1
EXHIBIT 2.10
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a material
inducement to and in consideration of SAFEWAY INC., a Delaware corporation,
whose address is 5918 Stoneridge Mall Road, Pleasanton, California 94588-3229
("Landlord"), entering into that certain Lease ("Lease") with ARG ENTERPRISES,
INC., a California corporation ("Tenant"), dated as of September 11, 1996,
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.
To the extent permitted by applicable law, Guarantor waives the benefit
of any statute of limitations affecting Guarantor's liability under this
Guaranty. 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
2
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,
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, 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.
2
3
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 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 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
3
4
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, 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 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 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.
4
5
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 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.
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
5
6
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 September 11, 1996.
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.: (415) 949-6442
6
7
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
___________, 1996, by ____________________, the __________________ of American
Restaurant Group, Inc.
__________________________________
Notary Public
________ County,__________________
My Commission Expires:
[Notary Public's Seal]
7