Document:

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EXHIBIT

10.6

GUARANTY

OF LEASE

 

The undersigned (hereinafter referred to as

“Guarantor”), as a material inducement to and in consideration of ARG

PROPERTIES I, LLC, a California limited liability company, whose address is c/o

Griffin Capital, 10940 Wilshire Boulevard, Suite 1600, Los Angeles, California

90024 (“Landlord”), entering into that certain Amended and Restated Master

Lease (“Lease”) with ARG ENTERPRISES, INC., a California corporation

(“Tenant”), dated as of May 11, 1998, hereby unconditionally, irrevocably and

personally guarantees to and for the benefit of Landlord, and Landlord’s

successors and assigns, the full and timely payment and performance of all of

Tenant’s duties, obligations and covenants under the Lease.  This Guaranty is a guaranty of payment and

performance and not of collection.

 

All payments to be made by Guarantor under this

Guaranty shall be made without deduction or offset and shall be made

immediately upon demand by Landlord. 

This Guaranty is absolute and unconditional and shall not be affected by

Landlord’s failure or delay to enforce any of its rights or any waiver by

Landlord, other than modifications or variations of the terms of the Lease

agreed to in writing by Landlord and Tenant or any waiver of Tenant’s and

Guarantor’s obligations with respect to the Lease agreed to in writing by

Landlord.

 

Guarantor’s obligations are independent of Tenant’s

obligations under the Lease and a separate action or actions may be brought and

prosecuted against Guarantor whether or not any action is brought against

Tenant or Tenant is joined in any such action or actions.  If Tenant defaults under the Lease, Landlord

can proceed immediately against Guarantor or Tenant, or both, or Landlord can

enforce against Guarantor or Tenant, or both, any rights that it has under the

Lease, this Guaranty or pursuant to applicable laws.  If the Lease terminates and Landlord has any rights it can

enforce against Tenant after termination, Landlord can enforce those rights

against Guarantor without giving previous notice to Tenant or Guarantor or

without making any demand on either of them. 

Guarantor hereby consents to any remedy pursued by Landlord to enforce

its rights under the Lease, in whatever order such party may choose, including

any remedies which may affect or destroy Guarantor’s right of subrogation or

the right of Guarantor to proceed against Tenant for reimbursement.  Without limiting the generality of the

foregoing, Guarantor hereby waives any rights Guarantor may have under

California Civil Code Sections 2809, 2819, 2845, 2849 and 2850, as they may be

amended or modified from time to time, and any similar or successor statutes.

 

Guarantor waives the right to require Landlord to

first or concurrently: (1) proceed against Tenant or any other person or pursue

any rights or remedies with respect to the Lease before proceeding against

Guarantor; (2) proceed against or exhaust any security that Landlord holds from

Tenant; or (3) pursue any other remedy in Landlord’s power.  The liability of Guarantor shall not be

released, discharged, affected or exonerated by any extension of time,

indulgence, compromise, settlement or modification or variation of terms which

may be extended by Landlord to Tenant or agreed upon by Landlord or Tenant

(provided that Guarantor shall receive the benefit of any modifications or

variations of the terms of the Lease agreed to in writing by Landlord and

Tenant or any waiver of Tenant’s and Guarantor’s obligations with respect to

the Lease agreed to in writing by Landlord) and regardless of the release or

discharge of Tenant by Landlord or by others or by operation of law, and,

unless agreed to in writing by Landlord, shall not be released, discharged,

affected or exonerated by any assignment or sublease by Tenant of its interest in

the Lease, nor shall the liability of Guarantor be released, discharged,

 

 

affected or exonerated by the insolvency, bankruptcy (voluntary or

involuntary), or reorganization of Tenant, or by the voluntary or involuntary

liquidation, sale or other disposition of all or substantially all of the

assets of Tenant or by any assignment of the Lease by Tenant or by any trustee,

receiver or liquidator of Tenant or any consent which Landlord may give to any

such assignment, or by the release, substitution or addition of any other

guarantor.  Landlord and Tenant, without

notice to or consent by Guarantor, may at any time or times enter into such

modifications, extensions, amendments or other covenants respecting the Lease as

they may deem appropriate, and Guarantor shall not be released of its liability

or released, discharged or exonerated thereby but shall continue to be fully

liable for the payment and performance of all obligations and duties of Tenant

under the Lease as so modified, extended or amended with the consent of Tenant.

 

Guarantor further agrees (1) to indemnify and hold

harmless Landlord from and against any claims, damages, expenses or losses,

including to the extent permitted by law, all reasonable attorney’s fees

incurred by counsel of Landlord’s choice (whether or not litigation is

commenced), resulting from or arising out of any breach of any provision of the

Lease by Tenant or by reason of Tenant’s failure to perform any of its

obligations thereunder, and (2) to the extent permitted by law, to pay all

costs and expenses, including reasonable attorneys’ fees (whether or not

litigation is commenced) incurred by Landlord in enforcing this Guaranty.

 

Landlord’s rights under this Guaranty will not be

exhausted by any action by Landlord until all of the obligations of Tenant to

pay rent and other sums under the Lease have been fully paid and performed and

the period of time has expired during which any payment made by Tenant or

Guarantor to Landlord may be determined to be a Preferential Payment (hereinafter

defined).  Guarantor further agrees that

to the extent Tenant or Guarantor makes any payment to Landlord in connection

with the obligations of Tenant under the Lease and all or any part of such

payment is subsequently 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 (but

only to the extent of the then remaining liability of Guarantor under this

Guaranty), the obligations or part thereof intended to be satisfied by such

Preferential Payment shall be revived and continued in full force and effect as

if said Preferential Payment had not been made.

 

Notwithstanding any other provision of this Guaranty

to the contrary, Guarantor agrees that until such time as the obligations and

liabilities of Tenant to Landlord under or arising out of the Lease (whether

now existing or hereafter arising, voluntary of involuntary, whether or not

jointly owed with others, direct or indirect, absolute or contingent,

liquidated or unliquidated, and whether or not from time to time decreased or

extinguished and later increased, created or incurred), including, without

limitations, Tenant’s obligations under the Lease to comply with certain

provisions of the Financing Documents, as such term is defined in the Lease

(collectively, the “Obligations”) have been paid and performed in full and the

period of time has expired during which any payment made by Tenant or Guarantor

to Landlord on account of the Obligations may be determined to be a

Preferential Payment, any claim or other rights which Guarantor may now have or

hereafter acquire against Tenant or any other guarantor of all or any of the

Obligations that arise from the existence or performance of Guarantor’s

obligations under

 

2

 

this Guaranty or otherwise (all such claims and rights are referred to

as “Guarantor’s Conditional Rights”), including, without limitation, any right

of subrogation, reimbursement, exoneration, contribution, or indemnification,

any right to participate in any claim or remedy of Landlord against Tenant or

any collateral which Landlord now has or hereafter acquires, whether or not

such claim, remedy or right arises in equity or under contract, statute or

common law, by any payment made hereunder or otherwise, including without

limitation, the right to take or receive from Tenant, directly or indirectly,

in cash or other property or by setoff or in any other manner, payment or security

on account of such claim or other rights, shall be subordinate to Landlord’s

right to full payment and performance of the Obligations, and Guarantor shall

not enforce any of Guarantor’s Conditional Rights during such period.  If, notwithstanding the foregoing

provisions, any amount shall be paid to Guarantor on account of any such

Guarantor’s Conditional Rights and either (a) such amount is paid to Guarantor

at any time when any of the Obligations shall not have been paid or performed

in full, or (b) regardless of when such amount is paid to Guarantor, any

payment made by Tenant to Landlord is at any time determined to be a

Preferential Payment, then such amount paid to Guarantor shall be held in trust

for the benefit of Landlord and shall forthwith be paid to Landlord to be

credited and applied upon the Obligations, whether matured or unmatured, in

such order as Landlord, in its sole and absolute discretion, shall determine.

 

Guarantor agrees to comply with all provisions of the

Lease and the Financing Documents applicable to Guarantor, including, without

limitation, any requirement for delivery of financial statements of Guarantor

thereunder.  Without limiting the

forgoing, Guarantor acknowledges that Landlord is relying on (and is an

intended third party beneficiary of, as applicable) the representations and

warranties of Guarantor contained in the Lease and in the other Transaction

Documents (as defined in the Lease).

 

Guarantor assumes the responsibility to remain

informed of the financial condition of Tenant and of all other circumstances

bearing upon the risk of Tenant’s default, which reasonable inquiry would

reveal, and agrees that Landlord shall have no duty to advise Guarantor of

information known to it regarding such condition or any such circumstances.  Landlord shall not be required to inquire

into the powers of Tenant or the officers, employees, partners or agents acting

or purporting to act on its behalf, and any indebtedness made or created in

reliance upon the professed exercise of such powers shall be guaranteed under

this Guaranty.  Guarantor hereby

represents and warrants to Landlord that Guarantor has received a copy of the

Lease, has read or had the opportunity to read the Lease, and understands the

terms of the Lease.  The provisions in

the Lease relating to the execution of additional documents, legal proceedings

by Landlord against Tenant, severability of the provisions of the Lease,

interpretation of the Lease, notices, waivers (including waiver of a jury

trial), limitation on right of recovery against Landlord, disclaimer of

individual liability, and the applicable laws which govern the interpretation

of the Lease are incorporated herein in their entirety by this reference and

made a part hereof as though set forth in full herein; any reference in those

provisions to “Tenant” shall mean Guarantor and any reference in those

provisions to the “Lease” shall mean this Guaranty.

 

The liability of Guarantor shall not be affected by

any repossession of the leased premises by Landlord (except to the extent the

liability of Tenant is thereby affected), provided, however, that the net

payments received by Landlord after deducting all costs and expenses of

repossessing and/or reletting the same, shall be credited from time to time by

Landlord to the

 

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account of Guarantor and Guarantor shall pay any balance owing to

Landlord from time to time, immediately upon demand by Landlord.

 

No action or proceeding brought or instituted under

this Guaranty and no recovery in pursuance thereof shall be a bar or defense to

any further action or proceeding which may be brought under this Guaranty by

reason of any further default or defaults hereunder and/or under the Lease.

 

To the extent permitted by applicable law, Guarantor

waives its right to enforce any remedies (except remedies Tenant has as tenant

only) that Tenant now has, or later may have, against Landlord.  Guarantor waives any right to participate in

any security now or later held by Landlord. Guarantor waives notice of

acceptance of this Guaranty, and all other notices in connection with this

Guaranty or in connection with the liabilities, obligations and duties

guaranteed hereby, including notices to Guarantor of default by Tenant under

the Lease.  Guarantor hereby waives

diligence, presentment, demand for performance, notice of nonperformance or

nonpayment, protest, notice of protest, notice of dishonor, and notice of

acceptance of this Guaranty, and waives all notices of the existence, creation,

or incurring of new or additional obligations. 

Guarantor hereby further waives and agrees not to assert or take

advantage of: (a) any right or defense that may arise by reason of the

incapacity, lack of authority, death or disability of Tenant or any other person;

(b) any and all defenses based upon an election of remedies by Landlord which

limits or destroys any subrogation rights Guarantor might otherwise have; or

(c) any bankruptcy of Tenant.

 

If there is more than one Guarantor, the liability of

each Guarantor shall be joint and several. 

Guarantor’s obligations under this Guaranty shall be binding on

Guarantor’s legal representatives, heirs, successors and assigns.

 

If Tenant disposes of its interest in the Lease,

“Tenant”, as used in this Guaranty, shall mean Tenant’s successors or

assigns.  Assignment of the Lease by

Landlord (as permitted by the Lease) shall not affect this Guaranty.  In the event of an assignment of the Lease

by Landlord, the term “Landlord” as used in this Guaranty shall mean Landlord’s

successors or assigns.

 

All rights, powers and remedies of Landlord hereunder

and under any other agreement now or at any time hereafter in force between

Landlord and Guarantor relating to the Lease shall be cumulative and not

alternative and such rights, powers and remedies shall be in addition to all

rights, powers and remedies given to Landlord by law.

 

Any notice, request, demand, instruction or other

communication to be given to any party hereunder shall be in writing and shall

be sent by registered or certified mail, return receipt requested, to Guarantor

at the address provided under Guarantor’s signature below, and if to Landlord

at the address provided above.  Notices

shall be deemed to have been given upon (i) hand delivery, (ii) one (1) day after

being deposited with Federal Express or another reliable overnight courier

service or transmitted by facsimile telecopy, or (iii) forty-eight (48) hours

after the deposit of the same in a United States mail post office box in a

state to which the notice is addressed, or three (3) business days after

deposit of same in any such post office box in a state other than the state to

which the notice is addressed, postage prepaid and addressed as set forth

above.  A notice shall not be deemed

given unless and until it shall have been given to all

 

4

 

address(es) to which notices must be sent.  Any party may change its street address(es) for notices by a

notice given in accordance with this Section.

 

If Landlord is required to enforce Guarantor’s

obligations under this Guaranty by any legal action or proceedings, or if a

dispute arises in connection with the validity, enforceability, enforcement or

construction of this Guaranty or any other matter relating to this Guaranty,

the losing party shall pay all reasonable attorneys’ fees incurred by the

prevailing party in such dispute.

 

Guarantor hereby represents and warrants that:  (a) Guarantor has received and reviewed the

Lease and is familiar with the terms thereof; (b) the execution of this

Guaranty will not render Guarantor insolvent in any way; and (c) Landlord’s

entering into the Lease materially benefits Guarantor and Guarantor is

receiving fair consideration for this Guaranty.

 

Any amount required to be paid by Guarantor hereunder

shall bear interest from the date due until the date paid to Landlord at the

lesser of:  (x) twelve percent (12%) per

annum; or (y) the maximum rate permitted by law.  All interest shall be compounded monthly and shall be payable to

Landlord on demand.

 

Time is of the essence with respect to the performance

of Guarantor’s obligations hereunder.

 

This Guaranty contains the entire agreement of

Guarantor and Landlord with respect to the subject matter hereof.

 

5

 

If any one or more of the provisions of this Guaranty

shall be held to be invalid, illegal or unenforceable in any respect, such

invalidity, illegality or unenforceability shall not affect any other provision

of this Guaranty, and this Guaranty shall be construed as if such invalid,

illegal or unenforceable provision had never been contained herein.  This Guaranty shall be construed according

to the laws of the State of California (“State”) without regard to conflicts of

laws principles.  By execution hereof,

the undersigned specifically consents to this choice of law designation and

agrees that all actions or proceedings arising directly, indirectly or

otherwise in connection with, out of, related to, or from this Guaranty or the

Lease shall be litigated only in the courts located in the State, and the

undersigned (i) consents and submits in advance to the exclusive and in

personam jurisdiction of any state or federal court located within the

State, (ii) waives any right to transfer or change the venue of litigation

brought against the undersigned, and (iii) agrees to service of process, to the

extent permitted by law, by mail.

 

Dated as of May 11, 1998.

 

	

   

  	

  GUARANTOR

  
	

   

  	

   

  
	

   

  	

  AMERICAN RESTAURANT GROUP, INC.,

  
	

   

  	

  a Delaware corporation

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  	

   

  
	

   

  	

  Its

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  GUARANTOR’S ADDRESS FOR NOTICES:

  
	

   

  	

   

  
	

   

  	

  4410 El Camino Real

  
	

   

  	

  Suite 201

  
	

   

  	

  Los Altos, California 94022

  
	

   

  	

  Attn:  Legal

  Department

  
	

   

  	

  Fax No.: 

  (650) 949-6420

  
	

   

  	

   

  
	

   

  	

  With a copy to: ARG Enterprises, Inc.

  
	

   

  	

  6th Floor, 450 Newport Center Drive

  
	

   

  	

  Newport Beach, CA 92660

  
	

   

  	

  Attn:  Chief

  Financial Officer

  
	

   

  	

  Fax No.: 

  (949) 721-8941

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  With a copy to: Stuart Anderson’s Restaurants

  
	

   

  	

  4410 El Camino Real

  
	

   

  	

  Suite 201

  
	

   

  	

  Los Altos, California 94022

  
	

   

  	

  Attn: 

  Director of Real Estate

  
	

   

  	

  Fax No.: 

  (650) 949-6425

  

 

6

 

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT

 

	

  STATE OF CALIFORNIA

  	

  )

  	

   

  
	

   

  	

  )  ss.

  	

   

  
	

  COUNTY OF 

  	

   

  	

   

  	

  )

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

  On

  	

   

  	

  , before me,

  	

   

  	

  ,

  
	

   

  	

  Date

  	

   

  	

  Name and Title of

  Officer (e.g. “Jane Doe, Notary Public”)

  	

   

  
	

  personally appeared

  	

   

  	

  ,

  
	

   

  	

  Name of Signer(s)

  	

   

  
	

  o

  personally known to me – OR – o

  	

  proved to me on the basis of satisfactory evidence

  to be the person(s) whose name(s) is/are subscribed to the within instrument

  and acknowledged to me that he/she/they executed the same in his/her/their

  authorized capacity(ies), and that by his/her/their signature(s) on the

  instrument the person(s), or the entity upon behalf of which the person(s)

  acted, executed the instrument.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  WITNESS my hand and official seal.

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Signature of Notary

  Public

  	

   

  
															

 

OPTIONAL

 

Though the data below is not required by law, it may prove valuable to

persons relying on the document and could prevent fraudulent reattachment of

this form.

 

	

   

  	

  CAPACITY(IES) CLAIMED BY SIGNER(S)

  	

   

  	

  DESCRIPTION OF ATTACHED DOCUMENT

  
	

   

  	

   

  	

   

  	

   

  
	

  o

  	

  Individual

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  o

  	

  Corporate Officer

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Title(s)

  	

   

  	

  Title or Type of

  Document

  
	

  o

  	

  Partner(s)

  	

  o

  	

  Limited

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  o

  	

  General

  	

   

  	

   

  
	

  o

  	

  Attorney-In-Fact

  	

   

  	

  Number of Pages

  
	

  o

  	

  Trustee(s)

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  o

  	

  Guardian/Conservator

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  o

  	

  Other:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Date of Document

  
	

  Signer is Representing:

  	

   

  	

   

  	

   

  
	

  Name of Person(s) or Entity(ies)

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Signer(s) Other Than

  Named Above(Begin typing here)

EXIHIBIT

10.7

 

GUARANTY

OF LEASE

 

The undersigned (hereinafter referred to as

“Guarantor”), as a material inducement to and in consideration of ARG

PROPERTIES II, LLC, a California limited liability company, whose address is

c/o Griffin Capital, 10940 Wilshire Boulevard, Suite 1600, Los Angeles,

California 90024 (“Landlord”), entering into that certain Amended and Restated

Master Lease (“Lease”) with ARG ENTERPRISES, INC., a California corporation

(“Tenant”), dated as of May 11, 1998, hereby unconditionally, irrevocably and

personally guarantees to and for the benefit of Landlord, and Landlord’s

successors and assigns, the full and timely payment and performance of all of

Tenant’s duties, obligations and covenants under the Lease.  This Guaranty is a guaranty of payment and

performance and not of collection.

 

All payments to be made by Guarantor under this

Guaranty shall be made without deduction or offset and shall be made

immediately upon demand by Landlord. 

This Guranty is absolute and unconditional and shall not be affected by

Landlord’s failure or delay to enforce any of its rights or any waiver by

Landlord, other than modifications or variations of the terms of the Lease

agreed to in writing by Landlord and Tenant or any waiver of Tenant’s and

Guarantor’s obligations with respect to the Lease agreed to in writing by

Landlord.

 

Guarantor’s obligations are independent of Tenant’s

obligations under the Lease and a separate action or actions may be brought and

prosecuted against Guarantor whether or not any action is brought against

Tenant or Tenant is joined in any such action or actions.  If Tenant defaults under the Lease, Landlord

can proceed immediately against Guarantor or Tenant, or both, or Landlord can

enforce against Guarantor or Tenant, or both, any rights that it has under the

Lease, this Guaranty or pursuant to applicable laws.  If the Lease terminates and Landlord has any rights it can

enforce against Tenant after termination, Landlord can enforce those rights

against Guarantor without giving previous notice to Tenant or Guarantor or

without making any demand on either of them. 

Guarantor hereby consents to any remedy pursued by Landlord to enforce

its rights under the Lease, in whatever order such party may choose, including

any remedies which may affect or destroy Guarantor’s right of subrogation or

the right of Guarantor to proceed against Tenant for reimbursement.  Without limiting the generality of the

foregoing, Guarantor hereby waives any rights Guarantor may have under

California Civil Code Sections 2809, 2819, 2845, 2849 and 2850, as they may be

amended or modified from time to time, and any similar or successor statutes.

 

Guarantor waives the right to require Landlord to

first or concurrently: (1) proceed against Tenant or any other person or pursue

any rights or remedies with respect to the Lease before proceeding against

Guarantor; (2) proceed against or exhaust any security that Landlord holds from

Tenant; or (3) pursue any other remedy in Landlord’s power.  The liability of Guarantor shall not be

released, discharged, affected or exonerated by any extension of time,

indulgence, compromise, settlement or modification or variation of terms which

may be extended by Landlord to Tenant (provided that Guarantor shall receive

the benefit of any modifications or variations of the terms of the Lease agreed

to in writing by Landlord and Tenant or any waiver of Tenant’s and Guarantor’s

obligations with respect to the Lease agreed to in writing by Landlord) and

regardless of the release or discharge of Tenant by Landlord or by others or by

operation of law, and, unless agreed to in writing by Landlord, shall not be

released, discharged, affected or exonerated by any assignment or sublease by

Tenant of its interest in the

 

 

 

 Lease, nor shall the liability

of Guarantor be released, discharged, affected or exonerated by the insolvency,

bankruptcy (voluntary or involuntary), or reorganization of Tenant, or by the

voluntary or involuntary liquidation, sale or other disposition of all or

substantially all of the assets of Tenant or by any assignment of the Lease by

Tenant or by any trustee, receiver or liquidator of Tenant or any consent which

Landlord may give to any such assignment, or by the release, substitution or

addition of any other guarantor.  Landlord

and Tenant, without notice to or consent by Guarantor, may at any time or times

enter into such modifications, extensions, amendments or other covenants

respecting the Lease as they may deem appropriate, and Guarantor shall not be

released of its liability or released, discharged or exonerated thereby but

shall continue to be fully liable for the payment and performance of all

obligations and duties of Tenant under the Lease as so modified, extended or

amended with the consent of Tenant.

 

Guarantor further agrees (1) to indemnify and hold

harmless Landlord from and against any claims, damages, expenses or losses,

including to the extent permitted by law, all reasonable attorney’s fees

incurred by counsel of Landlord’s choice (whether or not litigation is

commenced), resulting from or arising out of any breach of any provision of the

Lease by Tenant or by reason of Tenant’s failure to perform any of its

obligations thereunder, and (2) to the extent permitted by law, to pay all

costs and expenses, including reasonable attorneys’ fees (whether or not

litigation is commenced) incurred by Landlord in enforcing this Guaranty.

 

Landlord’s rights under this Guaranty will not be

exhausted by any action by Landlord until all of the obligations of Tenant to

pay rent and other sums under the Lease have been fully paid and performed and

the period of time has expired during which any payment made by Tenant or

Guarantor to Landlord may be determined to be a Preferential Payment

(hereinafter defined).  Guarantor further

agrees that to the extent Tenant or Guarantor makes any payment to Landlord in

connection with the obligations of Tenant under the Lease and all or any part

of such payment is subsequently 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 (but only to the extent of the then remaining liability of

Guarantor under this Guaranty), the obligations or part thereof intended to be

satisfied by such Preferential Payment shall be revived and continued in full

force and effect as if said Preferential Payment had not been made.

 

Notwithstanding any other provision of this Guaranty

to the contrary, Guarantor agrees that until such time as the obligations and

liabilities of Tenant to Landlord under or arising out of the Lease (whether

now existing or hereafter arising, voluntary of involuntary, whether or not

jointly owed with others, direct or indirect, absolute or contingent,

liquidated or unliquidated, and whether or not from time to time decreased or

extinguished and later increased, created or incurred), including, without

limitations, Tenant’s obligations under the Lease to comply with certain

provisions of the Financing Documents, as such term is defined in the Lease

(collectively, the “Obligations”) have been paid and performed in full and the

period of time has expired during which any payment made by Tenant or Guarantor

to Landlord on account of the Obligations may be determined to be a

Preferential Payment, any claim or other rights which Guarantor may now have or

hereafter acquire against Tenant or any other guarantor of all or any of the

Obligations that arise from the existence or performance of Guarantor’s

obligations under 

 

2

 

this Guaranty or otherwise (all such claims and rights are referred to

as “Guarantor’s Conditional Rights”), including, without limitation, any right

of subrogation, reimbursement, exoneration, contribution, or indemnification,

any right to participate in any claim or remedy of Landlord against Tenant or

any collateral which Landlord now has or hereafter acquires, whether or not

such claim, remedy or right arises in equity or under contract, statute or common

law, by any payment made hereunder or otherwise, including without limitation,

the right to take or receive from Tenant, directly or indirectly, in cash or

other property or by setoff or in any other manner, payment or security on

account of such claim or other rights, shall be subordinate to Landlord’s right

to full payment and performance of the Obligations, and Guarantor shall not

enforce any of Guarantor’s Conditional Rights during such period.  If, notwithstanding the foregoing

provisions, any amount shall be paid to Guarantor on account of any such

Guarantor’s Conditional Rights and either (a) such amount is paid to Guarantor

at any time when any of the Obligations shall not have been paid or performed

in full, or (b) regardless of when such amount is paid to Guarantor, any

payment made by Tenant to Landlord is at any time determined to be a

Preferential Payment, then such amount paid to Guarantor shall be held in trust

for the benefit of Landlord and shall forthwith be paid to Landlord to be

credited and applied upon the Obligations, whether matured or unmatured, in

such order as Landlord, in its sole and absolute discretion, shall determine.

 

Guarantor agrees to comply with all provisions of the

Lease and the Financing Documents applicable to Guarantor, including, without

limitation, any requirement for delivery of financial statements of Guarantor

thereunder.  Without limiting the

forgoing, Guarantor acknowledges that Landlord is relying on (and is an

intended third party beneficiary of, as applicable) the representations and

warranties of Guarantor contained in the Lease and in the other Transaction

Documents (as defined in the Lease).

 

Guarantor assumes the responsibility to remain

informed of the financial condition of Tenant and of all other circumstances

bearing upon the risk of Tenant’s default, which reasonable inquiry would

reveal, and agrees that Landlord shall have no duty to advise Guarantor of

information known to it regarding such condition or any such circumstances.  Landlord shall not be required to inquire

into the powers of Tenant or the officers, employees, partners or agents acting

or purporting to act on its behalf, and any indebtedness made or created in

reliance upon the professed exercise of such powers shall be guaranteed under this

Guaranty.  Guarantor hereby represents

and warrants to Landlord that Guarantor has received a copy of the Lease, has

read or had the opportunity to read the Lease, and understands the terms of the

Lease.  The provisions in the Lease

relating to the execution of additional documents, legal proceedings by

Landlord against Tenant, severability of the provisions of the Lease,

interpretation of the Lease, notices, waivers (including waiver of a jury

trial), limitation on right of recovery against Landlord, disclaimer of

individual liability, and the applicable laws which govern the interpretation

of the Lease are incorporated herein in their entirety by this reference and

made a part hereof as though set forth in full herein; any reference in those

provisions to “Tenant” shall mean Guarantor and any reference in those

provisions to the “Lease” shall mean this Guaranty.

 

The liability of Guarantor shall not be affected by

any repossession of the leased premises by Landlord (except to the extent the

liability of Tenant is thereby affected), provided, however, that the net

payments received by Landlord after deducting all costs and expenses of

repossessing and/or reletting the same, shall be credited from time to time by

Landlord to the 

 

3

 

account of Guarantor and Guarantor shall pay any balance owing to

Landlord from time to time, immediately upon demand by Landlord.

 

No action or proceeding brought or instituted under

this Guaranty and no recovery in pursuance thereof shall be a bar or defense to

any further action or proceeding which may be brought under this Guaranty by

reason of any further default or defaults hereunder and/or under the Lease.

 

To the extent permitted by applicable law, Guarantor

waives its right to enforce any remedies (except remedies Tenant has as tenant

only) that Tenant now has, or later may have, against Landlord.  Guarantor waives any right to participate in

any security now or later held by Landlord. Guarantor waives notice of

acceptance of this Guaranty, and all other notices in connection with this

Guaranty or in connection with the liabilities, obligations and duties

guaranteed hereby, including notices to Guarantor of default by Tenant under

the Lease.  Guarantor hereby waives

diligence, presentment, demand for performance, notice of nonperformance or

nonpayment, protest, notice of protest, notice of dishonor, and notice of

acceptance of this Guaranty, and waives all notices of the existence, creation,

or incurring of new or additional obligations. 

Guarantor hereby further waives and agrees not to assert or take

advantage of: (a) any right or defense that may arise by reason of the

incapacity, lack of authority, death or disability of Tenant or any other

person; (b) any and all defenses based upon an election of remedies by Landlord

which limits or destroys any subrogation rights Guarantor might otherwise have;

or (c) any bankruptcy of Tenant.

 

If there is more than one Guarantor, the liability of

each Guarantor shall be joint and several. 

Guarantor’s obligations under this Guaranty shall be binding on

Guarantor’s legal representatives, heirs, successors and assigns.

 

If Tenant disposes of its interest in the Lease,

“Tenant”, as used in this Guaranty, shall mean Tenant’s successors or assigns.  Assignment of the Lease by Landlord (as

permitted by the Lease) shall not affect this Guaranty.  In the event of an assignment of the Lease

by Landlord, the term “Landlord” as used in this Guaranty shall mean Landlord’s

successors or assigns.

 

All rights, powers and remedies of Landlord hereunder

and under any other agreement now or at any time hereafter in force between

Landlord and Guarantor relating to the Lease shall be cumulative and not

alternative and such rights, powers and remedies shall be in addition to all

rights, powers and remedies given to Landlord by law.

 

Any notice, request, demand, instruction or other

communication to be given to any party hereunder shall be in writing and shall

be sent by registered or certified mail, return receipt requested, to Guarantor

at the address provided under Guarantor’s signature below, and if to Landlord

at the address provided above.  Notices

shall be deemed to have been given upon (i) hand delivery, (ii) one (1) day

after being deposited with Federal Express or another reliable overnight

courier service or transmitted by facsimile telecopy, or (iii) forty-eight (48)

hours after the deposit of the same in a United States mail post office box in

a state to which the notice is addressed, or three (3) business days after

deposit of same in any such post office box in a state other than the state to

which the notice is addressed, postage prepaid and addressed as set forth

 

4

 

above.  A notice shall not be deemed

given unless and until it shall have been given to all address(es) to which

notices must be sent.  Any party may

change its street address(es) for notices by a notice given in accordance with

this Section.

 

If Landlord is required to enforce Guarantor’s

obligations under this Guaranty by any legal action or proceedings, or if a

dispute arises in connection with the validity, enforceability, enforcement or

construction of this Guaranty or any other matter relating to this Guaranty,

the losing party shall pay all reasonable attorneys’ fees incurred by the

prevailing party in such dispute.

 

Guarantor hereby represents and warrants that:  (a) Guarantor has received and reviewed the

Lease and is familiar with the terms thereof; (b) the execution of this Guaranty

will not render Guarantor insolvent in any way; and (c) Landlord’s entering

into the Lease materially benefits Guarantor and Guarantor is receiving fair

consideration for this Guaranty.

 

Any amount required to be paid by Guarantor hereunder

shall bear interest from the date due until the date paid to Landlord at the

lesser of:  (x) twelve percent (12%) per

annum; or (y) the maximum rate permitted by law.  All interest shall be compounded monthly and shall be payable to

Landlord on demand.

 

Time is of the essence with respect to the performance

of Guarantor’s obligations hereunder.

 

This Guaranty contains the entire agreement of

Guarantor and Landlord with respect to the subject matter hereof.

 

5

 

If any one or more of the provisions of this Guaranty

shall be held to be invalid, illegal or unenforceable in any respect, such

invalidity, illegality or unenforceability shall not affect any other provision

of this Guaranty, and this Guaranty shall be construed as if such invalid,

illegal or unenforceable provision had never been contained herein.  This Guaranty shall be construed according

to the laws of the State of California (“State”) without regard to conflicts of

laws principles.  By execution hereof,

the undersigned specifically consents to this choice of law designation and

agrees that all actions or proceedings arising directly, indirectly or

otherwise in connection with, out of, related to, or from this Guaranty or the

Lease shall be litigated only in the courts located in the State, and the

undersigned (i) consents and submits in advance to the exclusive and in

personam jurisdiction of any state or federal court located within the

State, (ii) waives any right to transfer or change the venue of litigation

brought against the undersigned, and (iii) agrees to service of process, to the

extent permitted by law, by mail.

 

Dated as of May 11, 1998.

 

	

   

  	

  GUARANTOR

  	 

	

   

  	

   

  	 

	

   

  	

  AMERICAN RESTAURANT GROUP, INC.,

  	 

	

   

  	

  a Delaware corporation

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  By

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  Its

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

  GUARANTOR’S ADDRESS FOR NOTICES:

  
	

   

  	

   

  
	

   

  	

  4410 El Camino Real

  
	

   

  	

  Suite 201

  
	

   

  	

  Los Altos, California 94022

  
	

   

  	

  Attn:  Legal

  Department

  
	

   

  	

  Fax No.: 

  (650) 949-6420

  
	

   

  	

   

  	 

	

   

  	

  With a copy to: ARG Enterprises, Inc.

  	 

	

   

  	

  6th Floor, 450 Newport Center Drive

  	 

	

   

  	

  Newport Beach, CA 92660

  	 

	

   

  	

  Attn:  Chief

  Financial Officer

  	 

	

   

  	

  Fax No.: 

  (949) 721-8941

  	 

	

   

  	

   

  	 

	

   

  	

  With a copy to: Stuart Anderson’s Restaurants

  	 

	

   

  	

  4410 El Camino Real

  	 

	

   

  	

  Suite 201

  	 

	

   

  	

  Los Altos, California 94022

  	 

	

   

  	

  Attn: 

  Director of Real Estate

  	 

	

   

  	

  Fax No.: 

  (650) 949-6425

  	 

							

 

6

 

CALIFORNIA

ALL-PURPOSE ACKNOWLEDGMENT

 

	

   

  	

   

  	

   

  
	

  STATE OF CALIFORNIA

  	

  )

  	

   

  	

   

  
	

   

  	

  )  ss.

  	

   

  	

   

  
	

  COUNTY OF

  	

   

  	

   

  	

  )

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  On 

  	

   

  	

  , before me, 

  	

  ,

  
	

  Date

  	

   

  	

  Name and Title of Officer (e.g. “Jane Doe, Notary

  Public”)

  
	

   

  	

   

  	

   

  
	

  personally appeared

  	

  ,

  
	

   

  	

  Name of Signer(s)

  
											

 

	

  o personally known to me – OR –

   

  	

  o

  	

  proved to me on the basis of satisfactory evidence

  to be the

  person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they 

  executed the same in his/her/their authorized capacity(ies), 

  and that by his/her/their signature(s) on the instrument the person(s), 

  or the entity upon behalf of which the person(s) 

  acted, executed the instrument.

  

 

WITNESS my hand

and official seal.

 

	

   

  
	

  Signature of Notary

  Public

  
	

   

  

 

OPTIONAL

 

Though the data below is not required by law, it may prove valuable to

persons relying on the document and could prevent fraudulent reattachment of

this form.

 

	

  CAPACITY(IES) CLAIMED BY SIGNER(S)

  	

  DESCRIPTION OF ATTACHED DOCUMENT

  
	

   

  	

   

  

o Individual

o Corporate Officer

 

	

   

  	

   

  	

   

  
	

  Title(s)

  	

   

  	

  Title or Type of

  Document

  
	

   

  	

   

  
	

  o 

  Partner(s)

  	

  o 

  Limited

  	

   

  
	

   

  	

  o 

  General

  	

   

  
	

   

  	

   

  	

  Number of Pages

  
	

   

  	

   

  	

   

  
	

  o 

  Attorney-In-Fact

  	

   

  	

   

  
	

  o 

  Trustee(s)

  	

   

  	

   

  
	

  o 

  Guardian/Conservator

  	

   

  	

   

  
	

  o 

  Other:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Date of Document

  
						

 

Signer is Representing:

Name of Person(s) or Entity(ies)

 

	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Signer(s) Other Than

  Named Above

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