DEPARTMENT Real Estate Services Division AGENDA NO. 9
MEETING DATE June 25, 2024
AGENDA ITEM
Public Utilities Commission
City and County of San Francisco
Real Estate Lease: Regular Calendar
Real Estate Director: Rosanna Russell
Approve a Five-Year Lease with Two 2-Year Extension Options for 1900 Oakdale Avenue, San Francisco at a $706,722 Annual Rent
Summary of
Proposed
Commission Action:
Approve the t erms and conditions and authorize the General Manager to execute a five-year lease, with two 2-year options to extend the term , with Lolita Lodhia, Hersha Lodhia Miller and Sharmila Lodhia, as Co-Trustees of the Lodhia Living Trust dated 11/21/1994, as lan dlord (Landlord), for the San Francisco Public Utilities Commission Wastewater Enterprise (WWE) warehouse and office use of 1900 Oakdale Avenue , San Francisco at an initial annual Base R ent of $706,722 with no annual increases. This action constitutes the Approval Action for the Project for the purposes of the California Environmental Quality Act (CEQA), pursuant to San Francisco Administrative Code section 31.04(h). The Pl
anning Department has
determined that the Project is exempt from the CE QA. The Commission will rely on that determination to make its decision on this action.
Background: Two-thirds of the San Francisc o Public Utilities Commission (SFPUC) Southeast Treatment Plan t (SEP) will be replaced over the next six to 10 years while the SFPUC embarks on more than $2 billion of impr ovements at the SEP and other bayside WWE facilities under the Sewer System Improvement Program (SSIP ). Parking, laydown, and construction space is limited at the SEP. The WWE must relocate materials and supplies and move staff from the SEP during this SS IP construction and to provide spac e to accommodate potential new staff.
To address its critical space shortfall , the SFPUC seeks to lease a building with approximately 33,000 square feet of warehouse and office space, together with approximately 13,000 s quare feet of outdoor yard space at 1900 Oakdale Avenue in San Francisco (together, the Premises).
The SFPUC will use the Premises to relocate displaced materials, supplies and staff from the main WWE trade warehouses for Gardeners, Plumbers, and Green Infrastructure and the WWE Engineering Building.
The warehouse space at the Premises will ensure that WWE can store materials and supplies securely and efficiently . The office space at the Premises will provide a workspace for displaced staff presently working in the WWE Engineering Building and modulars trailers.
After touring several potential sites, SFPUC staff recommends the rental of the Premises to relocate displaced s taff, materials, and supplies due to the Agreement: Approve a Five-Year Lease at 1900 Oakdale Avenue, San Francisco Commission Meeting Date: June 25, 2024
Premises’ availability, suitability, and close proximity to the SEP.
Environmental
Review:
On June 13, 2024, t he San Francisco Planning Department determined the Project to be categorical ly exempt from environme ntal review under the CEQA Guidelines section 15301, Class 1 (Existing Facilities) , under Case Number 2024-005316ENV. The exemption determination can be found here:
link.
This action constitutes the Approval Action for the Project for the purposes of the CEQA, purs uant to San Francisco Administrative Code section
31.04(h).
Budget & Costs: Funding for the rent payments will be made from SFPUC Chart of Accounts No. 530110-20160-229292-10000-10030002-0004.
Description of
Agreement:
Landlord: Lolita Lodhia, Hersh a Lodhia Miller and
Sharmila Lodhia, as Co- Trustees of the Lodhia
Living Trust dated 11/21/1994
Tenant: City and County of San Francisco, a municipal
corporation, acting through the SFPUC
Premises: Approximately 33,000 square foot building and 13,000 square foot outdoor yard at 1900
Oakdale Avenue, San Francisco, CA
Use: Warehouse, storage, offices, parking and
outdoor yard use and any other uses
commensurate with the existing zoning
Initial Term: Five years
Extension Option: Two 2-year options to exte nd the term of the Lease, to be exercised at City’s sole discretion.
Rental Rate: $706,722 per year with no annual increases until the commencement of any extended term.
The base rent for the first extended term will be
adjusted to $717,255 per year with no annual
increases. The base rent for the second
extended term will be adjusted to $742,359
with no annual increases.
Commencement Date: July 1, 2024
Expiration Date: June 30, 2029
Attachments: 1. SFPUC Resolution
2. Lease
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, While the San Francisco Public Utilities Commission (SFPUC) embarks on more than $2 bil lion of improvements at the Southeast Treatment Plant (SEP) and other bayside Wastewater Enterprise (WWE) facilities under the Sewer System Improvement Program (SSIP) , two-thirds of the SEP will be replaced over the next six to 10 years; and WHEREAS, The WWE must relocate materials and supplies and mov e s taff from the SEP during this SSIP construction and to provide space to accommodate potential new staff; and WHEREAS, Lolita Lodhia, Hersha Lodhia Miller and Sharmila Lodhia, as Co- Trustees of the Lodhia L iving Trust dated 11/21/1994 (Landlord), has agreed to lease to the City and County of San Francisco (City) , acting through the SFPUC, as the tenant, the use of a building consisting of approximately 33,000 square feet of warehouse and office space , together with approximately 13,000 square feet of outdoor yard space at 1900 Oakdale Avenue, San Francisco, California (together, the Premises); and
WHEREAS, The SFPUC will use the Premises to relocate displaced materials, supplies and staff from the main WWE t rade warehouses for Gardeners, Plumbers, and Green Infrastructure and the WWE Engineering Building; and
WHEREAS, The warehouse space at th e Premises will ensure that WWE can store displaced materials and supplies securely and efficiently . The office spac e at the Premises will provide a workspace for di splaced employees working in the WWE Engi neering Building and modular trailers; and
WHEREAS, After touring several other properties, SFPUC staff recommends the rental of the Pr emises to relocate displaced staff, materials, and supplies because of its avail ability, suitability, and close proximity to the SEP; and
WHEREAS, The City, through the SFPUC, desires to enter into a five-year lease (Lease), with Landlord, for the use of the Premises at a rental rate of $ 706,722 per year with no annual increases; and
WHEREAS, The Lease provides the City, through the SFPUC, with two 2-year options to extend the term of the Lease, to be exercised at the SFPUC’s sole discretion. The base rent for the first extended term will be adjusted to $717,255 per year with no annual increases. The base rent for the second extended term will be adjusted to $742,359 with no annual increases; and WHEREAS, Funding for the rent payments will be made from SFPUC Chart of Accounts No. 530110-20160-229292-10000-10030002-0004; and
WHEREAS, On June 13, 2024, the San Francisco Planning Department determined the Project to be categorically exempt from environmental review under the C EQA Guidelines section 15301, Cla ss 1 (Existing Facilities), under Case Number 2024- 005316ENV; now, therefore, be it
RESOLVED, That this Commission hereby approves the terms a nd conditions of the Lease; and be it
FURTHER RESOLVED, That this Commission hereby ratif ies, approves and author izes all actions heretofore taken by any City official in connection with the Lease; and, be it FURTHER RESOLVED, That this Commission hereby authorizes and directs the SFPUC General Manager to execute the Lease; and, be it
FURTHER RESOLVED, That this Commission herby authorizes the SFPUC General Manager to enter into any amendments o r m odifications to th e Lease, including without limitation, th e exhibits, that the General Manager determines, in consultation with the City Attorney, a re in the best interest of the City; do not materi ally increase the obligations or liabilities of the City; are necessary or advisable to effectuate the purposes and intent of the Lease or this resolution; and are in compliance with all applicable laws, in cluding the City Charter.
I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting of June 25, 2024.
Acting Commission Secretary, Public Utilities Commission
LEASE
between
LOLITA LODHIA, HERSHA LODHIA MILLER and SHARMILA LODHIA, as Co-Trustees of the LODHIA LIVING TRUST dated 11/21/1994, as Landlord
and
CITY AND COUNTY OF SAN FRANCISCO,
by and through its San Francisco Public Utilities Commission as Tenant
for the lease of
1900 Oakdale Avenue
San Francisco, California
May 30, 2024
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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Rev. March 2023
TABLE OF CONTENTS
Page
1. BASIC LEASE INFORMATION ...........................................................................1
2. PREMISES ..............................................................................................................3
2.1 Lease Premises .........................................................................................................3
2.2 Intentionally Omitted ...............................................................................................3
2.3 Condition of the Premises on Delivery ....................................................................3
2.4 Disability Access .....................................................................................................4
3. TERM ......................................................................................................................4
3.1 Term of Lease ..........................................................................................................4
3.2 Commencement Date and Expiration Date ..............................................................5
3.3 Delay in Delivery of Possession ..............................................................................5
3.4 Extension Option(s) .................................................................................................5
4. RENT .......................................................................................................................5
4.1 Base Rent .................................................................................................................5
4.2 Intentionally Omitted ...............................................................................................6
4.3 Base Rent for the Extended Term ............................................................................6
4.4 Additional Charges ..................................................................................................6
4.5 Intentionally Omitted ...............................................................................................6
4.6 Definitions................................................................................................................6
4.7 Intentionally Omitted ...............................................................................................7
4.8 Intentionally Omitted ...............................................................................................7
4.9 Intentionally Omitted ...............................................................................................7
4.10 Intentionally Omitted ...............................................................................................7
4.11 Intentionally Omitted ...............................................................................................7
4.12 Intentionally Omitted ...............................................................................................7
4.13 Intentionally Omitted ...............................................................................................7
4.14 Audits .......................................................................................................................7
4.15 Records ....................................................................................................................7
4.16 Payments by City .....................................................................................................7
4.17 Landlord’s Compliance with City Business and Tax Regulations Code .................7
4.18 Additional Services ..................................................................................................8
5. USE ..........................................................................................................................8
5.1 Permitted Use ...........................................................................................................8
5.2 Intentionally Omitted ...............................................................................................8
5.3 Interference with Access ..........................................................................................8 DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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6. INTENTIONALLY OMITTED ..............................................................................9
7. ALTERATIONS ......................................................................................................9
7.1 Alterations by City ...................................................................................................9
7.2 Title to Improvements ..............................................................................................9
7.3 City’s Personal Property ..........................................................................................9
7.4 Alteration by Landlord ...........................................................................................10
8. REPAIRS, REPLACEMENTS AND MAINTENANCE ......................................11
8.1 Landlord’s Repair Obligations ...............................................................................11
8.2 City’s Repair Obligations ......................................................................................11
8.3 Liens .......................................................................................................................12
9. UTILITIES AND SERVICES ...............................................................................12
9.1 Landlord’s Provision of Utilities ...........................................................................12
9.2 Services ..................................................................................................................12
9.3 Intentionally Omitted .............................................................................................12
9.4 Disruption in Essential Utilities or Services ..........................................................12
10. COMPLIANCE WITH LAWS; PREMISES CONDITION .................................13
10.1 Landlord’s Compliance with Laws; Premises Condition; Indemnity ....................13
10.2 City’s Compliance with Laws; Indemnity .............................................................13
10.3 City’s Compliance with Insurance Requirements ..................................................14
11. SUBORDINATION ...............................................................................................14
12. DAMAGE AND DESTRUCTION........................................................................15
13. EMINENT DOMAIN ............................................................................................16
13.1 Definitions..............................................................................................................16
13.2 General ...................................................................................................................16
13.3 Total Taking; Automatic Termination ...................................................................16
13.4 Partial Taking; Election to Terminate ....................................................................17
13.5 Termination of Lease; Rent and Award .................................................................17
13.6 Partial Taking; Continuation of Lease ...................................................................17
13.7 Temporary Taking .................................................................................................17
14. ASSIGNMENT AND SUBLETTING ..................................................................18
15. DEFAULT; REMEDIES .......................................................................................18
15.1 Events of Default by City ......................................................................................18
15.2 Landlord’s Remedies .............................................................................................19
15.3 Landlord’s Default .................................................................................................19
16. INDEMNITIES ......................................................................................................20
16.1 City’s Indemnity ....................................................................................................20 DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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16.2 Landlord’s Indemnity .............................................................................................20
17. INSURANCE .........................................................................................................20
17.1 City’s Self-Insurance .............................................................................................20
17.2 Landlord’s Insurance .............................................................................................20
17.3 Waiver of Subrogation ...........................................................................................21
18. ACCESS BY LANDLORD ...................................................................................21
19. ESTOPPEL CERTIFICATES ...............................................................................21
20. SURRENDER OF PREMISES..............................................................................22
21. HAZARDOUS MATERIALS ...............................................................................22
21.1 Definitions..............................................................................................................22
21.2 Landlord’s Representations and Covenants ...........................................................23
21.3 Landlord’s Environmental Indemnity ....................................................................23
21.4 City’s Covenants ....................................................................................................23
21.5 City’s Environmental Indemnity ............................................................................23
22. SPECIAL PROVISIONS .......................................................................................23
22.1 First Offer to Purchase ...........................................................................................23
23. CITY PROVISIONS ..............................................................................................25
23.1 MacBride Principles - Northern Ireland ................................................................25
23.2 Controller’s Certification of Funds ........................................................................25
23.3 Prevailing Wages and Working Conditions ...........................................................25
23.4 Non Discrimination in City Contracts and Benefits Ordinance.............................26
23.5 Intentionally Omitted .............................................................................................27
23.6 Bicycle Parking Facilities ......................................................................................27
23.7 Green Building Requirements for City Buildings .................................................27
23.8 Sunshine Ordinance ...............................................................................................27
23.9 Conflicts of Interest................................................................................................27
23.10 Notification of Prohibition on Contributions .........................................................27
23.11 Preservative-Treated Wood Containing Arsenic ...................................................28
24. GENERALLY APPLICABLE PROVISIONS ......................................................28
24.1 Notices ...................................................................................................................28
24.2 No Implied Waiver ................................................................................................28
24.3 Amendments ..........................................................................................................29
24.4 Authority ................................................................................................................29
24.5 Parties and Their Agents; Approvals .....................................................................29
24.6 Interpretation of Lease ...........................................................................................29
24.7 Successors and Assigns ..........................................................................................30 DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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24.8 Brokers ...................................................................................................................30
24.9 Severability ............................................................................................................30
24.10 Governing Law ......................................................................................................30
24.11 Entire Agreement; Incorporation of Exhibits ........................................................31
24.12 Holding Over .........................................................................................................31
24.13 Cumulative Remedies ............................................................................................31
24.14 Time of Essence .....................................................................................................31
24.15 Survival of Indemnities ..........................................................................................31
24.16 Signs .......................................................................................................................31
24.17 Quiet Enjoyment and Title .....................................................................................32
24.18 Bankruptcy .............................................................................................................32
24.19 Transfer of Landlord’s Interest ..............................................................................32
24.20 Non-Liability of City Officials, Employees, and Agents ......................................32
24.21 Counterparts ...........................................................................................................32
24.22 Effective Date ........................................................................................................32
24.23 Certification by Landlord .......................................................................................33
24.24 Intentionally Omitted .............................................................................................33
24.25 Intentionally Omitted .............................................................................................33
24.26 Cooperative Drafting .............................................................................................33
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A — Floor Plans of Premises
EXHIBIT B — Notice of Commencement Date
EXHIBIT C — Intentionally Omitted
EXHIBIT D — Intentionally Omitted
EXHIBIT E — Intentionally Omitted
EXHIBIT F — Intentionally Omitted
EXHIBIT G — Intentionally Omitted
EXHIBIT H — Intentionally Omitted
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
1 Rev. March 2023
LEASE
THIS LEASE (this “Lease”), dated for reference purposes only as of May 30, 2024, is by and between LOLITA LODHIA, HERSHA LODHIA MILLER and SHARMILA LODHIA, as Co-Trustees of the LODHIA LIVING TRUST dated 11/21/1994 (“Landlord”), and the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation (“City” or “Tenant”), by and through its San Francisco Public Utilities Commission (“SFPUC”).
Landlord and City hereby agree as follows:
1. BASIC LEASE INFORMATION
The following is a summary of basic lease information (the “Basic Lease Information”).
Each item below is deemed to incorporate all of the terms in this Lease pertaining to that item. If there is any conflict between the information in this Section and any more specific provision of this Lease, the more specific provision will control.
Lease Reference Date: May 30, 2024
Landlord: Lolita Lodhia, Hersha Lodhia Miller and
Sharmila Lodhia, as Co-Trustees of the Lodhia
Living Trust dated 11/21/1994
Tenant: City and County of San Francisco, by and
through its Public Utilities Commission
Building (Section 2.1): The entire Building consisting of approximately 33,000 square feet of space
located at 1900 Oakdale Avenue, San
Francisco as shown on the attached Exhibit A.
Outdoor Yard An approximately 13,000 square foot fenced outdoor yard and parking area as shown on the
attached Exhibit A.
Premises (Section 2.1): The Building and the Outdoor Yard as shown on the attached Exhibit A.
Term (Section 3): Estimated Commencement Date:
July 1, 2024
Expiration Date:
June 30, 2029
Extension Option(s) (Section 3.4): Two (2) additional consecutive terms of two (2) years each, exercisable by City by notice to
Landlord given not less than 180 days in
advance, with Base Rent as provided in
Section 4.3.
Base Rent (Section 4.1): Annual Base Rent: $706,722
Monthly payments: $58,893.50
Base Rent Abatement: Landlord will abate fifty
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
2 Rev. March 2023
percent (50%) of the Base Rent due for the first
two (2) months of the Initial Term following
the Commencement Date.
Base Rent Adjustment; Adjustment Da tes
(Section 4.2):
None
Real Estate Taxes and Operating Expenses
(Section 4.4)
Landlord will pay the cost of Real Estate Taxes
and Operating Expenses.
Base Year: None
City’s Percentage Share (Section 4.4): 100%
Permitted Use (Section 5.1): Warehouse, storage, offices, parking and outdoor yard use and any other uses
commensurate with the existing zoning
Leasehold Improvements (Section 6): None
Utilities (Section 9.1): City will pay the cost of utilities directly to utility providers.
Janitorial and Security Services (Section 9.2): City will supply and pay for janitorial and security services.
Notice Address of Landlord (Section 24.1): The Lodhia Living Trust 520 Rhodes Drive
Palo Alto, California 94303
Email: [email protected]
with copy to:
SSL Law Firm, LLP
505 Montgomery Street, Suite 620
San Francisco, California 94111
Attn: Joseph G. Tursi, Esq.
Landlord’s Key Contact: Hersha Lodhia-Miller
Landlord Contact Telephone No.: 415-613-7560
Tenant’s Notice Address (Section 24.1): Real Estate Services Division San Francisco Public Utilities Commission
525 Golden Gate Avenue, 10th Floor
San Francisco, California 94102
Attn: Real Estate Director
Re: 1900 Oakdale Lease
Email: [email protected]
with a copy to: Real Estate Division
25 Van Ness Avenue, Suite 400
San Francisco, CA 94102
Attn: Andrico Penick
Director of Property
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
3 Rev. March 2023
Re: 1900 Oakdale Lease/SFPUC
and to: Office of the City Attorney
City Hall, Room 234
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4682
Attn: Real Estate & Finance Team
Re: 1900 Oakdale Lease/SFPUC
Fax No.: (415) 554-4757
Tenant’s Key Contact: Steve Jones
Tenant Contact Telephone No.: 415-920-4928
Tenant’s Alternate Contact: Mike Maraviglia
Alternate Contact Telephone No.: 415-850-6766
Brokers (Section 24.8): HC&M Commercial
Other Noteworthy Provisions (Section 22): First Offer to Purchase
2. PREMISES
2.1 Lease Premises
Landlord leases to City and C ity leases from Landlord, subject to the provisions of this Lease, the Building and the Premises identified in the Basic Lease Information and shown on the floor plans attached as Exhibit A. Landlord and City hereby stipulate that any square footage that may have been used in calculating any of the ec onomic terms in this Lease is an approximation which Landlord and City agree is reasonable, and that no economic terms based upon such calculation are subject to revision, whether or not the actual square footage is more or less.
2.2 Intentionally Omitted
2.3 Condition of the Premises on Delivery
Landlord will deliver the Pr emises to City in good, broom clean condition, water tight , with th e outdoor yard, roof, roof membra ne, foundation, bearing and exterior walls, structural components, docks, windows, doors, door frames, demising walls, subflooring, gates, fencing, roll-up doors, exterior lighting, and the heating, ventilating, air conditi oning systems, plumbing systems, sump pumps, utility delivery systems, metering, drainage, electrical systems (including standard ceiling lighting, wiring, and electrical outlets), fire pro tection systems, sprinkler systems, life safety systems, s ecurity s ystems including cameras, and other mechanical, electrical, and communications systems of the Building (collec tively, the “Building Systems”) in good working order, condition, and repair, and all other systems in and serving the Premises in good working order, condition, and repa ir, and t he Premises in compliance with all applicable Laws, as provided in Se ction 10.1 (Landlord’s Compliance with Laws; Premises Condition; Indemnity).
Landlord, at its sole cost and expense, will ensu re that all fire alarm and sprinkler certifications are current and will upgrade the fire and life safety systems to be code compliant as of the Commencement Date. In addition, Landlord will use its best efforts to deliver the Premises with the ex isting warehouse racks (“Racks”) installed and left in the Premises by the previous DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
4 Rev. March 2023
tenant at the Premises as of the Commencement Date . City’s use of such shelving in its “as is” “where is” condition , will be without representation or warranty from Landlo rd, expre ss or implied, as to design, operation, or condition of the Racks, or its merchantability or fitness fo r any particular use or purpose . City releases Landlord from any claims City , officers, directors, agents or emplo yees, may have or may assert against Landlord arising out of or in connec tion with the Racks.
City and Landlord acknowledge that the Building’s elevator will not be delivered in operational condition and is currently de -commissioned, and that Landlord will have no obligation to make the elevator operational during the Term, or any extension thereof.
2.4 Disability Access
California Civil Code S ection 1938 requires commercial landlords to disclose to tenants whether the property being leased has undergone inspection by a C ertified Access Specialist (“CASp”) to determine whether the property meets all applicable construction -related accessibility requirements.
Landlord discloses (i) Landlord has not been issued a disability access inspection certificate as described in California Civil Code (“ CC”) Section 55.53(e), (ii) pursuant to CC Section 1938, that Landlord has not ordered, performed, or caused to be performed, a Certified Access Specialist (“CASp”) inspection of the Premises (sometimes referred to as “premises” or “sub ject premises” for the herein disclosures), and (iii) La ndlord makes the following statutory disclosure per CC Section 1938 (the required “CASp Disclosure”):
“A Certified Access Specialist (CASp) can inspect the subject premises and determin e whether the subject p remises comply with all of the applicable const ruction-related accessibility standards under state la w. Althou gh state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection , and the cost of making any repairs necessary to co rrect violations of construction -related accessibility standards within the premises.”
If City elects to obtain an inspection, the payment of the CASp inspection fee will be paid by the City. City and Landlord will mutually agree on the arrangements for th e time and manner of the CASp inspection and the cost of any repairs necessary to correct violations of construction-related accessibility standards.
3. TERM
3.1 Term of Lease
The Premises are leased for an initial term (the “Initial Term”) commencing on the date that Landlord delivers and City accepts the Premises in the condition required under this Lease , provided in but not li mited to Section 2.3 (Condition of the Premises on Delivery) and 10. 1 (Landlord’s Compliance with Laws; Premises Condition; Indemnity) which may not be before the Effective Date , as provided in Section 2 4.22 (Effective Date) (“Commencement Date ”).
The Term will end on the expiratio n date specified in the Basic Lease Info rmation, or the date that this Lease is earlier terminated under the provisions of this Lease , unless City extends the Term pursuant to Section 3.4 (Extension Option(s)), below.
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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3.2 Commencement Date and Expiration Date
If the Commencement Date occurs on a date other than the Estimated Commencement Date provided in the Basic Lease Information , then Landlord will promptly deliver to City a notice substantially in the form o f the attached Exhibit B confirming the actual Commencement Date, but Landlord’s failure to do so will not affect the dates of commencement or expiration of the Term.
3.3 Delay in Delivery of Possession
Landlord will use its best e fforts to deliver possession of the Premises in the condition required under this Lease on or before the Estima ted Commencement Date. I f Landlord is unable to deliver possession of the Premises by the Estimated Comm encement Date, then, subject to the prov isions of this Section below, the validity of this L ease will not be affected by Landlord’s inability t o deliver possession except that City ’s obligations to pay Rent will not commence until such time as Landlo rd has delivered the Premises as required under this Lease.
If the Commenc ement Date is later or earlier than the Estimated Commen cement Dat e, this Lease will still expire on the Expiration Date, unless sooner terminated under the provisions under this Lease. If Landlord is unable to deliver possess ion of the Premises to City as required under this Lease within one hundred eighty (180) days after the Estimated Commencement Date, then, by written notice to Landlord , City may terminate this Lease, without any further liability to Landlord or City.
3.4 Extension Option(s)
Landlord grants City the right to e xtend the Term (the “ Extension Option(s)”) for the additional term(s) specified in the Basic Lease Information (the “Extended Term(s) ”). The Extended Term(s) will be on all of the terms and conditions cont ained in this Lease. City m ay exercise an Extensio n Option, if at all, by giving written notice (the “ Extension Notice ”) to Landlord no later than one hundred eighty (180) days before expiration of the Term to be extended; provided, however, if there is an uncured Event of Default on the date City gives a n Extension Notice , then Landlord m ay reject City’s Extension Notice if City fails to cure the Event of Default within ten (10) days after Landlord’s written demand for City to cure the Event of Default. If the Extension Notice is not provided pur suant to this Section 3.4, the Ext ension Option shall expire. If City extends the Term as provided in this Section, then the word “Term” will mean and include any Extended Terms.
4. RENT
4.1 Base Rent
The Base Rent is payable in equal monthly payments at the address spec ified for Landlord in the Basic Lease Information, or other place as Landlord ma y designate in writing on not less than thirty (30) days ’ advance notice. City will pay t he Base Rent monthly within thirty (30) days after receipt of an invoice from Landlord and without any deductions or setoff except as otherwise provided in this Lease. If the Commencement Date occurs on a day other than the first day of a calend ar month or the Expiration Date occurs on a day other than the last day of a calendar month, then the monthly payment of the Base Ren t for the fractional month will be prorated based on a thirty (30)-day month.
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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4.2 Intentionally Omitted
4.3 Base Rent for the Extended Term
At the commencement of the first Extended Term, the Base Rent will be adjusted to $717,255 per year ($59,771.25 per month) with no annual increases . At the commencement of the second Extended Term, the Base Rent will be adjusted to $742,359 per year ($61,863.25 per month) with no annual increases.
4.4 Additional Charges
City will pay to Landlord any char ges or other amounts required under this Lease as additional rent ( “Additional Charges ”). City will not pay any addition al rent or expenses for Landlord’s Real Estate Taxes (as defined below) and ass essments, Operating Costs (as defined below) management fees, and insurance costs for the Premises. Furthermore, City will not pay for any tax increase resulting from a transfer of the Premises or any income or franchise tax, capital stock, inheritance, estate, gift, or any other tax imposed upon or mea sured by Landlord’s gross income or profits. All Additional Charges are payable to La ndlord at the place where the Base Rent is p ayable. The Base Rent and Additional Charges are someti mes col lectively referred to as “Rent.”
4.5 Intentionally Omitted
4.6 Definitions
“Operating Costs”, subject to City’s obligations under this Lease, including Section 8.2, means the total reasonable and prudent costs and expenses actually paid or incurred by Landlord, at no cost to City, in connection with the management, operation, maintenance, and repair of the Building, including: (1) all costs incurred by Landlord associated with fulfilling its obligations under the Lease, including Sections 8.1 and 10.1 (2) the cost incurred by Landlord for all insurance required to be carried on the Building, (3) wages, salaries, payroll taxes, and other labor costs and employee benefits relating to Landlord’s employees or its Agents (defined in Section 24.5 (Parties and Their Agents, Approvals) below) engaged in the operation, repair, or maintenance, of the Building, (4) management fees, (5) fees, charges, and other costs of all independent contractors engaged by Landlord, unless contracting on behalf of City or to fulfill City obligations under the Lease, (6) Landlord’s accounting and legal expenses, (7) depreciation on any personal property provided by Landlord, (8) costs of capital repairs, capital improvements, and equipment.
“Real Estate Taxes” means all taxes, assessments, and charges levied assessed or imposed on or with respect to the Building (or portion thereof) owned by Landlord, or Landlord’s interest in the Building paid by Landlord, at no cost to City. Real Estate Taxes include all general or special real property taxes and general and special assessments, charges, fees, or assessments for transit, housing, police, fire, or other governmental services, service payments in lieu of taxes that are now or later levied or assessed against Landlord by the federal, state, or local government, district or public corporation, and will also include any other tax, fee, or other excise, however described, that may be levied or assessed as a substitute for, or as an addition to, in whole or in part, any other Real Estate Taxes. For avoidance of doubt, City will have no obligation to pay or otherwise reimburse Landlord for any Real Estate Taxes.
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4.7 Intentionally Omitted
4.8 Intentionally Omitted
4.9 Intentionally Omitted
4.10 Intentionally Omitted
4.11 Intentionally Omitted
4.12 Intentionally Omitted
4.13 Intentionally Omitted
4.14 Audits
After not less than five (5) business days’ notice to Landlord, City may audit the books and records of the Building related to Additional Services. If the audit discloses any discrepancies that would result in a reduction of charges paid by City under this Lease, Landlord will immediately refund to City the amount of any overpayment by City. City will pay the cost of the audit.
4.15 Records
Landlord will maintain at its offices in a s afe, complete, and organized manner all of its records related to this Lease and any other charges paid by City under this Lease, for at least three (3) years after the Expiration Date or earlier termination of the Term. Landlord will maintain the records on a current basis and in sufficient detail to facilitate adequate review and audit. All books and records will be available for inspection, copying, and audit by City and i ts representatives, at City’s expense, subject to the provisions of Section 4.14 (Audits).
4.16 Payments by City
Landlord acknowledges that City cannot make any payments to Landlord u nless Landlord is qualified as an approved vendor in City’ s financial and payment system. Therefo re, City will not be in default of any monetary obligation un der this Lease and no interest or late charge will apply, if Landlord is not an approved vendor w ith City. More i nformation about being an approved vendor with City is available at
https://sfcitypartner.sfgov.org/Vendor/BecomeSupplier
. All Rent that has accrued while
Landlord was not an approved vendor will be payable within twenty (20) days after City receives Landlord’s written notice and the Contract Monitoring Division confirms that Landlord has been approved as a City vendor.
4.17 Landlord’s Compliance with City Business and Tax Regulations Code Landlord acknowledges that under Section 6.10 -2 of the San Francisco Business and Tax Regulations Code, the City Treasurer and Tax Collector may require the withholding of payments to any vendor that is delinquent in the payment of any amounts that the vendor is required to pay the City under the San Francisco Business and Tax Regulations Code. If, under that authority, any payment City is requi red to make to Landlord under this Lease is withheld, then City will not be in breach or default under this Lease, and the Treasurer and Tax Collector will authorize the release of any payments w ithheld under this pa ragraph to Landlord, without interest, late fees, penalties, or other charges, upon Landlord coming back into compliance with its San Francisco Business and Tax Regulations Code obligations.
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4.18 Additional Services
City may request from time to time in writing that Landlord provide or arrange for additional services or incur additional expenses not covered under this Lease for the Premi ses, which Landlord may p rovide or arrange in its reasonable discretion. If Landlord elects to provide the requested additi onal services and City has approved the cost and s cope of those services in advance, then City will pay Landlord as Additional Charges for the cost of those services as approved by the SFPUC Real Estate Director . Landlord may not contract for or provide any services (and City will not be obligated to pay for such services) without City’s prior written approval of the cost of the addit ional services (which may be the known costs, or an hourly rate and maximum number of hours, or a cost estimate with a not -to-exceed maximum amount) in writing before Landlord incurs any costs. City will pay for the cost of the additional services w ithin thirty (30) days after re ceipt of an invoice; provided, however, that City may elect to provide an y deposit or other pr epayment that City determines is appropriate given the nature of the requested services. Any additional terms for the additional services will be memorialized by a written agreement, which, upon execution by Landlord and City, will be considered a part of this Lease.
5. USE
5.1 Permitted Use
City may use the Premises for warehouse, storage, offices, parking and outdoor yard uses and any other uses commensurate with the existing zoning, and for no other use without Landlord’s prior written c onsent, which may not be u nreasonably withheld, conditioned, or delayed (“Permitted Use”).
5.2 Intentionally Omitted
5.3 Interference with Access
Landlord will provide to City uninterrupted access to the Premises twenty-four (24) hours per day, seven (7) days per week , including during any power outages affecting th e Premises or any porti on of the Building; but Landlord may, after consultation with City ’s Administrator , interrupt City’s access to the Premises if there is an immediate threat that will render the Premises or any portion of the Building unsafe for human occupancy. If City’s use of any of the Premises or access to the Premises is interrupted because the Pr emises or a ny portion of the Building is unsafe for human occupancy due to Landlord’ s failure to comply with its obligations under this Lease o r for any other reason other th an a n Event of Default, then Landlord will immediately undertake all necessary steps to correct the condition. If the condition continues for two (2) business days and impairs Cit y’s ability to carry on it s business in the Premises, then the Rent will be abated based on the extent to which the condition interferes with City ’s ability to normally and safely car ry on its business at the Premises. If the condition continues for thirty (30) days or more after City’s use is inter rupted or impaired then, without limiting any of its other rights under this Lease , City may terminate this Lease, unless Landlord supplies City with evidence reasonably satisfactory to City that City ’s normal a nd safe use will be restored within sixty (60 ) days after the date City ’s us e was interrupted or impaired , and City’s full use is actually restored within tha t sixty ( 60)-day period. Nothing in this Section will limit City ’s rights with respect to any disruption due to casualty under Section 12 (Damage and Destruction).
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6. INTENTIONALLY OMITTED
7. ALTERATIONS
7.1 Alterations by City
City may not make or permit any alterations, ins tallations, ad ditions, or improvements (collectively, “Alterations”) to the Premises wi thout first obtaining Land lord’s written cons ent, which Landlord will not unreasonably withhold, condition, or delay. City will also supply to Landlord any documents and information reasonably requested by Landlord in connection with Landlord’s consideration of a request for approval hereunder . No review or consent by Landlord of or to any proposed Alterations constitutes any warranty or representation that the same complies with al l Laws, for which City will at all times be sole ly re sponsible. Installation of furnishings, fixtures, equipment, or decora tive improvements that do not affect the Building Systems or structural integrity of the Buildin g (and do not require permits or other governmental approvals), and the repainting a nd recarpeting of the Premises do not constitute Alterations and do not require Landlord’s consent, but City will endeavor to use reasonable efforts to provide Landlord advance written notice detailing such intended improvements. Any Alterations permitted under this Lease following Landlord’s Delivery of the Premises provided in Section
2.3 (Condition of the Premis es on Delivery) will be made at City ’s cost in compliance w ith applicable Laws (as defined in Section 10.1 (Landlord’s Compliance with Laws)). Without cost to itself, Landlord will cooperate with City in securing bu ilding and other permits and authorizations needed for any permitted Alterations. Landlord will not be entitled to any construction or other administrative f ee in connection with any Alteration. City will not be required to remove any Alterations on the expiration or sooner termination of this Lease unless Landlord notifies City in writing at the time Landlord approves the Alterations that they must be removed. City is not required to remove any improvements not requiring Landlord’s consent.
7.2 Title to Improvements
Except for City ’s Personal Property (as defined in the n ext Section), all appurtenances, fixtures, i mprovements, equipment, additions, and other property permanently installed in the Premises as of the Commencement Date or during the Term will be and will remain Landlord’s property. City may not remove Landlord’s property without Landlord’s written approval.
7.3 City’s Personal Property
(a) All furniture, furnishings, equipment, trade fixtures , and articles of movable personal property insta lled in the Premises by or for City and tha t can be removed without structural damage to the Premises (collectively, “City’s Personal Property ”) are and will remain City ’s property. With regard to any personal property purchased by Landlord on behalf of City or leased by City under this Lease, (a) Landlord represents that it is fully compliant with the California Sales and Us e Tax Law and warrants to City that Landlord that it will fulfill its use tax obligations under that law with respect to the subject transaction; (b) Landlord will accept a Use Tax Direct Payment Exemption Certif icate in lieu of any use tax payment if the City, in its sole discretion, elects to provide such Certificate to Landlord; (c) If the City pays use tax to Landlord, Landlord will remit the entire amount of the use tax payment to the state and provide the City with a receipt in accordance with the C alifornia Sales and Use Tax Law; and (d) Landlord will be liable to the City for all amounts of use tax paid to Landlord that Landlord fails to remit to the S tate. This oblig ations of Landlord under the foregoing s entence will survive and termination or expiration of the Lease. (b) At a ny time during the Term, City may remove any of City’ s Personal Property, and City will repair any damage to the Premises resultin g from the insta llation, maintenance and removal . O n the expiration or earlier termin ation of this Lease, City will DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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remove City’s Personal Property from the Premises in accordance with Section 20 (Surrender of Premises). Landlord acknowledges that some of City’s Personal Property may be financed by an equipment lease financing otherwise subjected to a security interest, or owne d by an equipment company and leased to City (“Secured Personal Property”). Landlord recognizes the rights of any supplier, lessor, or lender who has an interest in any items of Secured Personal Property to enter the Premises and remove that Secured Perso nal Property at any time during the Term or within thirty (30) days after the Expiration Date. O n City’s reasonable request, Landlo rd will execute and deliver any commercially reasonab le document required by any supplier, less or, or lender in connection w ith the installation of any items of Secured Personal Property in the Premises, under which Landlord waives any rights it may have or acquire with re spect to the Secured Personal Property, so long as the supplier, e quipment supplier, lessor, or lender agre es that it (i) will remove the Secured Personal Property from the Premises within thirty (30) days after the Expiration Date (and i f it does not remo ve the Secured Personal Property within that time the equipment supplier, lessor, or lender will have waived any rights it may have had to the Secured Personal Property ), and (ii) will repair any damage caused by the removal of the Secured Personal Property.
7.4 Alteration by Landlord
Landlord will use its best efforts to minimize interference with or disruption to City’s use and occupancy of the Premises during any alterations, ins tallations, additions, or improvements to the Building. Landlord will promptly remedy any interference or disruption on receiving City’s notice thereof.
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8. REPAIRS, REPLACEMENTS AND MAINTENANCE
8.1 Landlord’s Repair Obligations
If any portion, segment, or component of the Building Systems requires repair, replacement or maintenance dur ing the first year of the Initial Term (“ Warranty Period ”), Landlord w ill be fully r esponsible for all costs to repair, replace or maintain that portion, segment or component requir ed to keep the Building Systems in good working order and in a condition that is substantially the same or better as of the Commencement Date.
Upon expiration of the Warranty Period and at all times durin g the Term, L andlord will repair, replace and maintain, in a clean, safe, attractive condition, the exterior a nd structural portions of the Building, including the ex isting roof, foundation, the e xterior walls , exterior window frames and glass, and the interior Building floor and subflo oring. Landlord will also repair and maintain, at its cost and in a clean, safe, attractive co ndition, the plumbing, electrical, fire protection, life safety, and other mechanical and electrical connection s from the street to the Building. Upon expiration of the Warranty Period and at all times during the Term, L andlord shall be responsible to replace any Building System s that fail o r cannot be reasonably re paired and need to be replaced. Landlord will be responsible to procure and pay for roof drain cleaning.
Landlord will be responsible to procure and pay for any inspections and repairs related to any utility, sprinkler, and fire an d life safety systems and to maintain and repair, including changing the filters as required . Landlord will be respon sible for maintaining the mural on the Oakdale Avenue side of the Building, including removal of graffiti from the mural.
Notwithstanding the foregoing, Landlord will not be responsible for repairing and maintaining damage directly caused by City or its A gents or Invite es (such terms are each defined below in Section 24.5 (Parties and Their Agents; Approvals) (ordinary wear and tear and damage excepted).
8.2 City’s Repair Obligations
Subject to Landlord’ s obligations during the Warranty Period and under Section 2.3 (Conditions of the Premises on Delivery) , Section 10.1 ( Premises Condition), and Landlord’ s repair and maintenance obligation s above, City will repair and maintain the interior portions of the Building, the interior portions of all plumbing, electric al, heating, ventilating, air condition systems and other mechanical systems after their co nnection to the Building and not maintai ned by Landlord as provided in Section 8.1 (Landlord’s Repair Obligations), the gat es, doors and roll-up doors , the outdoor yard and perimeter fencing for the P remises, fire extinguis hers as required by code, and will keep the Premises in good working order and condition and in a safe and sanitary condition, except for ordinary wear and tear and damage by casualty.
City will be responsible for the removal of exterior graffiti except as provided in Section
8.1 (Landlord’s Repair Obligations). City will make any required repairs and replacements to the interior of the Building that Landlord specifies in writing (a) at City’s cost, (b) by contractors or mechanics selected by C ity and reas onably approved by Landlord, (c) so that the interior portions of the Building will be at least substantially equal in quality, value , and utility to the original work or in stallation before the dam age, (d) in a m anner and using equipment and materials that will not materially interfere with or impair the operations, use, or occupation of the Building or the Building Systems, and (e) in compliance with all ap plicable Laws, including any applicable contracting requirements under City ’s Charter and Administrative Code. At all times during the Term, promptly after City’s r easonable notice, Landlord will provide City and its Agents with access to those portions o f the Building that are necessary to maint ain or repair the telecommunications and data and computer cabling facilities and equipment installed by City.
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Notwithstanding the forgoing, City shall not be responsible for violations of applicable Law that existed prior to the Commencement Date.
8.3 Liens
City will keep the Premises free from liens arising out of any work performed, ma terial furnished, or obligations incurred by City during the Term. Landlord may post on the Premises any notices permitted or requ ired by Laws or that are needed for the pr otection of Landlord, the Premises, or the Building, from mechanics’ and material s uppliers’ l iens. City will give Landlord at least ten (10) days ’ prior written notice of commencement of any repair or construction by City on the Premises.
9. UTILITIES AND SERVICES
9.1 Landlord’s Provision of Utilities
Landlord will fu rnish the following utilities and services to the Premises: (a) gas and electric current in amounts required for normal lighting, heating, air conditioning, ventilation and for the operation of personal computers and other normal office machines and equipment, on a twenty-four (24) hours-a-day, three hundred sixty- five (365) days-a-year basis ( “Daily Basis”); and (b) water for outdoor hoses, lavatory, kitchen, and drinking pu rposes on a Daily Basis.
Commencing on the Commencement Date, City shall pay for a ll water, sewer, gas, electricity, heat and cooling (if any), telephone, refuse collection, pest control, and all other utilities and services furnished to City at the Premises, together with all related installation or conn ection charges or deposits. Pursuant to Section 4.18 (Additional Services ), City may req uest for Landlord to provide, arrange for, or incur additional expenses rela ted to utilities and services to the Premises . City will pay Landlord as Additional Charges for the cost of those services as approved by t he SFPUC Real Estate Director . City will include the Building in its municipal benchmarking portfolio, and the SFPUC will report Building information to the San Francisco Environment Department in accordance with Environment Code Chapter 20.
9.2 Services
(a) Janitorial Service
City will be responsible for the cost of its janitorial, pest control and refuse removal services.
(b) Security Service
City will provide and be responsible for the cost of its own security for the Premises.
9.3 Intentionally Omitted
9.4 Disruption in Essential Utilities or Services
If any failure, stoppage , or interruption of any utilities or services to b e furnished by Landlord occurs, Landlord will immediately notify City of the failure, stoppage, or interruption; diligently attempt to restore service as promptly as possible; and keep City apprised of its efforts.
If Landlord is unable to supply any of the Building’ s sanitary, electrical, heating, air conditioning, water, fire protection, or other essential services serving the Premises (collectively, “Essential Services”) and that inability of Landlord impairs City’s ability to carry on its business in the Premises for (a) three (3) or more business days and it is in Landlord’s reasonable control to restore the Essential Services or (b) five (5) or more consecutive business days if the failure is DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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not within Landlord’s reasonable control, then the Rent will be abated in proportion to the degree to which City’s use of the Premises is impaired, or, alternat ively a t City ’s election, City may provide the Essential Services and offset the reasonable cost against the Rent next due under this Lease. The abatement or right to provide the Essenti al S ervices and offset against Rent will continue until the Essential Services have been restored so that the lack of a ny remainin g Essential Services no longe r materially impairs City ’s ability to carry on its business in the Premises. Landlord will use its best efforts to restore disrupted Essential Service s as soon as possible. I f the failure to provide any Essential S ervices occurs for any reason for fifteen (15) days or more in any sixty (60) -day period and that failu re interferes with City ’s ability to normally carry on its business in the Premises, then, without lim iting any of its other rights or remedies under this Lease or at law or in equity, City ma y terminate this Lease on written notice to Landlord, unless Landlord supplies City with evidence reasonably satisfactory to City that the Essential Services will be reliably restored within sixty (60) days after the date City’s use was first interrupted, and the Essential Services are actually restored and reliable wi thin the sixty (60)-day period. City will not be entitled to any abatement of Rent or right to termin ate if Landlord’s inability to supply Essential Se rvices to C ity results solely to the neg ligent acts or omissions of City and its Agents.
10. COMPLIANCE WITH LAWS; PREMISES CONDITION
10.1 Landlord’s Compliance with Laws; Premises Condition; Indemnity Subject to City’s obligation under Section 8.2 (City’s Repair Obligations), Landlord will at all times during the Term maintain, at its cost, the Building, the Outdoor Yard, and the Premises and the Building Systems in compliance with applicable present or future federal, state, local, and administrative laws, rules, regulations, orders, and re quirements (collectively, “Laws”). Landlord represents and warrants to City, and covenants w ith City, as follows to the best of Landlord’ s act ual knowledge, without duty of inve stigation: (a) the physi cal structure, fixtures, and permanent impro vements of t he Premises and all portions of the Building, the Outdoor Yard, and the Premises along the path of trave l to the Building (including the Building entrances, rest rooms, parking areas) are now, and as of the Commencement Date will be, in compliance with the requirements of the Americans With Disabilities Act of 1990, California Code of Regulations Title 24, and all other applicable Laws intended to provide equal accessibility for persons with disabilities (collectively, “D isabilities Laws”); (b) the Building is not an unreinforced masonry building, and is now, and as of the Commencement Date will be, in compliance with all applicable Laws relating to seismic safety (collectively, “Seismic Safety Laws”); (c) the Building and Building S ystems serving the Premises are now , and as of the Commencement Date will be, in full compliance with all applicable Laws relating to fire and life safety (including the San Francisco High-Rise Sprinkler Ordinance) (collectively, “ Life Safety Laws”); (d) the Building and Building Systems serving the Premises are now, and as of the Commencement Date will be in compliance with all other applicable Laws ; and (e) there are not now, and as of the Commencement Date will not be, any material physical or mechanical defects in the Premises, Building, or the Building Systems that would materially adve rsely affect City’s intended use of the Premises. Without limiting Section 16.2 (Landlord’s Indemnity), Landlord will Indemnify City against any and all Claims (defined in Section 16.1 (City’s Inde mnity) below) arising out of (i) any failure of the Premises, Building, Building Systems (or any portion of any of them) to comply with applicable Laws; or (ii) any misrepresentation by Landlord under this Section.
10.2 City’s Compliance with Laws; Indemnity
City will use the Premises during the Term in compliance w ith applicable Laws, except that City will not be required to make any structural alterations, additions , or other modifications DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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in order to comply with applicable Laws unless the modifications are necessary solely because of any Alterations to the Premises made by City under Section 7 (Alterations) and the modifications are not otherwise Landlord ’s responsibility under this Lease. City will be responsible for complying with any requi rement of th e D isabilities Laws relating to the placement of City’ s furniture or other City Personal Property and the operation of any programs in the Premises, other than any requirement r elating to the physical structure, fixtures , and permanent improvements of the Pre mises or portions of the Building along the pa th of travel to the Premises, which are Landlord ’s obligation a s provided in Section 10.1 ( Premises Condition).
Without limiting Section 16.1 (City’s Indemnity), City will Indemnify Landlord against any and all Claims arisin g out of City ’s failure to comply with all applicable Laws as provided in this Section.
If City's cost of compliance with any Laws pursuant to the terms of this Lease, including but
not limited to those in Section 10.2, exc eeds or is reasonably expected to exceed in the aggregate One Hundred Thousand Dollars ( $100,000) over the Initial Term, City may terminate this Lease effective sixty (60) days following City 's termination notice (" Laws Termination Notice"); provided however, L andlord will have the right by notice to City within thirty (30) days of receipt of City's Laws Termination Notice to revoke City's termination by either (i) providing notice of its inte nt to, within one hundred twenty (120) days, directly make improvements or alterations necessary to comply with such Laws; or (i i) otherwise agree to provide rent credits to City in actual amounts incurred by City to perform such work in excess of $100,000 on a dollar-for-dollar basis as rent would otherwise be due and payable. In the event of Landlord’s option (i), City will be obligated to pay to Landlord the first One Hundred Thousand Dollars ($100,000) of actual third -party costs to make such improvements or alterations. In making such improvements or alterations, at City's option, City will pay such amount, either (a) within thirty (30) days of receipt of an invoice together with reasonable evidence of actual costs or (b) in equal monthly installments over the remaining Term, demonstrating actual third -party costs incurred by Landlord. For option (ii) where the City will receiv e rent credits for the excess amount(s), City will prov ide reasonable documentation to verify expenses incurred above $100,000 so Landlord can promptly verify and apply as rent credits.
10.3 City’s Compliance with Insurance Requirements
City will not conduct any use in or about the Premises that would: (a) invalidate or be in conflict with any fire or other casualty insurance policies covering the Bui lding or any property located in the Building, (b) result in a refusal by casualty insurance companies of good standing to insure the Building or property in the Building in amounts reasonably satisfactory to Landlord or the holder of any mortgage or deed of trust encumbering the Building, (c) cause an increase in the casualty insurance premium for the Building unless City agrees to pay the increase, or (d) subject Landlord to any li ability or responsibility for injury to any person or prope rty solely because of the business operation conducted by City in the Premises; provided, however, Landlord will provide City with reasonable prior written notice of any applicable insu rance requirements and no insurance requir ements will materially and ad versely interfere with City ’s normal business on the Premises. Notwith standing the foregoing, Landlord acknowledges and hereby confirms that C ity’s Permitted Uses are not in conflic t wi th Landlord’ s fire or other casualty insurance policies covering the Building or any property in the Building and that City will not be responsible for any increase in the casualty insurance premium for the Building related to City’s Permitted Uses.
11. SUBORDINATION
(a) Subject to subsection (b) below, this Lease is subject and subordinate at all times to the following (each an “ Encumbrance”): (i) any reciprocal easement agreements, ground leases, or other underlying leases that may later be executed affecting Landlord’s interest DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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in the Premises ( or any p ortion of it), and (ii) the lien of any mortgages or deeds of trust and renewals, modifications, co nsolidations, replacements, and extensions of any of the foregoing that may be executed by Landlord at any time in any amount for which any part of the Premises, any ground lease, or underlying lease, or Landlord’ s interest or estate in them is subject. But, if the ground lessor, mortgagee, trustee, or holder of any mortgage or deed of trust (each an “Encumbrancer”) elects to hav e City’s interest in this Lease be superior to its Encumbra nce, then, on City’ s receipt of a notice from the E ncumbrancer, this L ease will be deemed superior, whether this Lease was executed before or after the date of the Encumbrance or th e date of its recording. The provisions of this subsection are sel f-operative and no further instrument will be required. At Landlord’s request, however, City will enter into a subordination, nondisturbance, and attornment agreement (“SNDA”) with Encumbrancer in a form reasonably acceptable to City and Encumbrancer evidencing the subordination or superiority of this L ease. City’s covenant under this subsection (a) to subordinate this Lease to any Encumbrance is conditioned on each senior instrument containing the commitments in subsection (b) below. (b) If any mortgage or deed of trust to which this Lease is subordinate i s foreclosed or a deed in lie u of foreclosure is given to the mortgagee or beneficiary, or if any ground lease or underlying lease to which this Lease is subordinate is terminated, then this Lease will not be barred, terminated, cut off, or foreclosed and the rights and possessio n of City under this Lease will not be disturbed unless an Event of Default h as occurred and is continuing. City will attorn to and become the tenant of the succe ssor-in-interest to L andlord, provided that City has received proper written notice of the succession and the name and address of the successor landlord.
The provisions of this Section 11 are self -operative an d no further ins trument will be required. Landlord agrees, however, upon request by City and in a form reasonably a cceptable to City to cause any Encumbrancer to execute an SNDA evidencing the foregoing non-disturbance provisions together with the priorit y or subordinati on of this Lease with respect to any such Encumbrance.
12. DAMAGE AND DESTRUCTION
(a) If the Premises, the B uilding, or any Building Syst ems are damaged by fire or other casualty, Landlord will repair the same without delay so long as the repairs can be made under applicable Laws within sixty (60) days after Landlord obt ains all necessary permits but not later than two hundred ten (210) days after the date of the damage (the “Repair Period”).
If Landlord is obligated to repair as provided above, t hen this Lease will remain in full force and effect, except that City will be entitled to an abatement of Rent until the Premises are restored to their condition before the casualty. The abatement in Rent will be based on the extent to which the damage, t he making of the repairs, and reoccupying the repaired Premises int erferes with City’s use of the Premises. Landlord’s repairs will not include, and the Rent will not be abated as a result of, any damage by fire or other cause to City ’s Personal Property or any damage caused by the negligence or willful misconduct of Cit y or its Agents that is not covered by insurance.
(b) Within twenty (20) days after the date of the damage, Landlord will notify City whether, in Landlord’ s reasonable judgment made in good fai th, the repairs can be made within the Repair Period. If the repairs cannot be made within the Repair Period, then either party may terminate this Lease by giving written notice to the other given within thirty (30) days after the date of Landlord’ s notic e. The terminat ion date will be the date spec ified in the termination notice, which date may be not less than thirty (30) or more than sixty (60) days after Landlord’s notice. If either party elects to terminate this Lease, then the Rent will be reduced by a proportiona te amount based on the extent to which the damage i nterferes with the normal conduct of City’s business in the Premises, and City will pay the reduced Rent up to the date of termination. Landlord will refund to City any Rent previously paid for any period after the date of termination.
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(c) Notwithstanding the foregoing, if the Premises are damaged or destro yed by flood or earthquake, and the damage or destruction is not fully covered by insurance proceeds payable under the insurance policies Landlord is requir ed to carry under this Lease ( excluding any deducti ble, for which Landlord is solely responsible), then Landlord may termin ate t his Lease by written notice to City within thirty (30) days after the date Landlord receives written notice that the damage is not covered by insurance. Landlord’s termination notice must include adequate written evidence of t he denial of insurance covera ge. If Landlord does not elect to terminate this Lease, then subsections (a) and (b) will apply. (d) If during the last six (6) mo nths of the Term there is subs tantial damage that Landlord would be required to repair under this Se ction, then within thirty (30 ) days after the date of the damage Landlord or City may, each at its option, terminate this Lease as of the date the damage oc curred by giving written notic e to the other party of its e lection to do so; provided, however, Landlord may terminate this Lease only if it would take more than thirty (30) days to repair the damage.
(e) The parties intend that the provisions of t his Section fully govern their rights and obligations in the event of d amage or destruction . Accordingly, Landlord and City each waives and releases any right to terminate this Lease in whole or in part under Section 1932, subdivision 2, Section 1933, subdivision 4, and Sections 1941 and 1942 of the Civil Code of Cal ifornia or under any similar Law now or later in effect, to the extent those rights are inconsistent with the provisions of this Section.
13. EMINENT DOMAIN
13.1 Definitions
“Taking” means a taking or damaging, including severance damage, by eminent domain, inverse condemnation, or for any public or quasi -public use under law. A Taking may occur pursuant to the recording of a final order of condemnation, or by voluntary sale or conveyance in lieu of condemnation, or in settlement of a condemnation action. “Date of Taking ” means the earlier of (a) the date on whic h title to the portion of the Premises taken passes to and vests in the condemnor or ( b) the date on which City is dispossessed.
“Award” means all compensation, sums, or anything of valu e paid, awarded or received for a Taking, whether under any judgment, agreement, settlement, or otherwise.
13.2 General
If during the Term or during the period between the exec ution of this Lease and the Commencement Date, there is any Taking of all or any part of the Premises or the Build ing or any interest in this Lease , the rights and obligations of the P arties will be determined under this Section. City and Landlord intend that the provisions of this Section govern fully in the event of a Taking and accordi ngly, Landlord and City each waives any right to terminate this Lease in whole or in part unde r Sections 1265.110, 1265.120, 1265.130 and 1265.140 of the California Code of Civil Procedure or under any similar Law now or later in effect.
13.3 Total Taking; Automatic Termination
If there is a total Taking of the Premises, then this Lease will terminate as of the Date of Taking.
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13.4 Partial Taking; Election to Terminate
(a) If there is a Taking of any portion (but less than al l) of the Premises, then this Lease will terminate in its entirety if all of the following exist: (i) the partial Taking, in City’s reasonab le ju dgment, renders the remaining portion of the Premises untenantable or unsuitable for continued use by City for its intended purposes or otherwise materially adversely affects City ’s norm al operations in the Premises or access to the Premises, (ii) the condition rendering the Premises untenantable or unsuitable or that materially adversely affects City ’s normal operations or limits access to the Premises either is not curable or is curable but Landlord is unwilling or unable to cure the condition, and (iii) City elects to terminate. (b) If a partial Taking of a substantial portion of the Building occurs, but subsection (a) above does not apply , then within thirty (30) days after the Date of Tak ing either City or Landlord may t erminate this Lease by written notice to the other, provided that, as a condition to City’s right to terminate, the portion of the Building taken must, in City’s reasonable judgment, render the Premises unsu itable for continued use by City for its intended purposes or otherwise materially adversely affect City ’s normal operations in the Premises or access to the Premises.
(c) If either party elects to terminate this Lease under this Section , then this Lease will terminate on the later of the thirtieth (30 th) day after the written notice is given o r the Date of Taking.
13.5 Termination of Lease; Rent and Award
On termination of this Lease in its entirety under S ection 13.3 (Total Taking; Automatic Termination) or under Section 13.4 (Partial Taking; Continuation of Lea se), then: (a) City’s obligation to p ay Rent will continue up until the date of termination and then will cea se, and (b) Landlord will be entitled to the entire Award, except that City will receive any portion of the Award for the unamortized cost of any Leasehold Improvements paid for by City and any Award made specifically for City ’s relocation expenses or the interruption of or damage to City ’s business or damage to City’s Personal Property.
13.6 Partial Taking; Continuation of Lease
If there is a partial Taking of the Premises and this Lease is not terminated in its entirety under Section 13.4 (Partial Taking; Continuation of Lease) above, then this Lea se will terminate as to the portion of the Pre mises taken, but will remain in effect as to the portion not taken, and the rights and obligations of the P arties will be as follows: (a) Rent will be equitably reduced depending on the configuration or the Pre mises and the portion taken (for instance, if the area of the Premises taken has no special or significant use, then the reduction may be by an amount that is in the same ratio to the Rent as the area of the Premises taken bears to the area of the Premises before the Date of Taking), and (b) Landlord will be entitled to the entir e Award in connection therewith, provided that City will receive any portion of the Award for the unamortized cost of any Leasehold Improvements paid for by City in the portion of t he P remises take n and any Award made specifically for City’s relocation expenses or the interruption of or damage to City’s business or damage to City’s Personal Property.
13.7 Temporary Taking
Notwithstanding anything to contrary in this Section, if a Taking of th e Premises occurs for sixty (60) consecutive days or fe wer, this Lease will remain unaffected by the tem porary Taking, and City will continue to pay Rent and to perform all of the terms, conditions , and covenants of this Lease. In the event of a temporary Taking, City will be entitled to receive that portion of any Award representing compensation for the use or occupancy of the Premises during DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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the Term up to the total Rent owing by City and any out-of-pocket costs incurred by City due to the temporary Taking for the period of the Taking.
14. ASSIGNMENT AND SUBLETTING
Except as pr ovided in this Section, City may not directly or indirectly sell, assi gn, encumber, pledge, or otherwise transfer or hypothecate all or any part of its interest in or rights with re spect to the Pre mises or its leasehold estate created by this Lease or perm it all or any portion of the Premises to be occupied by anyone ot her than itself or sublet all or any portion of the Premises, without Landlor d’s prior written consent in each insta nce, which will not be unreasonably withheld, conditioned, or delayed. For requests which require Landlord’s consent, each request for consent t o an assignment or subletting will be in writing and delivered to Landlord not less than thirty (30) days prior to the an ticipated commencement date th ereof, accompanied by information relevant to Landlord’s deter mination as to the financial and operational responsibility and appropriateness of the proposed assignee or subtenant, including but not limited to the intended use and/or required modification of the Premises.
Notwithstanding the foregoing, f rom time to time, on notice to Landlord, but wit hout Landlord’s consent, City may transfer this Lease or use and occupancy of all or any of the Premises to any department, com mission, agency, vendor, or contractor of the City and County of San Francisco for uses permitted under this Lease. Landlord acknowledges that City’s transfer of this Lease or use and occupancy of all or any portion of the Premises by any depar tment, commission, agency, vendor or contr actor of the City a nd County of San Francisco, shall not be an “assignment” or “sublet” for purposes of this Lease.
Any Rent or other consideration realized by Tenant under any such sublease or assignment in excess of the Rent payable hereunder, after amortization of a reasonable brokerage commission incurred by City, shall be divided and paid, fifty percent (50%) to City, fifty percent (50%) to Landlord.
If City desires to assign all or more than fifty percent (50%) of its interest in or rights with respect to the Premises o r its leasehold estate under this Lease to an entity that is not a City department, c ommission, or agency of City, then within ten (10) business days of Landlord’ s receipt of City’s notice of intent to sublease or assign, Landlord may elect to terminate this Lease in which case City and Landlord will agree to a termination date that wi ll be no later than ninety (90) days from the da te of City’s notice, and on such termination date, this Lease wi ll terminate, and each of Landlord and City wi ll be relieved of all obligations under this Lease accruing on or after the termination date (except to the extent such obligation specifically survives any termination of this Lease).
15. DEFAULT; REMEDIES
15.1 Events of Default by City
Any of the following will constitute an “Event of Default” by City:
(a) After Landlord is qualified as an approved vendor as provided in Section 4.14 (Payments by City) above, City fails to make any timely payment of Rent and to cure the nonpayment within five (5) business days after rec eipt of written notice of nonpayment from Landlord, provided that for the first two (2) monthly payme nts of Rent at the beginning of the Initial Term, as may be extended pursuant to the terms hereof, and for the first monthly payment of Rent after the beginning of each new fiscal year for City, City will have twenty (20) days after written notice from Landlord to cure any nonpayment.
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(b) City’s abandons the Premises (within the meaning and under the requirements of California Civil Code Section 1951.3).
(c) City’s failure to perfor m any other of its covenant s or obligations under this Lease (not involving the payment of money) and failure to cure the non-performance within thirty (30) days of the date of receipt of Landlord’s notice of the failure , provided that if more than thirty (30) days are reasonably required for the cure, no Event of Default will occur if City commences the cure within the thirty (30 )-day period and diligently prosecutes the cure to completion.
15.2 Landlord’s Remedies
On the occurrence and during the continuance of any Event of Default by City, Landlord will have all rights and remedies available under law or granted pursuant to this Lease, including the following:
(a) The rights and remedies provided by California Civil Code Section 1951.2 (damages on termination for breach), inc luding the right to ter minate City’s right to possession of the Premises and to recover the worth at the time of awa rd of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of rental loss for the same period that City proves could be reasonably avoided, as computed under subsection (b) of Section 1951.2.
(b) The rights and remedies provided by California Civil Code Section 1951.4 (continuation of lease after breach and abandonm ent), which allow s Landlord t o continue this Lease in effect and to enforce all of its rights and remedies under this Lease, including the right to re cover Rent as it becomes due, for so long as Landlord does not terminate C ity’s right to possession, if City has the right to sublet or assign, subject only to reasonable limitations.
15.3 Landlord’s Default
If Landlord fails to perform any of its obligations under this Lease, then (without limiting any of City’s other c ure rights under this Lease), at its sole opt ion, City may cur e the default at Landlord’s expense if the default continues after ten (10) business days after the date City gives notice to Landlord of City’s intention to perform the cure. However, if a default occurs because of a cause beyond Landlor d’s control (excl uding any fi nancial inability to pe rform), and Landlord cannot with due diligence cure the default within the ten (10) business day period, then the ten (10) business day period will be extended if, promptly on receipt of City ’s notice, Landlord advises City of Landlo rd’s intention to take all steps required to cure the default, and Landlord promptly commences the cure and diligently prosecutes the cure to completion. But if any default by Landlord continues for sixty (60) days and impairs City’s ability to carry on i ts normal busines s in t he Premises, then City may terminate this Lease o n written notice to Landlord within thirty ( 30) days after the expiration of the sixty (60)-day period. Subject to the other provisions of this Lease rela ting to abatement of Rent, if Landlord fails to cure any default within the ten ( 10)-day cure period provided above (as it may be extended as pro vided above), then, whether or not City elects to cure Landlord’ s default, the Rent will be abated based on the extent to which the default interferes with C ity’s ability to carry on its normal business at the Premises. City’s rights under this Section an d under any other provisions of this Le ase will not limit in any way any of its other rights and remedies under this Lease or at law or in equity.
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16. INDEMNITIES
16.1 City’s Indemnity
City will indemnify, defend, and hold harmless ( “Indemnify”) Landlord and its Agents from and against any and all claims, losses, damages, costs, and expenses, (collectively, “Claims”), incur red as a result o f (a) City’s use of the Premises, (b) any Event of D efault by Tenant in the perform ance of any of its material obligations unde r this Lease, or (c) any negligent acts or omissions of City or its Agents in, on, or about the Premises ; pro vided, however, City will not be obligated to Indemnify Landlord or its Agents to the e xtent any Claim arises out of the negl igence or willful misconduct of Landlord or its Agents. In any action or proceeding brought against Landlord or its Agents because of a Claim Indemnified by City under this Section, at its sole option, City may elect to defend the Claim by attorneys in Ci ty’s Office of the City Attorney, by other attorneys selected by City, or both. City will have the right to control the defense and to de termine the settlement or compromise of any action or proceeding, provided that Landlord will have the right, but not the obligation, to participate in the defense of the Claim at its sole cost. City’s obligations under this Sec tion will survive the termination of the Lease.
16.2 Landlord’s Indemnity
Landlord will Indemnify City and its Agents against any and all Claims incur red as a result of (a) any default by Landlord in the performance of any of its obligations under this Lease or any breach of any representations or warranties made by Landlord under this Lease, or (b) any negligent acts or omissions of Landlord or its Agents in, on, or about the Premises ; provided, however, Landlord will not be obligated to Indemnify City or its Agents to the extent any Claim arises out of the negl igence or willful misconduct of C ity or its Agents. In any action or proceeding brought against City or its Agents because of a Claim Indemnified by Landlord under this Section, at its so le option, Landlord may elect to defend the Claim by attorneys selected by Landlord. Landlord will have the right to control the defense and to determine the settlement or compromise of any action or proceeding, provided that City wi ll have the right, but not the obligation, to par ticipate in the defense o f any Claim at its sole cost. Landlord’s obligat ions under this Section will survive the termination of this Lease.
17. INSURANCE
17.1 City’s Self-Insurance
Landlord acknowledges that City m aintains a program of self-insurance and City is not be required to carry any insurance with respect to this Lease. City assumes the risk of damage to any of City’s Personal Property, except for damage caused by Landlord or its Agents.
17.2 Landlord’s Insurance
(a) At all times during the Term, Landlord will keep the Building insured against damage and destruction by fire, vandalism, malicious mischief, sprinkler damage (include earthquake sprinkler leakage) and other perils customarily covered under a cause of loss-special form property insurance policy in an amount equal to one hundred percent (100%) of the full insurance replacement value (replacement cost new, including debris removal and demolition). Upon City’s request, Landlord will provide to City a certificate of insurance issued by the insu rance carrier , evidencing the re quired insurance. The certificate must expressly provide that the policy is not cancelable or subj ect to reduction of coverage or otherwise subject to modification except after thirty (30) days’ prior written notice to City (or, if the insurer refuses to provide notice to the City, then Landlord will provide such thirty (30) -day prior notice to DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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City). Landlord waives any rights against City for loss or damage to the Premises t o the extent covered by Landlord’s property insurance.
(b) In addition, at no cost to City, Landlord will procure and keep in effect at all times during the Term insurance as follows: (i) commercial general liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for bodily injury and property damage , including contractual liability, independe nt contractors, broad-form property damage, fire damage legal liability (of not less than Fifty Thousand Dollars ($50,000)), personal injury, products and complete d operations, and explosion, collapse , and underground (XCU); and ( ii) worker’s compensation insurance in the amounts required by applicable L aws and employer ’s liability with l imits not less than One Mil lion Dollars ($1,000,000) each accident. All insurance policies required by this Lease to be maintai ned by Landlord must be endorsed to provide for thirty (30) days’ prior written notice of cancellation for any reason, intended non-r enewal, or reduction i n coverage to Landlord and City (or, if such endorsement is not available from the insurer, Landlord will provide such notice to City). (c) Landlord will maintain loss of rent coverage for a twelve (12) month period.
(d) Landlord will maintain such umbrella policy and addition al coverage as it reasonably determines necessary or as required by any Encumbrancer. The parties agree that the minimums set forth in this Section 17.2 will be re-evaluated every five (5) years, and increased to the extent comparable with similarly situated landlords and properties.
17.3 Waiver of Subrogation
Notwithstanding anything to the contrary in this Lease, Landlord waives any right of recovery against City for any loss or damage relating to the Building or the Premises or any operations or contents in the Building, whether or not th e loss is caused by City ’s fault or negligence, to the e xtent the loss or damage is covered by Land lord insurance that is required under this Lease or any excess coverage otherwise held by Landlord or its Agents. Landlord will obtain a waiver of subrogation endorsement from applicable insurance carriers issuing policies relating to the Building or the Premises, but Landlord’s failure to do so will not affect the above waiver.
18. ACCESS BY LANDLORD
Landlord reserve s for itself a nd any of its designated Agent s the ri ght to enter the Premises at all reasonable times and, except in cases of emergency (in which event Landlord will give any reasonable notice), after giving City at least twenty four (24) hours ’ advance written notice, to (a) inspect the Premises, (b) supply any service to be provided by Landlord under this Lease, (c) show the Premises to any prospective purchasers, mortgagees or, during the last six (6) months of the Term, tenants, (d ) post notices of non- responsibility, and (e) alter, improv e, or repair the Premises and any portion of the Building, and, f or that purpose , Landlord may erect, use, and maintain necessary structures in and through the Premises where reasonably required by the work to be performed, provided that the entr ance to the Premises may not be blocked.
Landlord may not interfere with City’s use of the Premises.
19. ESTOPPEL CERTIFICATES
From time to time during the Term, by not less than thirty (30) days’ prior written notice to the other party, either party may request the other part y to execute, acknowledge, and deliver to the persons or entities designated by the other party a c ertificate stating: (a) the Commencement Date and Expiration Date of this Lease, (b) that this Lease is unmodified and in full force and effect (or, if there have been modifications, this the Lease is in full force and effect DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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as modified and stating the mo difications), (c) that there are no defaults under this Lease (or if so, specifying the same), and (d) the date to which Rent has been paid.
20. SURRENDER OF PREMISES
On the expiration or sooner termination of this L ease, City will surrender the Premises to Landlord in good order and condition, excepting reasonable use and wear and damage by fire or other casualty or condemnation. Within ten (10) days after the Expiration Date, City will remove from the Premises all of City ’s Personal Property, City’ s telecommunica tions, data , and computer facilities, the Racks, and any Alterations City desires or is required to remove from the Premises under t he provisions of Section 7.1 (Alterations by Ci ty). City will re pair or pay the cost of repairing any damage to the Premises or the Building resulting from that removal. City’s obligations under this Section will survive the expirati on or earlier termina tion of this Leas e.
Notwithstanding anything to the contrary contained in this Lease, if a subsequent tenant or Landlord requests t o reta in the Racks and City agrees, then City would not be obligated t o remove the Racks. Any personal property of Ci ty not removed on or befo re the Expiration Date or any earlier termination date shall be deemed to have been abandoned by City and may be disposed of or retained by Landlord as Landlord may desire. City expre ssly waives the provisions of Civil Code §§ 1980 and 1988 et seq. Withi n ten (10) days after the Expiration Date or earl ier termination, Landlord will notify City about any personal property of City that was not removed and City will have thirty (30) days to remove before Landlord incurs costs and charges City for costs for that removal. Notwithstanding the foregoing, in the event Landlord is prevented from re -leasing the Premises because of City's Personal Property or City's Personal Property materially impacts Landlord's use or Landlord actually incurs costs, City will pay those costs, as the Parties mutually agree.
21. HAZARDOUS MATERIALS
21.1 Definitions
As used in this Lease, the following terms are defined below:
“Environmental Laws ” means any Law relating to industrial hygiene, environmental conditions, or Hazardous Material, whether now in effect or later adopted. “Hazardous Material” means any material that, be cause of its quantity, concentration , or physical or ch emical characteristics, is deemed by any fe deral, state, or local governmental authority to pose a present or potential hazard to human health or safety or to the environment.
Hazardous Material includ es any material or substance defined as a “ hazardous substance,” or “pollutant” or “contaminant” under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ( “CERCLA”, also commo nly known as the Superfund law), as amended (42 U.S .C. S ection 9601 et seq.), or under C alifornia Health & Safety Code Section 78075; any “ hazardous waste” listed under California Health & Safety Co de Section 25140; any asbestos and asbestos containing materials whether or not those materials are part of the structure of the Building or are naturally occurring substances on or about the Premises; and petroleum, including crude oil or any fraction thereof, natural gas , or natural gas liquids.
“Release” when used with respect to Hazardous Material includes any actual or imminent spilling, leaking, pumping, pouring, emitting, emptying, discharging, i njecting, escaping, leaching, dumping, or disposing into or inside the Building, or in, on, under , or about the Premises.
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21.2 Landlord’s Representations and Covenants
Landlord represents and warrants to City that, to the best of Landlord’s actual knowledge, without duty of investigation, the follow ing statements are true and correct and will be true and correct as of the Commencement Date (a) the Premises are not in violation of any Environmental Laws; (b) the Premises is not now, and has not been, used for the manufacture, use, storage, discharge, deposit, transportation, or disposal of any Hazardous Material, except for the use of Hazardous Material in limited quantities as are customarily used in offices, which limited use is and has been in compl iance with En vironmental Laws; (c) the Premises does not consist of any landfill or contain any underground storage tanks; (d) the Building does not contain any asbestos-containing materials or have building materials that contain a ny other Hazardous Material, and the Premises or the common areas of the Building do not contain any lead -based paints; (e) there is and has been no R elease of any Hazardous Material in the Building or in, on, under, or about the Premises; and (f ) the Premises is not subject to any clai m by a ny governmental regulatory agency or third party related to the Release of any Hazardous Material, and there is no inquiry by any governmental agency (including the California Department of Toxic Subst ances Co ntrol or t he Regional Water Qualit y Contr ol Boa rd) with respect to the presence of Hazardous Material in the Building or in, on, under , or about the Premises, or th e migration of Hazardous Material from or to other real property. Subject to City’s obligations under this Section below, La ndlord will maintain the Premises throughout the Term in compliance with all Environmental Laws that could affect the health, safet y, and welfare of City’s employees or City’ s u se, occupancy, or enjoyment of the Premises for their intended purposes.
21.3 Landlord’s Environmental Indemnity
Without limiting Landlord’s Indemnity in Section 16.2 (Landlord’s Indemnity), Landlord will Indemnify City and its Agents against any and all Claims arising during or after the Term (a) as a result of any breach of any of Landlord’s representations, warranties, or covenants in the preceding Section, or (b) in connection with any presence or Release of Hazardous Material in the Building or on, under, or about the Premises, unless City or its Agents caused the Release.
21.4 City’s Covenants
Neither City nor its Agents will cause any Hazardous Material to be brought on, kept, used, stored, generated, or disposed of in, on or about the Premises, or transport ed to or from the Premises, in violation of any Environmental Laws.
21.5 City’s Environmental Indemnity
If City breaches its obligations contained in the preceding Section 21.4 (City’s Covenants), or if City or its Agents cause the Release of Hazardous Material f rom, in, on, or about the Premises, then City will Indemnify Landlord against any and all Claims arising during or after the Term as a result of the Release, except to the extent Landlord or its Agents is responsible for the Release. The foregoing Indemnity will not include any Claims resulting from the non- negligent aggravation by City, its Agents, or Invitees of physical conditions of the Premises, existing before City’s occupancy.
22. SPECIAL PROVISIONS
22.1 First Offer to Purchase
If Landlord decides to sell the Premises during the Term of the Lease, Landlord will first offer the Premises to City at the purchase price that the Premises will be offered to the real estate market. The purchase price will be contained in a w ritten n otice ( “Sale Notification ”) from DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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Landlord to City and will be subject to adjustment as provided below. City will have a period of thirty (30) days (the “ 30-Day Period”) from the date it receives th e Sale Notification to submit (i) an acceptance of the purchase at the purchase price contained in the Sale Notification or (ii) a counter offer at a lesser price and otherwise substantially upon the other business t erms contained in the Sale Notification .
City’s offer to purchase the Premises will be subjec t to th e approval of its Board of Supervisors and Mayor within seventy-five (75) days of Landlord’s execution of a Purchase and Sale Agreement to which Landlord and City have agreed as to form , the title company is willing to issue ALTA Ti tle Insurance acceptable to City, and, at City’s option, City’ s successful issuance of a debt type instrument to fund the purchase.
Within (3) days of the Landlord’s execution and delivery of a Purchase and Sale Agreement, Landlord will deliver copies of all reports, app raisals, and other documents in Landlord’s possession not previously delivered to City. Landlord will cooperate with City in its due diligence investigation.
Close of escrow will occur on or before one hundred and fifty- five (155) days from the date of City’s notice of the approval by City’s Board of Supervisors and Mayor of the purchase transaction.
At closing, Landlord and City will each pay for one-half of the cost of the premium of the extended coverage title insurance policy, one -half of the escrow fees, and one-half of the othe r typical clos ing expenses. City and Landlord will each pay one -half of the assign or sublease taxes, one -half of the escrow fe es, and one -half of the other ty pical closing expenses such as notary fees and overnight express c harges. Landlord will deliver th e following (a mong other customary items) through a mutually agreeable escrow company:
(i) a grant deed conveying ALTA insurable title subject only to taxes not yet due and payable, and other exceptions acceptable to City,
(ii) a bill of sale for all personal property on the Premises, and (iii) a written disclosure of all known facts (including any and all property inspection reports) that wo uld affect the marketa bility or City’s intended use of the Premises.
If City does not agree to purchase the Premises for the purc hase price contained in the Sale Notification and does not make any counteroffer within 30 days, then this first offer to purchase will terminate and Landlord will be free to sell the Premises to any person whomever and upon any terms whatsoever without any obligation to City.
If, however, City while not accepting the purchase price stated in the Sale Notification, has made an all-cash-on–closing the counter offer (the “ City’s Counter Offer ”) within the 30- day Period that has not been accepted by Landlord, then Landlord may sell the Premises, free of any claim of City, to any potential buyer who is willing to pay a gr oss purchase price (an amount determined Landlord credits or givebacks to the potential buyer for such items as exi sting building conditions or improveme nts hereinafter to referred t o as “ Gross Purchase Price” ) exceeding the amount of City’s Counter Offer.
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If Landlord is unable to sell the Premises for more than the City Counter Offer and still wishes to sell th e Premises, Landlord will provide City with another Sale Notification with a reduced purchase price and the above procedure for City’s offer to purchase will be repeated.
This first offer to purchase will terminate and be of no further effect if a sale o f the Premises to an arm’s length third party is consummated under the foregoing provisions.
23. CITY PROVISIONS
23.1 MacBride Principles - Northern Ireland
The provisions of San Fr ancisco Administrative Code Section 12F are incorporated into this Lease by this ref erence and made part of this L ease. Landlord c onfirms that Landlord has read and understood that City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the MacBride Principles, and urges San Francisco companies to do business with corporations that abide by the MacBride Principles
23.2 Controller’s Certification of Funds
The terms of this Lease are governed by and subject to the budgetary and fiscal provisions of City ’s Charter. Notwithstanding anything to the contra ry contained in this Lea se, there will be no obligation for the payment or expenditure of money by City under this Le ase unless the Controller of the City and County of San Francisco first certifies, under Section 3.105 of City’s Charter, that there is a v alid appropriation from whi ch the expendi ture may be made and that unencumbered funds are available from the appropriation to pay the expenditure.
Without limiting the foregoing, if in any fiscal year of City after the fiscal year in which the Term of this Lease commences, suffi cient funds for the payment of Rent are not appropriated, then City may terminate this Lease, without penalty, liability, or expense of any kind to City, as of the last date on which sufficient funds are appropriated. City will use its reasonable efforts to give Landlord reasonable advance notice of the termination.
23.3 Prevailing Wages and Working Conditions
Any undefined, initiall y-capitalized term used in this Section ha s the meaning given to that term in San Francisco Adminis trative Code section 23.61. Landlord will require its Contractors and Subcontractors to perform (i) labor in the construction of a “ public work” as defined in California L abor Code S ection 1720 et seq. (which includes certain construction, alteration, maintenance, demolition, installa tion, repair, c arpet laying, or refuse hauling if paid for in whole or part out of public funds), or (ii) Covered Construction at the Premises to (A) pay workers performing the work not less than the Prevailing Rate of Wages, (B) provide the same hours, working conditions, and benefits as in each case are provided for similar work performed in San Francisco County, and (C) employ Apprentices in accordance with San Francisco Administrative Code Section 23.61 (collectively, “Prevailing Wage Requirements”). Landlord will cooperate with City in any action or proceeding against a Contractor or Subcontr actor that fails to comply with the Prevailing Wage Requirements.
Landlord will include, and require its Contractors and Subcontract ors (regardless of tier) to in clude, the Prev ailing Wage Requirements and the agreement to cooperate in City enforcement actions in any Construction Contract with specific reference to San Francisco Administrative Code Section 23.61. Each Construction Contract must name the City and County of San Fr ancisco, affected workers, and employee organiz ations formally representing af fected workers as third -party bene ficiaries for the limited purpose of enforcing the Prevailing Wage Requirements, including the righ t to file charges and seek pen alties against an y Contractor or DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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Subcontractor in accordance with San Francisco Administrative Code Section 23.61. Landlord’s failure to comply with its obligations under this Section will constitute a material breach of this Lease. A Contractor’s or Subcontractor’s failure to comply with this Section will enable C ity to seek the remedies specif ied in San Francisco Administrativ e Code S ection 23.61 against the breaching party.
23.4 Non Discrimination in City Contracts and Benefits Ordinance (a) Covenant Not to Discriminate
In th e performance of this Lease, Landlord will not to discriminate against any employee of Landlord, any City employee working with Landlord, any applicant for employment with Landlord, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business , social, or other establishmen ts or organizations on the basis of the fact or p erception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual ori entation, ge nder identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AIDS/HIV status), or association with members of those protected classes, or in retaliatio n for opposition to discrimination against those classes.
(b) Subcontracts
Landlord will include in all subcontracts relating to the Premises a non - discrimination clause applic able to the subcontractor in substantially the form of subsection (a) above. In addition, Landlord will incorpora te by reference in all subcontracts the applicable provisions of San Francisco Labor and Empl oyment Code Articles 131 and 132 and require all subcontractors to comply with those provisions. Landlord’s failure to comply with the obligations in this subsection will constitute a material breach of this Lease. (c) Non-Discrimination in Benefits
Landlord does not as of the date of this Le ase, and will n ot during the T erm, in any of its operations in San Francisco, on real property owne d by C ity, or where the work i s being performed for City or elsewhere within the United States, discriminate in the provisi on of bereavement leave, family medical leave, he alth benefits, membership or membership discounts, moving expenses, pension and reti rement benefits, or travel benefi ts, as well as any benefits other than the benefits specifi ed above, between employees wit h domestic partners and employees with spouses, a nd/or between the domestic partners and spouses of the employees, where the domestic partnership has been register ed with a gover nmental entity under state or local law authorizing that registration, subject to the conditions set forth in Sa n Francisco Labor and Employment Code, Section 131.2.
(d) CMD Form
As a condition to this Lease, Landlord wil l execute the City’s Declaration:
Nondiscrimination in Contracts and Benefits form with supporting documentation and secure the approval of the form by the San Francisco Contract Monitoring Division (the “CMD”).
Landlord represents that before execution of the Lease: ( i) Landlord executed and submitted the required form with supporting documentation, and (ii) the CMD approved the form.
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(e) Incorporation of Labor and Emplo yment Code Provisions by Reference
The provisions of San Francisco Labor and Employm ent Code Articles 131 and 132 relating to non -discrimination by parties contracting for the lease of property to City are incorporated into this Section by r eference and made a part of this Lease as though fully set forth. Landlord will comply fully with and be bound by all of the pro visions that ap ply to this Lease under Labor and Employment Code Articles 131 and 132, including the remedies provided in those Chapters. With out limiting the foregoing, Landlord understands that under Section 131.2(h) a penalty of Fifty Dollars ($50) for each person for each calendar day during which that person wa s discriminated against in viol ation of the provisions of this Le ase may be assessed against Landlord and/or deducted from any payments due Landlord.
23.5 Intentionally Omitted
23.6 Bicycle Parking Facilities
San Francisco Planning Code (the “ Planning Code”) Article 1.5, Section 155.3 requires that bicycle parking must be provided at City-leased buildings at no cost to Landlord. During the Term, City will have the right to in stall and maintain, at no cost to Landlord, all Class 1 Bicycle Parking Spaces (as defined in the Planning Code) and all Cl ass 2 Bicycle Parking Spaces (as defined in the Planning Code) in the Building locations required under the Planning Code.
23.7 Green Building Requirements for City Buildings
Landlord acknowledges that the City and County of San Francisco has enacted San Francisco Environment Code Sections 700 to 705 relating to green building requirements for the design, construction, and operation of City buildings. Landlord will com ply with all applicable provisions of those code sections.
23.8 Sunshine Ordinance
In accordance w ith San Francisco Administrative C ode S ection 67.24(e), contracts, contractors’ bids, leases, agreements, responses to Requests for P roposals, and all other record s of communicat ions between City and persons or firms seeking contracts will be open to inspection immediately after a contract has been awarded. Nothing in this provision requires the disclosure of a private person ’s or orga nization’s net worth or other pro prietary financial data submitted for qualification for a contract, lease, agreement, or other benefits until and unless that person or organization is awarded the contract, lease, agreement, or benefit. Information provided that is covered by this Section will be made available to the public on request.
23.9 Conflicts of Interest
Through its execut ion of this Lease, Landlord acknow ledges that it is familiar with the provisions of City ’s Campaign and Governmental Conduct Code Art icle III, Chapter 2 and California Government Code Section 87100 et seq. and Section 1090 et seq., and certifies that it does not know of any facts that woul d constitute a violation of those provisions . I f Landlord becomes aware of any such fact during the Term of this Lease, Landlord will immediately notify City.
23.10 Notification of Prohibition on Contributions
By executing this Lease, Landlord acknowledges its obligations unde r Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who leases, or seeks to lease, t o or from any department of the City any land or building from making any DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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campaign contribution to (a) a City elected official if the lease must be approved by that official, (b) a candidate for that City electi ve office, or (c) a committee controlled by t hat elected official or a candidate for that office, at any time from the submission of a proposal for the lease until the later of either the termination of negotiations for the lease or twelve (12) months afte r the date the City approves the lease. Landlord acknowledges that the foregoing restriction applies only if the lease or a combination or series of leases o r other contracts approved by the same individual or board in a fiscal year have a total anticipated or a ctual value of one hundr ed thousand dollars ($100,000) or more. Landlord further acknowledges that (i) the prohibiti on on contributions applies to each prospective party to the lease; any person with an ownership interest of more than 10 percent (10%) in Landlord; any subcontrac tor listed in the lease; and any committee that is sponsored o r controlled by Landlord; and ( ii) within thirty (30) days of the submission of a proposal for the Lease, the City department with whom Landlord is leasing is obligated to submit to the Ethics Commission the parties to the lease and any subcontractor. Additionally, Landlord certifies t hat it has informed each such pers on of the limit ation on contributions imposed by Section 1.126 by the time it submitted a proposal for the lease, and has provided the names of the persons required to be informed to the City department with whom it is leasing.
23.11 Preservative-Treated Wood Containing Arsenic
Landlord may not purchase preservative -treated wood products containing arsenic in the performance of this Lease unless an exem ption from the requirements of Environment Code Chapter 13 is obtained from th e Department of Environment under Environment Code Section 1304. The term “ preservative-treated wood containing arsenic ” means wood treated with a preservative th at contains arsenic, elemental arsenic, or an arsenic copper c ombination, including chromated copper arsenate preservative, amm oniac copper zi nc arsenate preservative, or ammoniacal copper arsenate preservative. Landlord may purchase preservative-treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of Environment. This provision does not preclude Landlord from purchasing preservative-treated wood containing arseni c for saltwater immersion. The t erm “saltwater immersion” means a pressure- treated wood tha t is used for construction purposes or facilities that are partially or totally immersed in saltwater.
24. GENERALLY APPLICABLE PROVISIONS
24.1 Notices
Except as otherwise specifically provided in this Lease, any notice given under this Lease must be in writing and given by delivering the noti ce in person or by commercial courier, or by sending it by first- class mail, certified mail, return receipt requested, or Express Mail, ret urn receipt requested, with postage prepaid, to: (a) City at City’s address set forth in the Basic Lease Information; or (b) Landlord at Landlord’ s address set forth in the Basic Lease Information; or (c) any other address designated by as either Lan dlord or City as its new addre ss for notices by notice given to the other in accordance with this Section. A properly addr essed notice transmitted by one of the foregoing methods will be deemed received upon confirmed delivery, attempted delivery, or reje cted delivery. For the convenience of the P arties, copies of notices may also be given by email to the email address number set forth in the Basic Lease Information or any other email address as may be provided from time to time , but, neither party may gi ve official or binding notice by email.
24.2 No Implied Waiver
No failure by either party to insist on the strict performance of any obligation of the other party under this Lease or to exercise any right, power, or remedy after a breach of this Lease will constitute a waiver of any breach or of term, cov enant, or condition. No acceptance of full or partial Rent by Landlord while City is in default will constitute a waiver of the default by DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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Landlord. No express written waiver of any default or the performance of any provision of this Lease will affect an y other default or performance, or cover any other period, other than the default, performance, or time specified in the express waiver. One or more written waivers of a default or the performance of any provis ion of this Lease will not be deemed to be a waiver of a subsequent default or performance. The consent of Landlord or City given in one instance under the terms of this L ease will not relieve the other party of any obligation to secure the consent to any other or future instance under the terms of the Lease.
24.3 Amendments
The terms and provisions of this Lease may only be changed, waived, discharged , or terminated by a written instrument signed by both parties. No waiver of any breach will affect or alter this Lease, and each and every term, covenant, and condition of this Lease will continue in full force and effect with respect to any other then-existing or subsequent breach. Whenever this Lease requires or permits City ’s consent or approval, the SFPUC Re al Est ate Director , or designee, will be authorized to provide the consent or approval, except as otherwise provided by applicable Law, including the Charter of the City an d County of San Francisco. City’s agreement to a ny amendments or modifications to this Lease (including the exhibits ) may be made on the sole approval of the SFPUC Real Estate Director, or designee; provided, however, material amendments or modifications to this Lease (a) changing the legal description of the Premises, (b) increasing the Term, (c) increasing the Rent , (d) changing the general use of the Premises from the use authorized under Section 5.1 (Permitted Use) , and (e) any other amendment or modif ication that materially increases City ’s liabilities or financial obligations under this L ease may require the approval of City ’s B oard of Supervisors in addition to the SFPUC Commission.
24.4 Authority
Landlord represents and warrants to City th at it is the sole owner of the Premises and the execution and delivery of this Lease by Landlord does not violate any provision of a ny agreement or any applicable Laws. If Landlord is a corporation, limited liability company, or a partnership, each person executing this Lease on behalf of Landlord, by their signature, covenants and warrants that Landlord is a duly authorized and exist ing entity, that Landlord is qualified to do business in Ca lifornia, that Landlord has the full right and authority to enter into this Lease, and that each person signing on behalf of Landlord is authorized to do so. On City’s request, Landlord will provide City with e vidence reasonably satisfactory to City confirming these representations and warranties.
24.5 Parties and Their Agents; Approvals
If applicable, the word “ Landlord” will include the plural as well as the singular. T he term “Agents” when used w ith respect to ei ther party include s the agents, employees, of ficers, and contractors of the party, and the term “Invitees” when used with respect to City will include the clients, customers, invitees, guests, licensees, assig nees, or subtenants of City. Whenever this Lease requires or permits the giving by City of its consent or approval , the SFPUC General Manager, or designee, will be authorized to provide such consent or approval, except as otherwise provided by applicable law, including the City ’s Charter. If there is more than one entity that comprises Landlord , the obligations and l iabilities under this Lease imposed on Landlord are joint and several.
24.6 Interpretation of Lease
The captions preceding the articles and secti ons of this Lease and in the t able of contents have been inserted for convenience of reference only and will in no way define or limit the scope or intent of any provision of this Lease. Except as otherwise specifically provided in this Lease, DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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wherever Landlord or City is required or req uested to give its consent or approval to any matter or action by the other, the consent or approval will not be unreasonably withheld or delayed and the reasons for disapproval of consent will be stated in reasonable detail in writing. Provisions in this Lease relating to the number of days will be calendar days unless otherwise specified. If the last day of any period to give notice, reply to a notice , or take any other action occurs on a Saturday, Sunday, or a bank or City holiday, then the last day for taking the action or giving or replying to the notice will be the next succeeding business day. T he words “include ” or “including” or similar words will not be construed to limit any general term, statement , or other matter in this Lease or any of i ts attached exhibits, whether or not language of non- limitation, such as “without limitation” or similar words, are used.
24.7 Successors and Assigns
Subject to the provisions of Section 14 (Assignment and Subletting) , the terms, covenants, and conditions contained in this Le ase will bind and inure to the benefit of Landl ord and City and, except as otherwise provided in this Lease, the ir pers onal representatives and successors and assigns. There are no third-party beneficiaries to this Lease.
24.8 Brokers
Neither party has had any c ontact or dealings or communications regarding leasing the Premises through any licensed real estate broker or other person who could claim a right to a commission or finder’s fee in connection with the lease of the Premises, except for the broker, if any, identified in the Basic Lease Information . That broker ’s commission is Landlord’s sole responsibility under a separate written agreement between Landlord and the broker, and City has no liability for that co mmission. If any other broker or finder perfects a claim for a commission or finder’s fee based on any contact, dealings, or communication, the party throug h whom the broker or finder makes their claim will be responsible for the commission or fee and wil l Indemnify the other party from any and all Cl aims incurred by the indemnified party. The provisions of this Section will survive any termination of this Lease.
24.9 Severability
If any provision of this Lease or it s application to any person, entity, or circumstance is found to be invali d or unenforcea ble, the remainder of this Lease, or the application of the provision to persons, entities , or circumstances other than those as to which it is invalid or unenforceable, will not be affected by that finding, and each other provision of this Lease will be valid and be enforceable to the full extent permitted by L aw, except to the extent that enforcement of this Lease without the invalidated provision would be unreasonable or inequitable under all the circumstances or would frustrate a fundamental purpose of this Lease.
24.10 Governing Law
This Lease will be construed and enforced in accordance with the laws of the State of California and City’ s Charter. Any legal suit, action, or proceeding arising out of or relating to this Lease will be instituted in the Superior Court for the City and County of San Francisco, and each party agrees to the exclusive jurisdiction of such co urt in any such suit, action, or proceeding (excluding bankruptcy matters). The parties irrevocably and unconditionally waive any objection to th e laying of venue of any suit, action, or proceeding in such court a nd irrevocably waive and agree not to plead or claim that any suit, action, or proceeding brought in San Francisco Superior Court relating to this Lease has been brought in an inconvenient forum.
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24.11 Entire Agreement; Incorporation of Exhibits
The parties intend that this Lease (including all of the attached exhibits, which are made a part of this Lease by this reference) is the final expression of their agreement with respect to the lease of the Premises and may not be contradicted by evidence of any prior or contemporaneous written or oral agreements or understandings. The parties further intend that this Lease will constitute the complete and exclusiv e statement of its terms and that no extr insic evidence whatsoever (including prior dr afts and changes) may b e introduced in any judicial, administrative, or other legal proceeding involving this Lease.
24.12 Holding Over
If City holds over in possession of the Premises after the expiration of the Initial Term, or any Extended Term, if exercised, with Landlord’s consent, that holding over will not be deemed to extend the Initial Term or the Extended Term, as the case may be or renew this Lease, and City’s tenancy will continue as a month-to-month tenancy until the tenancy is terminated by either party by giving least thirty (30) days’ prior written notice of termination. The month-to-month tenancy will be on all the terms and conditions of this Lease and at the monthly Base Rent in effect during the last month of the Term, or then expiring Extended Term, as the case may be, or as Landlord and City may mutually agree in writing. If City holds over without Landlord’s consent, the rent payable by City during the period of holding over will be one hundred twenty- five percent (125%) of the monthly Base Rent in effect during the last month of the Initial Term or then expiring Extended Term, as the case may be, of this Lease, and the tenancy will otherwise be on the terms and conditions contained in this Lease.
24.13 Cumulative Remedies
All rights and remedies of either party set forth in this Lease ar e cumulative, excep t as otherwise specifically provided in this Lease.
24.14 Time of Essence
Time is of the essence for all provisions of this Lease.
24.15 Survival of Indemnities
Termination of this Lease will not affect the right of either party to enforce any indemnities and rep resentations and warranties given or made to the other party, and it will not affect any provision of this Lease t hat expressly states it will survive termination. With respect to each of the indemnities contained in this Lease, the indemnitor has an imme diate and independent obligation to defend the indemnitees from any claim that actually or potentially falls within the indemnity provi sion even if the claim is or may be groundless, fraudulent , or false, and the obligation to defend arises at the time the claim is tendered to the indemnitor by the indemnitee and continues at all times until resolved.
24.16 Signs
City may e rect or post exterior signs on or about t he Premi ses with Landlord’s prior approval. Landlord reserves the right to review and approve the placement, design, and plan for before erecting or posting any sign, which review and approval will not be unreasona bly withheld or delayed. Interior signs not visible from the exterior of the Premises are permitted as provided under Article 7 (Alterations). Pursuant to Section 20 ( Surrender of Premises), City will remove exterior signs installed by City.
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24.17 Quiet Enjoyment and Title
Landlord covenants and represents that it has full right, pow er, and authority to grant the leasehold e state as provided in this Lease, and covenants that City, on paying the Rent and performing the covenants contained in this Lease, will peaceably and quietly have, hold, and enjoy the Premises and al l related rights during the Term as against all persons o r entities or on account of any action, inaction, or agreement of Landlord or its Agents. Without limiting the provisions of Section 16.2 (Landlord’s Indemnity), Landlord will Indemnify City and its Agents against Claims arising out of any assertion that would i nterfere with City ’s right to quiet enjoyment as provided in this Section.
24.18 Bankruptcy
Landlord represents and warran ts to City that Landlord has neither filed nor been the subject of any filin g of a petition under the federal bank ruptcy law or any f ederal or state insolvency laws or laws for the composition of indebtedness or for the reorganization of debtors, and, to t he best of Landlord’ s knowledge, no such filing is threatened. City’s leasehold estate under this L ease includes all rights to recei ve and enjoy all services, facilities , and amenities of the Premises as provided in this Lease. I f any of the services, facilities , or amenities are terminated, or materially limited or restricted b ecause of any such case or proceeding, or for any other r eason, City may (a) contract directly with any third -party provider of those services, facilities, or amenities, and (b) offset against the Rent all reasonable costs and expenses incurred by City in obtaining those services, facilities, or amenities.
24.19 Transfer of Landlord’s Interest
Landlord may transfer its interest in any portion of the Premises or this Lease to any other financially responsible person or entity. I f Landlord transfer s its interest i n any portion of the Premises or this Lease to another ot her financially responsible person or entity, then Landlord will be relieved of Landlord ’s obligations under this Lease accrui ng from and after the date of the transfer when (a) Landlord has provided notice to City of the name and address of Landlord’s successor, (b) Landlord has provided City with supporting documentation reasonably acceptable to City demonstrating the transf eree’s financial ability to assume these obligations transferred to it by La ndlord, (c) Landlord has transferred t he Security Deposit to the transferee, and (d) Landlord has delivered to City an express written assumption by the transferee of all of Landlord’s obligations under this Lease.
24.20 Non-Liability of City Officials, Employees, and Agents Notwithstanding anyt hing to the contrary in this Lease, no elected or appointed board, commission, member, officer, employee , or other A gent of City will be personall y liable to Landlord, its successors, or its assigns for any City default or breach or for any amount that may become due to Landlord or its successors or assigns, or for any obligation of City under this Lease.
24.21 Counterparts
This Lease may be executed in t wo or more counterparts, each of whic h will be deemed an original, but all of which taken together will constitute one and the same instrument.
24.22 Effective Date
This Lease will become effective on the date (the “Effective Date”) that (a) City's San Francisco Public Utilities Commission, in their sole and absolute discretion, adopt a resolution DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416
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approving this Lease i n accordance with all applicable laws and (b) this Lease is duly executed by Landlord and City.
24.23 Certification by Landlord
By executing this Lease, Landlord certifies that neither Landlord nor any of its officers or members have been suspended, disciplined, or disbarred by, or prohibited from contracting with, any federal, state, or local governmental agency. If Landlord or any of its officers or me mbers have been suspended, disbarred, disciplined, or prohibited from contra cting with any governmental agency , it will immediately n otify City of that fact and the reasons for the suspension, disbarment, discipline, or prohibition together with any relevant facts or information requested by C ity. If there is any suspension, disbarment, di scipline, or p rohibition that may result in the termination or suspension of this Lease , City may terminate this Lease on written notice to Landlord. Landlord acknowledges that this certification is a mater ial term of this Lease.
24.24 Intentionally Omitted
24.25 Intentionally Omitted
24.26 Cooperative Drafting
This Lease has been drafted through a cooperative effort of both parties, and both parties have had an opportunity to have the Lea se reviewed and revised by legal Land lord. No party will be considered the drafter of this Lease, and no presumption or rule that an ambiguity will be construed against the party drafting the clause will apply to the interpretation or enforcement of this Lease.
NOTWITHSTANDING ANYTHING TO T HE CONTRARY CONTAINED IN THIS LEASE, LANDLORD
ACKNOWLEDGES THAT NO OFFICER OR EMPLOYEE OF CITY HAS THE AUTHORITY TO COMMIT CITY
TO THIS LEASE UNLESS THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION HAS DULY ADOPTED A
RESOLUTION APPROVING THIS LEASE AND AUTHOR IZING CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS LEAS E. THEREFORE, ANY OBLIGATIONS OR LIABILITIES OF CITY UNDER
THIS LEASE ARE CONTINGENT ON THE ADOPTION OF THAT RESOLUTION, AND THIS LEASE WILL BE
NULL AND VOID UNLESS THE SAN FRANCISCO PUBLIC UTILITIES COMMISSION APPROVE THIS
LEASE, IN THEIR R ESPECTIVE SOLE AND ABSOL UTE DISCRETION, AND IN ACCORDANCE WITH ALL APPLICABLE LAWS. APPROVAL OF THIS LEASE BY ANY DEPARTMENT, COMMISSION, OR AGENCY OF
CITY WILL NOT BE D EEMED TO IMPLY THAT THE RESOLUTION WI LL BE ADOPTED AND NO SUCH APPROVAL WILL CREATE ANY BINDING OBLIGATIONS ON CITY.
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Landlord and City have executed this Lease as of the date first written above. [Landlord also acknowledges that it has read and understood the City's statement urging companies doing business in Northern Ireland to move t oward resolvin g employme nt inequities, encouraging compliance with the MacBride Principles, and urging San Francisco companies to do business with corporations that abide by the MacBride Principles.]
LANDLORD: LOLITA LODHIA, HERSHA LODHIA MILLER
and SHARMILA LODHIA, as Co -Trustees of the
LODHIA LIVING TRUST dated 11/21/1994
By: ___________________________________
Lolita Lodhia
Co-Trustee
By: ____________________________________
Hersha Lodhia Miller
Co-Trustee
By: ____________________________________
Sharmila Lodhia
Co-Trustee
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APPROVED AS TO FORM:
DAVID CHIU, City Attorney
By: _____________________________
Nancy Taylor
Deputy City Attorney
Authorized by
San Francisco Public Utilities Commission
Resolution:
Adopted:
CITY:
CITY AND COUNTY OF SAN FRANCISCO,
a municipal corporation
By: _________________________________
DENNIS J. HERRERA
General Manager
San Francisco Public Utilities Commission
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A-1
EXHIBIT A
Floor Plans of Premises
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B-1
EXHIBIT B
NOTICE OF COMMENCEMENT DATE
_________________, 2024
Rosanna S. Russell
Real Estate Director
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 10th Floor
San Francisco, California 94102
RE: Acknowledge ment of Commencement Date, Lease Between LOLITA LODHIA, HERSHA LODHIA MILLER and SHARMILA LODHIA, as Co-Trustees of the LODHIA LIVING TRUST dated 11/21/1994 (Landlord), and the CITY AND COUNTY OF SAN FRANCISCO (Tenant), for premises located at 1900 Oakdale Avenue, San Francisco.
Dear Ms. Russell:
This letter confirms that for all purposes of the Lease, the Commencement Date (as defined in Section 3.2 of the Lease) is ______________, 2024.
Please acknowledge your acceptance of this letter by signing and returning a copy of this letter.
Very truly yours,
The Lodhia Living Trust dated November 21,
1994
_____________________________
By: Hersha Lodhia-Miller, Co-Trustee and
Landlord
Accepted and Agreed:
By: ________________________
Rosanna Russell
Real Estate Director
Dated: _____________________
DocuSign Envelope ID: 72289571-FA37-4F31-81D4-E457EA59A416