Dollar General 2008 Annual Report Download - page 45

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11.875% per annum, and PIK interest (as that term is defined below) accrues at a rate of
12.625% per annum, if applicable. The initial interest payment on the senior subordinated notes
was 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. Through January 30, 2009, all such interest has been paid 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
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 also may seek, from time to time, to retire some or all of the notes
through cash purchases on the open market, in privately negotiated transactions or otherwise.
Such repurchases, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors. The amounts involved may be material.
We repurchased $44.1 million and $25.0 million of the senior subordinated notes in the fourth
quarters of 2008 and 2007, respectively.
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;
• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;
and
• designate our subsidiaries as unrestricted subsidiaries.