and
                        such  approval  not required by the Borrower if an Event
                        of  Default  has  occurred)  in  minimum  increments  of
                        $1,000,000,  provided, however, that (i) no such consent
                        of the  Borrower  or the Agent  shall be required to any
                        assignment by a Lender to an affiliate of such Lender or
                        to a fund  managed by Lender or an  affiliate  of Lender
                        and (ii) the  minimum  increment  requirement  shall not
                        apply if a Lender is assigning its entire commitment. An
                        administrative fee of $1,000 shall be due and payable by
                        such  assigning  Lender to the Agent upon the occurrence
                        of any  assignment.  Sales  of  participations  to other
                        banks  and  financial  institutions  will  be  permitted
                        without restriction. Such participation will not release
                        the selling Lender from its obligations  with respect to
                        the Revolvers.

Required Lenders:       Lenders  holding a majority of the  committed  amount of
                        the Revolvers.

Indemnification:        The Borrower shall pay (i) all reasonable, out-of-pocket
                        costs and  expenses  of the  Agent  and its  affiliates,
                        including the reasonable fees, charges and disbursements
                        of  counsel  for  the  Agent  and  its  affiliates,   in
                        connection   with  the   syndication  of  the  Revolvers
                        provided for herein,  the preparation and administration
                        of the loan documents and any amendments,  modifications
                        or  waivers  thereof  (whether  or not the  transactions
                        contemplated herein shall be consummated),  and (ii) all
                        out-of-pocket  costs and  expenses  (including,  without
                        limitation,    the   reasonable   fees,    charges   and
                        disbursements  of outside counsel and the allocated cost
                        of inside  counsel)  incurred by the Agent or any Lender
                        in connection  with the enforcement or protection of its
                        rights in connection with the loan  documentation or the
                        loans made thereunder.  The Borrower shall indemnify the

                                       8

<PAGE>

                        Agent and each  Lender  against  all  reasonable  costs,
                        losses,  liabilities,  damages, and expenses incurred by
                        them in connection with any  investigation,  litigation,
                        or other proceedings  relating to the Revolvers,  except
                        when due to the gross  negligence or willful  misconduct
                        on the part of the indemnified party, as determined by a
                        final  non-appealable  judgment by a court of  competent
                        jurisdiction.

Governing Law:          State of Georgia

                                       9

<PAGE>

Dollar General Corporation
--------------------------------------------------------------------------------

                                     ANNEX I

                              SELECTED DEFINITIONS
                              --------------------

     Adjusted  Funded  Debt shall  mean,  at any time for the  Borrower  and its
Subsidiaries on a consolidated  basis,  the sum of (i) Funded Debt at such time,
and (ii) the present value  (determined  based on a discount rate of ten percent
(10%) in accordance with discounted present value analytical technology) at such
time of all  remaining  payments  due under  leases  and  financing  obligations
(excluding  capital leases already  included in the calculation of Funded Debt),
whether for retail stores,  distribution  centers,  administrative office space,
furniture,  fixtures,  equipment,  or other  tangible  assets,  determined  on a
consolidated basis in accordance with generally accepted accounting principles.

     Applicable Debt Rating shall mean the senior unsecured  non-credit enhanced
long term debt rating of the Borrower as assigned by each of Moody's and S&P. If
the Moody's rating and the S&P rating shall fall within different  categories of
the Pricing Grid attached as Annex II hereto,  then the  Applicable  Debt Rating
shall  be  determined  by  reference  to the  lower of the two  ratings  for all
purposes hereunder.

     Applicable  Margin shall mean the  percentage  (expressed  in basis points)
designated  in the  "Pricing  Grid"  attached  hereto  as  Annex II based on the
Borrower's Applicable Debt Rating.

     Base Rate shall mean the  higher of (i) the rate which  SunTrust  announces
from time to time as its prime  lending rate, as in effect from time to time, or
(ii) the Federal  Funds rate,  as in effect from time to time,  plus one-half of
one percent  (1/2%) per annum (any  changes in such rates to be  effective as of
the date of any change in such  rate).  The  SunTrust  prime  lending  rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually  charged to any customer.  SunTrust may make commercial  loans or other
loans at rates of interest at, above, or below the SunTrust prime lending rate.

     EBITDAR shall mean, for the Borrower and its  Subsidiaries  for any period,
an amount equal to the sum of (i) EBITR for such period,  and (ii) to the extent
deducted  in  determining   Net  Income  for  such  period,   depreciation   and
amortization for such period,  determined on a consolidated  basis in accordance
with generally accepted accounting principles in each case.

     EBITR shall mean, for the Borrower and its Subsidiaries for any period,  an
amount  equal  to the sum of (a) Net  Income  for such  period,  plus (b) to the
extent  deducted  in  determining  the Net Income for such  period (i)  Interest
Expense,  (ii)  income tax  expense,  and (iii) Rent  Expense,  determined  on a

<PAGE>

Dollar General Corporation
--------------------------------------------------------------------------------

consolidated basis in accordance with generally accepted  accounting  principles
in each case.

     Eligible   Inventory   shall  mean   inventory  of  the  Borrower  and  its
Subsidiaries  valued at the lower of cost or market with cost  determined  using
the  retail  last-in,  first-out  method,  all  as  properly  reflected  on  the
Borrower's  consolidated  balance sheet and  otherwise  determined in accordance
with generally accepted accounting principles.

     Funded Debt shall mean, at any time, all  outstanding  Indebtedness  of the
Borrower and its  Subsidiaries on a consolidated  basis (other than as described
in clause (xi) of the definition of the term  Indebtedness),  including  without
limitation, all obligations under the Revolvers.

     Indebtedness of any Person shall mean, without duplication, (1) obligations
of such Person for borrowed money,  (ii) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) obligations of such
Person in respect of the deferred  purchase price of property or services (other
than  trade  payables  incurred  in the  ordinary  course of  business  on terms
customary in the trade),  (iv)  obligations of such Person under any conditional
sale or other title retention agreement(s) relating to property acquired by such
Person,  (v) capitalized  lease  obligations of such Person,  (vi)  obligations,
contingent  or  otherwise,  of such  Person in  respect  of  letters  of credit,
acceptances or similar extensions of credit,  (vii) guaranties by such Person of
Indebtedness  of others of the types  described in this  definition,  (viii) all
indebtedness  of a third  party  secured by any lien on  property  owned by such
Person,  whether or not such indebtedness has been assumed by such Person,  (ix)
all obligations of such Person,  contingent or otherwise,  to purchase,  redeem,
retire or  otherwise  acquire  for value  any  capital  stock or member or other
ownership  interests  of such  Person,  in each case  where  the  holder of such
capital stock or member or other ownership  interests may require such purchase,
redemption, retirement or other acquisition to be effected prior to the maturity
of the 3-Year  Revolver,  (x)  off-balance  sheet  liability in respect of asset
securitization  programs,  synthetic leases, sale and leaseback  transactions or
other similar obligations arising with respect to any other transaction which is
the functional  equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated  balance sheet of such Person and its
subsidiaries,  and (xi)  obligations  that would be due under any interest  rate
hedge agreement or foreign exchange agreement if terminated at such time.

     Interest  Expense shall mean, for the Borrower and its Subsidiaries for any
period,  determined on a consolidated  basis in accordance with GAAP, the sum of
(i) total interest expense,  including without limitation the interest component
of any payments in respect of capital leases capitalized or expensed during such
period  (whether or not  actually  paid during  such  period)  plus (ii) the net
amount payable (or minus the net amount receivable) under hedging agreements

                                       2

<PAGE>

Dollar General Corporation
--------------------------------------------------------------------------------

during  such  period  (whether  or not  actually  paid or  received  during such
period).

     Interest Period shall mean with respect to LIBOR loans, the period of 1, 2,
3 or 6 months  selected by the Borrower  pursuant to the terms of the  Revolvers
and subject to customary adjustments in duration.

     LIBOR shall mean, for any Interest Period, the British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars for a period comparable to
the Interest  Period  appearing on Telerate  Screen Page 3750,  as of 11:00 a.m.
London time, on the day that is two business days prior to the Interest  Period.
Such rates may be adjusted for any applicable reserve requirements.

     Net  Income  shall  mean,  for any  period,  the net  income or loss of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with generally accepted accounting principles; provided that there
shall be excluded  the income of any Person  (other than the  Borrower) in which
any other  Person  (other than the Borrower or any  Subsidiary)  owns any equity
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of the Subsidiaries during such period.

     Net  Worth  shall  mean,  at any  time,  the  shareholders'  equity  of the
Borrower,  as set forth or  reflected  on the most recent  consolidated  balance
sheet of the Borrower prepared in accordance with generally accepted  accounting
principles, but excluding any redeemable preferred stock.

     Person shall mean any natural person,  corporation,  business trust,  joint
venture,  association,  company,  partnership,  limited  liability  company,  or
government, or any agency or political subdivision thereof.

     Rent Expense shall mean, for the Borrower and its  Subsidiaries  during any
period, the aggregate amount of all rental payments  (including both minimum and
contingent  rents)  during  such period in respect of all lease  agreements  and
financing  obligations  (excluding  any amounts in respect of capital  leases or
financing  obligations  included in the calculation of Interest Expense for such
period), whether for retail stores, distribution centers,  administrative office
space, furniture, fixtures, equipment, or other tangible assets.

     Subsidiary  shall mean,  as to any Person,  any other  Person of which more
than 50% of the outstanding  stock or comparable equity interest having ordinary
voting power for the election of the board of  directors,  managers,  or similar
governing body is at the time directly or indirectly  owned by such Person or by
one or more of its Subsidiaries.

                                       3
<PAGE>

                                         ANNEX II

                                     REVOLVER PRICING
                                     ----------------
<TABLE>
<CAPTION>

3 Year Revolving Credit Facility
---------------------------------------------------------------------------------------------
        Senior                                     Applicable Margin
     Debt Rating                               (Basis points per annum)
---------------------------------------------------------------------------------------------
                              LIBOR          Facility Fee         Base         All In Spread
                                                                  Rate
                        ---------------------------------------------------------------------
     <S>                      <C>                <C>              <C>              <C>
     < BB+/Ba1                200.0              37.5             87.5             237.5
       BB+/Ba1                175.0              25.0             50.0             200.0
       BBB-/Baa3              125.0              25.0              0.0             150.0
       BBB/Baa2                85.0              20.0              0.0             105.0
     > BBB+/Baa1               75.0              15.0              0.0              90.0
---------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

364-Day Revolving Credit Facility
---------------------------------------------------------------------------------------------
        Senior                                     Applicable Margin
     Debt Rating                               (Basis points per annum)
---------------------------------------------------------------------------------------------
                              LIBOR          Facility Fee         Base         All In Spread
                                                                  Rate
                        ---------------------------------------------------------------------
     <S>                      <C>                <C>              <C>              <C>
     < BB+/Ba1                205.0              32.5             87.5             237.5
       BB+/Ba1                180.0              20.0             50.0             200.0
       BBB-/Baa3              130.0              20.0              0.0             150.0
       BBB/Baa2                90.0              15.0              0.0             105.0
     > BBB+/Baa1               80.0              10.0              0.0              90.0
---------------------------------------------------------------------------------------------
</TABLE>

                                      AII-1Prepared by R.R. Donnelley Financial -- Amended & Restated 1998 Stock Option Plan

  
 Exhibit 10.1 
  
 PELION SYSTEMS, INC. 
 AMENDED AND RESTATED 
 1998 STOCK OPTION PLAN 
  
 SECTION 1.

 Purpose 
  
 The
purpose of Pelion Systems, Inc. 1998 Stock Option Plan (the “Plan”) is to further the growth and development of Pelion Systems, Inc. (the “Company”) by affording an opportunity for stock ownership to selected employees, directors
and consultants of the Company and its subsidiaries who are responsible for the conduct and management of its business or who are involved in endeavors significant to its success. 
  
 SECTION 2. 
 Definitions 
  

Unless otherwise indicated, the following words when used herein shall have the following meanings: 
  
 (a)    “Affiliate” shall mean, with respect to any person or entity, a person or entity that directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, such person or entity. 
  
 (b)    “Board” shall mean the Board of Directors of the Company. 
  
 (c)    “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. 
  
 (d)    “Common Stock” shall mean the Company’s common stock and any share or shares of the Company’s capital stock hereafter issued or issuable in substitution for such shares.

  
 (e)    “Incentive Stock Option” shall mean any option granted to an eligible
employee under the Plan, which the Company intends at the time the option is granted to be an Incentive Stock Option within the meaning of Section 422 of the Code. 
  
 (f)    “Nonqualified Stock Option” shall mean any option granted to an eligible employee, Director or consultant under the Plan which is not
an Incentive Stock Option. 
  
 (g)    “Option” shall mean and refer collectively to
Incentive Stock Options and Nonqualified Stock Options. 
  
 (h)    “Option Agreement”
means the agreement specified in Section 7.2. 

  
 (i)    “Optionee” shall mean any employee, Director
or consultant who is granted an Option under the Plan. “Optionee” shall also mean the personal representative of an Optionee and any other person who acquires the right to exercise an Option by bequest or inheritance. 

 
 (j)    “Parent” shall mean a parent corporation of the Company as defined in Section 424(e) of
the Code. 
  
 (k)    “Subsidiary” shall mean a subsidiary corporation of the Company as
defined in Section 424(f) of the Code. 
  
 SECTION 3. 
 Effective Date 
  
 The effective date of the Plan is December 9, 1998, provided,
however, that the adoption of the Plan by the Board is subject to approval and ratification by the shareholders of the Company within 12 months of the effective date. Options granted under the Plan prior to approval of the Plan by the shareholders
of the Company shall be subject to approval of the Plan by the shareholders of the Company. 
  
 SECTION 4.

 Administration 
  
 4.1    Administration.    The Plan shall be administered by the Board, which shall have the full and exclusive right to grant and determine terms and conditions of all Options granted
under the Plan and to prescribe, amend and rescind rules and regulations for administration of the Plan. In granting Options, the Board shall take into consideration the contribution the Optionee has made or may make to the success of the Company or
its Subsidiaries and such other factors as the Board shall determine. 
  
 4.2    Interpretation of Plan.    The determination of the Board as to any disputed question arising under the Plan, including questions of construction and interpretation, shall be
final, binding and conclusive upon all persons, including the Company, its Subsidiaries, its shareholders, and all persons having any interest in Options which may be or have been granted pursuant to the Plan. 
  
 4.3    Indemnification.    Each person who is or shall have been a member of the Board
shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred in connection with or resulting from any claim, action, suit or proceeding to which such
person may be a party or in which such person may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid in settlement thereof, with the Company’s approval, or paid in
satisfaction of a judgment in any such action, suit or proceeding against him, provided such person shall give the Company an opportunity, at its own expense, to handle and defend the same before undertaking to handle and defend it on such
person’s own behalf. The foregoing right of indemnification shall not be exclusive of, and is in addition to, any other rights of indemnification to which any person may be entitled under the Company’s Articles of
 
 

 -2- 

 
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 
  

SECTION 5. 
 Stock Subject to the Plan 
  
 5.1    Number.    The aggregate number of shares of Common Stock which may be issued under
Options granted pursuant to the Plan shall not exceed 329,412 shares. Shares which may be issued under Options may consist, in whole or in part, of authorized but unissued stock or treasury stock of the Company not reserved for any other purpose.

  
 5.2    Unused Stock.    If any outstanding Option under the Plan
expires or for any other reason ceases to be exercisable, in whole or in part, other than upon exercise of the Option, the shares which were subject to such Option and as to which the Option had not been exercised shall continue to be available
under the Plan. 
  
 5.3    Adjustment for Change in Outstanding
Shares.    If there is any change, increase or decrease, in the outstanding shares of Common Stock which is effected without receipt of additional consideration by the Company, by reason of a stock dividend, recapitalization,
merger, consolidation, stock split, combination or exchange of stock, or other similar circumstances, then in each such event, the Board shall make an appropriate adjustment in the aggregate number of shares of stock available under the Plan, the
number of shares of stock subject to each outstanding Option and the Option prices in order to prevent the dilution or enlargement of any of Optionee’s rights. In making such adjustments, fractional shares shall be rounded to the nearest whole
share. The Board’s determinations in making adjustments shall be final and conclusive. 
  
 SECTION 6.

 Eligibility 
  
 All employees of the Company and its Subsidiaries who are responsible for the conduct and management of its business or who are involved in endeavors significant to its success shall be eligible to receive both Incentive Stock
Options and Nonqualified Stock Options under the Plan. Directors and consultants who are not employees of the Company or its Subsidiaries but who are involved in endeavors significant to its success shall be eligible to receive Nonqualified Stock
Options, but not Incentive Stock Options, under the Plan. 
  
 SECTION 7. 
 Grant of Options 
  
 7.1    Grant of
Options.    The Board may from time to time in its discretion determine which of the eligible employees, Directors and consultants of the Company or its Subsidiaries should receive Options, the type of Options to be granted
(whether Incentive Stock Options or Nonqualified Stock Options), the number of shares subject to such Options and the dates on which such Options are to be granted. No employee may be granted Incentive Stock Options to the extent that the aggregate
fair market value (determined as of the time each Option is granted) of the Common Stock with respect to which any such Options are exercisable for the first time
 
 

 -3- 

 
during a calendar year (under all incentive stock option plans of the Company and its Parent and Subsidiaries) would exceed $100,000. 
  
 7.2    Option Agreement.    Each Option granted under the Plan shall be evidenced by a written Option Agreement setting forth
the terms upon which the Option is granted. Each Option Agreement shall designate the type of Options being granted (whether Incentive Stock Options or Nonqualified Stock Options), and shall state the number of shares of Common Stock, as designated
by the Board, to which that Option pertains. More than one Option may be granted to an eligible person. 
  
 7.3    Option Price.    The option price per share of Common Stock under each Option shall be determined by the Board and stated in the Option Agreement. The option price for Incentive
Stock Options granted under the Plan shall not be less than 100% of the fair market value (determined as of the day the Option is granted) of the shares subject to the Option. 
  
 7.4    Determination of Fair Market Value.    If the Common Stock is listed upon an established stock exchange or exchanges,
then the fair market value per share shall be deemed to be the average of the quoted closing prices of the Common Stock on such stock exchange or exchanges on the day for which the determination is made, or if no sale of the Common Stock shall have
been made on any stock exchange on that day, on the next preceding day on which there was such a sale. If the Common Stock is not listed upon an established stock exchange but is traded in the Nasdaq National Market System, the fair market value per
share shall be deemed to be the closing price of the Common Stock in the National Market System on the day for which the determination is made, or if there shall have been no trading of the Common Stock on that day, on the next preceding day on
which there was such trading. If the Common Stock is not listed upon an established stock exchange and is not traded in the National Market System, the fair market value per share shall be deemed to be the mean between the dealer “bid” and
“ask” closing prices of the Common Stock on the Nasdaq System on the day for which the determination is made, or if there shall have been no trading of the Common Stock on that day, on the next preceding day on which there was such
trading. If none of these conditions apply, the fair market value per share shall be deemed to be an amount as determined in good faith by the Board by applying any reasonable valuation method. 
  

7.5    Duration of Options.    Each Option shall be of a duration as specified in the Option Agreement; provided,
however, that the term of each Option shall be no more than ten years from the date on which the Option is granted and shall be subject to early termination as provided herein. 
  
 7.6    Additional Limitations on Grant.    No Incentive Stock Option shall be granted to an employee who, at the time the
Incentive Stock Option is granted, owns stock (as determined in accordance with Section 424(d) of the Code) representing more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary, unless
the option price of such Incentive Stock Option is at least 110% of the fair market value (determined as of the day the Incentive Stock Option is granted) of the stock subject to the Incentive Stock Option and the Incentive Stock Option by its terms
is not exercisable more than five years from the date it is granted. 
 

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 7.7    Other Terms and
Conditions.    The Option Agreement may contain such other provisions, which shall not be inconsistent with the Plan, as the Board shall deem appropriate, including, without limitation, provisions that relate to the vesting
or early exercise of the Option (e.g., the Optionee’s ability to exercise an Option based on the passage of time or the achievement of specific goals established by the Board or the occurrence of certain events specified by the Board). The
Option Agreement may also provide that any shares of Common Stock acquired upon exercise of an Option shall become, upon such acquisition, restricted stock subject to the terms of a Restricted Stock Agreement which shall be set forth as an
attachment to the Stock Option Agreement. 
  
 SECTION 8. 
 Exercise of Options 
  
 8.1    Manner
of Exercise.    Subject to the limitations and conditions of the Plan or the Option Agreement, an Option shall be exercisable, in whole or in part, from time to time, by giving written notice of exercise to the Secretary of
the Company, which notice shall specify the number of shares of Common Stock to be purchased and shall be accompanied by (a) payment in full to the Company of the purchase price of the shares to be purchased, plus (b) payment in full of such amount
as the Company shall determine to be sufficient to satisfy any liability it may have for any withholding of federal, state or local income or other taxes incurred by reason of the exercise of the Option, and (c) a representation meeting the
requirements of Section 11.2 if requested by the Company, and (d) a stock restriction agreement meeting the requirements of Section 11.3 if requested by the Company. 
  
 8.2    Payment of Purchase Price.    Payment for shares and withholding taxes shall be in the form of either (a) cash or
personal check, or (b) a certified or bank cashier’s check to the order of the Company. 
  
 SECTION 9.

 Effect of Termination of Employment 
  
 9.1    No Effect for Nonqualified Stock Options.    An Optionee may exercise a Nonqualified Stock Option at any time following termination of employment for any reason, subject
to the terms of the Plan and the applicable Option Agreement. 
  
 9.2    Termination By Death
of Optionee.    If an Optionee shall die while in the employ of the Company or a Subsidiary or within a period of three months after the termination of employment with the Company or a Subsidiary under circumstances to which
Section 10 apply, the personal representatives of the Optionee’s estate or the person or persons who shall have acquired an Incentive Stock Option from the Optionee by bequest or inheritance may exercise the Incentive Stock Option at any time
within the year after the date of death but not later than the expiration date of the Incentive Stock Option, to the extent the Optionee was entitled to do so on the date of death. Any Incentive Stock Options not exercisable as of the date of death
and any Incentive Stock Options or portions of Incentive Stock Options of deceased Optionees not exercised as provided herein shall terminate. 
 

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 9.3    Termination By Disability of
Optionee.    Upon termination of an Optionee’s employment with the Company or a Subsidiary by reason of the Optionee’s disability (within the meaning of Section 22(e)(3) of the Code), the Optionee may exercise an
Incentive Stock Option at any time within one year after the date of termination but not later than the expiration date of the Incentive Stock Option, to the extent the Optionee was entitled to do so on the date of termination. Any Incentive Stock
Options not exercisable as of the date of termination and any Incentive Stock Options or portions of Incentive Stock Options of disabled Optionees not exercised as provided herein shall terminate. 
  
 9.4  Termination of Employment Other than Upon Death or Disability.    Upon termination of an
Optionee’s employment with the Company or a Subsidiary other than upon death or disability (within the meaning of Section 22(e)(3) of the Code), an Optionee may, at any time within three months after the date of termination but not later than
the date of expiration of an Incentive Stock Option, exercise the Incentive Stock Option to the extent the Optionee was entitled to do so on the date of termination. Any Incentive Stock Options not exercisable as of the date of termination and any
Incentive Stock Options or portions of Incentive Stock Options of terminated Optionees not exercised as provided herein shall terminate. 
  
 9.5    Termination of Directors and Consultants.    For purposes of this Section 9, a termination of employment shall be deemed to include the termination of a Director’s
service as a member of the Board and the termination of a consulting arrangement in the case of consultants. 
  
 SECTION
10. 
 Non-Transferability of Option 
  
 Options granted pursuant to the Plan are not transferable by the Optionee other than by Will or the laws of descent and distribution and shall be exercisable during the Optionee’s lifetime only by the Optionee. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, or upon the levy of any attachment or similar process upon the Option, the Option shall immediately become null and void.

  
 SECTION 11. 
 Issuance of
Shares 
  
 11.1    Transfer of Shares to Optionee.    As soon as
practicable after the Optionee has given the Company written notice of exercise of an Option and has otherwise met the requirements of Section 8.1, the Company shall issue or transfer to the Optionee the number of shares of Common Stock as to which
the Option has been exercised and shall deliver to the Optionee a certificate or certificates therefor, registered in the Optionee’s name. In no event shall the Company be required to transfer fractional shares to the Optionee, and in lieu
thereof, the Company may pay an amount in cash equal to the fair market value (as determined in accordance with Section 7.4) of such fractional shares on the date of exercise. If the issuance or transfer of shares by the Company would for any
reason, in the opinion of counsel for the Company, violate any applicable federal or state laws or regulations, the Company may delay issuance or transfer of such shares to the Optionee until compliance with such laws can
 
 

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reasonably be obtained. In no event shall the Company be obligated to effect or obtain any listing, registration, qualification, consent or approval under any applicable federal or state laws or
regulations or any contract or agreement to which the Company is a party with respect to the issuance of any such shares. 
  
 11.2    Investment Representation.    Upon demand by the Company, the Optionee shall deliver to the Company a representation in writing that the purchase of all shares with respect to
which notice of exercise of the Option has been given by the Optionee is being made for investment only and not for resale or with a view to distribution, and containing such other representations and provisions with respect thereto as the Company
may require. Upon such demand, delivery of such representation promptly and prior to the transfer or delivery of any such shares and prior to the expiration of the option period shall be a condition precedent to the right to purchase such shares.

  
 11.3    Stock Restriction Agreement.    Upon demand by the
Company, the Optionee shall execute and deliver to the Company a stock restriction agreement in such form as the Company may provide at the time of exercise of the Option. Such agreement may include, without limitation, restrictions upon the
Optionee’s right to transfer shares, including the creation of an irrevocable right of first refusal in the Company and its designees, and provisions requiring the Optionee to transfer the shares to the Company or the Company’s designees
upon a termination of employment. Upon such demand, execution of the stock restriction agreement by the Optionee prior to the transfer or delivery of any shares and prior to the expiration of the option period shall be a condition precedent to the
right to purchase such shares, unless such condition is expressly waived in writing by the Company. 
  
 SECTION 12.

 Amendments 
  
 The
Board may at any time and from time to time alter, amend, suspend or terminate the Plan or any part thereof, or any Option Agreement or any part thereof as it may deem proper, except that no such action shall diminish or impair the rights under an
Option previously granted. Unless the shareholders of the Company shall have given their approval, the total number of shares for which Incentive Stock Options may be issued under the Plan shall not be increased, except as provided in Section 5.3
and no amendment shall be made which reduces the price at which the Common Stock may be offered under the Plan below the minimum required by Section 7.3, except as provided in Section 5.3, or which materially modifies the requirements as to
eligibility for the grant of Incentive Stock Options under the Plan. Subject to the terms and conditions of the Plan, the Board may modify, extend or renew outstanding Options granted under the Plan, or accept the surrender of outstanding Options to
the extent not theretofore exercised and authorize the granting of new Options in substitution therefor, except that no such action shall diminish or impair the rights under an Option previously granted without the consent of the Optionee.

 

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 SECTION 13. 
 Term of Plan 
  
 This Plan shall terminate on December 9, 2008, provided, however,
that the Board may at any time prior thereto suspend or terminate the Plan. 
  
 SECTION 14. 
 Rights as Stockholder 
  
 An Optionee
shall have no rights as a stockholder of the Company with respect to any shares of Common Stock covered by an Option until the date of the issuance of the stock certificate for such shares. 
  
 SECTION 15. 
 No Employment Rights 
  
 Nothing contained in this Plan or in any Option granted under the Plan shall confer upon any Optionee any right with respect to the
continuation of such Optionee’s employment by the Company or any Subsidiary or interfere in any way with the right of the Company or any Subsidiary, subject to the terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the Optionee from the rate in existence at the time of the grant of the Option. 
  
 SECTION 16. 
 Governing Law 
  
 This Plan, and all Options granted under this Plan, shall be construed and shall take effect in accordance with the laws of the State of Colorado, without regard to the
conflicts of laws rules of such State. 
 

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