Exhibit 4.14
GUARANTY
GUARANTY, dated as of March 19, 1998 (the "Guaranty"), from
RITE AID CORPORATION, a Delaware corporation (the "Guarantor"), to RAC
LEASING LLC, a Wyoming limited liability company (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 I of the
Master Lease; and the rules of interpretation set forth in Appendix I of
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 Significant Subsidiaries is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all corporate or similar entity
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. On the date hereof, the Guarantor owns 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. The Guarantor will continue to own,
directly or indirectly, a sufficient number of the issued and outstanding
shares of capital stock of the Lessee, so that the Lessee will remain a
Subsidiary.
(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:
RAC Leasing LLC
American National Bank Building
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
With a copy to:
The Diversified Group Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopier: (000) 000-0000
Telephone: (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
of 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.
(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:
RAC LEASING LLC
By: The Diversified Group Incorporated
By:___________________________________
Name:
Title:
