EXECUTION COPY
Proprietary & Confidential
RITE AID CORPORATION
---------------
PARENT GUARANTY
---------------
Dated as of June 27, 2001.
PARENT GUARANTY
Proprietary & Confidential
PARENT GUARANTY
PARENT GUARANTY, dated as of June __, 2000 (this "Guaranty"), by RITE AID
CORPORATION, a Delaware corporation (the "Guarantor"), to XXXXX FARGO BANK
NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely as
trustee of the RAC DISTRIBUTION STATUTORY TRUST (the "Lessor"). Capitalized
terms used herein and not defined herein shall have the meanings ascribed to
them in the Participation Agreement dated as of the date hereof among the
Lessor, Rite Aid Realty Corp. (the "Lessee"), the Guarantor, Xxxxx Fargo Bank
Northwest, National Association, not in its individual capacity except as
expressly provided therein but solely as Trustee of RAC Distribution Statutory
Trust, the Persons named therein as Certificate Holders and Note Holders, and
Citicorp USA, Inc., as Agent (the "Agent") (as the same may be amended from time
to time, the "Participation Agreement").
Preliminary Statement
A. As contemplated by the Participation Agreement, the Lessor will acquire
(i) a fee interest in two certain parcels of land located in Perryman, Maryland,
and a fee interest in certain improvements located thereon and (ii) a leasehold
interest in a certain parcel of land located in Lancaster, California, and a fee
interest in certain improvements located thereon.
B. The Lessor will finance its acquisition of its interests in the
Properties through the issuance of Notes and Certificates.
C. The Guarantor intends this Guaranty to be an inducement for (i) the
Lessor and the Agent to enter into the transactions contemplated by the
Operative Documents, (ii) the Note Holders to purchase the Notes, and (iii) the
Certificate Holders to purchase the Certificates, all of which the Agent, the
Lessor, the Trust, the Note Holders and the Certificate Holders would be
unwilling to do if the Guarantor did not execute and deliver this Guaranty.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound by this Guaranty, the Guarantor hereby agrees to be bound as
follows:
1. Guaranty. The Guarantor unconditionally guarantees and agrees with the
Lessor that (i) all Rent, the Residual Value Amount, the Termination Value, all
indemnification payments required to be made pursuant to Section 9.14 of the
Participation Agreement and all other sums stated in the Operative Documents to
the extent payable by the Lessee thereunder will be promptly paid in full when
due, whether at stated maturity, by acceleration or otherwise, in accordance
with the provisions of the Operative Documents and (ii) the Lessee will perform,
comply with and observe all
PARENT GUARANTY
Proprietary & Confidential
other obligations, covenants, terms, conditions and undertakings of the Lessee
contained in the Operative Documents.
2. Nature of the Guaranty. (a) This Guaranty shall be irrevocable, and in
all events shall be continuing, unconditional and absolute, and if for any
reason any sums stated in the other Operative Documents to be payable by Lessee,
or any part thereof, shall not be paid promptly when due, or any other
obligation, covenant, term, condition or undertaking of the Lessee contained in
any Operative Document shall not be performed, complied with or observed in
accordance with said Operative Document, subject in each case, in respect of
such obligation to pay or perform, to the terms of the Operative Documents, then
in each such instance upon demand of payment, performance, compliance or
observance, made by the Lessor to the Guarantor, the Guarantor shall pay,
perform, comply with or observe the same to or for the benefit of the Lessor
pursuant to and in accordance with the provisions of the Operative Documents,
regardless of any defenses or rights of set-off or counterclaim, regardless of
whether the Lessor shall have taken any steps to enforce its rights against the
Guarantor, the Lessee or any other Person, to collect such sums, or any part
thereof, and regardless of any other condition or contingency. The Guarantor
also agrees to pay on demand to the Lessor such further amounts as shall be
sufficient to cover the costs and expenses of collecting such sums, or part
thereof, or of otherwise enforcing this Guaranty, including, in any case,
compensation to their respective attorneys for all services rendered in that
connection.
(b) Any and all payments by the Guarantor hereunder shall be made free and
clear of and without deduction for any and all Charges. If the Guarantor shall
be required by Law to deduct any Charges from or in respect of any sum payable
hereunder, (i) the amounts payable by the Guarantor shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this paragraph 2(b)) the Lessor
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Guarantor shall make such deductions and (iii)
the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Law.
3. The Guarantor hereby unconditionally (a) waives any requirement that the
Agent, the Lessor, the Trust, the Note Holders and the Certificate Holders first
make demand upon, or seek to enforce remedies against, any other Person or any
of the collateral or property of such other Person before demanding payment
from, or seeking to enforce this Guaranty against, the Guarantor; (b) covenants
that this Guaranty will not be discharged except by complete satisfaction of all
obligations of the Lessee contained in the Operative Documents; (c) agrees that
this Guaranty shall remain in full effect without regard to, and shall not be
affected or impaired by, any invalidity, illegality, irregularity or
unenforceability in who le or in part of any other Operative Document (and the
Guarantor hereby waives any defense relating to the enforceability of the
Operative Documents or any provision contained therein) or except as expressly
set forth herein or
2
PARENT GUARANTY
Proprietary & Confidential
in the Operative Documents, or any limitation of the liability of the Company
thereunder or any limitation on the method or terms of payment thereunder which
may now or hereafter be caused or imposed in any manner whatsoever; (d) waives
diligence, presentment and protest with respect to, and, except as expressly
provided herein or in the Operative Documents, any notice of default in, the
payment of any amount at any time payable under or in connection with the
Instruments or any of the Operative Documents; and (e) agrees that each and
every right, power and remedy given under this Guaranty or any other Operative
Document shall be cumulative and not exclusive, and be in addition to all other
rights, powers and remedies now or hereafter granted or otherwise existing.
4. The Guarantor hereby irrevocably waives any claim, remedy or right that
it may now have or hereafter acquire against the Lessee that arise from the
existence, payment, performance or enforcement of the obligations of the Lessee
under any other Operative Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Agent, the Lessor, the Trust,
any Note Holder or any Certificate Holder against the Lessee whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from the Lessee
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right. If any
amount shall be paid to the Guarantor in violation of the preceding sentence at
any time prior to the indefeasible cash payment in full of all amounts payable
under this Guaranty, such amount shall be held in trust for the benefit of the
Lessor, and shall forthwith be paid to the Lessor and be credited and applied to
the amounts payable under this Guaranty. The Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangement contemplated
by the Operative Documents and that the waiver set forth in this subsection is
knowingly made in contemplation of such benefits. Notwithstanding the foregoing,
the obligation to hold amounts in trust shall not have effect to the extent that
it would otherwise create or take effect as a charge or security interest over
such amounts.
5. The obligations, undertakings and conditions to be performed or observed
by the Guarantor under this Guaranty shall not be affected or impaired by reason
of the happening from time to time of any of the following with respect to the
Operative Documents, all without notice to, or the further consent of, the
Guarantor:
(a) the waiver by the Agent, the Lessor, the Trust, any Note Holder or
any Certificate Holder or any other Person of the observance or performance
by the Lessee or the Guarantor of any of the obligations, undertakings or
conditions contained in any of the Operative Documents, except to the
extent of such waiver;
3
PARENT GUARANTY
Proprietary & Confidential
(b) the extension, in whole or in part, of the time for payment of any
amount owing or payable under any of the Instruments, the Loan Agreement,
or any other Operative Document or of any other sums or obligations under
or arising out of or on account of the Instruments, the Loan Agreement or
any other Operative Document except to the extent of such extension;
(c) the modification or amendment (whether material or otherwise) of
any of the obligations of the Lessee, the Lessor, the Guarantor or any
other guarantor under any Operative Document, except to the extent of such
modification or amendment;
(d) the taking or the omission of any of the actions referred to in
any other Operative Document (including, without limitation, the giving of
any consent referred to therein);
(e) any failure, omission, delay or lack on the part of the Agent, the
Lessor, the Trust, any Note Holder, any Certificate Holder, or any other
Person to enforce, assert or exercise any right, power or remedy conferred
on the Agent, the Lessor, the Trust, any Note Holder or any Certificate
Holder or any other Person in any of the Operative Documents or any action
on the part of the Agent, the Lessor, any Note Holder or any Certificate
Holder, or any other Person granting indulgence or extension in any form;
(f) the release or discharge of the Agent, the Lessor, the Trust, the
Lessee or any other Person from the performance or observance of any
obligation, undertaking or condition to be performed by the Agent, the
Lessee or any other Person under any Instrument or any other Operative
Document by operation of Law;
(g) the receipt and acceptance by the Agent, the Lessor, the Trust, a
Note Holder, a Certificate Holder, or any other Person of notes, checks or
other instruments for the payment of money and extensions and renewals
thereof;
(h) any action, inaction or election of remedies by the Agent, the
Lessor, the Trust, a Note Holder, a Certificate Holder or any other Person
which results in any impairment or destruction of any sub rogation rights
of the Guarantor, or any rights of the Guarantor to proceed against any
other Person for reimbursement;
(i) the surrender by the Agent, the Lessor, the Trust, any Note
Holder, any Certificate Holder or any other Person of any security at any
time held for the performance or observance of any of the agreements,
covenants,
4
PARENT GUARANTY
Proprietary & Confidential
terms or conditions contained in the Instruments or any of the other
Operative Documents;
(j) any event or circumstance which might otherwise constitute a legal
or equitable discharge or defense of a guarantor, indemnitor or surety
under the laws of the States of New York or any other applicable
jurisdiction;
(k) any other circumstances whatsoever (with or without notice to or
knowledge of the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Guarantor with respect
to its obligations hereunder or under the other Operative Documents, in
bankruptcy or in any other instance, except based on payment or
performance;
(l) any change in circumstances, whether or not foreseen or
foreseeable, whether or not imputable to the Guarantor, any Note Holder,
any Certificate Holder, the Agent or the Lessor and whether or not such
change in circumstances shall or might in any manner and to any extent vary
the risk of the Guarantor hereunder;
(m) any sublease or other use of any of the Properties, or any sale,
transfer, disposition, grant of security interest, mortgaging or assignment
by the Lessee of any of its interests, rights or obligations, in, to and
under the Lease, or with respect to any of the Properties or any part
thereof, whether or not permitted by the terms of any of the Operative
Documents;
(n) any assignment or grant of security interest by any Note Holder of
all of any part of such Note Holder's right, title and interest in its
Notes or in the Collateral;
(o) any assignment or grant of security interest by any Certificate
Holder of all or part of such Certificate Holder's right, title and
interest in its Certificates or in the Collateral;
(p) any sale by the Lessor, or its successors or assigns, of any of
the Properties or any part thereof;
(q) any consolidation or merger of the Lessee, whether permitted under
the terms of the Participation Agreement or otherwise, or the sale,
transfer or other disposition by the Lessee of all or substantially all of
the assets and/or liabilities of the Lessee or any change in the ownership
of the Lessee;
5
PARENT GUARANTY
Proprietary & Confidential
(r) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, the arrangement, composition or readjustment of
the Lessee, or any other similar proceeding affecting the status,
existence, assets or obligations of the Lessee, or the limitation on
damages for the breach of, or the disaffirmation of, any of the Operative
Documents in any such proceeding;
(s) any invalidity or unenforceability, for any reason, of the Lease
or any other Operative Document, or of any provision thereof, or of any of
the obligations, or any defect in the Lessor's title to, or any mortgage or
other security interest granted in, any of the Properties or any part
thereof; or
(t) any other cause, whether similar or dissimilar to the foregoing;
it being the intention of the Guarantor that this Guaranty be absolute and
unconditional in any and all circumstances and that this Guaranty shall be
discharged only by the indefeasible payment in full of all sums and the
performance of all obligations with respect to which this Guaranty relates.
6. An Event of Default under the Participation Agreement shall constitute
an Event of Default hereunder.
7. Notice of acceptance of this Guaranty and notice of the execution and
delivery of any other instrument referred to in this Guaranty are hereby waived
by the Guarantor.
8. This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the
obligations to be paid is rescinded or must otherwise be restored or returned by
any Person, upon the insolvency, bankruptcy or reorganization of the Guarantor,
or otherwise, all as though such payment had not been made. The provisions of
this paragraph shall survive the termination of this Guaranty.
9. This Guaranty shall remain in full force and effect until payment in
full of all sums payable by the Lessee under the Operative Documents, the
termination of all commitments thereunder and the performance in full of all
obligations of the Guarantor in accordance with the provisions of this Guaranty,
subject to reinstatement as provided in Section 8. Subject as aforesaid, the
Guarantor's payment obligations hereunder shall be deemed satisfied upon the
actual and timely receipt by the Agent of all amounts payable hereunder in full
in cash. This Guaranty is a guaranty of payment and performance when due and not
a guaranty of collection.
6
PARENT GUARANTY
Proprietary & Confidential
10. In case any provision of this Guaranty or any application thereof shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions and any other application thereof shall not in any
way be affected or impaired thereby.
11. TIME IS OF THE ESSENCE IN THIS GUARANTY AND THE TERMS HEREIN SHALL BE
SO CONSTRUED. This Guaranty shall be binding upon the Guarantor and its
successors and shall inure to the benefit of, and be enforceable by the Lessor
and its respective successors and assigns. This Guaranty may not be changed,
waived, discharged or terminated orally, but only by a statement in writing
signed by the Guarantor, the Agent, the Lessor, the Note Holders and the
Certificate Holders. This Guaranty may be enforced as to any one or more
defaults either separately or cumulatively.
12. (a) THIS GUARANTY SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW (OR ANY SIMILAR SUCCESSOR
PROVISION THERETO) BUT EXCLUDING ALL OTHER CONFLICT-OF-LAW RULES.
(b) The Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any other
Operative Document, or for recognition or enforcement of any judgment, and
the Guarantor hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in
any such New York State court or, to the extent permitted by law, in such
federal court. The Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Guaranty shall affect any right that the Note Holders,
the Certificate Holders, the Agent or the Lessor may otherwise have to
bring any action or proceeding relating to this Guaranty in the courts of
any jurisdiction.
(c) The Guarantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any other
Operative Document in any New York State or federal court. The Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
7
PARENT GUARANTY
Proprietary & Confidential
13. All notices, demands, requests, consents, approvals and other
instruments hereunder shall be given in the manner and at the appropriate
address set forth in the Participation Agreement or at such other address as
such party shall designate by notice to each of the other parties hereto.
14. The Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the amounts which the Guarantor is obligated to
pay hereunder and notice of or proof of reliance by the Agent, the Lessor, the
Trust, the Note Holders or the Certificate Holders upon this Guaranty or
acceptance of this Guaranty. The indebtedness evidenced by the Operative
Documents shall conclusively be deemed to have been created, contracted,
incurred, renewed, extended, amended or waived in reliance upon this Guaranty,
and all dealings between the Guarantor, the Agent, the Lessor, the Note Holders
and the Certificate Holders shall likewise be conclusively presumed to have been
had or consummated in reliance upon this Guaranty.
15. The rules of construction set forth in Appendix A to the Participation
Agreement apply to this Guaranty.
8
PARENT GUARANTY
Proprietary & Confidential
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed as of the day and year first above written.
RITE AID CORPORATION
By: __________________________
Name:
Title:
9
