80A - PH AGMT WITH COUNTY OF ORANGE 65 YR GROUND LEASE

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Joint Powers Authority, Ground Lease, and Option Agreement For the Crossroads at Washington February 18, 2020 Page 6 original acreage and proportional interests with the County owning 36.3% undivided interest and the Agency owning 63.69% undivided interest. The approval of both the Agency and County shall be required for decisions regarding management and disposition of the joint property. The Joint Powers Agreement has been signed by the County to acknowledge their acceptance of the terms. The Agreement is not considered final until the Agency and County Board of Supervisors have reviewed and approved the Agreement and the Agreement is executed by all parties. The approval of the Option Agreement and 65-year Ground Lease is contingent on approval of the Joint Powers Agreement. Option Agreement The Option Agreement is between the County of Orange ("County") and the Housing Authority ("Agency") together as the "Optionor" and Washington Santa Ana Housing Partners, L.P. as the "Optionee" (Exhibit 3). In its simplest form, the Option Agreement allows the Agency and the County to enter into the 65-year Ground Lease with the Developer after they meet several conditions listed in the Option Agreement. The purpose of the Option Agreement is to protect the County and City from entering into a 65-year Ground Lease with a developer who is not ready and able to develop the Project. It requires the Developer to meet specific terms and conditions before their "Option" to enter into the Ground Lease can be exercised. The following is a list of key items agreed upon in the Option Agreement: • Term: thirty-six (36) calendar months commencing on February 25, 2020. • If at any point during the Term the Optionee has failed to act diligently and in good faith to obtain funding or to plan and permit the Project, the Optionor may terminate the Option Agreement with fifteen (15) days written notice to Optionee. • The price of the Option is $36, which shall be paid to Optionor prior to the effective date. • The Option may not be exercised until the following terms and conditions shall have been met: o The Optionee shall submit preliminary plans for the development and use of the site for the Project for Optionor's approval including a detailed site plan, cost estimate and construction schedule. o The California Environmental Quality Act has been fully satisfied. o The Project is entitled by the City of Santa Ana. o The Optionee shall submit construction contract documents and cost estimates for development of the site including complete architectural, landscape and engineering working drawings; outline unit specifications; construction contract; and construction schedule. o The Optionee has received their grading permit from the City. o The Optionee shall submit satisfactory evidence of Optionee's ability to finance the cost of the development, assurances of construction completion, and evidence of insurance coverage. • Optionee has the right to enter the premises to meet the conditions in the Agreement and is indemnified from liability. • At any time during the Term that Optionee shall have performed all conditions as set forth in the Option Agreement, Optionee may exercise the Option by giving Optionor written 80A-6