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 7 notice of election to do so, accompanied by properly executed copies of the Lease in triplicate. • Failure of Optionee to fully and satisfactorily meet the terms and conditions of the Option Agreement within the time limits stated shall terminate Optionee's rights. • Upon execution of this Option Agreement, the Optionee shall execute, acknowledge, and deliver to Old Republic Title Company (the "Escrow Holder") a quitclaim deed, quitclaiming all right to title and interest created by the Option Agreement back to the Optionor ("Quitclaim Deed"). The Quitclaim Deed shall be retained by the Escrow Holder for the duration of the Option Agreement and Optionor shall be entitled to instruct the Escrow Holder to record the Quitclaim Deed provided however, that Optionor shall first deliver to Optionee at least five (5) days' prior to written notice of its intention to authorize Escrow Holder to record the Quitclaim Deed. The Option Agreement has been signed by the Developer 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 is contingent on approval of the Joint Powers Agreement. Sixty -Five (65) Year Ground Lease The sixty-five (65) year Ground Lease is between the County of Orange ("County") and the Housing Authority ("Agency") together as the "Lessor" and the Developer as the "Tenant" (Exhibit 4). In its simplest form, the Ground Lease binds the Agency and the County into a 65-year Ground Lease with the Developer to develop the Crossroads at Washington on the jointly owned parcel at 1126 and 1146 E. Washington Ave. The purpose of the Ground Lease is to ground lease the jointly owned parcel by the County and Agency to the Developer for no more than 65 years from the date they receive their Certificate of Occupancy. At that point, the base rent described in the Agreement shall become due and payable. The following is a list of key items agreed upon in the 65-year Ground Lease: • Term: sixty-five (65) years, commencing on the Effective Date of the lease, and shall expire at 12:00 midnight Pacific Standard Time on the 62nd anniversary of the Commencement Date. The Effective Date is the date when the Tenant takes possession of the property and starts construction. No more than three years from that date, the Commencement Date is the date when the Tenant receives their Certificate of Occupancy. • Tenant accepts the parcel "as -is". • Tenant shall pay to the County and Agency a base rent in the form of residual receipts in the Project's cash flow waterfall. The County will receive 33.4% of the available residual receipts and the Agency will receive 33.3% (the .01 % difference is due to the larger subsidy provided by the County for the entire Project). The total base rent payable to the Agency is calculated per the proportional value allocation below. The base rent will accumulate 3% simple interest beginning on the Effective Date of the Lease: 80A-7