ARTICLE 4.
GROUND LEASE.

Section 4.1 Term. The Ground Lease will be for an initial term of forty (40) years, with five (5) separately exercisable options, each for an additional term of four (4) years, and will be co-terminous with the Stadium Lease and Team Sublease. Upon the 49ers Stadium Company's exercise of any extension option pursuant to the Stadium Lease, the Ground Lease will automatically be extended for the corresponding extension term.

Section 4.2 City's Interest Not Subordinated. The City will not subordinate its interest in any property, including the Stadium Site and surrounding land or parking areas, or in the Ground Rent to any financing for the Stadium.

Section 4.3 Ground Rent. During the term of the Ground Lease, the Stadium Authority will pay to the City, as ground rent ("Ground Rent"), the sum of (i) Fixed Ground Rent, (ii) any Performance-Based Rent and (iii) any SA Excess Revenue Payment, in accordance with the following:

1. Fixed Ground Rent. For each year, commencing in the first year of Stadium operations (i.e., the first year in which NFL Games will be played in the Stadium), Ground Rent will include a fixed base rent as described in this Section 4.1(a), subject to increase in the event of a Second Team as described in Section 16.1(d) ("Fixed Ground Rent"). Fixed Ground Rent will be payable by the Stadium Authority to the City and will not be reduced by any payment of Performance-Based Rent or any SA Excess Revenue Payment as described below. Fixed Ground Rent for the first (1st) year of Stadium operations will equal One Hundred Eighty Thousand Dollars ($180,000). Beginning in the second (2nd) year of Stadium operations and annually thereafter through the tenth (10th) year of Stadium operations, the Fixed Ground Rent will increase annually by Thirty-Five Thousand Dollars ($35,000). Beginning in the eleventh (11th) year of Stadium operations, Fixed Ground Rent will be increased to equal One Million Dollars ($1,000,000), and thereafter will be increased by One Hundred Thousand Dollars ($100,000) every five (5) years through the end of the initial term of the Ground Lease. If the term of the Ground Lease is extended, then, during the first extension term, the Fixed Ground Rent will equal One Million Five Hundred Eighty Thousand Dollars ($1,580,000); and if and to the extent the Ground Lease is further extended, the Fixed Ground Rent will be increased by Eighty Thousand Dollars ($80,000) every four (4) years thereafter through the expiration of the term of the Ground Lease. At the City's option, the Stadium Authority will pay in advance prior to opening of the Stadium (and 49ers Stadium Company will advance funds to the Stadium Authority for this purpose), as a credit against Fixed Ground Rent for the first two years of Stadium operations, up to the amount of Three Hundred Ninety Five Thousand Dollars ($395,000).
2. Performance Based Rent. For each year, in addition to Fixed Ground Rent, Ground Rent will include performance-based rent ("Performance-Based Rent") equal to (i) fifty percent (50%) of the Net Income from Non-NFL Events, less (ii) the sum of the following (collectively, "Performance-Based Rent Credits"):
   1. Fifty percent (50%) of the Fixed Ground Rent (including the increase in Fixed Ground Rent in the event of a Second Team) payable for such year, plus
   2. The Credited Public Safety Costs, if any, for such year, plus
   3. Following expiration of the Agency's ability to collect tax increment in the Redevelopment Project Area, the portion of property tax revenue actually received by the City for that year on account of all possessory interests in the Stadium, plus
   4. Any Permitted Credits Carry-forward (as defined below). In no event may Performance-Based Rent be less than zero for any year. As used herein, the "Permitted Credits Carry-forward" means the total amount, if any, of the Performance-Based Rent Credits listed in subparagraphs (1), (2) and (3) above that have not previously been applied in the calculation of Performance-Based Rent in the preceding five (5) years. Performance-Based Rent Credits listed in subparagraphs (1), (2) and (3) above, if not used within the year incurred or the next five (5) succeeding years, will expire and will not be included within Permitted Credits Carry-forward thereafter.
3. SA Excess Revenue Payment. In addition to Fixed Ground Rent and Performance-Based Rent, for each year in which the Stadium Authority has Excess Revenues after contribution to the Stadium Capital Expenditure Reserve as provided in clause (a) of Article 15 of the Term Sheet, Ground Rent will include the amount of the Stadium Authority's payment to the City of such Excess Revenues in accordance with the priorities for payment set forth in clause (b) of Article 15 of the Term Sheet ("SA Excess Revenue Payment").

Section 4.4 City of Santa Clara Senior and Youth Program Fee. In addition to Ground Rent, the Stadium Authority will pay the City the annual proceeds from the City of Santa Clara Senior and Youth Program Fee, up to a maximum amount of Two Hundred Fifty Thousand Dollars ($250,000) per year. The amount of such fee paid to the City will fund City programs for parks and recreation and libraries, including, without limitation, senior activities and the Youth Championship Team Fund. The "City of Santa Clara Senior and Youth Program Fee" is a fee that the Stadium Authority will require be imposed on each ticket for NFL Games in the Stadium during the term of the Stadium Lease, equal to thirty-five cents ($0.35) per ticket.