ARTICLE 3.
DISPOSITION AND DEVELOPMENT AGREEMENT.

Section 3.1 DDA and Preconditions to Closing. The City and Stadium Authority will enter into a Disposition and Development Agreement ("DDA") with 49ers Stadium Company. The DDA will set forth the predevelopment activities to be performed, the preconditions to commencement of construction of the Stadium and the amount and timing of Agency, CFD, Stadium Authority and 49ers Stadium Company funding of construction costs. The execution of the Ground Lease and the Stadium Lease (the "Closing") will be conditioned on the satisfaction of various conditions ("Conditions to Closing"), including without limitation, the following:

1. The Parties' approval of the design of the Stadium;
2. The Parties' approval of a schedule for the commencement and completion of construction of the Stadium;
3. The Parties' approval of a guaranteed maximum price design/build contract with a design/build contractor that is procured in accordance with applicable laws, which may include an amendment of the City Charter as described in Section 6.3 below ("Construction Contract");
4. The Parties' approval of the Development Budget and the Project Management Agreement;
5. The Parties' approval of a detailed Finance Plan as described in Article 7 below;
6. The Parties' approval of the Stadium Lease, Team Sublease and the Non-Relocation Agreement;
7. The Parties' approval of line items to be included in the Reimbursable Expenses;
8. The Parties' approval of a parking plan for NFL Events;
9. The Parties' approval of the Public Safety Agreement; and,
10. All entitlements and other regulatory approvals necessary to commence construction are final, including but not limited to any necessary SB 211 Plan Amendment to the Bayshore North Redevelopment Plan, zoning amendment and street vacation.

Section 3.2 Leasing the Stadium Site and the Stadium. At such time as all Conditions to Closing, as more fully set forth in the DDA, are satisfied, the following will occur:

1. Execution of Ground Lease. The City will lease the Stadium Site to the Stadium Authority pursuant to the Ground Lease and the Stadium Authority will commence construction of the Stadium;
2. Execution of Stadium Lease. 49ers Stadium Company will concurrently lease the Stadium from the Stadium Authority, subject to the Stadium Authority's obligation to construct the Stadium;
3. Execution of Team Sublease. The Team will concurrently sublease the Stadium from 49ers Stadium Company for the same initial term and option terms as contained in the Stadium Lease (the "Team Sublease"). The Team will also enter into an agreement with the Stadium Authority pursuant to which the Team will, after the completion of construction of the Stadium, commit to play in the Stadium not less than one pre-season game each year (so long as there are at least two scheduled pre-season home games in that year) and all of its regular season and post-season home games for the term of the Team Sublease, except as may be prescribed by the NFL or as may otherwise agreed upon by the Team, 49ers Stadium Company and the Stadium Authority (e.g., during reconstruction in the event of a casualty) (the "Non-Relocation Agreement").