Dollar General 2009 Annual Report Download - page 53

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Prepayments. The senior secured credit agreement for the Term Loan Facility requires us to
prepay outstanding term loans, subject to certain exceptions, with:
50% of our annual excess cash flow (as defined in the credit agreement) which will be reduced
to 25% and 0% if we achieve and maintain a total net leverage ratio of 6.0 to 1.0 and 5.0 to 1.0,
respectively;
100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of
property in excess of $25.0 million in the aggregate and subject to our right to reinvest the
proceeds; and
100% of the net cash proceeds of any incurrence of debt, other than proceeds from debt
permitted under the senior secured credit agreement.
The mandatory prepayments discussed above will be applied to the Term Loan Facility as directed
by the senior secured credit agreement. Through January 29, 2010, no prepayments have been required
under the prepayment provisions listed above. The Term Loan Facility can be prepaid in whole or in
part at any time.
In addition, the senior secured credit agreement for the ABL Facility requires us to prepay the
ABL Facility, subject to certain exceptions, as follows:
With 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions
of revolving facility collateral (as defined below) in excess of $1.0 million in the aggregate and
subject to our right to reinvest the proceeds; and
To the extent such extensions of credit exceed the then current borrowing base (as defined in
the senior secured credit agreement for the ABL Facility).
The mandatory prepayments discussed above will be applied to the ABL Facility as directed by the
senior secured credit agreement for the ABL Facility. Through January 29, 2010, no prepayments have
been required under the prepayment provisions listed above.
An event of default under the senior secured credit agreements will occur upon a change of
control as defined in the senior secured credit agreements governing our Credit Facilities. Upon an
event of default, indebtedness under the Credit Facilities may be accelerated, in which case we will be
required to repay all outstanding loans plus accrued and unpaid interest and all other amounts
outstanding under the Credit Facilities.
Amortization. Beginning September 30, 2009, we were required to repay installments on the loans
under the Term Loan Facility in equal quarterly principal amounts in an aggregate amount per annum
equal to 1% of the original principal amount. During 2009, we paid two such quarterly installments
totaling $11.5 million. Due to the $325.0 million voluntary prepayment of the Term Loan Facility
discussed above, no further quarterly principal installments will be required prior to maturity of the
Term Loan on July 6, 2014. There is no amortization under the ABL Facility. The entire principal
amounts (if any) outstanding under the ABL Facility are due and payable in full at maturity, on July 6,
2013, on which day the commitments thereunder will terminate.
Guarantee and Security. All obligations under the Credit Facilities are unconditionally guaranteed
by substantially all of our existing and future domestic subsidiaries (excluding certain immaterial
subsidiaries and certain subsidiaries designated by us under our senior secured credit agreements as
‘‘unrestricted subsidiaries’’), referred to, collectively, as U.S. Guarantors.
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