OPTION TO ENTER INTO A COMMERCIAL LEASE AGREEMENT

BY: TERREBONNE PARISH SCHOOL BOARD

AND: TERREBONNE REVITALIZATION COMPANY, LLC
STATE OF LOUISIANA
PARISH OF TERREBONNE
EXCLUSIVE OPTION TO LEASE REAL ESTATE
(711 Grinage Street, Houma, LA)
This EXCLUSIVE OPTION TO LEASE REAL ESTATE (hereinafter referred to as the "Option")
is made as of the 28th day of June, 2013 by and between the Terrebonne Parish School Board
(hereinafter referred to as IILessorll) and Terrebonne Revitalization Company, LLC, a limited
liability company organized under the laws of Louisiana (hereinafter referred to as "Lessee").
The parcel of land that is the subject of this Option is more particularly set forth in
Paragraph 1 below (the IIProperty"), and is owned by Lessor. The Property includes buildings
that are currently partially occupied as administrative and office space and operated by Lessor.
Lessor desires to vacate the Property and has identified Lessee as a qualified Lessee;
Lessor acknowledges that Lessee intends to rehabilitate the Property to create approximately
55 residential housing units (the "Development").
Lessor is willing to lease the Property to Lessee until a qualified purchaser has been
identified and terms of a sale are agreed upon between Lessor and such qualified purchaser. If
Lessee qualifies as purchaser pursuant to any public bid process for the sale of the Property,
Lessor agrees to sell the Property to Lessee on terms agreed to between the Parties.
The parties contemplate that the Development will be financed with funds from the
Terrebonne Parish Consolidated Government (TPCG) with an allocation of Community
Development Block Grant Funds (CDBG) and equity capital raised by Lessor arising out of an
allocation of low income housing tax credits (IIUHTCs
ll
) from the Louisiana Housing Corporation
(the ((LHC
II
).
In order for Lessee to obtain the necessary resources to construct the Development,
Lessee must demonstrate that it has control of the real estate, and Lessor hereby intends to
evidence its intent to transfer its interest in the Property to Lessee should Lessee qualify as the
winning bidder under a competitive process.
NOW THEREFORE, in consideration of the Option Payment to the Lessor by Lessee (as
defined below), and for other good and valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), and intending to be legally bound, Lessor hereby grants to
Lessee the exclusive right and option to lease the Property, on the following terms and
conditions:
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1. Property. The Property, as further described in Exhibit A, is all of Blocks 12, 51, 63, and
64, as well as the St. Francis CYO lot (bounded by Grinage St., Point St., Goode St., and
Academy St.) in the 03C Ward/District of Houma, Terrebonne Parish.
2. Agreement to Enter Lease. Upon exercise of this Option, Lessor and Lessee will enter
into a lease (the "Lease") that will contain the terms set forth in Section 3 along with
such other terms and conditions as are customary or appropriate and are agreed to by
Lessor and Lessee.
3. Lease Terms. The parties agree that the Lease between the parties will contain the
following terms:
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a. Term. The Lease term will be for 1 year with 10 annual renewals.
b. Rent. Lessee shall pay to Lessor a rental payment of $1,000 per month upon
entering the lease.
c. Additional Rent. All other amounts payable by Lessee to Lessor under the Lease
shall be deemed to be additional rent, and shall be collectable as rent.
d. Ownership for Tax Purposes. For federal tax purposes and to the extent allowed
under applicable federal law, the Lessee shall be deemed owner of all
improvements on the Property.
e. Development. The lease shall provide, inter alia, that Lessee, as lessee, will
rehabilitate certain improvements currently located on the Property and
construct an apartment complex with approximately 55 apartment units.
LESSEE may make improvements and renovations at LESSEE's sole costs and
expense to the LEASE PREMISES. In connection with any improvements made,
LESSEE shall satisfy any and all outstanding claims resulting therefrom. In the
event of a failure by LESSEE to satisfy, all such legitimate claims, thereby
resulting in the filing of any lien or other encumbrance against the LEASE
PREMISES, LESSOR shall be entitled to demand and receive the entire rent for
the unexpired term, or the alternative, to cancel the subject lease, all without
relieving LESSEE of any obligation incurred in connection with the making of said
improvements. All improvements made to the LEASE PREMISES shall, at the
termination of the lease, become the property of LESSOR without compensation
to LESEE for the value of the same.
Should LESSER at any time violate any of the obligations or conditions of this
lease, or fail to pay the rent, or electric bill or similar charges punctually at
maturity, as stipulated, or upon the filing of a bankruptcy receivership, or respite
petition by or against LESSER, or upon LESSEE's suspension, failure of insolvency
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the rent for the whole unexpired term of this lease shall, without putting LESSER
in default, at once become due and eligible, and in any such event, LESSOR shall
have the option either at once to demand the entire rent for the whole
unexpired term or to immediately cancel this lease without placing LESSEE in
default; LESSEE to remain liable for all damages to LESSOR; LESSEE hereby
assenting thereto and expressly waiving the legal notice to vacate the premises.
Failure to strictly and promptly enforce these conditions shall in no way be
construed or operate as a waiver of LESSOR's rights, LESSOR reserving the right
to always enforce all conditions and obligations including the payment of rent,
or to cancel this lease, regardless of any indulgences or extensions previously
granted.
Should the premises be vacated or abandoned by LESSEE because of ejectment
for breach hereof, or otherwise should the LESSEE begin to remove personal
property to prejudice of LESSOR'S lien for rent for the unexpired term, the entire
rent, together with attorney's fees shall at once become due and payable and
LESSOR, at its option, has the right to cancel the lease, or re-enter and let said
premises for such price and on such terms as may be immediately obtainable
and apply the net amount realized to the payment of the rent.
f. Operating Expenses and Taxes. All operating expenses and property taxes, if
any, shall become the sole responsibility of Lessee upon execution of the Lease
and payable to Lessor or directly to the appropriate taxing authority as
additional rent. The Lessee shall be responsible for all utility bills attributable to
the leased premises and shall promptly pay same to each respective furnisher of
said utilities when done.
g. Costs and Expenses. All costs and expenses of title examination, and
preparation and recording of the Lease (other than for Lessor's own review of
same), including but not limited to all transfer and recordation costs, shall be
paid by the Lessee.
h. Insurance: LESSEE shall, at all times during the term of this lease, maintain with
a good and solvent insurance company having at least an A+ rating, a policy of
Public Liability Insurance containing a minimum coverage of $1,000,000.00 per
occurrence. LESSEE shall furnish to LESSOR throughout the primary term
current certificates evidencing the effectiveness of said required insurance.
LESSEE shall cause LESSOR to be named as an additional insured under said
policy, a 30-day notice of cancellation, and a "waiver of subrogation". LESSEE
may if desired, carry insurance to cover personal contents, LESSOR being under
no duty or obligation for such insurance.
LESSEE specifically agrees to indemnify and hold harmless LESSOR, from all
liability for death of, or injury to persons or damage to property, whether arising
out of defects in the LEASE PREMISES, or occasioned by, or as a result of
LESSEE'S occupancy of the LEASED PREMISES, and to defend at its cost and
expense any and all legal actions instituted in connection therewith, and to pay
any final judgment resulting therefrom. In the event of a transfer of the
premises described herein to a third party, and should LESSER refuse to extend
such indemnity to any such transferee upon request, then in such event, at the
option of said transferee, said lease may be ipso facto terminated.
LESSOR and LESSEE acknowledge that LESSEE assumes responsibility for the
condition of the premises and LESSOR, availing itself of the provision of LSA R.S.
9:3221, shall not be liable for injuries caused by an defect therein, to LESSOR or
any other person on the premises whether on the premises at LESSEE'S
invitation or not, LESSEE agreeing to fully indemnify and hold LESSOR harmless
for all such claims.
LESSEE agrees to pay all costs and reasonable attorney's fees incurred in
enforcing the provisions of this lease.
LESSOR reserved at all times during the term of this lease the right to sell or
otherwise transfer the LEASED PREMISES, but agrees that any such transfer shall
be made subject to the lease contract herein.
At the expiration of this lease, or its termination for cause, LESSEE agrees to
immediately surrender all keys to the leased premises and to vacate same, and
to lease said premises in broom clean conditions free of all trash. Should LESSEE
fail to comply, it does hereby consent to pay as liquidated damages five (5)
times the rent per day, plus attorney's fees, costs, etc.
i. Possession. Possession of the Property shall be delivered to Lessee immediately
upon execution of the Lease.
4. Access to Property. Through the term of this Option (as described below), Lessee, and
its authorized agents and representatives, shall have access to the Property at all
reasonable times for the purpose of making such examinations, studies, engineering
and environmental tests and investigations (the IIlnspections") of the Property as
Lessee deems advisable in its sole discretion. Lessee shall notify Lessor in writing of its
intention to enter the Property at least 48 hours prior to such intended entry. In
conducting such Inspections on the Property, Lessee and its agents and representatives
shall restore the Property to the condition in which the same was found before any
such Inspection was undertaken. Lessee indemnifies and holds Lessor harmless from
any and all loss, damage or claim therefore arising, directly or indirectly, out of Lessee's
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Inspections of the Property, Lessor's own intentional misconduct or gross negligence
excepted.
5. Exercise of Option. This Option may be exercised by Lessee upon 30 days' prior written
notice to Lessor.
6. Option Payment. Lessee shall pay $1,200 as consideration for this Option, which payment
has previously been paid to Lessor as a deposit made in connection with its bid submission
and shall be applied by Lessor to this Option.
Term of Option Agreement. This Option to enter into a lease shall expire on January 31,
2014. Lessee may terminate this Option prior to such date if (i) Lessee is notified that it
will not receive an award of CDBG funds from TPCG in an amount equal to at least
$5,700,000, (ii) Lessee fails to obtain financing to complete the Development as provided in
the CDBG application, (iii) Lessee determines that environmental conditions on the
Property render the Property undevelopable as residential apartments or economically
infeasible. Lessor may terminate this Option upon notification to Lessee that Lessee is not
a qualified purchaser under the competitive bidding process for the sale of the Property.
7. Risk of Loss or Damage. Subject to Section 4 above, all risk of loss or damage to the
Property by fire or other casualty shall remain with Lessor until execution of the Lease.
8. Notices. All notices, requests, demands, approvals, or other communications given
hereunder or in connection with this Option shall be in writing and shall be deemed
given when delivered by hand or sent by registered or certified mail, return receipt
requested, addressed as follows:
If to Lessor:
With a Copy to:
If to Lessee:
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Terrebonne Parish School District
201 Stadium Drive
Houma, Louisiana 70360
Attention: Mr. Philip Martin
Telephone: (985) 876-7400
Fax: (985) 972-0054
Terrebonne Parish School Board
P. O. Box 5097
Houma, LA 70361
Terrebonne Revitalization Company, LLC
c/o Ray T. Spadafora
812 Gravier Street, Suite 200
New Orleans, LA 70112
9. Assignment. This Option shall not be assignable by Lessee, except upon written consent
of Lessor.
10. Counterparts. This Option may be executed in counterparts, each of which shall be
deemed original, but all of which, together, shall constitute one instrument.
11. Interpretation and Governing Law. This Option shall not be construed against the party
who prepared it but shall be construed as though prepared by both parties. This Option
shall be construed, interpreted, and governed by the laws of the State of Louisiana.
12. Severability. If any portion of this Option is declared by a court of competent
jurisdiction to be invalid or unenforceable such portion shall be deemed severed from
this Option and if feasible the remaining parts shall continue in full force as though such
invalid or unenforceable provision had not been part of this Option.
13. Parties Bound. No officer, director, shareholder, employee, agent, or other person
authorized to act for and on behalf of either party shall be personally liable for any
obligation, express or implied, hereunder.
14. Modification of Option. This Option may not be altered, modified, rescinded, or
extended orally. This Option may be amended, supplemented or changed only by a
writing signed or authorized by or on behalf of the party to be bound thereby.
15. Conflict of Interest. The Lessee has no conflict of interest, and shall inform the Lessor of
any subsequent potential conflict of interest that would: impair the Lessee's ability to
effectuate orderly progress of the Development.
16. Successors. The terms, covenants, agreements, provisions, and conditions contained
herein shall bind and inure to the benefit of the parties hereto, their successors and
assigns.
17. Headings. The headings in this Option are inserted for convenience only and shall not
be used to define, limit or describe the scope of this Option or any of the obligations
herein.
18. Construction. Whenever in this Option a pronoun is used, it shall be construed to
represent either the singular or the plural, either the masculine or the feminine, as the
case shall demand.
19. Approval by Terrebonne Parish School Board. This Option is subject in all respects to the
approval of the Terrebonne Parish School Board. No obligations may be enforced
against Lessor, nor rights conferred on Lessee, nor may the Option be exercised,
without the express written approval of this Option by said School Board.
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IN WITNESS WHEREOF, the Lessor and Lessee have each duly executed, or caused to be
duly executed, this Option as of the date first written above.
LESSOR:
Terrebonne Parish School Board
By:
'* 7)ah
LESSEE:


Title: ecretary
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