i - option agreement sp ed lease

7/27/2019 I - Option Agreement Sp Ed Lease

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OPTION TO ENTER INTO A COMMERCIAL LEASE AGREEMENTBY: TERREBONNE PARISH SCHOOL BOARDAND: TERREBONNE REVITALIZATION COMPANY, LLC

STATE OF LOUISIANAPARISH 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 limitedliability 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 inParagraph 1 below (the IIProperty"), and is owned by Lessor. The Property includes buildingsthat 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 quali fied Lessee;Lessor acknowledges that Lessee intends to rehabilitate the Property to create approximately55 residential housing units (the "Development").

Lessor is willing to lease the Property to Lessee until a qualified purchaser has beenidentified and terms of a sale are agreed upon between Lessor and such qualified purchaser. IfLessee qualifies as purchaser pursuant to any public bid process fo r 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 theTerrebonne Parish Consolidated Government (TPCG) with an allocation of CommunityDevelopment Block Grant Funds (CDBG) and equity capital raised by Lessor arising ou t of anallocation of low income housing tax credits (IIUHTCs ll ) from the Louisiana Housing Corporation(the ((LHCII ).

In order fo r 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 toevidence its intent to transfer its interest in the Property to Lessee should Lessee qualify as thewinning bidder under a competitive process.

NOW THEREFORE, in consideration of the Option Payment to the Lessor by Lessee (asdefined below), and fo r other good and valuable consideration (the receipt and sufficiency ofwhich are hereby acknowledged), and intending to be legally bound, Lessor hereby grants toLessee the exclusive right and option to lease the Property, on the following terms andconditions:

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1. Property. The Property, as further described in Exhibit A, is all of Blocks 12, 51, 63, and64, as well as the St. Francis CYO lot (bounded by Grinage St., Point St., Goode St., andAcademy St.) in the 03C Ward/District of Houma, Terrebonne Parish.

2. Agreement to Enter Lease. Upon exercise of this Option, Lessor and Lessee will enterinto a lease (the "Lease") that will contain the terms set forth in Section 3 along withsuch other terms and conditions as are customary or appropriate and are agreed to byLessor and Lessee.

3. Lease Terms. The parties agree that the Lease between the parties will contain thefollowing 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 allimprovements on the Property.

e. Development. The lease shall provide, inter alia, that Lessee, as lessee, willrehabilita te certain improvements currently located on the Property andconstruct an apartment complex with approximately 55 apartment units.LESSEE may make improvements and renovations at LESSEE's sole costs andexpense to the LEASE PREMISES. In connection with any improvements made,LESSEE shall satisfy any and all outstanding claims resulting therefrom. In theevent of a failure by LESSEE to satisfy,all such legitimate claims, therebyresulting in the filing of any lien or other encumbrance against the LEASEPREMISES, LESSOR shall be entitled to demand and receive the entire rent forthe unexpired term, or the alternative, to cancel the subject lease, all withoutrelieving LESSEE of any obligation incurred in connection with the making of saidimprovements. All improvements made to the LEASE PREMISES shall, at thetermination of the lease, become the property of LESSOR without compensationto LESEE for the value of the same.Should LESSER at any time violate any of the obligations or conditions of thislease, or fail to pay the rent, or electric bill or similar charges punctually atmaturity, as stipulated, or upon the filing of a bankruptcy receivership, or respitepetition by or against LESSER, or upon LESSEE's suspension, failure of insolvency


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the rent fo r the whole unexpired term of this lease shall, without putting LESSERin default, at once become due and eligible, and in any such event, LESSOR shallhave the option either at once to demand the entire rent for the wholeunexpired term or to immediately cancel this lease without placing LESSEE indefault; LESSEE to remain liable fo r all damages to LESSOR; LESSEE herebyassenting thereto and expressly waiving the legal notice to vacate the premises.Failure to strictly and promptly enforce these conditions shall in no way beconstrued or operate as a waiver of LESSOR's rights, LESSOR reserving the rightto always enforce all conditions and obligations including the payment of rent,or to cancel this lease, regardless of any indulgences or extensions previouslygranted.Should the premises be vacated or abandoned by LESSEE because of ejectmentfor breach hereof, or otherwise should the LESSEE begin to remove personalproperty to prejudice of LESSOR'S lien fo r rent fo r the unexpired term, the entirerent, together with attorney's fees shall at once become due and payable andLESSOR, at its option, has the right to cancel the lease, or re-enter and le t saidpremises for such price and on such terms as may be immediately obtainableand apply the net amount realized to the payment of the rent.

f. Operating Expenses and Taxes. All operat ing expenses and property taxes, ifany, shall become the sole responsibility of Lessee upon execution of the Leaseand payable to Lessor or directly to the appropriate taxing authority asadditional rent. The Lessee shall be responsible for all utility bills attributable tothe leased premises and shall promptlypay same to each respective furnisher ofsaid utilities when done.

g. Costs and Expenses. All costs and expenses of title examination, andpreparation and recording of the Lease (other than for Lessor's own review ofsame), including but not limited to all transfer and recordation costs, shall bepaid by the Lessee.

h. Insurance: LESSEE shall, at all times during the term of this lease, maintain witha good and solvent insurance company having at least an A+ rating, a policy ofPublic Liability Insurance containing a minimum coverage of $1,000,000.00 peroccurrence. LESSEE shall furnish to LESSOR throughout the primary termcurrent certificates evidencing the effectiveness of said required insurance.LESSEE shall cause LESSOR to be named as an additional insured under saidpolicy, a 30-day notice of cancellation, and a "waiver of subrogation". LESSEEmay i f desired, carry insurance to cover personal contents, LESSOR being underno duty or obligation for such insurance.


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LESSEE specifically agrees to indemnify and hold harmless LESSOR, from allliability fo r death of, or injury to persons or damage to property, whether arisingout of defects in the LEASE PREMISES, or occasioned by, or as a result ofLESSEE'S occupancy of the LEASED PREMISES, and to defend at its cost andexpense any and all legal actions instituted in connection therewith, and to payany final judgment resulting therefrom. In the event of a transfer of thepremises described herein to a third party, and should LESSER refuse to extendsuch indemnity to any such transferee upon request, then in such event, at theoption of said transferee, said lease may be ipso facto terminated.LESSOR and LESSEE acknowledge that LESSEE assumes responsibility for thecondition of the premises and LESSOR, availing itsel f of the provision of LSA R.S.9:3221, shall not be liable for injuries caused by an defect therein, to LESSOR orany other person on the premises whether on the premises at LESSEE'Sinvitation or not, LESSEE agreeing to fully indemnify and hold LESSOR harmlessfor all such claims.LESSEE agrees to pay all costs and reasonable at torney's fees incurred inenforcing the provisions of this lease.LESSOR reserved at all times during the term of this lease the right to sell orotherwise transfer the LEASED PREMISES, but agrees that any such transfer shallbe made subject to the lease contract herein.At the expiration of this lease, or its termination fo r cause, LESSEE agrees toimmediately surrender all keys to the leased premises and to vacate same, andto lease said premises in broom clean conditions free of all trash. Should LESSEEfail 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 immediatelyupon execution of the Lease.

4. Access to Property. Through the term of this Option (as described below), Lessee, andits authorized agents and representatives, shall have access to the Property at allreasonable times for the purpose of making such examinations, studies, engineeringand environmental tests and investigations (the IIlnspections") of the Property asLessee deems advisable in its sole discretion. Lessee shall notify Lessor in writing of itsintention to enter the Property at least 48 hours prior to such intended entry. Inconducting such Inspections on the Property, Lessee and its agents and representativesshall restore the Property to the condition in which the same was found before anysuch Inspection was undertaken. Lessee indemnifies and holds Lessor harmless fromany 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 negligenceexcepted.

5. Exercise of Option. This Option may be exercised by Lessee upon 30 days' prior writtennotice to Lessor.

6. Option Payment. Lessee shall pay $1,200 as consideration for this Option, which paymenthas previously been paid to Lessor as a deposit made in connection with its bid submissionand 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 itwill 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 inthe CDBG application, (iii) Lessee determines that environmental conditions on theProperty render the Property undevelopable as residential apartments or economicallyinfeasible. Lessor may terminate this Option upon notification to Lessee that Lessee is nota 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 theProperty by fire or other casualty shall remain with Lessor until execution of the Lease.

8. Notices. All notices, requests, demands, approvals, or other communications givenhereunder or in connection with this Option shall be in writing and shall be deemedgiven when delivered by hand or sent by registered or certified mail, return receiptrequested, addressed as follows:If to Lessor:

With a Copy to :

If to Lessee:

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Terrebonne Parish School District201 Stadium DriveHouma, Louisiana 70360Attention: Mr. Philip MartinTelephone: (985) 876-7400Fax: (985) 972-0054Terrebonne Parish School BoardP. O. Box 5097Houma, LA 70361Terrebonne Revitalization Company, LLCc/o Ray T. Spadafora812 Gravier Street, Suite 200New Orleans, LA 70112


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9. Assignment. This Option shall not be assignable by Lessee, except upon written consentof Lessor.

10. Counterparts. This Option may be executed in counterparts, each of which shall bedeemed original, but all of which, together, shall constitute one instrument.

11. Interpretation and Governing Law. This Option shall not be construed against the partywho prepared it but shall be construed as though prepared by both parties. This Optionshall 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 competentjurisdiction to be invalid or unenforceable such portion shall be deemed severed fromthis Option and if feasible the remaining parts shall continue in full force as though suchinvalid or unenforceable provision had not been part of this Option.

13. Parties Bound. No officer, director, shareholder, employee, agent, or other personauthorized to act for and on behalf of either party shall be personally liable for anyobligation, express or implied, hereunder.

14. Modification of Option. This Option may not be altered, modified, rescinded, orextended orally. This Option may be amended, supplemented or changed only by awrit ing 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 ofany subsequent potential conflict of interest that would: impair the Lessee's ability toeffectuate orderly progress of the Development.

16. Successors. The terms, covenants, agreements, provisions, and conditions containedherein shall bind and inure to the benefit of the parties hereto, their successors andassigns.

17. Headings. The headings in this Option are inserted for convenience only and shall notbe used to define, limit or describe the scope of this Option or any of the obligationsherein.

18. Construction. Whenever in this Option a pronoun is used, it shall be construed torepresent either the singular or the plural, ei ther the masculine or the feminine, as thecase shall demand.

19. Approval by Terrebonne Parish School Board. This Option is subject in all respects to theapproval of the Terrebonne Parish School Board. No obligations may be enforcedagainst 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 beduly executed, this Option as of the date first written above.

LESSOR:Terrebonne Parish School BoardBy: '* )ah 1 ) ~ r 1 ; ; xLESSEE:

: : ~ r ~ e b o n n e ~ d 2 _ - -N a m e ~ ~ yTitle: ecretary

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i - option agreement sp ed lease

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