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Exhibit 10.16
GUARANTY OF LEASE
This GUARANTY OF LEASE ("
Guaranty ") is made as of November 1, 2006, by BUFFETS,
INC., a Minnesota corporation (" Guarantor "), to FIGRYANF
LLC, a Delaware limited liability company (" Landlord "),
with reference to the following facts:
A. Landlord and FIRE MOUNTAIN
RESTAURANTS, LLC, a Delaware limited liability company (("Fire
Mountain"), together with its 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. Fire Mountain 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, 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
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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.
(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.
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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 meaning), such shall be deemed to referred
to the actual knowledge of the following individuals, which
individuals Guarantor represents and warrants to Landlord have
significant responsibility for any one or more of policy making,
major decisions or financial affairs of Guarantor:
(i) Mr. Michael Andrews, (ii) Mr. Damon Fraser
and (iii) Mr. Fred T. Grant, Jr.
5. Guarantor’s
Financial Covenants . Guarantor shall provide, or cause to be
pro
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