Lease Agreement & Construction Addendum

ROADHOUSE GRILL/Jacksonville, Duval County, Florida LEASE AGREEMENT THIS LEASE AGREEMENT is made and entered into as of September 15th, 1998, by and between:


(i) CNL APF PARTNERS, LP, a Delaware limited partnership, with principal office and place of business at 400 E. South Street, Suite 500, Orlando, Florida 32801 ("Landlord"), and (ii) ROADHOUSE GRILL, INC., a Florida corporation, with a mailing address of 6600 North Andrews Avenue, Suite 160, Ft. Lauderdale, Florida 33309 ("Tenant").


WITNESSETH:


Landlord leases to Tenant, for the purpose of developing, constructing and operating a ROADHOUSE GRILL Restaurant and for no other use or purpose whatsoever and subject to the terms and conditions of the Rent Addendum and Construction Addendum attached hereto, and Tenant rents from Landlord the following described premises, (hereinafter "Premises") located at 9220 Baymeadows Road, Jacksonville, DuvaJ County, Florida and being more particularly described in Exhibit "A" attached hereto and made a part hereof, together with all rights and privileges in and about the Premises as may be necessary or convenient to Tenant's business, inclusive of all easements benefitting the real property described in Exhibit "A". Premises shall include all improvements and structures whether now existing or hereafter constructed thereon.


The following additional stipulations are hereby declared to be covenants of this Lease and shall, unless otherwise expressly stated, be applicable at all times throughout the term of this Lease and any extension or renewal thereof:


1. DEFINITIONS


For purposes of this Lease, the following terms are hereby defined to mean: "Effective Date" shall mean the first date set forth at the beginning of this Lease.


"Landlord" shall mean CNL APF PARTNERS, LP, a Delaware limited partnership, its successors and assigns.


"Lease" shall include this Lease Agreement and all amendments hereto, if any, entered into from time to time hereafter.


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"Lease Year" shall mean a fiscal period beginning on the Effective Date (and each anniversary thereof) and expiring twelve (12) months thereafter.


"Rent" shall mean the Rent payable under this Lease as set forth in the Rent Addendum attached hereto and incorporated herein, and shall include Interim Rent and Annual Rent (all as defined in the Rent Addendum).


2. TERM AND RENT


(a) TERM. The term of this Lease shall begin on the Effective Date and shall expire on a date thirteen (13) years thereafter unless previously terminated or renewed or extended as provided herein.


(b) RENT. Rent shall be due and payable as provided in the Rent Addendum attached hereto and incorporated herein.


3. ALTERATIONS AND IMPROVEMENTS, INVESTMENT TAX CREDIT, MECHANIC'S LIENS,
LANDLORD'S DISCLAIMER


(a) Tenant shall be permitted to install, use on and about, and remove from the Premises at any time and from time to time all trade fixtures and other personal property (exclusive of lighting, electrical, heating and air conditioning improvements) which are not a component of the building located or to be located on the Premises (hereinafter referred to as the "Tenant's Property"), all of which at all times shall remain the property of Tenant with the right of removal (subject to paragraph (d) below) at the expiration of this Lease. Trade fixtures shall include: (1) removable decor items and office equipment; (2) building lettering, signs, sign posts and sign standards; (3) unattached food and customer service equipment; and (4) food and customer service equipment attached to the building by bolts and screws and/or by utility connections, including without limitation, walk-in refrigerators and freezers, remote refrigeration systems, exhaust systems and hoods. Tenant shall also have the right, at its option and expense, to redecorate or otherwise remodel the Premises upon any termination hereof or upon subletting or assignment in such manner as will, without reducing the fair market value thereof, avoid the appearance of the ROADHOUSE GRILL Restaurant operated under this Lease; provided, however, Tenant shall not impair the structural condition of the Premises or reduce the size thereof. Tenant shall have the right to make any additions, alterations, changes and improvements, structural and nonstructural, including but not limited to construction of additional buildings and additions to the then existing buildings, as Tenant shall desire; provided, however, (i) Tenant shall submit plans of all structural changes to Landlord at least thirty (30) days in advance of the proposed construction date, (ii) Tenant shall provide Landlord with evidence of Tenant's financial ability to pay for such changes, (iii) if the cost of structural changes exceeds TEN THOUSAND AND NO/l00 DOLLARS ($l0,000.00), Tenant shall post payment and performance bonds for such work naming Landlord and Tenant as dual obligees, (iv) all such construction shall be completed in a workmanlike manner and in full compliance with all building laws and ordinances applicable thereto, at Tenant's expense, and (v) such additions, alterations, changes and improvements shall not reduce the fair market value of the Premises. All such additions, alterations, changes and improvements shall be deemed to be a part of the Premises.


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(b) Landlord hereby grants Tenant the right and privilege of applying for and receiving all investment tax credits, if any, under the Internal Revenue Code which may be available with respect to the building and other improvements to be constructed. To this end, Landlord agrees to execute all such further documents and supply such additional information as may be required to make such election effective.


(c) Tenant shall not do or suffer anything to be done whereby the Premises, or any part thereof, may be encumbered by a mechanic's lien or similar lien, and, if, whenever and as often as any mechanic's lien or similar lien is filed against the Premises, or any part thereof, purporting to be for or on account of any labor done, materials or services furnished in connection with any work in or about the Premises, done by, for or under the authority of Tenant, or anyone claiming by, through or under Tenant, Tenant shall discharge the same of record within ten (10) days after service upon Tenant of notice of the filing thereof; provided, however, Tenant shall have the right to remove the lien by bonding same in accordance with applicable law and to contest any such lien; provided further that Tenant shall diligently prosecute any such contest, at all times effectively staying or preventing any official or judicial sale of the Premises under execution or otherwise, and, if unsuccessful, satisfy any final judgment against Tenant adjudging or enforcing such lien or, if successful, procuring record satisfaction or release thereof.


(d) All of Tenant's Property placed in or upon the Premises by Tenant shall remain the property of Tenant with the right to remove the same at any time during the term of this Lease. Landlord, if requested by Tenant, agrees to execute such documentation subordinating its lien rights (vis a vis any equipment lender or landlord) to Tenant's personalty and to all rights of levy for distraint for rent against same as shall be reasonably required by any equipment lender or lessor of Tenant; provided any damage caused by, or resulting from the removal of any trade fixtures, equipment or other personal property shall be promptly repaired by Tenant or the party entitled to remove same.


4. DESTRUCTION OF PREMISES; INSURANCE


(a) If the Premises are damaged or destroyed by fire, flood, tornado or other element, or by any other casualty and such damage or destruction does not occur within the last twenty-four (24) months of the original or of any extended or renewed term of this Lease, this Lease shall continue in full force and effect and Tenant shall, as promptly as possible, restore, repair or rebuild the Premises to substantially the same condition as it existed before the damage or destruction. Tenant shall for this purpose use all, or such part as may be necessary, of the insurance proceeds received from insurance policies carried on the Premises under the provision of subparagraph 4(b) hereinbelow. If such insurance proceeds are not sufficient to pay such costs, Tenant shall pay such deficit. Should the Premises be damaged or destroyed by any of the foregoing described casualties within the last twenty-four (24) months of the original term or of any extended or renewed term of this Lease, to the extent that they are untenantable or


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unsuitable, in Tenant's opinion for continued use in the normal conduct of Tenant's business, Tenant shall have the right, exercisable by written notice to Landlord given within thirty (30) days after the date of such damage or destruction, of terminating this Lease effective upon the date of such damage or destruction. If Tenant terminates this Lease as thus provided Landlord shall be entitled to all of the insurance proceeds on the Premises, but not to the proceeds of insurance carried by Tenant on Tenant's Property; provided, however, Tenant shall not have the right to terminate this Lease unless (i) the damage or destruction of the Premises was caused by a peril which was insured against by the provisions of subparagraph 4(b) of this Lease; (ii) at the time of such damage and destruction the said insurance policies to be carried by Tenant were in the amount of the full replacement cost of such improvements (without deduction or co-insurance) and in full force and effect; and (iii) the insurer has confirmed coverage and its obligation to pay. If Tenant defaults in its obligation to carry insurance in the amount required under subparagraph 4(b), then, prior to a Tenant termination of this Lease, Tenant shall be obligated to pay toward said reconstruction or to Landlord the difference between the amount actually carried and the amount required to be carried under this paragraph.


(b) Tenant, at its expense and as additional rent hereunder, shall throughout the term of this Lease and any extension or renewal thereof, keep the Premises insured with "all risk" coverage, including code changes, glass breakage, vandalism and malicious mischief coverage, and builder's risk (if the Premises are to be constructed) ("all risk" as such term is used in the insurance industry) for the full replacement value, with any deductible to be approved by Landlord (and without any co-insurance provision (Agreed Value endorsement)). If Tenant serves alcoholic beverages, or if the Premises are located in a flood or earthquake zone, then additional coverage shaI1 be obtained by Tenant in amounts and in forms acceptable to Landlord. Tenant shall provide Landlord with copies of such policies or certificates of such coverage, and the policy or policies shall name Landlord and any mortgagee designated by Landlord as an additional insured (or, if elected by Landlord, loss payee) and shall provide that all losses shall be payable as herein provided. All such policies of insurance shall provide that the amount thereof shall not be reduced and that none of the provisions, agreements or covenants contained therein shall be modified or cancelled by the insuring company or companies without thirty (30) days prior written notice being given to Landlord; and that all insurance proceeds shall be paid by check payable to Landlord. Such policy or policies of insurance may also cover loss or damage to Tenant's Property, and the insurance proceeds applicable to Tenant's Property shall not be paid to Landlord or any mortgagee but shall accrue and be payable solely to Tenant. In the event of a casualty, Tenant shall be responsible for any deficiency between the replacement cost of the Premises and the amount actually paid by the insurance company.


(c) Tenant shall maintain, at its own expense and as additional Rent, public liability insurance and liquor liability insurance covering the Premises, for the joint benefit of and insuring Tenant and Landlord, each with coverage of not less than $2,000,000.00 per occurrence, with any deductible to be approved by Landlord, and with a general aggregate limit of not less than $10,000,000.00, per occurrence in excess of the general liability and liquor liability coverages required above. Landlord (and if Landlord is either a general or limited partnership, all general partners) shall be named as an additional insured (or, if elected by Landlord, loss payee).


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All such policies of insurance shall provide that the amount thereof shall not be reduced and that none of the provisions, agreements or covenants contained therein shall be modified or canceled by the insuring company or companies without thirty (30) days prior written notice being given to all parties to this Lease. A copy of the policy or certificate of such insurance shall be delivered to Landlord.


(d) Tenant shall maintain, at its own expense, business interruption insurance for not less than six (6) months coverage for each occurrence, with any deductible to be approved by Landlord. All such policies of insurance shall provide that Landlord is additional insured (or, if elected by Landlord, loss payee); and that the amount thereof shall not be reduced and that none of the provisions, agreements or covenants contained therein shall be modified or cancelled by the insuring company or companies without thirty (30) days prior written notice being given to all parties to this Lease. A copy of the policy or certificate of such insurance shall be delivered to Landlord.


(e) All insurance companies providing the coverage required under this Paragraph 4 shall be selected by Tenant and shah be rated A minus (A-) or better by Best's Insurance Rating Service, shall be licensed to write insurance policies in the state in which the Premises is located, and shall be acceptable to Landlord in Landlord's reasonable discretion.


5. MAINTENANCE AND REPAIR


(a) Tenant shall maintain the Premises and all buildings and improvements thereon (interior and exterior, structural and otherwise) in good order and repair and, subject to the provisions of paragraph 4(a) with respect to damage within the last twenty-four (24) months of the Lease, and paragraph 6 herein, return the Premises and all buildings and improvements thereon at the expiration of the term of this Lease or any extension thereof in as reasonably as good condition as when received, ordinary wear and tear excepted.


(b) Tenant agrees that Landlord shall have no obligation under this Lease to make any repairs or replacements (including the replacement of obsolete components) to the Premises or the buildings or improvements thereon, or any alteration, addition, change, substitution or improvement thereof or thereto, whether structural or otherwise. The terms "repair" and "replacement" include the replacement of any portions of the Premises which have outlived their useful life during the term of the Lease (or any extensions thereof). Landlord and Tenant intend that the rent received by Landlord shall be free and clear of any expense to Landlord for the construction, care, maintenance (including common area maintenance charges and charges accruing under easements or other agreements relating to the Premises), operation, repair, replacement, alteration, addition, change, substitution and improvement of or to the Premises and any building and improvement thereon. Upon the expiration or earlier termination of this Lease, Tenant shall remain responsible for, and shall pay to Landlord, any cost, charge or expense for which Tenant is otherwise responsible for hereunder attributable to any period (prorated on a daily basis) prior to the expiration or earlier termination of this Lease.


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6. CONDEMNATION


(a) In the event that the whole or any material part of the building on the Premises or such a material portion of the land (for purposes hereof, "material" shall mean more than 20% of the building on the Premises or more than 40% of the land) shall be taken during the term of this Lease or any extension or renewal thereof for any public or quasi-public use under any governmental law, ordinance, regulation or by right of eminent domain, or shall be sold to the condemning authority under threat of condemnation with the result that the Premises cannot continue to be operated as the type of restaurant contemplated herein or if all reasonable access to the adjacent roadways from the existing or comparable curb cuts shall be taken (any of such events being hereinafter referred to as a "taking"), Tenant shall have the option of terminating this Lease as of a date no earlier than the date of such taking, such termination date to be specified in a notice of termination to be given by Tenant to Landlord not fewer than fourteen (14) days prior to the date on which possession of the Premises, or part thereof, must be surrendered to the condemning authority or its designee.


(b) In the event of any taking which does not give rise to an option to terminate or in the event of a taking which does give rise to an option to terminate and Tenant does not elect to terminate, Landlord shall make its award available to Tenant and Tenant shall, to the extent of the award from such taking (which word "award" shall mean the net proceeds after deducting expenses of any settlement, or net purchase price under a sale in lieu of condemnation but shall exclude the value of Landlord's reversionary interest), promptly restore or repair the Premises and all improvements thereon (except the items which Tenant is entitled to remove) to the same condition as existed immediately prior to such taking insofar as is reasonably possible. If the estimated cost of restoration or repair shall exceed the amount of Landlord's award, Tenant shall deposit with Landlord the amount of such excess. The award and any excess shall be held in trust by Landlord and used, to the extent required, for the purpose of such restoration or repair. A just and proportionate part of the Rent payable hereunder shall be abated from the date of such taking until ten (10) days after Tenant has restored same and thereafter the Rent shall be reduced in proportion to the reduction in the then rental value of the Premises after the taking in comparison with the rental value prior to the taking. If the award shall exceed the amount spent or to be spent promptly to effect such restoration, repair or replacement, such excess shall unconditionally belong to Landlord and shall be paid to Landlord.


(c) In the event of any partial taking where this Lease is not terminated, Tenant shall not be entitled (except for use in reconstruction) to any part of the compensation or award given Landlord for the taking of the fee of the Premises, but Tenant shall have the right to recover from the condemning authority such compensation as is specifically awarded to Tenant (i) to reimburse Tenant for any cost which Tenant may incur in removing Tenant's Property from the Premises and (ii) for loss of Tenant's business.


(d) If this Lease is terminated by reason of a taking , then Landlord shall be entitled to receive the entire award in any such condemnation or eminent domain proceedings or purchase in lieu thereof and Tenant hereby assigns to Landlord all of its right, title and interest in and to all and any part of such award, provided, however, Tenant shall be entitled to receive any award specifically made to reimburse Tenant.


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7. TAXES AND ASSESSMENTS


Tenant shall pay prior to delinquency all taxes and assessments which may be levied upon or assessed against the Premises and all taxes and assessments of every kind and nature whatsoever arising in any way from the use, occupancy or possession of the Premises or assessed against the improvements situated thereon, together with all taxes levied upon or assessed against Tenant's Property. To that end, Landlord shall not be required to pay any taxes or assessments whatsoever which relate to or may be assessed against this Lease, the Rent and other amounts due hereunder, the Premises, improvements and Tenant's Property. Provided, however, that any taxes or assessments which may be levied or assessed against the Premises for a period ending after the termination hereof shall be prorated between Landlord and Tenant as of such date. Within thirty (30) days after Tenant receives the paid receipted tax bills, Tenant shall furnish Landlord with copies of a paid receipt for such tax bills. Upon demand by Landlord, Tenant shall deliver-and pay over to Landlord such additional sums as are necessary to satisfy any deficiency in the amount necessary to pay the taxes before the same become due. Tenant may, at its option, contest in good faith and by appropriate and timely legal proceedings any such tax and assessment; provided, however, that Tenant shall indemnify and hold harmless Landlord from any loss or damage resulting morn any such contest, and all expenses of same (including,, without limitation, all attorneys' fees, court and other costs) are paid solely by Tenant.


8. COMPLIANCE, UTILITIES, SURRENDER


(a) Tenant at its expense shall promptly comply with all governmental requirements, whether or not compliance therewith shall require structural changes in the Premises; will procure and maintain all permits, licenses and other authorizations required for the use of the Premises or any part thereof then being made and for the lawful and proper installation, operation and maintenance of all equipment and appliances necessary or appropriate for the operation and maintenance of the Premises, and shall comply with all easements, restrictions, reservations and other instruments of record applicable to the Premises. Tenant shall indemnify and save Landlord harmless from all expenses and damages by reason of any notices, orders, violations or penalties filed against or imposed upon the Premises, or against Landlord as owner thereof, because of Tenant's failure to comply with this paragraph.


(b) Tenant shall pay all charges for heat, water, gas, sewage, electricity and other utilities used or consumed on the Premises and shall contract for the same in its own name. Landlord shall not be liable for any interruption or failure in the supply of any such utility service to the Premises.


(c) Tenant shall peacefully surrender possession of the Premises, the buildings and other improvements thereon, to Landlord at the expiration, or earlier termination, of the original term or any extended or renewed term of this Lease.


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9. QUIET ENJOYMENT


Landlord covenants and warrants that Landlord has full power and authority to make this Lease, and that Tenant shall have and enjoy full, quiet and peaceful possession of the Premises, their appurtenances and all rights and privileges incidental thereto during the term hereof and any renewals or extensions, subject to the provisions of this Lease and any easements, restrictions, reservations and other instruments of record applicable to the Premises and in existence at the time of the conveyance of the Premises to Landlord by Tenant.


10. OPTION TO RENEW


Tenant shall have two (2) successive ten (l0) year options to extend this Lease for up to an additional twenty (20) years upon the same terms, covenants, conditions and rental as setforth herein provided that Tenant is not in default hereunder at the commencement of such option period. Tenant may exercise each such ten (10) year option by giving written notice to Landlord not less than six (6) months prior to the expiration of the then current term of this Lease. Should Tenant fail to give Landlord such timely written notice during the required period, all remaining rights of renewal shall automatically expire.


11. FIRST RIGHT OF REFUSAL TO PURCHASE; OPTION TO PURCHASE


(a) So long as Tenant is not in default under this Lease, Tenant shall have the right to purchase the Premises in accordance with the terms of this paragraph. If Landlord receives and desires to accept a bona fide offer to purchase (excluding any transfer to an affiliate of Landlord) the Premises during the term of this Lease or any extension or renewal thereof, Landlord shall serve a notice on Tenant stating the name of such offeror with a copy of the terms and conditions of such offer attached and Tenant shall have the right to purchase the Premises on the same terms and conditions set forth in Landlords notice, provided Tenant delivers written notice to Landlord of its election to do so within twenty (20) days after receipt of such notice from Landlord. If Tenant does not elect to exercise its right to purchase as aforesaid, Landlord may sell the Premises, provided the sale is consummated with the offeror and on the terms and conditions set forth in Landlord's notice to Tenant. The foregoing preemptive right shall remain in existence notwithstanding its non-exercise in respect to any sale and shall be binding upon Landlord's successors in title.


(b) Tenant shall have the option to purchase the Premises at any time after the seventh (7th) Lease Year, as follows:


(i) Tenant shall exercise its option hereunder by giving written notice in writing to Landlord in accordance with the requirements of paragraph 20 of this Lease. At the time of the exercise of the option, Tenant shall also pay to Landlord (or if required by Landlord, to the qualified intermediary described in Paragraph 19(b) of this Lease Agreement) a non-refundable deposit of FIVE HUNDRED AND NO/100 DOLLARS ($500.00).


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(ii) The purchase price to be paid by Tenant shall be the greater of (A) the fair market value of the Premises as of the date of the exercise of the option, as determined by an appraisal of an M.A.I. qualified appraiser selected by Landlord, or (B) Landlord's cost for the Premises, plus Twenty percent (20%).


(iii) The closing pursuant to the option shall be held in the office of Landlord's attorneys on or before a date which is thirty (30) days after Landlord and Tenant have received the above-mentioned appraisal from the appraiser, or at such other place as shall be acceptable to Landlord.


(iv) Tenant shall receive a credit for the deposit required under (i) above and the balance of the purchase price shall be paid at closing in cash, by cashier's check on cleared local funds or by wire transfer to Landlord's account.


(v) All expenses of closing shall be paid by Tenant.


(vi) The option granted to Tenant pursuant to this subparagraph (b) may not be exercised at any time while Tenant shall then be in default under any term or condition of this Lease. The option granted to Tenant pursuant to this subparagraph (b) shall terminate and become null and void in the event Tenant's right of first refusal becomes operative, Tenant fails to exercise such right of first refusal, and the offer triggering such right of first refusal closes.


(c) Tenant's rights and options granted in (a) and (b) above shall be subject and subordinate to any rights or options currently of record or those existing under Tenant's franchise agreement, if any.


12. NONCOMPETE


Tenant shall not own an interest in, or operate, another ROADHOUSE GRILL Restaurant within a three (3) mile radius of the Premises. Violation of this covenant shall constitute a default hereunder and, because the parties agree that damages would not be an adequate remedy, Tenant hereby agrees that Landlord shall be entitled to equitable relief, including injunctive relief and specific performance in addition to any remedy available at law.


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13. DEFAULT


(a) If any one or more of the following events occur, said event or events shall hereby be classified as a "Default":


(i) If Tenant fails to pay Interim Rent (if applicable), Annual Rent, any additional rent, or any other charges required hereunder or under any other lease with Landlord or an affiliate of Landlord when same shall become due and payable, and such failure continues for ten (10) days after written notice from Landlord.


(ii) If Tenant shall fail to perform or observe any term, condition, covenant, agreement, or obligation of this Lease or any other lease with Landlord or an affiliate of Landlord, and such failure continues for fifteen (15) days after written notice from Landlord (except that such fifteen (15) day period shall be automatically extended for such additional period of time as is reasonably necessary to cure such Default, if such Default ...