This GUARANTY OF
LEASE (“ Guaranty ”) is made as of
November 1, 2006, by BUFFETS, INC., a Minnesota corporation
(“ Guarantor ”), to FIGRYANH LLC, FIGRYANH-1
LLC, FIGRYANH-2 LLC, FIGRYANH-3 LLC, FIGRYANH-4 LLC, FIGRYANH-5
LLC, FIGRYANH-6, FIGRYANH-7 LLC, FIGRYANH-8 LLC, FIGRYANH-9 LLC,
FIGRYANH-10 LLC, FIGRYANH-11 LLC, FIGRYANH-12 LLC, FIGRYANH-13 LLC,
FIGRYANH-14 LLC, FIGRYANH-15 LLC, FIGRYANH-16 LLC, each a Delaware
limited liability company (collectively “ Landlord
”), with reference to the following facts:
A. Landlord
and FIRE MOUNTAIN RESTAURANTS, LLC, a Delaware limited liability
company (“Fire Mountain”), RYAN’S RESTAURANT
GROUP, INC. a South Carolina corporation
(“Ryan’s”), OCB RESTAURANT COMPANY, LLC, a
Minnesota limited liability company (“OCB”), and
HOMETOWN BUFFET, INC., a Minnesota corporation ((“Hometown
Buffet”, together with Fire Mountain, Ryan’s and OCB
and any of their successors and assigns, including without
limitation any assignee of any of its interest under the Lease, the
“ Tenant ”) have entered into that certain
Master Land and Building Lease (as the same may be amended from
time to time pursuant to the terms thereof, the “
Lease ”) regarding certain “ Demised
Premises ” as defined in the Lease. Capitalized terms not
otherwise defined herein shall have the meaning set forth in the
Lease.
B. Each of
Fire Mountain, Ryan’s, OCB and Hometown Buffet is an indirect
100% owned subsidiary of Guarantor.
C. Landlord
would not enter into the Lease but for the execution and delivery
of this Guaranty by Guarantor. Guarantor is willing to execute this
Guaranty for the express and intended purposes of inducing Landlord
enter into the Lease.
D. Guarantor
will benefit from the execution of the Lease. Guarantor is
executing this Guaranty in consideration of that anticipated
benefit.
NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and agreed, Guarantor hereby agrees
as follows:
1.
Guaranty . Guarantor hereby absolutely and unconditionally
guarantees to Landlord the full, prompt and faithful performance by
Tenant of all Tenant’s Obligations (as defined below). As
used herein, “ Tenant’s Obligations ”
means all covenants, terms, and conditions of the Lease, and any
extensions, modifications or renewals thereof, to be hereafter
performed and kept by Tenant, including without limitation the
prompt payment of all amounts that Tenant may at any time owe under
the Lease, and any extensions, renewals or modifications
thereof.
2.
Independent Obligations . Guarantor’s obligations
hereunder are independent of the obligations of Tenant, and a
separate action or actions may be brought and prosecuted
against
Guarantor
whether or not any action or actions are brought against Tenant and
whether or not Tenant shall be joined in any such action or
actions.
3. Rights
of Landlord . Guarantor authorizes Landlord, without notice or
demand and without affecting its liability hereunder, from time to
time to (a) extend, accelerate, or otherwise change the time
for any payment provided for in the Lease, or any covenant, term or
condition of the Lease, delay enforcing Landlord’s remedies
or rights against Tenant in connection with the Lease, and consent
to any assignment, subletting or reassignment of the Lease,
(b) take and hold security for any payment provided for in the
Lease or for the performance of any covenant, term or condition of
the Lease, or exchange, waive or release any such security; and
(c) apply such security and direct the order or manner of sale
thereof as Landlord in its sole discretion may determine. Landlord
may without notice assign this Guaranty, the Lease, or the rents
and other sums payable thereunder. Notwithstanding any termination,
renewal, extension, or holding over of the Lease, or any assignment
of the Lease by Landlord or Tenant, this Guaranty shall continue
until all of Tenant’s Obligations have been fully and
completely performed by Tenant.
Guarantor shall
not be released by any act or event which might, but for this
provision of this Guaranty, be deemed a legal or equitable
discharge of a surety, or by reason of any waiver, extension,
modification, forbearance or delay or other act or omission of the
Landlord or its failure to proceed promptly or otherwise as against
Tenant or Guarantor, or by reason or any action taken or omitted or
circumstance which may or might vary the risk or affect the rights
or remedies of Guarantor as against Tenant, or by reason of any
further dealings between Tenant and Landlord, whether relating to
the Lease or otherwise, and Guarantor hereby expressly waives and
surrenders any defense to its liability hereunder based upon any of
the foregoing acts, omissions, things, or agreements. It is the
purpose and intent of this Guaranty that the obligations of
Guarantor hereunder are absolute and unconditional under any and
all circumstances. Notwithstanding any provision hereof to the
contrary, Guarantor shall be released and discharged of its
obligations hereunder if and to the same extent as Tenant is
released or discharged of its obligations under the Lease with the
consent of Landlord or in accordance with the terms of the Lease.
The foregoing sentence shall in no way affect any waivers or any
bankruptcy provisions set forth herein.
Guarantor further
agrees that to the extent Tenant or Guarantor makes any payment to
Landlord in connection with Tenant’s Obligations and all or
any part of such payment is subsequent invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by
Landlord or paid over to a trustee, receiver or any other entity,
whether under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a “ Preferential Payment
”), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such
payment or repayment by Landlord, Tenant’s Obligations or
part thereof intended to be satisfied by such Preferential Payment
shall be revived and continued in full force and effect as if such
Preferential Payment had not been made.
4.
Guarantor’s Representations and Warranties
.
(a)
Qualification and Authority . Guarantor is a company duly
organized, validly existing and in good standing under the laws of
Delaware. Guarantor has the right,
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power, and
authority to execute, deliver, and perform this Guaranty. This
Guaranty, when executed and delivered by Guarantor, shall
constitute the valid and binding agreement of Guarantor, and shall
be enforceable against Guarantor in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general
equitable principles. All requisite authorizations, consents,
resolutions and actions on the part of Guarantor have been or will
prior to the date hereof be obtained, adopted or taken, as
applicable, by Guarantor in connection with making and entering
into this Guaranty. Neither this Guaranty nor the consummation of
any of the transactions contemplated hereby violates or shall
violate any provision of any agreement or document to which
Guarantor is a party or to which Seller is bound.
(b)
Bankruptcy . Neither Guarantor nor any entity or person in
Control of, having Control over, or under common Control with
Guarantor, regardless of the number of tiers of ownership, is
bankrupt under the Federal Bankruptcy Code, or has filed for
protection or relief under any applicable bankruptcy or creditor
protection statute or has been threatened by creditors with an
involuntary application of any applicable bankruptcy or creditor
protection statute. Guarantor is not entering into the transactions
described in this Agreement with an intent to defraud any creditor
or to prefer the rights of one creditor over any other. As used in
this Agreement, “ Control ” means ownership of
voting securities sufficient to elect a majority of the board of
directors of a corporation, or analogous ownership interests of
non-corporate entities.
(c)
Contractual Obligations . Guarantor is not in default in the
performance, observance or fulfillment of any of the material
obligations, covenants or conditions contained in any contractual
obligation of Seller beyond any applicable notice and cure period,
and to Guarantor’s knowledge, no condition exists that, with
the giving of notice or the lapse of time or both, would constitute
such a default.
(d)
Disclosure . No financial statements or any other document,
certificate or written statement furnished to Landlord by Guarantor
and, to the knowledge of Guarantor, no document or statement
furnished by any third party on behalf of Seller, for use in
connection with this Guaranty or the transactions contemplated
herein, when taken as a whole, contains any untrue representation,
warranty or statement of a material fact, and none omits or will
omit to state a material fact necessary in order to make the
statements contained herein or therein not misleading. There is no
material fact known to Guarantor that has had or will have a
Material Adverse effect (as defined below) and that has not been
disclosed in writing to Buyer by Seller or by any third party on
behalf of Guarantor. As used herein, “ Material Adverse
Effect ” means (A) a material adverse effect upon
the business, operations, properties, assets or condition
(financial or otherwise) of Guarantor or Tenant, with respect to
such party, when taken as a whole, or (B) the material
impairment of the ability of Guarantor to perform its obligations
under this Guaranty, or (C) the material impairment of
Landlord’s rights or remedies under the Guaranty. In
determining whether any individual event would result in a Material
Adverse Effect, notwithstanding that such event does not of itself
have such effect, a Material Adverse Effect shall be deemed to have
occurred if the cumulative effect of such event and all other then
occurring events and existing conditions would result in a Material
Adverse Effect.
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(e)
Suits, Judgments and Liens . There are no lawsuits, claims,
suits, or legal, administrative or other proceedings or
investigations pending or, to Guarantor’s knowledge,
threatened against or affecting Guarantor, nor to Guarantor’s
knowledge, is there any basis for any of the same, and there are no
lawsuits, suits or legal, administrative or other proceedings
pending in which Guarantor is the plaintiff or claimant and which
relate to any Property; and there is no action, suit or legal,
administrative or other proceeding pending or, to Guarantor’s
knowledge, threatened which questions the legality or propriety of
the transactions contemplated by the Guaranty.
Whenever
in this Guaranty, or in any document or certificate executed on
behalf of Guarantor pursuant to this Guaranty, reference is made to
the knowledge of Guarantor (whether by use of the words
“knowledge” or “known”, or other words of
similar m
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