Dollar General 2007 Annual Report Download - page 40

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indenture, dated as of July 6, 2007 (the “senior indenture”), and $725 million aggregate principal
amount of 11.875%/12.625% senior subordinated toggle notes due 2017 (the “senior
subordinated notes”), which mature on July 15, 2017, pursuant to an indenture, dated as of July
6, 2007 (the “senior subordinated indenture”). The senior notes and the senior subordinated notes
are collectively referred to herein as the “notes.” The senior indenture and the senior
subordinated indenture are collectively referred to herein as the “indentures.”
Interest on the notes is payable on January 15 and July 15 of each year, commencing
January 15, 2008. Interest on the senior notes will be payable in cash. Cash interest on the senior
subordinated notes will accrue at a rate of 11.875% per annum, and PIK interest (as that term is
defined below) will accrue at a rate of 12.625% per annum. The initial interest payment on the
senior subordinated notes will be payable in cash. For any interest period thereafter through July
15, 2011, we may elect to pay interest on the senior subordinated notes (i) in cash, (ii) by
increasing the principal amount of the senior subordinated notes or issuing new senior
subordinated notes (“PIK interest”) or (iii) by paying interest on half of the principal amount of
the senior subordinated notes in cash interest and half in PIK interest. After July 15, 2011, all
interest on the senior subordinated notes will be payable in cash.
The notes are fully and unconditionally guaranteed by each of the existing and future
direct or indirect wholly owned domestic subsidiaries that guarantee the obligations under our
New Credit Facilities.
We may redeem some or all of the notes at any time at redemption prices described or set
forth in the indentures. We repurchased $25.0 million of the 11.875%/12.625% senior
subordinated toggle notes in the fourth quarter of 2007.
Change of Control. Upon the occurrence of a change of control, which is defined in the
indentures, each holder of the notes has the right to require us to repurchase some or all of such
holder’ s notes at a purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the repurchase date.
Covenants. The indentures contain covenants limiting, among other things, our ability
and the ability of our restricted subsidiaries to (subject to certain exceptions):
• incur additional debt, issue disqualified stock or issue certain preferred stock;
• pay dividends on or make certain distributions and other restricted payments;
• create certain liens or encumbrances;
• sell assets;
• enter into transactions with affiliates;
• make payments to us;