Exhibit 4.23
GUARANTY
GUARANTY, dated as of May 30, 1997 (the "Guaranty"), from RITE
AID CORPORATION, a Delaware corporation (the "Guarantor"), to SUMITOMO BANK
LEASING AND FINANCE, INC., a Delaware corporation (the "Lessor").
W I T N E S S E T H:
WHEREAS, the Guarantor wishes to induce the Lessor to enter
into (i) a certain Master Lease and Security Agreement (the "Master Lease")
dated as of the date hereof and with Rite Aid Realty Corp., a Delaware
corporation and a wholly-owned subsidiary of the Guarantor (the "Lessee")
and (ii) certain other Operative Documents (as defined in the Master Lease)
with the Lessee on or after the date hereof (the Master Lease and such
Operative Documents, as each of them may be amended, modified,
supplemented, or extended from time to time, are collectively referred to
hereinafter as the "Guaranteed Agreements"); and
WHEREAS, the Lessor is unwilling to enter into the Guaranteed
Agreements with the Lessee unless the Guarantor enters into this Guaranty;
and
WHEREAS, capitalized terms used but not otherwise defined in
this guaranty have the respective meanings specified in Appendix 1 to the
Master Lease; and the rules of interpretation set forth in Appendix 1 to
the Master Lease shall apply to this Guaranty;
NOW, THEREFORE, in order to induce the Lessor to enter into the
Guaranteed Agreements and to consummate the transactions contemplated
thereby, the Guarantor hereby agrees as follows:
1. Guaranty. (a) The Guarantor unconditionally and irrevocably
guarantees to the Lessor the due and punctual performance of and compliance
by the Lessee with all obligations, covenants, warranties, undertakings and
conditions agreed by the Lessee to be performed, observed or complied with
by the Lessee and contained in or arising under the Guaranteed Agreements
including but not limited to, the full and punctual payment by the Lessee,
when due, whether at the stated due date, by acceleration or otherwise, of
any and all rent, obligations, liabilities, indebtedness and other amounts
of every kind arising out of the Guaranteed Agreements, all amounts in
respect to indemnities provided for in the Guaranteed Agreements, and all
damages (whether provided for in the Guaranteed Agreements or otherwise
permitted by law) in respect of a failure or refusal by the Lessee to make
any such payment, howsoever created, arising or evidenced, voluntary or
involuntary, whether direct or indirect, absolute or contingent, now or
hereafter existing or owing to the Lessor (all the foregoing obligations
and undertakings are collectively referred to hereinafter as the
"Obligations").
(b) This Guaranty is an absolute and unconditional
guaranty of performance and payment when due under the Guaranteed
Agreements and not of collection of any indebtedness contained in or
arising under the Guaranteed Agreements. This Guaranty is in no way
conditioned upon any attempt to collect from the Lessee or upon any other
event or contingency, and shall be binding upon and enforceable against the
Guarantor without regard to the validity or enforceability of the
Guaranteed Agreements, or of any term thereof. If for any reason the Lessee
shall fail or be unable duly and punctually to pay any such amount when due
under the Guaranteed Agreements, the Guarantor will forthwith pay, if not
already paid by the Lessee, the same immediately upon written demand.
(c) In case any of the Guaranteed Agreements shall be
terminated as a result of the rejection thereof by any trustee, receiver or
liquidating agent of the Lessee or any of its properties in any bankruptcy,
insolvency, reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar proceeding, the Guarantor's obligations
hereunder shall continue to the same extent as if such agreement had not
been so rejected. The Guarantor agrees that this Guaranty shall continue to
be effective or be reinstated, as the case may be, if at any time payment
to the Lessor of the Obligations or any part thereof is rescinded or must
otherwise be returned by the Lessor upon the insolvency, bankruptcy or
reorganization of the Lessee, or otherwise, as though such payment to the
Lessor had not been made.
(d) The Guarantor shall pay on demand all reasonable
costs, expenses and damages incurred (including, without limitation,
attorneys' fees and disbursements) in connection with the enforcement of
the obligations of the Guarantor under this Guaranty.
2. Guaranty Continuing and Unlimited. The obligations of the
Guarantor hereunder shall be continuing and unlimited, shall not be subject
to any non- compulsory counterclaim, set-off, deduction or defense (other
than payment or performance) based upon any claim the Guarantor may have
against the Lessor or the Lessee or any other Person, and shall remain in
full force and effect without regard to, and shall not be released,
discharged or in any way affected by any circumstance or condition (whether
or not the Guarantor shall have any knowledge or notice thereof) whatsoever
which might constitute a legal or equitable discharge or defense including,
but not limited to, (a) any express or implied amendment or modification of
or supplement to the Guaranteed Agreements or any other agreement referred
to in either thereof, or any other instrument applicable to the Lessee or
to the Obligations, or any part thereof, or any assignment or transfer of
any thereof; (b) any failure on the part of the Lessee to perform or comply
with the Guaranteed Agreements or any failure of any other Person to
perform or comply with any term of the Guaranteed Agreements, or any other
agreement as aforesaid; (c) any waiver, consent, change, extension,
indulgence or other action or any action or inaction under or in respect of
the Guaranteed Agreements, or any other agreement as aforesaid, or this
Guaranty, whether or not the Lessor, the Lessee or the Guarantor has notice
or knowledge of any of the foregoing; (d) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or
similar proceeding with respect to the Guarantor or the Lessee, or their
respective properties or their creditors, or any action taken by any
trustee or receiver or by any court in any such proceeding; (e) any
furnishing or acceptance of additional security or any release of any
security (and the Guarantor authorizes the Lessor to obtain, accept or
release said security); (f) any limitation on the liability or Obligations
of the Lessee under the Guaranteed Agreements (other than any limitation
expressly provided for therein) or any termination, cancellation,
frustration, invalidity or unenforceability, in whole or in part, of the
Guaranteed Agreements, or any term of any thereof; (g) any lien, charge or
encumbrance on or affecting the Guarantor's or any of the Lessee's
respective assets and properties; (h) any act, omission or breach on the
part of the Lessor or any other Person under the Guaranteed Agreements, or
any other agreement at any time existing between the Lessor and the Lessee
or any other law, governmental regulation or other agreement applicable to
the Lessor or any Obligation; (i) any claim as a result of any other
dealings among the Lessor, the Guarantor or the Lessee or any of them; (j)
the assignment of the Guaranteed Agreements by the Lessor to any other
Person, or the assignment of this Guaranty by the Lessor to any Person; or
(k) any change in the name or ownership of the Lessor, the Lessee or any
other person referred to herein.
3. Waiver. (a) The Guarantor unconditionally waives: (i) notice
of any of the matters referred to in Section 2 hereof; (ii) all notices
which may be required by statute, rule of law or otherwise to preserve any
rights against the Guarantor hereunder, including, without limitation,
notice of the acceptance of this Guaranty, or the creation, renewal,
extension, modification or accrual of the Obligations or notice of any
other matters relating thereto, any presentment, demand, notice of
dishonor, protest, nonpayment of any damages or other amounts payable under
the Guaranteed Agreements; (iii) any requirement for the enforcement,
assertion or exercise of any right, remedy, power or privilege under or in
respect of the Guaranteed Agreements, including, without limitation,
diligence in collection or protection of or realization upon the
Obligations or any part thereof or any collateral therefor; (iv) any
requirement of diligence; (v) any requirement to mitigate the damages
resulting from a default by the Lessee under the Guaranteed Agreements;
(vi) the occurrence of every other condition precedent to which the
Guarantor or the Lessee may otherwise be entitled; (vii) the right to
require the Lessor to proceed against the Lessee or any other Person liable
on the Obligations, to proceed against or exhaust any security held from
the Lessee or any other Person, or to pursue any other remedy in the
Lessor's power whatsoever; (viii) the right to have the property of the
Lessee first applied to the discharge of the Obligations; and any defense
arising by reason of any disability or other defense of the Lessee or by
reason of the cessation from any cause whatsoever of the liability, either
in whole or in part, of the Lessee to the Lessor for the Obligations,
provided that nothing contained herein shall be deemed to be a waiver by
Guarantor of the benefit to Guarantor of any notice or grace period to
which the Lessee is entitled pursuant to the express terms of the Operative
Documents.
(b) The Lessor may, at its election, exercise any right
or remedy it may have against the Lessee or any security held by the
Lessor, including, without limitation, the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in
any way the liability of the Guarantor hereunder, except to the extent the
Obligations have been paid, and the Guarantor waives any defense arising
out of the absence, impairment or loss of any right of reimbursement,
contribution or subrogation or any other right or remedy of the Guarantor
against the Lessee or any such security, whether resulting from such
election by the Lessor or otherwise. The Guarantor understands that the
liability of the Lessee to the Lessor for the Obligations may be secured by
real property and that the Guarantor shall be liable for the full amount of
its liability hereunder notwithstanding foreclosure on such real property
by trustee sale or any other reason impairing the Guarantor's right to
proceed against the Lessee.
(c) The Guarantor understands that the Lessor's exercise
of certain rights and remedies contained in the Guaranteed Agreements may
affect or eliminate the Guarantor's rights of subrogation against the
Lessee and that the Guarantor may therefore incur partially or totally
nonreimbursable liability hereunder; nevertheless, the Guarantor hereby
authorizes and empowers the Lessor, its successors, endorsees and/or
assignees, to exercise in its or their sole discretion, any rights and
remedies, or any combination thereof, which may then be available, it being
the purpose and intent of the Guarantor that its obligations hereunder
shall be absolute, independent and unconditional under any and all
circumstances.
(d) The Guarantor assumes the responsibility for being and
keeping informed of the financial condition of the Lessee and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and
agrees that the Lessor shall not have any duty to advise the Guarantor of
information regarding any condition or circumstance or any change in such
condition or circumstance. The Guarantor acknowledges that the Lessor has
not made any representation to the Guarantor concerning the financial
condition of the Lessee.
4. Representations and Warranties of the Guarantor.
The Guarantor represents and warrants to the Lessor that:
(a) Corporate Existence and Power. The Guarantor is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of Delaware, and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted.
(b) Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Guarantor of
this Guaranty are within the Guarantor's corporate powers, have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or official and
do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or
by-laws of the Guarantor or of any agreement or instrument evidencing or
governing debt of the Guarantor or any Subsidiary or any other material
agreement, instrument, judgment, injunction, order or decree binding upon
the Guarantor or any Subsidiary or result in the creation or imposition of
any Lien on any asset of the Guarantor or any Subsidiary pursuant to any
such agreement, instrument, judgment, injunction, order or decree.
(c) Binding Effect. This Guaranty constitutes a valid and
binding agreement of the Guarantor enforceable in accordance with its
terms.
(d) Financial Information.
(i) The consolidated balance sheet of the Guarantor and
its Consolidated Subsidiaries as of March 1, 1997 and the related consolidated
statements of income and cash flows for the fiscal year then ended,
reported on by KPMG Peat Marwick LLP, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial
position of the Guarantor and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such fiscal
year.
(ii) Since March 1, 1997, there has been no material
adverse change in the business, financial position, results of operations
or prospects of the Guarantor and its Consolidated Subsidiaries, considered
as a whole.
(e) Full Disclosure. All financial statements and other
documents furnished by the Guarantor to the Lessor in connection with this
Guaranty and the transactions contemplated hereby do not and will not
contain any untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein not
misleading. The Guarantor has disclosed to the Lessor in writing any and
all facts which materially and adversely affect the business, operations or
condition, financial or otherwise, of the Guarantor and its Subsidiaries or
the Guarantor's ability to perform its obligations under this Guaranty.
(f) Litigation There is no action, suit or proceeding
pending against, or to the knowledge of the Guarantor threatened against or
affecting, the Guarantor or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could materially
adversely affect the business, consolidated financial position or
consolidated results of operations of the Guarantor and its Consolidated
Subsidiaries or which in any manner draws into question the validity or
enforceability of this Guaranty.
(g) Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA
and the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code
with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Code in
respect of any Plan, (ii) failed to make any contribution or payment to any
Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or
made any amendment to any Plan or Benefit Arrangement, which has resulted
or could result in the imposition of a Lien or the posting of a bond or
other security under ERISA or the Code or (iii) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA.
(h) Taxes. The Guarantor and its Subsidiaries have filed
all United States Federal income tax returns, and the Guarantor and its
Significant Subsidiaries have filed all other material tax returns, which
are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Guarantor or any
Significant Subsidiary except where the payment of any such taxes is being
contested in good faith by appropriate proceedings. The charges, accruals
and reserves on the books of the Guarantor and its Consolidated
Subsidiaries in respect of taxes or other governmental charges are, in the
opinion of the Guarantor, adequate.
(i) Subsidiaries. Each of the Guarantor's corporate
Significant Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
(j) Environmental Matters. In the ordinary course of its
business, the Guarantor conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of the
Guarantor and its Subsidiaries, in the course of which it identifies and
evaluates associated liabilities and costs (including, without limitation,
any capital or operating expenditures required for clean-up or closure of
properties presently or previously owned, any capital or operating
expenditures required to achieve or maintain compliance with environmental
protection standards imposed by law or as a condition of any license,
permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction
in the level of or change in the nature of operations conducted thereat,
any costs or liabilities in connection with off-site disposal of wastes or
hazardous substances, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). On the
basis of this review, the Guarantor has reasonably concluded that such
associated liabilities and costs, including the costs of compliance with
Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of the
Guarantor and its Consolidated Subsidiaries, considered as a whole.
(k) Lessee. The Guarantor owns and will continue to own,
directly or indirectly, not less than 100% of the issued and outstanding
shares of capital stock of the Lessee. All such shares have been validly
issued, are fully paid and non-assessable and are free and clear of any
liens or encumbrances.
(l) Defaults. The Guarantor is not in default under (and
no event has occurred which with the giving of notice or lapse of time
would result in a default under) any instrument evidencing any debt in
excess of $10,000,000 or any agreement relating thereto or any material
mortgage, deed of trust, security agreement, lease, franchise or other
agreement to which the Guarantor is a party or by which the Guarantor or
any of its properties or assets is bound or to which it may be subject.
5. Payments. Each payment by the Guarantor to the Lessor under
this Guaranty shall be made by transferring the amount thereof in
immediately available funds without set-off or counterclaim; provided that
no such payment shall be deemed a waiver of any rights the Guarantor may
have.
6. Parties. This Guaranty shall inure to the benefit of the
Lessor and its successors, assigns or transferees, and shall be binding
upon the Guarantor and its successors and assigns. The Guarantor may not
delegate any of its duties under this Guaranty without the prior written
consent of the Lessor or any Person to whom the Lessor has assigned this
Guaranty.
7. Notices. All notices, demands and other communications
between the Lessor and the Guarantor under this Guaranty shall be in
writing and shall be delivered or sent to the address or telecopier number
shown below, or to such other address or telecopier number as either of us
may by written notice to the other have designated for such purpose. Any
such notice, demand or other communication shall not be effective until
actually received.
If to the Lessor:
Sumitomo Bank Leasing
and Finance, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Credit Officer
Telecopier: 000-000-0000
If to the Guarantor:
Rite Aid Corporation
00 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Chief Financial Officer
Telecopier: 000-000-0000
8. Remedies. The Guarantor stipulates that the remedies at law
in respect of any default or threatened default by the Guarantor in the
performance of or compliance with any of the terms of this Guaranty are not
and will not be adequate, and that any of such terms may be specifically
enforced by a decree for specific performance or by an injunction against
violation of any such terms or otherwise.
9. Rights to Deal with the Lessee. At any time and from time to
time, without terminating, affecting or impairing the validity of this
Guaranty or the obligations of the Guarantor hereunder, the Lessor may deal
with the Lessee in the same manner and as fully and as if this Guaranty did
not exist and shall be entitled, among other things, to grant the Lessee,
without notice or demand and without affecting the Guarantor's liability
hereunder, such extension or extensions of time to perform, renew,
compromise, accelerate or otherwise change the time for payment of or
otherwise change the terms of payment or any part thereof contained in or
arising under the Guaranteed Agreements, or to waive any Obligation of the
Lessee to perform, any act or acts as the Lessor may deem advisable.
10. Subrogation. Until such time as the Obligations (except for
any indemnification not then due and payable) shall have been paid or
performed in full by the Guarantor, no payment by or for the account of the
Guarantor shall entitle the Guarantor by subrogation or otherwise to any
payment by the Lessee or from or out of any property of the Lessee, and the
Guarantor shall not exercise any right or remedy against the Lessee or any
property of the Lessee by reason of any performance by the Guarantor.
11. Guarantor's Covenants. The Guarantor hereby covenants and
agrees that until the Obligations and all obligations of the Guarantor
under this Guaranty have been paid or discharged in full:
(a) The covenants contained in Article V of the Credit
Agreement are hereby incorporated herein by reference with the same force
and effect as if such covenants were set forth expressly herein.
Notwithstanding the foregoing, any amendments or waivers of such covenants
approved by the requisite parties under the Credit Agreement shall likewise
be effective hereunder provided that the Lessor and the Liquidity Providers
shall have received a pro rata share (based on the respective commitments
of the Lessor, Liquidity Providers and parties to the Credit Agreement) of
any consideration given by the Guarantor or any Affiliate of the Guarantor
in connection with such amendment or waiver. In the event the Credit
Agreement is no longer in effect, or in the event any Liquidity Provider
having a commitment which is equal to or greater than 30% of the Total
Commitment is no longer a party to the Credit Agreement, the covenants of
the Credit Agreement in effect for the purposes of this Guaranty
immediately prior to the termination of the Credit Agreement or the last
date on which such Liquidity Provider is a party to the Credit Agreement,
as the case may be, shall be deemed part of this Guaranty subject to
amendment or waiver at the discretion of the Lessor.
(b) The Guarantor will ensure that its obligations under this
Guaranty, and the obligations of the Lessee under the Guaranteed
Agreements, constitute senior debt for all purposes of all subordinated
debt for money borrowed issued, incurred or assumed by the Guarantor or the
Lessee, as the case may be, after the date hereof.
12. Survival of Representations, Warranties, etc. All
representations, warranties, covenants and agreements made herein and in
statements or certificates delivered pursuant hereto shall survive any
investigation or inspection made by or on behalf of the Lessor and shall
continue in full force and effect until all of the obligations of the
Guarantor under this Guaranty shall be fully performed in accordance with
the terms hereof, and until the payment in full of all sums payable by the
Lessee under the Guaranteed Agreements, and until performance in full of
all obligations of the Lessee in accordance with the terms and provisions
of such agreements.
13. Third Party Beneficiaries. The Guarantor expressly
acknowledges and agrees that each Indemnitee (as such term is defined in
the Master Lease) shall be a third party beneficiary of this Guaranty.
14. GOVERNING LAW; WAIVER OF JURY TRIAL; CONSENT TO
JURISDICTION. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO
HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND AGREE THAT ANY SUCH ACTION
OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE
GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY JUDICIAL PROCEEDINGS BROUGHT
AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK
AND, BY THE EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR ACCEPTS
THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. SERVICE OF PROCESS
MAY BE MADE BY ANY MEANS AUTHORIZED BY FEDERAL LAW OR THE LAW OF NEW YORK,
AS THE CASE MAY BE. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY
REGISTERED MAIL TO THE GUARANTOR AT THE ADDRESS SET FORTH IN SECTION 7
HEREOF, OR AT SUCH OTHER ADDRESS AS MAY BE DESIGNATED BY THE GUARANTOR IN A
NOTICE TO THE LESSOR. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LESSOR OR
ITS ASSIGNEE TO BRING PROCEEDINGS AGAINST THE GUARANTOR IN THE COURTS OF
ANY OTHER JURISDICTION.
15. Miscellaneous. If any term of this Guaranty or any
application thereof shall be invalid or unenforceable, the remainder of
this Guaranty and any other application of such term shall not be affected
thereby. Any term of this Guaranty may be amended, waived, discharged or
terminated only by an instrument in writing signed by the Guarantor and the
Lessor. The headings in this Guaranty are for purposes of reference only
and shall not limit or define the meaning hereof. This Guaranty may be
executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have caused this Guaranty
to be executed and delivered as of the day and year first above
written.
RITE AID CORPORATION,
as Guarantor
By:___________________________________
Name:
Title:
Acknowledged and Agreed:
SUMITOMO BANK LEASING AND
FINANCE, INC.
By:______________________________
Name:
Title:
