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ARTICLE 2. LEASE OF THE LAND Section 2.1 Lease of Land. Subject to the terms hereof and in consideration of the covenants of payment and performance stipulated herein, Lessor leases the Land to Lessee, and in consideration thereof, Lessee takes, hires and leases the Land from the Lessor, pursuant to the terms of this Lease. Section 2.2 Term. Unless sooner terminated pursuant to the provisions hereof, this Lease shall continue in full force and effect for a term ("Term"), commencing on the Commencement Date and expiring on midnight the day immediately preceding the seventy-fifth (75th) anniversary thereof. Section 2.3 Use. Subject to the provisions hereof, Lessee shall use the Leased Premises for the construction and operation of the Project, which includes the construction, development and operation of the Improvements on the Land in accordance with the restrictions and requirements set forth in Article 3 hereof. Further, Lessee agrees: (a) not to use the Leased Premises for any disorderly or unlawful purpose; (b) to use reasonable efforts to prevent any Tenant from committing or maintaining any nuisance or unlawful conduct on or about the Leased Premises; (c) to use reasonable efforts to prevent any action by any Tenant that would cause Lessee to violate any of the covenants and conditions of this Lease with respect to the Improvements; (d) to take reasonable action, if necessary, to abate any action by any Tenant that violates, or that would cause Lessee to violate this Lease; and (e) subject to the laws of the State of California and the rights of Tenants, to permit Lessor and its agents to inspect the Leased Premises or any part thereof at any reasonable time during the Term. Section 2.4 Possession. Lessor agrees to and shall provide possession of the Leased Premises to Lessee upon close of construction financing, free and clear of all rights to possession or use by any tenants or other individuals or entities other than Lessee (except as disclosed to Lessee or apparent from Lessee's inspection), and free and clear of any encumbrances except as expressly approved by Lessee in writing. Lessee hereby approves the TCAC Rider, the Regulatory Agreement, and the encumbrances associated with the Senior Loans, the City Loan, the AHP Loan, and the County Loan. Section 2.5 Memorandum of Lease. The Parties shall execute and acknowledge a memorandum of ground lease, substantially in the form attached hereto as Exhibit C, which shall be recorded at Lessee's expense Section 2.6 AS -IS Conveyance. Lessee specifically acknowledges that Lessor is leasing the Leased Premises to Lessee on an "AS IS", "WHERE IS" and "WITH ALL FAULTS" 8 OAK 14823-7863-2026 v2