DEPARTMENT Real Estate Services Division AGENDA NO. 8
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 Three-Year Office Lease with a Two-Year Extension Option for 3801 3rd Street, San Francisco at a $386,640 Annual Rent
Summary of
Proposed
Commission Action:
Approve the terms and conditions and authorize the General Manager to execute a three-year lease, with a two-year option to extend the term , with Bayview Plaza, LLC, as landlord, for the San Francisco Public Utilities Commission Wastewater Enterprise use of office s pace located at 3801 3 rd Street in San Francisco at an initial annual Base R ent of $386,640 with three percent annual increases.
Background: On May 24, 2016, by Resolution No. 16-0100, this Commission authorized a lease (Original Lease) between Bayview Plaza, LLC (Landlord) and the City and County of San Francisco (City), acting through the San Francisco Public Utilities Commission ( SFPUC), as tenant, for the SFPUC’s use of approximately 10,740 square feet of office space at 3801 3 rd Street, Suite
600, in San Francisco (Premises).
On Ja nuary 26, 2021, by Resolution No. 21- 0007, this Commission authorized an amendment to extend the Original Lease for three years . The Original Lease is due to expire on June 30, 2024.
The SFPUC ’s Wastewater Enterprise Col lection System Division (CSD) staff occupies the Premises . CSD is responsible for inspecting and cleaning the 900- mile combined sewer system and minimizing harmful pollutants entering the sewer system through management of the P retreatment, Resource Recovery and Pollution Prevention Program s. After considering office space availabilities in the Bayview -Hunters Point submarket and potential CSD moving costs, CSD staff electe d to remain in the Premises, which are close to the SFPUC’s Southeast Treatment Plant and CSD’s Sewer Operations Facility.
The SFPUC seeks a new three- year lease with a two-year option to extend the term (Lease) with Landlord for CSD staff to continue to occup y the Premises. SFPUC Real Estate Services s taff negotiated the Lease at an annual Base Rent of $386,640, wit h thre e percent (3%) annual increases .
The new rent under the Lease would be less than the annual base rent of $412,189.56 that the SFPUC is currently paying under the Original Lease.
Environmental
Review:
Approval and execution of the lease does not constitute a “project” under the California Environmental Quality Act Guidelines section 15378 because it is Agreement: Approve a Three-Year Lease at 3801 3rd Street, San Francisco Commission Meeting Date: June 25, 2024
a continuing use of an existing facility and will not result in direct or indirect physical changes in the environment.
Budget & Costs: Funding for the rent payments will be made from Wastewater Operating Fund.
Description of
Agreement:
Landlord: Bayview Plaza, LLC, a California limited
liability company
Tenant: City and County of San Francisco, a municipal
corporation, acting through the SFPUC
Premises: Approximately 10,740 square feet of office
space at 3 801 Third S treet, Suite 600, San
Francisco, CA
Use: Offices for the SFPUC’s Collection System
Division
Initial Term: Three years
Extension Option: One 2-year option to extend the Lease , to be exercised at City’s sole discretion
Rental Rate: $386,640 per year with three percent (3%) annual increases
Commencement Date: July 1, 2024
Expiration Date: June 30, 2027
Attachments: 1. SFPUC Resolution
2. Lease
PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.
WHEREAS, On May 24, 2016, by Resolution No. 16- 0100, this Commission authorized a lease (Original Lease) between Bayview Plaza, LLC, a California limited liability company, as landlord (Landlord), and the City and County of San Francisco (Cit y), acting through the San Francisco Public Utilities Commission (SFPUC ), as tenant, for the SFPUC’s use of approximately 10,740 square feet of office space at 380 1 3rd Street, Suite 600, in San Francisco (Premises); and
WHEREAS, On January 26, 2021, by R esolution No. 21- 0007, this Commission authorized an amendment to extend the Original Lease for three years. The Original Lease is due to expire on June 30, 2024; and
WHEREAS, The SFPUC’s Wastewater Enterpris e Collection System Division (CSD) staff occu pies the Premises. CSD is responsible for inspecting and cleaning the 900 -mile combined sewer system and minimizing harmful pollutants e ntering the sewer system th rough management of the Pre treatment, Resource Recovery and Pollution Prevention Programs. After considering office space availabilities in the Bayview -Hunters Point submarket and potential CSD moving costs, CSD staff elected to remain in the Premises, whi ch are close to the SFPUC’s Southeast Treatment Plant and CSD’s Sewer Operations Facility; and WHEREAS, The SFPUC seeks a new three- year lease with a two -year option to extend the term (Lease) with Landlord for CSD staff to continue to occupy the Premises; and WHEREAS, SFPUC Real Estate Services staff negotiated the Lease at an annual base rent of $386,640 with three percent annual increases. The new rent under the Lease would be less than the annual base rent of $412,189.56 t hat the SFPUC is currently paying under t he Original Lease; and
WHEREAS, Funding for the rent payments will be made from SFPUC Chart of Accounts No. 292649 20160 10030002 10000 0008 530110; and
WHEREAS, Approval and execution of the lease does not constit ute a “project” under the C alifornia Environmental Qua lity Act Guidelines section 15378 bec ause it is a continuing use of an existing facility and will not result in direct or indirect physic al changes in the environment; now, therefore, be it
RESOLVED, That this Commission hereby approves the te rms and condi tions of the Lease; and be it
FURTHER RESOLVED, That this Commission hereby ratifies, approves and authorizes all actions heretofore taken by any City official in connection with the Lease; and, be it FURTHER RESOLVED, That this Commissio n he reby authoriz es 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 a mendments or modifications to th e Lease, including without limitation, the exhibi ts, that the General Manager determines, in consultation with the City Attorney, are in the best interest of the City; do not materially increase the obligations or liabilities of the City; are necessar y or advisable to effectuate the purpos es and intent of the Lease or this resolution; and are i n compliance wit h all applicable laws, including 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
OFFICE LEASE
between
BAYVIEW PLAZA, LLC,
a California limited liability company,
as Landlord
and
CITY AND COUNTY OF SAN FRANCISCO,
by and through its Public Utilities Commission,
as Tenant
for the lease of
3801 Third Street, Suite 600
San Francisco, California
May 29, 2024
DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514 ii
Rev. August 2020
TABLE OF CONTENTS
Page
1. BASIC LEASE INFORMATION ...........................................................................1
2. PREMISES ..............................................................................................................3
2.1 Lease Premises .........................................................................................................3
2.2 Common Areas ........................................................................................................3
2.3 Parking .....................................................................................................................3
2.4 Condition of the Premises on Delivery ....................................................................4
2.5 Disability Access .....................................................................................................4
3. TERM ......................................................................................................................4
3.1 Term of Lease ..........................................................................................................4
3.2 Commencement Date and Expiration Date ..............................................................5
3.3 Intentionally Omitted ...............................................................................................5
3.4 Extension Option .....................................................................................................5
4. RENT .......................................................................................................................5
4.1 Base Rent .................................................................................................................5
4.2 Adjustments in Base Rent ........................................................................................5
4.3 Determination of Base Rent for the Extended Term ...............................................5
4.4 Intentionally Omitted ...............................................................................................7
4.5 Records ....................................................................................................................7
4.6 Payments by City .....................................................................................................7
4.7 Landlord’s Compliance with City Business and Tax Regulations Code .................7
4.8 Additional Services ..................................................................................................7
5. USE ..........................................................................................................................8
5.1 Permitted Use ...........................................................................................................8
5.2 Observance of Rules and Regulations .....................................................................8
5.3 Interference with Access ..........................................................................................8
6. LEASEHOLD IMPROVEMENTS .........................................................................9
6.1 Landlord’s Obligation to Install Improvements .......................................................9
6.2 Intentionally Omitted ...............................................................................................9
6.3 Intentionally Omitted ...............................................................................................9
6.4 Construction of Improvements that Disturb or Remove Exterior Paint ..................9
7. ALTERATIONS ......................................................................................................9
7.1 Alterations by City ...................................................................................................9
7.2 Title to Improvements ............................................................................................10
7.3 City’s Personal Property ........................................................................................10 DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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7.4 Alteration by Landlord ...........................................................................................11
8. REPAIRS AND MAINTENANCE .......................................................................11
8.1 Landlord’s Repairs .................................................................................................11
8.2 City’s Repairs .........................................................................................................11
8.3 Liens .......................................................................................................................11
9. UTILITIES AND SERVICES ...............................................................................12
9.1 Landlord’s Provision of Utilities ...........................................................................12
9.2 Services ..................................................................................................................12
9.3 Conservation ..........................................................................................................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 ..................................................13
11. SUBORDINATION ...............................................................................................14
12. DAMAGE AND DESTRUCTION........................................................................14
13. EMINENT DOMAIN ............................................................................................15
13.1 Definitions..............................................................................................................15
13.2 General ...................................................................................................................16
13.3 Total Taking; Automatic Termination ...................................................................16
13.4 Partial Taking; Election to Terminate ....................................................................16
13.5 Termination of Lease; Rent and Award .................................................................16
13.6 Partial Taking; Continuation of Lease ...................................................................16
13.7 Temporary Taking .................................................................................................17
14. ASSIGNMENT AND SUBLETTING ..................................................................17
15. DEFAULT; REMEDIES .......................................................................................17
15.1 Events of Default by City ......................................................................................17
15.2 Landlord’s Remedies .............................................................................................18
15.3 Landlord’s Default .................................................................................................18
16. INDEMNITIES ......................................................................................................18
16.1 City’s Indemnity ....................................................................................................18
16.2 Landlord’s Indemnity .............................................................................................19
17. INSURANCE .........................................................................................................19
17.1 City’s Self-Insurance .............................................................................................19
17.2 Landlord’s Insurance .............................................................................................19
17.3 Waiver of Subrogation ...........................................................................................20 DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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Rev. August 2023
18. ACCESS BY LANDLORD ...................................................................................20
19. ESTOPPEL CERTIFICATES ...............................................................................20
20. SURRENDER OF PREMISES..............................................................................20
21. HAZARDOUS MATERIALS ...............................................................................21
21.1 Definitions..............................................................................................................21
21.2 Landlord’s Representations and Covenants ...........................................................21
21.3 Landlord’s Environmental Indemnity ....................................................................22
21.4 City’s Covenants ....................................................................................................22
21.5 City’s Environmental Indemnity ............................................................................22
22. CITY PROVISIONS ..............................................................................................22
22.1 MacBride Principles - Northern Ireland ................................................................22
22.2 Controller’s Certification of Funds ........................................................................22
22.3 Prevailing Wages and Working Conditions ...........................................................22
22.4 Non-Discrimination in City Contracts and Benefits Ordinance ............................23
22.5 Tropical Hardwood and Virgin Redwood Ban ......................................................24
22.6 Bicycle Parking Facilities ......................................................................................24
22.7 Resource-Efficient City Buildings .........................................................................25
22.8 Sunshine Ordinance ...............................................................................................25
22.9 Conflicts of Interest................................................................................................25
22.10 Notification of Prohibition on Contributions .........................................................25
22.11 Preservative-Treated Wood Containing Arsenic ...................................................25
23. GENERALLY APPLICABLE PROVISIONS ......................................................26
23.1 Notices ...................................................................................................................26
23.2 No Implied Waiver ................................................................................................26
23.3 Amendments ..........................................................................................................26
23.4 Authority ................................................................................................................27
23.5 Parties and Their Agents; Approvals .....................................................................27
23.6 Interpretation of Lease ...........................................................................................27
23.7 Successors and Assigns ..........................................................................................27
23.8 Brokers ...................................................................................................................27
23.9 Severability ............................................................................................................28
23.10 Governing Law ......................................................................................................28
23.11 Entire Agreement; Incorporation of Exhibits ........................................................28
23.12 Holding Over .........................................................................................................28
23.13 Cumulative Remedies ............................................................................................29
23.14 Time of Essence .....................................................................................................29 DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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Rev. August 2023
23.15 Survival of Indemnities ..........................................................................................29
23.16 Signs .......................................................................................................................29
23.17 Quiet Enjoyment and Title .....................................................................................29
23.18 Bankruptcy .............................................................................................................29
23.19 Transfer of Landlord’s Interest ..............................................................................30
23.20 Non-Liability of City Officials, Employees, and Agents ......................................30
23.21 Counterparts ...........................................................................................................30
23.22 Effective Date ........................................................................................................30
23.23 Certification by Landlord .......................................................................................30
23.24 Cooperative Drafting .............................................................................................30
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT A — Floor Plan of Premises
EXHIBIT B — Notice of Commencement Date
EXHIBIT C — Rules and Regulations
EXHIBIT D — Standards for Utilities and Services
EXHIBIT E — Standards for Janitorial Service
EXHIBIT F — Standards for Security Service
DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
OFFICE LEASE
THIS OFFICE LEASE (this “ Lease”), dated for reference purposes only as of May 29, 2024, is by and between BAYVIEW PLAZA, LLC, a California limited liability company (“Landlord”), and the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation (“City” or “Tenant”), by and through its Public Utilities Commission (“SFPUC”), pursuant to SFPUC Commission Resolution No. , dated _______________ 2024, and with reference to the following facts and circumstances.
Landlord and City are sometimes collectively
referred to in this Lease as the “Parties” or singularly as a “Party”.
RECITALS
A. City and Landlord entered into that cer tain Office Lease, dated as of April 5, 2016 (the “Office Lease”), as amended by that certain Amendment No. 1 to Office Lease, entered into by and between City and Landlord, dated November 16, 2020 (“Amendment No. 1” and together with the Office Lease, the “Original Lease”), for City’s lease of the Premises at the Building (as such terms are defined in this Lease.)
B. The Original Lease will expire by its terms on June 30, 2024, and City desires to continue leasing the Premises from Landlord.
C. In furtherance of the foregoing, the Part ies now desire to enter into this Lease subject to the terms and conditions contained in this Lease and hereby agree as follows:
1. BASIC LEASE INFORMATION
The following is a summary of basic lease information (“ 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 29, 2024
Landlord: BAYVIEW PLAZA, LLC
Tenant: CITY AND COUNTY OF SAN F
RANCISCO
Building (Section 2.1): 3801 Third Street
Premises (Section 2.1): Suite 600
Rentable Area of Premises (Section 2.1): Approximately 10,740 rentable square feet Parking (Section 2.3): At no additional cost and without being su bject to the two-hour posted parking limit, City will
have the right to park seven (7) days a week in
the parking lot on the Property (i) one (1)
vehicle in the parking lot between 8:00 a.m. –
5:00 p.m. and (ii) additi onal vehicles for more
than the two-hour posted limit, and between
5:00 p.m. and 8:00 a.m., all under the
provisions of Section 2.3 below.
DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
Term (Section 3): Estimated Commencement Date:
July 1, 2024
Expiration Date:
June 30, 2027
Extension Option (Section 3.4): One (1) additional term of two (2) yea rs (“Extended Term ”), exercisable by City by
notice to Landlord given not less than one
hundred eighty (180) calendar days in advance,
on the terms and conditions set forth in Section
3.4. Base Rent for the Extended Term will be 95%
of the then fair market rent as provided in
Section 4.4.
Base Rent (Section 4.1): Initial Annual Base Rent: $386,640 Initial Monthly payments: $32,220
Base Rent Adjustment; Adjustment Dates
(Section 4.2):
On each anniversary of the Commencement
date, the Base Rent will escalate by three
percent (3%) annually.
Use (Section 5.1):
General office an d any other purpose
commensurate with the existing zoning and for
no other purpose without the prior written
consent of Landlord which Landlord will not
unreasonably withhold or delay
Leasehold Improvements (Section 6):
Landlord will provide, at its sole cost, new
replacement window coveri ngs for all exterior
windows located within the Premises
Utilities (Section 9.1): Paid by Landlord
Services (Section 9.2): Paid by Landlord
Notice Address of Landlord (Section 23.1): Bayview Plaza, LLC 22 Battery Street, Suite 503
San Francisco, CA 94111
Landlo
rd’s Key Contact: Leslie Karren
Landlord Contact Telephone No.: (415) 979-0406
DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
Landlord’s Maintenance Contact: SG Real Estate
[email protected]
Tenant’s Notice Address (Section 23.1): San Francisco Public Utilities Commission 525 Golden Gate Avenue, 10th Floor
San Francisco, CA 94102
Attn: Real Estate Director
Re: 3801 Third Street, Suite 600
Email: [email protected]
and to: Office of the City Atto
rney
City Hall, Room 234
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4682
Attn: Real Estate & Finance Team
Re: 3801 Third Street, Suite 600
Tenant’s Key Contact: Mabel Chow, SFPUC Wastewater Enterprise Collection Systems Division
Tenant Contact Telephone No.: (415) 603-7647
Brokers (Section 23.8):
None
2. PREMISES
2.1 Lease Premises
Landlord leases to City and City leases from Landlord, subject to the provisions of this Lease, those premises in the building iden tified in the Basic Lease Information (“Building”) and shown on the floor plan(s) attached as Exhibit A (“ Premises”). The Premises contain the rentable area and are located on the floor(s) of the Building specified in the Basic Lease Information. As used in this Lease, the term “ rentable area” means that the measurement of interior floor area is computed in accordance with the “Office Buildings: Standard Methods of Measurements” (ANSI/BOMA Z65.1-2017, adopt ed by the Building Owners and Managers Association (“BOMA Standard”). The Building, the land on which the Building is located, and all other improvements on or appur tenances to the land are referred to collectively as the “Property.”
2.2 Common Areas
City has the non-exclusive right to use, together with any ot her tenants in the Building, the lobbies, corridors, elevators, stairways, and other public areas of the Building and the Property (collectively, the “Common Areas”), and the non-exclusive right of access to and from the Premises by the main entrances to the Building and the Property.
2.3 Parking
At no additional cost and without being subject to the two-hour posted parking limit, City will have the right to park seven (7) days a week in the parking lot on the Property (i) one (1) vehicle in the parking lot between 8:00 a.m. – 5:00 p.m. (“ Normal Business Hours ”) and (ii) DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
additional vehicles between 5:00 p.m. and 8:00 a.m. City will provide Landlord with the license plate number of the one (1) vehi cle entitled to park during Norm al Business House to receive a parking permit. City should park such vehicle in one of the parking spaces furthest from the stores on the Property facing Thir d Street. Between the hours of 5:00 p.m. and 8:00 a.m., City will have the right to park additional vehicles in the same area. The additional cars must be moved from the parking lot by 8:00 a.m.
2.4 Condition of the Premises on Delivery
Landlord will deliver the Premises to City in good, broom clean condition, fully demised, water tight, with all Building Sy stems (as defined in Section 8.1 (Landlord’s Repairs)) in good working order, condition, and repair, and all othe r systems in and serving the Premises in good working order, condition, and repair, and the Pr emises, the Building, and the Common Areas in compliance with all app licable Laws, as provided in Sect ion 10.1 (Landlord’s Compliance with Laws; Premises Condition; Indemnity).
2.5 Disability Access
California Civil Code Section 1938 requires commercial landlo rds to disclose to tenants whether the property being leased has undergon e inspection by a Certified Access Specialist (“CASp”) to determine whether the property meets all applicable construction-related accessibility requirements.
Landlord discloses (i) Landlord has not been issu ed a disability access inspection certificate as described in California Civil Code (“ Civil Code”) 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 “subject premises” for the herein disclosures), and (iii) Landlord makes the following statutory disclosure per Civil Code Section 1938 (required “CASp Disclosure”):
“A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. A lthough state law does not require a CASp inspection of the subject premises, the co mmercial 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 le ssee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on th e 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 correct violations of cons truction-related accessibility standards within the premises.”
If City elects to obtain an inspection, C ity and Landlord will mutually agree on the arrangements for the time a nd manner of the CASp inspecti on, the payment of the CASp inspection fee, and the cost of any repairs necessa ry to correct violations of construction-related accessibility standards
3. TERM
3.1 Term of Lease
The Premises are leased for an initial term (“ Initial Term”) commencing on the later to occur of (a) the date specified in the Basic Lease Information as the estimated commencement date (the “ Estimated Commencement Date ”), or (b) the date that the San Francisco Public Utilities Commission has approved the transaction cont emplated by this Lease, in its sole and absolute discretion, as further pr ovided in this Lease. Th e Initial Term will end on the DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
Expiration Date specified in the Basic Lease Information, or the da te that this Lease is earlier terminated under the provi sions of this Lease, unless City extends the Initial Term under Section 3.4 (Extension Option), below.
3.2 Commencement Date and Expiration Date
The dates that the Initial Term commences and expires under this Lease are the “Commencement Date” and the “ Expiration Date.” If the Commencement Date occurs on a date other than the Estimated Commencement Da te provided in the Basic Lease Information, then Landlord will promptly deliver to City a no tice substantially in the form of 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 Initial Term.
3.3 Intentionally Omitted
3.4 Extension Option
Landlord grants City the right to extend the Initial Term (“ Extension Option”) for the additional term(s) specified in the Basic Lease Information ( “Extended Term”). The Extended Term will be on all of the terms and conditions c ontained in this Lease. City may exercise an Extension Option, if at all, by giving written notice (“ Extension Notice”) to Landlord no later than one hundred eighty (180) calendar days before the expiration of the term to be extended; provided, however, if there is an uncured Event of Default on the date City gives an Extension Notice, then Landlord may reject City’s Extensi on Notice if City fails to cure the Event of Default within ten (10) business da ys after Landlord’s written demand for City to cure the Event of Default. If City extends the Initial Term as provided in this Section, then the word “ Term” will mean and include any Extended Term.
4. RENT
4.1 Base Rent
The Base Rent is payable in equal monthl y payments at the address specified for Landlord in the Basic Lease Information, or othe r place as Landlord may designate in writing on not less than thirty (30) calendar days’ advance notice. City will pay the Base Rent monthly within thirty (30) calendar days after 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 calendar month or the Expi ration Date occurs on a da y other than the last day of a calendar month, then the monthly paymen t of the Base Rent for the fractional month will be prorated based on a thirty (30) calendar day month.
4.2 Adjustments in Base Rent
On each date specified in the Basic Lease In formation for the adjustment of Base Rent (an “Adjustment Date”), the Base Rent payable under Section 4.1 (Base Rent) will be adjusted as follows:
On each Adjustment Date, the Base Re nt for the following twelve-month period will be adjusted to equal one hundred three percent (103%) of the Base Rent for the lease year preceding the Adjustment Date.
4.3 Determination of Base Rent for the Extended Term
(a) At the commencement of any Extended Term, the Base Rent will be adjusted to equal ninety-five percent (95%) of the prevailing market rate for space of comparable DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
3801 3rd Street, Suite 600
size and location to the Premises then being offere d for rent in other buildings similar in age, location, and quality to the Building (“Comparable Space”) situated within the Bayview area of San Francisco (“Reference Area.”) As used in this Section, “ prevailing market rate ” means the base rent for Comparable Space, taking into account (i) any additional rent and all other payments and escalations payable under this Lease, (ii) the floor locations and sizes of the premises covered by leases of the Comparable Space, if any, (iii) the duration of Extended Term under this Lease and the term of the leases for Comparable Space, (iv) any free rent and other tenant concessions given under the leases for Comparable Space, and (v) any tenant improvement allowances and other allowances gi ven under the leases for Comparable Space, if any.
(b) Within thirty (30) calendar days after City’s exercise of the Extension Option, Landlord will notify City of Landlord’s dete rmination of the prevailing market rate for the Premises, together with re asonable supporting documentation. If City disputes Landlord’s determination of the prevailing ma rket rate, City will notify La ndlord within fourteen (14) calendar days after Landlord’s notice to City of the prevailing market rate and the dispute will be resolved as follows:
(i) Within thirty (30) calendar days after
Landlord’s notice to City of the prevailing market rate, Landlord and City will attempt in good faith to me et no less than two (2) times, at a mutually agreeable time and place, to attempt to resolve the disagreement. (ii) If within that thirty (30) calendar day period,
Landlord and City cannot agree on the prevailing market rate, then each will select one appraiser to de termine the prevailing market rate. Within thirty (30) calendar days after the expirati on of the thirty (30) calendar day consultation period, each party will cause its appraiser to prepare and complete an appraisal report determining the prevailing market rate and submit the report to Landlord and City.
(iii) If only one appraisal repor t is submitted within that thirty (30) calendar day period, then the prevailing market rate determined in that appraisal report will be used to establish the Base Rent for the Extended Term. If both appraisal reports are submitted within the thirty (30) calendar day period, and if the prevailing market rate s determined in the two appraisal reports differ by less than ten percent (10%) of the higher of the two, then the average of the two will be the prevailing market rate. If the prevailing market rates in the two appr aisal reports differ by more than ten percent (10%) of the hi gher of the two, then th e two appraisers will immediately select a third appraiser. Within ten (10) calendar days after selection, the third appraiser will dete rmine which of the first two appraisal reports specified a value closest to the ac tual fair market value, which will be the prevailing market rate. Within thir ty (30) calendar days after the third appraiser is selected, the third apprai ser will prepare an appraisal report determining the prevailing market rate and submit the repo rt to Landlord and City. The prevailing market rate determined in the third appraisal report will then be averaged with the closer of the prevailing market rates from the two previous appraisals and the result w ill be the prevailing market rate. The determination of the third appraiser will be final and bind the Parties. (iv) If City’s Director of Property does not approve
the prevailing market rate as determin ed by the appraisal procedure specified above, the Director of Property may revoke City’s exercise of the Extension Option.
DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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(v) All appraisers must be “MAI” designated
members of the Appraisal Institute with not less than five (5) years of recent experience appraising leases of commerci al properties similar to the Premises in the Reference Area. Landl ord and City will pay the cost of the appraiser it selects and one-half of the cost of the third appraiser.
4.4 Intentionally Omitted
4.5 Records
Landlord will maintain at the Building at its of fices in San Francisco in a safe, complete, and organized manner all of its records related to this Lease, Real Estate Taxes, Operating Costs, and any other charges paid by Ci ty under this Lease, for at le ast three (3) ye ars after the Expiration Date or earlier termination of the Term. Landlord will maintain the records on a current basis and in sufficient de tail to facilitate ad equate review and audit. All books and records will be available for in spection, copying, and audit by City and its representatives, at City’s expense.
4.6 Payments by City
Landlord acknowledges that City cannot ma ke any payments to Landlord unless Landlord is qualified as an appr oved vendor in City’s financial a nd payment system. City and Landlord acknowledge and agree that Landlord is an approved vendor. Therefore, if Landlord is ever deemed not to be an approved vendor, City will not be in default of any monetary obligation under this Lease and no interest or late charge will apply during any peri od of the Term where Landlord is not an approved vend or with City. More informa tion 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) calendar days after City receives Landlord’s written notic e and the Contra ct Monitoring Division confirms that Landlord has been approved as a City vendor.
4.7 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 Ta x Collector may require the withholding of payments to any vendor that is delinquent in the payment of any amo unts that the vendor is required to pay the City under the San Francisc o Business and Tax Regulations Code. If, under that authority, any payment City is required to make to Landlor d 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 wit hheld under this paragraph to Landlord, without interest, late fees, penalties, or other charges, upon Landlord co ming back into compliance with its San Francisco Business and Tax Regulations Code obligations.
4.8 Additional Services
City may request from time to time in writi ng that Landlord provide or arrange for additional services or incur a dditional expenses not covered unde r this Lease fo r the Premises, which Landlord may provide or arrange in its reasonable discretion. If Landlord elects to provide the requested additional services and City has approved the cost and scope of those services in advance, then City will pay Landl ord as Additional Charges for the cost of those services as approved by the SFPUC Real Estate Director. Landl ord 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 additional 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 DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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services within thirty (30) calendar days after receipt of an i nvoice; provided, however, that City may elect to provide any deposit or other prepayme nt 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, whic h, 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 general office uses and any other uses specified in the Basic Lease Information, and for no other use without Landlord’s prior written consent, which may not be unreasonably withheld, conditioned, or delayed.
5.2 Observance of Rules and Regulations
City will observe the rules and regulations for the Building attached to this Lease as Exhibit C (“Rules and Regulations ”), but the provision s of this Lease will govern over any conflicting Rules and Regulations. Landlord ma y make reasonable changes to the Rules and Regulations, but all changes must be applicable to all other Building tenants and the changes may not (a) reduce Landlord’s obligations under the Lease, (b) conflict with the provisions of this Lease, (c) materially increase City’s burdens or obligations, (d) impose a charge on City for services that this Lease expressly states ar e to be provided to City at no charge, or (e) materially adversely affect any permitted use of the Premises. The changes permitted under this Section will be binding on City within a reasonable implementation period after delivery of Landlord’s written notice of the changes to City. Landlor d will administer the Rules and Regulations in a fair and nondiscriminatory manner and use reasonable efforts to cause other Building tenants to comply with them. Landlord will notify City of any waiver of or speci al dispensation under the Rules and Regulations granted by Landlord to a ny other tenant in the Building and on request, City will be entitled to the same waiver or special dispensation.
5.3 Interference with Access
Landlord will provide to City uninterrupted access to the Building and the Premises twenty-four (24) hours per day, seven (7) days per week, including during any power outages affecting the Premises or any portion of the Buil ding; but Landlord may, after consultation with City’s Administrator, interrupt City’s access to the Premises or the Building if there is an immediate threat that will rende r the Premises, the Common Areas, or any other 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 Premises, the Common Areas, or any other portion of the Building is unsafe for human occupancy due to Landl ord’s failure to comply with its obligations under this Lease or for an y other reason other th an an Event of Defau lt, then Landlord will immediately undertake all necessary steps to correct the condition. If the condition continues for two (2) business days and impairs City’s ability to carry on its business in the Premises, then the Rent will be abated based on the extent to which the condition interferes with City’s ability to carry on its business normally and safely at the Pr emises. If the conditi on continues for thirty (30) calendar days or more afte r City’s use is interrupted or impaired then, without limiting any of its other rights under this Leas e, City may terminate this Leas e, unless Landlord supplies City with evidence reasonably satisfactory City that City’s normal and safe use will be restored within sixty (60) calendar days after the date City’s use was interrupted or impaired, and City’s full use is actually restored within that sixty (60) cale ndar 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. LEASEHOLD IMPROVEMENTS
6.1 Landlord’s Obligation to Install Improvements
At no cost to City, Landlord will complete the Leasehold Improvements as set forth in the Basic Lease Information within one hundred twenty (120) calendar days of the Effective Date (as defined in Section 23.22 (Effective Date)).
6.2 Intentionally Omitted
6.3 Intentionally Omitted
6.4 Construction of Improvements that Disturb or Remove Exterior Paint Landlord, on behalf of itself and its successors, assigns, and Ag ents, will comply with all requirements of the San Francisco Building Code Chapter 34 and all other applicable local, state, and federal laws, including the California and United States Occupational and Health Safety Acts and their implementing regulations, when the work or alteration dist urbs or removes exterior or interior lead based or “presumed” lead-based pa int (as defined below). Landlord and its Agents must give to City no less than three (3) busine ss days’ prior written notice of any disturbance or removal of exterior or interior lead-based or presumed lead-based paint. Landlord acknowledges that the required notification to the San Franci sco Department of Buil ding Inspection regarding the disturbance or removal of exterior lead-based paint unde r San Francisco Building Code Chapter 34 does not constitute notification to City as Tenant under this Lease and similarly that notice under this Lease does not constitute no tice under San Francisco Building Code Chapter
34. Further, Landlord and its Ag ents, when disturbing or removi ng exterior or interior lead- based or presumed lead-based paint, will not use or cause to be used any of the following methods: (a) acetylene or propane burning and to rching; (b) scraping, sanding, or grinding without containment barriers or a High Efficiency Particulate Air filter (“HEPA”) local vacuum exhaust tool; (c) hydroblasting or high-pressure wash without cont ainment barriers; (d) abrasive blasting or sandblasting w ithout containment barrier s or a HEPA vacuum exhaust tool; and (e) heat guns operating above 1,100 degrees Fahre nheit. Landlord will comply with the requirements of California Code of Regulations Title 17 when taking measures that are designed to reduce or eliminate lead hazard s. Under this Section, paint on the exterior or interior of buildings built before January 1, 1979 is presumed to be lead-based paint unless a lead-based paint test, as defined by San Francisco Buildin g Code Chapter 34, demonstrates an absence of lead-based paint on the interior or exterior surf aces of the buildings. Under this Section, lead- based paint is “disturbed or re moved” if the work or alterati on involves any action that creates friction, pressure, heat, or a chem ical reaction on any lead-based or presumed lead-based paint on a surface so as to abrade, loosen, penetrate, cut through, or eliminate paint from that surface.
7. ALTERATIONS
7.1 Alterations by City
City may not make or permit any alterations , installations, additi ons, or improvements (collectively, “Alterations”) to the Premises wit hout first obtaining Landl ord’s written consent, which Landlord will not unreasonably withhold, conditi on, or delay. Installation of furnishings, fixtures, equipment, or decora tive improvements that do not affect the Building Systems or structural integrity of the Building, and the re painting and re-carpeting of the Premises do not constitute Alterations and do not require Landlor d’s consent. Any Alte rations permitted under this Lease will be made at City ’s cost in compliance with ap plicable Laws (as defined in Section 10.1 (Landlord’s Compliance with Laws )). Without cost to itself, Landlord will cooperate with City in securing the building and other permits and authorizations needed for any permitted Alterations. Landlord wi ll not be entitled to any construction or other administrative DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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fee 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 th at 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 next Section) and the Leasehold Improvements, all appurtenances, fixtures, improvements, 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 pr operty. City may not re move 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 instal led in the Premises by or for City and that can be removed without structural damage to the Premises (collectively, “ City’s Personal Property”) are and will remain City’s property. If City requests, Landlord may assist City by ordering and installing City’s Personal Property and City will reimburse Landlord for all fees , costs, and expenses approved by City in advance within thirty ( 30) calendar days after receipt of an invoice; provided, however, that City may elect to provide any deposit or other expense required at the time of ordering City’s Personal Property. To the extent possible, any ma intenance contract or warranty in connection with the purchase or leas e of tangible personal property will be optional (namely, City may, but is not requi red to, purchase a ma intenance contract or warranty). To the extent feasible, Landlord and any vendors of Landlord will separately itemize any shipping charges. Although Landlord may order and inst all City’s Personal Pr operty, all items will remain City’s Personal Property and not be considered Leasehol d Improvements or constitute any component of the Leasehold Improvements. 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 Use Tax Law and warrants to City that Landlord that it will fulfill its use tax obl igations under that law with resp ect 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 rem it the entire amount of the use tax payment to the state and provide the City with a receipt in accordance with the California 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 State. This ob ligations of Landlord unde r the foregoing sentence will survive expiration or earlier termination or of the Lease. (b) At any time during the Term, City ma y remove any of City’s Personal Property, and City will repair any damage to the Premises resulting from th at removal. On the expiration or earlier termination of this Lease, City will remove City ’s Personal Property from the Premises in accordance with Section 20 (Su rrender 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 ow ned by an equipment company and leased to City (“Secured Personal Property ”). Landlord recognizes the right s of any supplier, lessor, or lender who has an interest in a ny items of Secured Personal Prope rty to enter the Premises and remove that Secured Personal Property at any time during the Term or within thirty (30) calendar days after the Expiration Date. On City’s reas onable request, Landlord will execute and deliver any document required by any supplie r, lessor, or lender in connec tion with the in stallation of any items of Secured Personal Property in the Premises, under which Landlord waives any rights it may have or acquire w ith respect to the Secu red Personal Property, so long as the supplier, equipment supplier, lessor, or lender agrees that it (i) will remove the Secured Personal Property from the Premises within thirty (30) calendar da ys after the Expiration Date (and if it does not DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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remove 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 in terference with or disruption to City’s use and occupancy of the Premises during any altera tions, installations, add itions, or improvements to the Building, including any leasehold improvemen t work for other tenants in the Building.
Landlord will promptly remedy any interference or disruption on receiving City’s notice thereof.
8. REPAIRS AND MAINTENANCE
8.1 Landlord’s Repairs
At its cost, Landlord will repair and maintain the exterior and struct ural portions of the Building in good working order an d repair, including, the roof, f oundation, bearing and exterior walls, windows, doors, door frames, demising walls, and subflooring, and the heating, ventilating, air conditioning, plumbi ng, electrical, fire protection, li fe safety, security, and other mechanical, electrical, and co mmunications systems of the Building (collectively, the “ Building Systems”) and the Common Areas. Wi thout limiting the foregoing, Landlord will maintain the Building in a clean, orderly, safe, and attractive manner, will provide exterior graffiti removal with reasonable frequency, and wi ll not permit any other tenants of the Building to disturb or interfere with City’s use of the Premises or perm it to be done in or about the Building or the Common Areas anything that is illegal, is da ngerous to persons or property, or constitutes a nuisance.
8.2 City’s Repairs
Subject to Landlord’s warranty under Section 10.1 (Premises Condition), any construction warranties or guaran ties received in connection with Landlord’s completion of the Leasehold Improvements, and Landlord’s repair and maintenance obligations under this Lease, City will repair and maintain at its cost the interior portions of the Premises and will keep the Premises in good working order an d in a safe and sanitary condi tion, except for ordinary wear and tear and damage by casualty or condemna tion. City will make any required repairs and replacements to the interior of the Pr emises that Landlord specifies in writing (a) at City’s cost, (b) by contractors or mechanics se lected by City and reasonably approved by Landlord, (c) so that the interior portions of the Premises will be at least substantially equal in quality, value, and utility to the original work or installation before the damage, (d) in a manner 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 applicable Laws, including any applicable contractin g requirements under City’s Charter and Administrative Code. At all ti mes during the Term, promptly after City’s reasonable notice, Landlord will provide City and its Agents with a ccess to those portions of the Building that are necessary to maintain or repair the telecommunications and data and computer cabling facilities and equipment installed by City.
8.3 Liens
City will keep the Premises free from liens arising out of any work performed, material furnished, or obligations incurred by City during the Term. Landlord may post on the Premises any notices permitted or required by Laws or that are needed for the protection of Landlord, the Premises, or the Building, from mechanics’ and material suppliers’ liens. City will give Landlord at least ten (10) business days’ prior written notice of commencement of any repair or construction by City on the Premises.
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9. UTILITIES AND SERVICES
9.1 Landlord’s Provision of Utilities
Landlord will furnish or cause to be furnished to the Premises, at its cost, utilities, and services in accordance with the Standards for U tilities and Services set forth in the attached Exhibit D.
9.2 Services
(a) Janitorial Service
At its cost, Landlord will provide janitorial service in accordance with the standards and specifications contained in the attached Exhibit E.
(b) Security Service
At its cost, Landlord will provide security for the Building in accordance with the specifications contained in the attached Exhibit F.
9.3 Conservation
Landlord may establish reasonable measures to conserve energy and water, including automatic light shut off after hours and efficient lighting forms, so long as these measures do not unreasonably interfere with City’s use of the Premises.
9.4 Disruption in Essential Utilities or Services
If any failure, stoppage, or interruption of any utilities or services to be furnished by Landlord occurs, Landlord will immediately notify C ity 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 Bu ilding’s sanitary, electrical, heating, air conditioning, water, elevator, fi re protection and security, audio, video or electronic communications, hazard detection, a nd alarm, janitorial 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) two (2) or more business days and it is in Landlord’s reasonable control to re store the Essential Services or (b) five (5) or more consecutive business days if the failure is not within Landlord’s reasonable control, then the Rent will be abated based on the extent that the lack of the Essential Services impairs City’s ability to normally carry on its business in the Premises, or, alternatively at City’s election, City may provide the Essential Services and offset the reas onable cost against the Rent next due under this Lease. The abatement or right to provide the Essential Services and offset against Rent will continue until the Essential Services have been restored so that the lack of any remaining Essential Services no longer materially impairs City’s ability to carry on its business in the Premises. Landlord will use its be st efforts to restor e disrupted Essential Services as soon as possible. If the failure to provide any Essential Services occurs for any reason for fifteen (15) calendar days or more in any sixty (60) calendar day period and that failure interferes with City’s ability to normally carr y on its business in the Pr emises, then, w ithout limiting any of its other rights or remedies under this L ease or at law or in equity, City may terminate this Lease on written notice to Landlord, unle ss Landlord supplies City with evidence reasonably satisfactory to City that the Essential Servi ces will be reliably restored within sixty (60) calendar days after the date City’s use was first interrupted, and th e Essential Services ar e actually restored and reliable within the sixty (60) ca lendar day period. C ity will not be entitled to any abatement of Rent or right to terminate if La ndlord’s inability to supply Essential Services to City results solely from the negligent acts or omissions of City and its Agents.
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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 Repairs), Landlord will at all times during the Term maintain, at its cost, the Pr operty, Building, Common Ar eas, and the Building Systems in compliance with applic able present or future federal, state, local, and administrative laws, rules, regulations, orders, and requirements (collectively, “ Laws”). Landlord represents and warrants to City, and covena nts with City, as follows to the best of Landlord’s knowledge:
(a) the physical structure, fixtures, and permanen t improvements of the Premises (including the Leasehold Improvements) and all portions of th e Property and the Building along the path of travel to the Premises (including the Building en trances, Common Areas, restrooms, elevators, lobbies, telephone banks, and dr inking fountains and parking ar eas) 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 pe rsons with disabilities (collectively, “ Disabilities Laws”); (b) the Building is not an unreinforced mas onry building, and is now, and as of the Commencement Date will be, in co mpliance with all applicable La ws relating to seismic safety (collectively, “ Seismic Safety Laws ”); (c) the Building, the Common Areas, and Building Systems serving the Premises are now, and as of the Commencement Date will be, in full compliance with all applicable Laws relating to fi re and life safety (inc luding the San Francisco High-Rise Sprinkler Ordina nce) (collectively, “ Life Safety Laws ”); (d) the Building, the Common Areas, 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 adversely affect City’s intended use of the Premises. Without limiting Section 16.2 (L andlord’s Indemnity), Landlord will Indemnify City against any and all Clai ms (defined in Section 16.1 (City’s Indemnity ) below) arising out of (i) any failure of the Property, Building, Common Areas, 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 with applicable Laws, except that City will not be required to make any structural alterations, additions, or other modifications 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 resp onsibility under this Lease. City w ill be responsible for complying with any requirement of the Disabilit ies Laws relating to the placement of City’s furniture or other City Persona l Property and the operation of any programs in the Premises, other than any requirement re lating to the physical structur e, fixtures, and permanent improvements of the Premises or portions of the Property or Building along the path of travel to the Premises, which are Landlord’s obligation as provided in Section 10.1 (Premises Condition).
Without limiting Section 16.1 (City’s Indemnity), City will Indemnify La ndlord against any and all Claims arising out of City’s failure to comply with all applicable Laws as provided in this Section.
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 insu rance policies covering the Building 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 Build ing in amounts reasonably satisfactory to Landlord or the holder of any mortgage or deed of trust encumbering the Building, (c) cause an increase in DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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the casualty insurance premium for the Building unless City agrees to pay the increase, or (d) subject Landlord to any liability or responsibility for injury to any person or property solely because of the business operation conducted by City in the Premises; provided, however, Landlord will provide City with reasonable prio r written notice of any applicable insurance requirements and no insurance requirements will mate rially and adversely interfere with City’s normal business in the Premises.
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 in the Property (or any portion of it), and (ii) the lien of any mortgages or deeds of trust and renewals, modifications, consolid ations, replacements, and extens ions of any of the foregoing that may be executed by Landlord at any time in any amount for which any part of the Property, any ground lease, or underlying lease, or Landlord’s in terest or estate in them is subject. But, if the ground lessor, mortgagee, trus tee, or holder of any mortgage or deed of trust (each an “Encumbrancer”) elects to have City’s interest in this Lease be superior to its Encumbrance, then, on City’s receipt of a notice from the Encu mbrancer, this Lease will be deemed superior, whether this Lease was executed be fore or after the date of the Encumbrance or the date of its recording. The provisions of this subsection 11(a) are self-opera tive and no furt her instrument will be required. At Landlord’s request, how ever, City will enter into a subordination, non- disturbance, and attornment agreement (“ SNDA”) with Encumbrancer in a form reasonably acceptable to City and Encumbrancer evidencing th e subordination or superior ity of this Lease.
City’s covenant under this subs ection (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 is foreclosed or a deed in lieu 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 fore closed and the rights and possession of City under this Lease will not be disturbed unless an Even t of Default has occurred and is continuing. City will attorn to and become the tenant of the suc cessor-in-interest to Landlord, provided that City has received proper written notice of the succession and the name and address of the successor landlord. The provisions of this subsection 11(b) are self-operative and no further instrument will be required. Landlord agrees, however, up on request by City and in a form reasonably acceptable to City to cause any Encumbrancer to execute an SNDA evidencing the foregoing non-disturbance provisions together with the priority or subordination of this Lease with respect to any such Encumbrance.
12. DAMAGE AND DESTRUCTION
(a) If the Premises, the Building, or an y Building Systems are damaged by fire or other casualty, Landlord will repair the same without delay (and if Landlord is then carrying insurance on the Leasehold Improvements or if, at its sole option, City makes sufficient funds available to Landlord, Landlord will also re pair the Leasehold Improvements) so long as the repairs can be made under app licable Laws within sixty (60) calendar days after Landlord obtains all necessary permits but not later than two hundred ten (210) calendar days after the date of the damage (“Repair Period”). If Landlord is obligated to repair as provided above, then 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 whic h the damage, the making of the repairs, and reoccupying the repaired Premises interferes 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 DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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to City’s Personal Property or any damage caused by the neg ligence or willfu l misconduct of City or its Agents that is not covered by insurance.
(b) Within twenty (20) calendar days af ter the date of the damage, Landlord will notify City whether, in La ndlord’s reasonable judgment made in good faith, the repairs can be made within the Repair Period. If the repair s 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 Landl ord’s notice. The termination date will be the date specified in the termination notice, which date may be not le ss than thirty (30) or more than sixty (60) calendar days after Landlord’s notice. If either party elects to terminate this Lease, then the Rent will be reduced by a proportionate amount based on the extent to which the damage interferes with the normal conduct of City ’s business in the Premises, and City will pay the reduced Rent up to the date of termin ation. Landlord will refund to City any Rent previously paid for any period after the date of termination.
(c) Notwithstanding the foregoing, if the Pr emises are damaged or destroyed by flood or earthquake, and the damage or destruction is not fully covered by insurance proceeds payable under the insurance policies Landlord is required to carry under this Lease (excluding any deductible, for which Landlord is solely re sponsible), then Landlord may terminate this Lease by written notice to City within thirty (30) calendar 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 the denial of insurance coverage. If Landlord does not elect to terminate this Lease, then subsections (a) and (b) will apply. (d) If during the last six (6) months of th e Term there is substantial damage that Landlord would be required to repair under this Section, then within thirty (30) calendar days after the date of the damage Landlord or Ci ty may, each at its opti on, terminate this Lease as of the date the damage occurred by giving written notice to the other party of its election to do so; provided, however, Landlord may terminate this Lease only if it would take more than thirty (30) calendar days to repair the damage.
(e) The parties intend that the provisions of this Section fully govern their rights and obligations in the event of damage 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, subdivi sion 4, and Sections 1941 and 1942 of the Civil Code of California or unde r 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 unde r 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 which titl e to the portion of the Property 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 value paid, awarded, or received for a Taking, whether under any judgment, agreement, settlement or otherwise.
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13.2 General
If during the Term or during the period betw een the execution of this Lease and the Commencement Date, there is any Taking of all or any part of the Premises or the Building or any interest in this Lease, the rights and oblig ations of the Parties 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 accordingly, Landlord and City each waives any right to terminate this Lease in whole or in part under 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.
13.4 Partial Taking; Election to Terminate
(a) If there is a Taking of any portion (but less than all) of the Premises, then this Lease will terminate in its enti rety if all of the following exist: (i) the partial Taking, in City’s reasonable judgment, renders the remain ing portion of the Pre mises untenantable or unsuitable for continued use by City for its intended purposes or otherwise materially adversely affects City’s normal operations in th e Premises or acces s to the Premises, (ii) the condition rendering the Premises untenantabl e or unsuitable or that materi ally 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) calendar da ys after the Date of Taking either City or Landlord ma y terminate 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 Pr emises unsuitable for continued use by City for its intended purposes or otherwise mate rially 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) calendar day after th e written notice is
given or the Date of Taking.
13.5 Termination of Lease; Rent and Award
On termination of this Lease in its entiret y under Section 13.3 (Total Taking; Automatic Termination) or under Sectio n 13.4 (Partial Taking; Cont inuation of Lease), then: (a) City’s obligation to pay Rent will continue up until the date of termination and then will cease, and (b) Landlord will be entitled to the entire Award, ex cept 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 , if any, 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; C ontinuation of Lease) above, th en this Lease will terminate as to the portion of the Premises taken, but will remain in effect as to the portion not taken, and the rights and obligations of th e Parties will be as follows: (a) Rent will be equitably reduced depending on the configuration or the Premises and the portion taken (for instance, if the area of DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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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 th e Premises taken bears to the area of the Premises before the Date of Taking), and (b) Landlord will be entitled to the entire Award in connection therewith, provided that City will receive any por tion of the Award for the unamortized cost of any Leasehold Improvements paid for by City in the portion of the Premises taken and any Award made specifically for City ’s relocation expenses, if any, or the interruption of or damage to City’s business or damage to City’s Personal Property.
13.7 Temporary Taking
Notwithstanding anything to the c ontrary in this Section, if a Taking of the Premises occurs for sixty (60) consecutive calendar days or fewer, this Lease will remain unaffected by the temporary 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, C ity will be entitled to receive that portion of any Award representing compensati on for the use or occupa ncy of the Premises during 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 provided in this Section, City ma y not directly or indi rectly sell, assign, encumber, pledge, or otherwise tran sfer or hypothecate all or any part of its interest in or rights with respect to the Premises or its leasehold estate created by this Lease or permit 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 Landlord’ s prior written consent in each instance, which will not be unreasonably withheld, conditioned, or delayed. Notwithstandi ng the foregoing, from time to time, on notice to Landlord, but without Landlord’s c onsent, City may transfer this Lease or use and occupancy of all or any of the Premises to any department, commission, or agency of the City and County of San Francisco for uses permitted under 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 4.6 (Payments by City) above, City fails to make any timely payment of Rent and to cure the nonpayment within five (5) busi ness days after receipt of wr itten notice of nonpayment from Landlord, provided that for the firs t two (2) monthly payments 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 fo r City or any Adjustment Date, City will have twenty (20) calendar days after written notice from Landlord to cure any nonpayment. (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 perform any other of its covenants or obligations under this Lease (not involving the pa yment of money) and failure to cure the non-performance within thirty (30) calendar days of the date of receipt of Landlord’s notice of the failure, provided that if more than thirty (30) calendar days are reasonably required for the cure, no Event of Default will occur if City commences the cure within the thirty (30) calendar day period and diligently prosecutes the cure to completion.
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15.2 Landlord’s Remedies
On the occurrence and during th e 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), including the right to terminate City’s right to possession of the Premises and to recover the worth at the time of award 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 co uld 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 af ter breach and abandonment), which allows Landlord to continue this Lease in effect and to enforce all of its rights and remedies unde r this Lease, including the right to recover Rent as it becomes due, for so long as Landlord doe s not terminate City’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 cure rights under this Lease), at its sole option, City may cure the default at Landlord’s expense if the default continues after te n (10) calendar days afte r the date City gives notice to Landlord of City’s intention to perform the cure. Howeve r, if a default occurs because of a cause beyond Landlord’s control (excluding any financial inability to perform), and Landlord cannot with due diligence cure the defau lt within the ten (10) calendar day period, then the ten (10) calendar day period will be extende d if, promptly on receipt of City’s notice, Landlord advises City of Landlord’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) cal endar days and impairs City’s ability to carry on its normal business in the Premises, then City may terminate this Lease on written notice to Landlord within thirty (30) calendar days afte r the expiration of the sixty (60) calendar day period. Subject to the other provi sions of this Lease relating to abatement of Rent, if Landlord fails to cure any default within the ten (10) calendar day cure period provided above (as it may be extended as provided 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 City’s ability to carry on its normal business at the Premises. City’s rights under this Sec tion and under any other provisions of this Lease will not limit in any way any of its other rights and remedies under this Lease or at law or in equity.
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 clai ms, losses, damages, costs, a nd expenses, including reasonable attorneys’ fees (collectively, “Claims”), incurred as a result of (a) City’s use of the Premises, or (b) any negligent acts or omissions of City or its Agents in, on, or about the Premises or the Property; provided, however, City will not be obligated to Indemnify Landlord or its Agents to the extent any Claim arises out of the negligence 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 S ection, at its sole option, City ma y elect to defend the Claim by attorneys in City’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 determine the settlement or compromise of any DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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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 Section will survive the termination of the Lease.
16.2 Landlord’s Indemnity
Landlord will Indemnify City and its Agents against any and all Claims incurred 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 omissi ons of Landlord or its Agents in , on, or about the Premises or the Property; provided, however, Landlord will not be ob ligated to Indemnify City or its Agents to the extent any Claim arises out of the negligence or willful misconduct of City or its Agents. In any action or proceeding brought ag ainst City or its Agents beca use of a Claim Indemnified by Landlord under this Section, at its sole optio n, 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 an y action or proceeding, pr ovided that City will have the right, but not the obliga tion, to participate in the defense of any Claim at its sole cost.
Landlord’s obligations under this Section will survive the termination of this Lease.
17. INSURANCE
17.1 City’s Self-Insurance
Landlord acknowledges that City maintains a program of self-i nsurance and City is not 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. Subject to the terms hereof, City acknowledges and agrees that it will be responsible for any insurance for damage or destruction within the Premises, to th e extent such damage or destruction is not the result of actions or omissions of 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 mis chief, sprinkler damage, and other perils customarily covered under a cause of loss-special fo rm property insurance policy in an amount equal to on e hundred percent (100%) of the fu ll insurance replacement value (replacement cost new, includ ing debris removal and demoli tion). Upon City’s request, Landlord will provide to City a certificate of insurance issued by the insurance carrier, evidencing the required insurance. The certificate must expressly provide that the policy is not cancelable or subject to reduction of coverage or otherwise subject to modification except after thirty (30) calendar days’ prior written notice to City (or, if the insurer refuses to provide notice to the City, then Landlord will provide such thir ty (30) calendar day prior notice to City).
Landlord waives any rights against City for loss or damage to the Premises or any other part of the Property to the extent covered by Landlord’s property insurance. (b) In addition, at no co st to City, Landlord will pr ocure and keep in effect at all times during the Term insurance as follows: (i) commercial general liability insurance with limits not less than One Milli on Dollars ($1,000,000) each occurrence combined single limit for bodily injury and property dama ge, including contractual liabil ity, independent 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 insura nce in the amounts required by applicable Laws and employer’s liability with limits not less than One Million Dollars ($1,000,000) each accident. All insurance policies required by this Lease to be maintained by Landlord must be endorsed to provide for thirty (30) days’ prior written notice of cancellation for DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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any reason, intended non-renewal, or reduction in 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 additional 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 (d) 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 re lating to the Building or the Premises or any operations or contents in the Building, whether or not the loss is caused by City’s fault or negligence, to the extent the loss or damage is covered by Landlord 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 in surance carriers issuing policies relating to the Building or the Premises, but Landlo rd’s failure to do so will not affect the above waiver.
18. ACCESS BY LANDLORD
Landlord reserves for itself and any of its designated Agents the right 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 f our (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 pur chasers, mortgagees or, tenants during the last six (6) months of the Term, (d) post notices of nonresponsibility, and (e) alter, improve, or repair the Premises and any portion of the Build ing, and, for 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) calendar days’ prior written notice to the other party, either pa rty may request the othe r party to execute, acknowledge, and deliver to the persons or entiti es designated by the ot her party a certificate stating: (a) the Commencement Date and Expiration Date of this Lease, (b) that this Lease is unmodified and in full force and eff ect (or, if there have been modifications, this the Lease is in full force and effect as modified and stating the modifications), (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 Lease, City will surrender the Premises to Landlord in good order and conditio n, excepting reasonable use and wear and damage by fire or other casualty or condemnation. Within ten (10) business days after the Expira tion Date, City will remove from the Premises all of City’s Pe rsonal Property, City’s telecommunications, data, and computer facilities and any Alterations City desires or is required to remove from the Premises under the provisions of Section 7.1 (Alte rations by City). City will repair or pay the cost of repairing any damage to the Premises or the Building resul ting from that removal. City will not be required to demolish or remove from the Premises any of the Leasehold DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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Improvements. City’s obligati ons under this Section will surv ive the expiration or earlier termination of this Lease.
21. HAZARDOUS MATERIALS
21.1 Definitions
As used in this Lease, the following terms are defined below:
“Environmental Laws ” means any Law relating to i ndustrial hygiene, environmental conditions, or Hazardous Material, whether now in effect or later adopted. “Hazardous Material” means any material that, because of its quantity, concentration, or physical or chemical characteri stics, is deemed by any federal, state, or local governmental authority to pose a present or potential hazard to hum an health or safety or to the environment.
Hazardous Material includes any ma terial or substance defined as a “hazardous substance,” or “pollutant” or “contaminant” under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“ CERCLA”, also commonly known as the Superfund law), as amended (42 U.S.C. Section 9601 et seq.), or under California Health & Safety Code Section 25316; any “hazardous waste” listed under California Health & Safety Code 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 Property; 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, empt ying, discharging, in jecting, escaping, leaching, dumping, or disposing into or inside the Building, or in, on, under, or about the Property.
21.2 Landlord’s Representations and Covenants
Landlord represents and warrant s to City that, to the best of Landlord’s knowledge, the following statements are true and correct and will be true and correct as of the Commencement Date (a) the Property is not in violation of any Environmental Laws; (b) the Property 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, wh ich limited use is and has been in compliance with Environmental Laws; (c) the Property does not consist of any landfill or contain any underground storage tanks; (d) the Building does not contain a ny asbestos-containing materials or have building materials that contain any ot her Hazardous Material, a nd the Premises or the common areas of the Building do not contain any lead-based paints; (e) there is and has been no Release of any Hazardous Material in the Buildi ng or in, on, under, or about the Property; and (f) the Property is not subject to any claim by any governmental re gulatory 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 Substances Control or the Regional Water Quality Control Board) with respect to the presen ce of Hazardous Material in the Building or in, on, under, or about the Property, or the migration of Hazardous Material from or to other real property. Subject to City’s obligations under th is Section below, Landl ord will maintain the Property throughout the Term in co mpliance with all Environmental Laws that could affect the health, safety, and welfare of Ci ty’s employees or City’s use, occupancy, or enjoyment of the Premises for their intended purposes.
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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 Hazar dous Material in the Building or on, under, or about the Property, unless City or its Agents caused the Release.
21.4 City’s Covenants
Neither City nor its Agents will cause a ny Hazardous Material to be brought on, kept, used, stored, generated, or disposed of in, on, or about the Premises or the Property, or transported to or from the Premises or the Property, in violation of any Environmental Laws.
21.5 City’s Environmental Indemnity
If City breaches its oblig ations contained in the preceding Section 21.4 (City’s Covenants), or if City or its Agents cause th e Release of Hazardous Ma terial from, in, on, or about the Premises or the Property, then City will Indemnify Landlord against any and all Claims arising during or after the Term as a result of the Release, excep t to the extent Landlord or its Agents is responsible for the Release. The foregoi ng Indemnity will not include any Claims resulting from the non-negligen t aggravation by City, its Agents, or Invitees of physical conditions of the Premises, or other parts of the Property, existing before City’s occupancy.
22. CITY PROVISIONS
22.1 MacBride Principles - Northern Ireland
The provisions of San Francisco Administrativ e Code Section 12F ar e incorporated into this Lease by this reference and made part of this Lease. Landlord confirms that Landlord has read and understood that City urges companies doing business in Northern Ireland to resolve employment inequities and to abide by the M acBride Principles and urges San Francisco companies to do business with corporations that abide by the MacBride Principles.
22.2 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 anyt hing to the contrary contained in this Lease, there will be no obligation for the payment or expenditure of money by City under this Lease unless the Controller of the City and County of San Francisco fi rst certifies, under Section 3.105 of City’s Charter, that there is a valid approp riation from which the expenditure may be made and that unencumbered funds are available from the appropria tion to pay the expenditure.
Without limiting the foregoing, if in any fiscal year of City afte r the fiscal year in which the Term of this Lease commences, sufficient funds for the payment of Rent are not appropriated, then City may terminate this Lease, without penalt y, liability, or expense of any kind to City, as of the last date on which sufficient funds are appr opriated. City will use its reasonable efforts to give Landlord reasonable advance notice of the termination.
22.3 Prevailing Wages and Working Conditions
Any undefined, initially capitalized term used in this Section has the meaning given to that term in San Francisco Administrative Code Section 23.61. Landlord will require its Contractors and Subc ontractors performing (i) labor in the construction of a “public work” as defined in California Labor Code Section 1720 et seq. (which includes certain construction, alteration, maintenance, demolition, installation, repair, carpet la ying, or refuse hauling if paid DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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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 eac h 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 procee ding against a Contractor or Subcontractor that fails to comply with the Prevailing Wage Requirements.
Landlord will include and require its Contractors and Subcontractors (regardless of tier) to include, the Prevailing 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 Francisco, affected workers, and employee organi zations formally representing affected workers as third-party beneficiaries for the limite d purpose of enforcing the Prevailing Wage Requirements, including th e right to file charges and seek penalties agai nst any Contractor or Subcontractor in accordance with San Francisco Administrative Code Section 23.61. Landlord’s failure to comply with its obligat ions under this Section will const itute a material breach of this Lease. A Contractor’s or Subcontractor’s failure to comply with this Sect ion will enable City to seek the remedies specified in San Francisc o Administrative Code Section 23.61 against the breaching party.
22.4 Non-Discrimination in City Contracts and Benefits Ordinance (a) Covenant Not to Discriminate
In the performance of this Lease, Landlor d will not to discri minate against any employee of Landlord, any City employee working with Landlord, any applicant for employment with Landlord, or against any person seeking acc ommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, dom estic 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 retaliation for opposition to discrimination against those classes.
(b) Subcontracts
Landlord will include in all subcontracts relating to the Premises a non- discrimination clause applicable to the subcontractor in substant ially the form of subsection (a) above. In addition, Landlord will incorporate by reference in all subcontracts the provisions of San Francisco Administrative Code Sections 12 B.2(a), 12B.2(c)-(k), and 12C.3 and require all subcontractors to comply with those provision s. 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 Lease, and will not during the Term in any of its operations in San Francisco, on real prope rty owned by City, or where the work is being performed for City or elsewhere within the Un ited States, discriminate in the provision of bereavement leave, family medical leave, health benefits, membership or membership discounts, moving expenses, pension and retirement benefits, or travel benefits, as well as any benefits other than the benefits speci fied above, between employees with domestic partners and employees with spouses, and/or between the dome stic partners and spouses of the employees, where the domestic partnership has been regist ered with a governmental entity under state or DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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local law authorizing that regi stration, subject to the conditions set forth in San Francisco Administrative Code Section 12B.2(b).
(d) CMD Form
As a condition to this Lease, Landlord will execute the “Chapter 12B Declaration:
Nondiscrimination in Contract s and Benefits” form (Form CMD-12B-101) with supporting documentation and secure the approval of the fo rm by the San Francisco Contract Monitoring Division (“ CMD”). Landlord represents that before execution of the Lease: (i) Landlord executed and submitted to the CMD Form CMD-12B-101 with supporting documentation, and (ii) the CMD approved the form.
(e) Incorporation of Administrative Code Provisions by Reference The provisions of San Francisco Adminis trative Code Chapters 12B and 12C relating to non-discrimina tion by parties contracting for th e lease of property to City are incorporated into this Section by reference and made a part of this Lease as though fully set forth. Landlord will comply fu lly with and be bound by all of the provisions that apply to this Lease under Administrative Code Chapters 12B and 12C, including the re medies provided in those Chapters. Without limiting the foregoing, Landlord understands that under San Francisco Administrative Code Section 12B.2(h), a penalty of Fifty Dollars ($50) for each person for each calendar day during which that person was discriminated against in violation of the provisions of this Lease may be assessed against Landlord and/or deducted from any payments due Landlord.
22.5 Tropical Hardwood and Virgin Redwood Ban
(a) Except as expressly permitted by San Francisco Environment Code Sections 802(b) and 803(b), neither Landlord nor any of its contractors may provide any items to City in the construction of the Leasehold Improvements or otherw ise in the performance of this Lease that are tropical hardwood, tropical hardw ood wood products, virgin redwood, or virgin redwood wood products.
(b) The City and County of San Francisc o urges companies not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood, or virgin redwood wood products. (c) If Landlord fails to comply in good fa ith with any of the provisions of San Francisco Environment Code Chapter 8, Landl ord will be liable for liquidated damages for each violation in an amount equal to Landlord’s net profit on the contract, or five percent (5%) of the total amount of the contract dollars, whic hever is greatest. Landlord acknowledges and agrees that the liquidated damages assessed will be payable to the City and County of San Francisco on demand and may be set off ag ainst any monies due to Landlord from any contract with City.
22.6 Bicycle Parking Facilities
San Francisco Planning Code (“Planning Code”) Article 1.5, Section 155.3 requires that bicycle parking must be provide d at City-leased buildings at no cost to Landlord. During the Term, City will have the right to install and maintain, at no cost to Landlord, all Class 1 Bicycle Parking Spaces (as defined in the Planning C ode) and all Class 2 Bicycle Parking Spaces (as defined in the Planning Code) in the Building locations required under the Planning Code.
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22.7 Resource-Efficient City Buildings
Landlord acknowledges that the City and County of San Francisco has enacted San Francisco Environment Code Sections 700 to 713 relating to green building requirements for the design, construction, and operation of City buildings. Landlord will comply with all applicable provisions of those code sections.
22.8 Sunshine Ordinance
In accordance with San Francisco Administr ative Code Section 67.24(e), contracts, contractors’ bids, leases, agreements, responses to Requests for Proposals, and all other records of communications 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 organization’s net worth or ot her proprietary financial data submitted for qualification for a contract, lease, ag reement, 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.
22.9 Conflicts of Interest
Through its execution of this Lease, Landlor d acknowledges that it is familiar with the provisions of City’s Campaign and Government al Conduct Code Article III, Chapter 2 and California Government Code Section 87100 et seq. and Section 1090 et seq. a nd certifies that it does not know of any facts that would constitute a violation of those pr ovisions. If Landlord becomes aware of any such fact during the Term of this Lease, Landlord will immediately notify City.
22.10 Notification of Prohibition on Contributions
By executing this Lease, Landlord acknowle dges its obligations under Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohi bits any person who leases, or seeks to lease, to or from any department of the City any land or building from making any campaign contribution to (a) a City elected official if the leas e must be approved by that official, (b) a candidate for that C ity elective office, or (c) a committee controlled by that 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 after the date the City approves the lease. Landl ord acknowledges that the foregoi ng restriction applies only if the lease or a combination or seri es of leases or other contract s approved by the same individual or board in a fiscal year have a total anticipated or actual valu e of one hundred thousand dollars ($100,000) or more. Landlord further acknowledges that (i) the prohibition on contributions applies to each prospective party to the lease; any person with an ownership interest of more than 10 percent (10%) in Landlor d; any subcontractor list ed in the lease; and any committee that is sponsored or 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 that it has informed each such person of the limitation 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.
22.11 Preservative-Treated Wood Containing Arsenic
Landlord may not purchase preservative-treated wood products containing arsenic in the performance of this Lease unless an exemptio n from the requirements of Environment Code Chapter 13 is obtained from the Department of Environment unde r Environment Code Section 1304. The term “prese rvative-treated wood containing arsenic” means wood treated DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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with a preservative that contains arsenic, elemental arsenic, or an arsenic copper combination, including chromated copper arsena te preservative, ammoniac coppe r zinc arsenate preservative, or ammoniacal copper arsenate preservative. Landlord may pur chase preservative-treated wood products on the list of environm entally preferable alternatives prepared and adopted by the Department of Environment. This provision does not pr eclude Landlord from purchasing preservative-treated wood contai ning arsenic for saltwat er immersion. The term “saltwater immersion” means a pressure-treat ed wood that is used for cons truction purposes or facilities that are partially or totally immersed in saltwater.
23. GENERALLY APPLICABLE PROVISIONS
23.1 Notices
Except as otherwise specifically provided in this Lease, any notice given under this Lease must be in writing and given by delivering the no tice in person or by commercial courier, or by sending it by first-class mail, certified mail, return receipt requested, or Express Mail, return 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 fo rth in the Basic Lease Information; or (c) any other address designated by as either Landlord or City as its new address for notices by notice given to the other in accordance with this Section. A properly addressed notice transmitted by one of the forego ing methods will be deemed r eceived upon confirmed delivery, attempted delivery, or rejected delivery. For th e convenience of the Partie s, 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 give official or binding notice by email.
23.2 No Implied Waiver
No failure by either party to insist on the st rict 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 of term, co venant, or condition. No acceptance of full or partial Rent by Landlord while City is in defa ult will constitute a waiver of the default by Landlord. No express written waiver of any defa ult or the performance of any provision of this Lease will affect any other defa ult 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 provision of this Lease will not be deemed to be a waiver of a subsequent default or performance. The consen t of Landlord or City given in one instance under the terms of this Lease w ill not relieve the other party of any obligation to secure the consent to any other or future instance under the terms of the Lease.
23.3 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, covena nt, 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 General Manager, or his or her designee, will be authorized to provide the consent or approval , except as otherwise provided by applicable Law, including the Charter of the City and County of San Francisco. City’s agreement to any amendments or modifications to this Le ase (including the exhibits) may be made on the sole approval of the SFPUC General Manager, or his or her designe e; 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 modification that ma terially increases City’s liabilities or financial obligations DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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under this Lease may also require the approva l of the SFPUC Commission and the City’s Board of Supervisors.
23.4 Authority
Landlord represents and warrants to City that it is the sole owner of the Property and the execution and delivery of this Lease by Landl ord does not violate any provision of any 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 existing en tity, that Landlord is qualified to do business in California, that Landlo rd 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 evid ence reasonably satisfactor y to City confirming these representations and warranties.
23.5 Parties and Their Agents; Approvals
If applicable, the word “Landlord” will include the plural as well as the singular. The term “Agents” when used with respect to either party includes the agents, employees, officers, and contractors of the party, and the term “ Invitees” when used with respect to City will include the clients, customers, invitees, guests, licensees, assignees, or subtenants of City. Whenever this Lease requires or permits the givi ng by City of its consent or a pproval, the General Manager of the San Francisco Public Utilities Commission, or his or her designee, will be authorized to provide such consent or approval, except as othe rwise provided by applicable law, including the Charter of the City and County of San Francisco. If there is more than one entity that comprises Landlord, the obligations and li abilities under this Lease im posed on Landlord are joint and several.
23.6 Interpretation of Lease
The captions preceding the articles and sections of this Lease and in the table 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. Excep t as otherwise specifically provided in this Lease, wherever Landlord or City is re quired or requested 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 number of days will be calendar days, unless otherw ise specified. If the last day of any period to give not ice, reply to a notice, or to 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. The 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 its attached e xhibits, whether or not language of non-limitation, such as “without limitation” or similar words, are used.
23.7 Successors and Assigns
Subject to the provisions of Section 14 (Assignment and Subletting), the terms, covenants, and conditions contained in this Leas e will bind and inure to the benefit of Landlord and City and, except as otherwise provided in this Lease, their personal representatives and successors and assigns. There are no third-party beneficiaries to this Lease.
23.8 Brokers
Neither party has had any contact or dealin gs or communications regarding leasing the Premises through any licensed real estate broker or other pers on who could clai m a right to a DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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commission or finder’s fee in connection with the lease of the Pr emises, 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 commission. 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 through whom the broker or finder makes his claim will be res ponsible for the commission or fee and will Indemnify the other party from any and all Cl aims incurred by the i ndemnified party. The provisions of this Section will survive any termination of this Lease.
23.9 Severability
If any provision of this Lease or its application to any perso n, entity, or circumstance is found to be invalid or unenforceab le, the remainder of this Leas e, 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 pe rmitted by Law, except to the extent that enforcement of this Lease without the inva lidated provision would be unreasonable or inequitable under all the circumstances or would frustrate a fundamental purpose of this Lease.
23.10 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, ac tion, 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 court in any such suit, action, or proceeding (excluding bankruptcy matters). The parties irrevocably and unconditionally waive any objection to the laying of venue of any su it, action, or proceedi ng in such court and irrevocably waive and agree not to plead or clai m that any suit, action, or proceeding brought in San Francisco Superior Court relating to this L ease has been brought in an inconvenient forum.
The Parties also unconditionally and irrevocably waive any right to remove any such suit, action, or proceeding to Federal Court.
23.11 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 furthe r intend that th is Lease will constitute the complete and exclusive statemen t of its terms and that no extrinsic evidence whatsoever (including prior drafts and cha nges) may be introduced in any judicial, administrative, or other legal proceeding involving this Lease.
23.12 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 Landl ord’s consent, that holding over will not be deemed to extend the Initial Term or the Exte nded 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) calendar days’ pr ior 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 Initial Term, or the then expiring Extended Term, as the case may be, or as Landlord and City may mutually agree in writing. If City holds over wi thout Landlord’s consent, the re nt payable by City during the period of holding over will be one hundred ten pe rcent (110%) of the monthly Base Rent in effect during the last month of the Initial Term of this Lease, or then expiring Extended Term, as DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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the case may be, and the tenancy will otherwise be on the terms and conditions contained in this Lease.
23.13 Cumulative Remedies
All rights and remedies of either party set forth in this Lease are cumulative, except as otherwise specifically provided in this Lease.
23.14 Time of Essence
Time is of the essence for all provisions of this Lease.
23.15 Survival of Indemnities
Termination of this Lease will not affect the right of either party to enforce any indemnities and representations and warranties gi ven or made to the other party, and it will not affect any provision of this Lease that expressly states it will su rvive termination. With respect to each of the indemnities contained in this Lease, the indemnitor has an immediate and independent obligation to defend the indemnitees from any claim that actually or potentially falls within the indemnity provision even if the claim is or may be gr oundless, 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.
23.16 Signs
City may erect or post exterior signs on or about the Premises with Landlord’s prior written approval. Landlord rese rves the right to re view and approve the placement, design, and plan for before erecting or posting any sign, whic h review and approval will not be unreasonably withheld or delayed. Interior si gns not visible from the exterior of the Premises are permitted as provided under Article 7 (Alterations).
23.17 Quiet Enjoyment and Title
Landlord covenants and represents that it has full right, power, and authority to grant the leasehold estate as provided in this Lease, an d covenants that City, on paying the Rent and performing the covenants contained in this Le ase, will peaceably and quietly have, hold, and enjoy the Premises and all relate d rights during the Term as agains t all persons or 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 a ny assertion that would interfere with City’s right to quiet enjoyment as provided in this Section.
23.18 Bankruptcy
Landlord represents and warrants to City th at Landlord has neither filed nor been the subject of any filing of a petit ion under the federal bankruptcy law or any federal or state insolvency laws or laws for the composition of i ndebtedness or for the reorganization of debtors, and, to the best of Landlord’s knowledge, no such filing is threatened. C ity’s leasehold estate under this Lease includes all rights to receive and enjoy all services, facilities, and amenities of the Premises and the Building as provided in this Lease. If any of the services, facilities, or amenities are terminated, or materially limite d or restricted because of any such case or proceeding, or for any other reason, City may (a) contract directly with any third-party provider of those services, facil ities, or amenities, and (b) offset against the Rent all reasonable costs and expenses incurred by City in obtaining those services, facilities, or amenities.
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23.19 Transfer of Landlord’s Interest
Landlord may transfer its interest in the Property, the Building, or this Lease to any other financially responsible person or entity. If Landlord transfers its interest in the Property, the Building, or this Lease to another other financia lly responsible person or entity, then Landlord will be relieved of Landlord’s obligations unde r this Lease accruing 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 transferee’s financial ability to assume these obligations transferred to it by Landlord, (c) Landlord has transferred the Securi ty 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.
23.20 Non-Liability of City Officials, Employees, and Agents Notwithstanding anything to the contrary in this Lease, no elected or appointed board, commission, member, officer, employee, or othe r Agent of City will be personally liable to Landlord, its successors, or its assi gns for any City default or bre ach or for any amount that may become due to Landlord or its successors or a ssigns, or for any obligation of City under this Lease.
23.21 Counterparts
This Lease may be executed in two or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.
23.22 Effective Date
This Lease will become effective on the date (“ Effective Date”) that is the later to occur of the following: (a) City’s Public Utilitie s Commission, at its sole and absolute discretion, adopts a resolution approving this Lease in accordance with all applicable laws; (b) Landlord has become an approved vendor of City; or (c) this Lease is duly executed by Landlord and City.
23.23 Certification by Landlord
By executing this Lease, Landlord certifies that neither Landlord nor any of its officers or members have been suspended, disciplined, or di sbarred by, or prohibited from contracting with, any federal, state, or local governmental agency. If Landlord or any of its officers or members have been suspended, disbarre d, disciplined, or prohibited from c ontracting with any governmental agency, it will imme diately notify City of that fact and the reasons for the suspension, disbarment, discipline, or prohibition together with any relevant facts or information requested by City. If there is any suspension, disbarment, discipline, or prohibition 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 material term of this Lease.
23.24 Cooperative Drafting
This Lease has been drafted th rough a cooperative effort of both parties, and both parties have had an opportunity to have the Lease reviewed and revised by the legal Landlord. 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.
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NOTWITHSTANDING ANYTHING TO THE 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 AUTHORIZING CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS LEASE . 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 APPROVES THIS
LEASE, IN THEIR RESPECTIVE SOLE AND ABSOLUTE DISCRETION , AND IN ACCORDANCE WITH ALL APPLICABLE LAWS. APPROVAL OF THIS LEASE BY ANY DEPARTMENT , COMMISSION, OR AGENCY OF
CITY WILL NOT BE DEEMED TO IMPLY THAT TH E RESOLUTION WILL BE ADOPTED AND NO SUCH APPROVAL WILL CREATE ANY BINDING OBLIGATIONS ON CITY.
[Signatures Appear on Following Page]
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Landlord and City have executed this Lease as of the date first written above.
Landlord also acknowledges that it has re ad and understood the City's statement urging companies doing business in Northern Ireland to move toward resolving employment inequities, encouraging compliance with the MacBride Principles, and urging San Francisco companies to do business with corporations that abide by the MacBride Principles.
LANDLORD: BAYVIEW PLAZA, LLC,
a California limited liability company
By: __________________________________
Name: Leslie Karren
Its: _______________________________
CITY:
CITY AND COUNTY OF SAN FRANCISCO,
a municipal corporation
By: _________________________________
DENNIS J. HERRERA
General Manager
San Francisco Public Utilities Commission
Date: ________________________________
APPROVED AS TO FORM:
DAVID CHIU, City Attorney
By: _____________________________
Vincent Brown
Deputy City Attorney
Authorized by
San Francisco Public Utilities Commission
Resolution
Adopted:
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EXHIBIT A
Floor Plan(s)
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EXHIBIT B
NOTICE OF COMMENCEMENT DATE
__________________, 2024
Rosanna S. Russell
Real Estate Director
San Francisco Public Utilities Commission
525 Golden Gate Avenue, 10
th Floor
San Francisco, California 94102
RE: Acknowledgement of Commencem ent Date, Lease by and between ________________________ (Landlord), and the CITY AND COUNTY OF SAN FRANCISCO, by and through its Public Utilities Commission (City), for premises located at 3801 Third Street, Suite 600, San Francisco, California. ________________________________
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,
_____________________________
By:_ ______________
Name:_________________________________
Title:_________________________________
Accepted and Agreed:
By: ________________________
Rosanna S. Russell
Real Estate Director
Dated: ______________________
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EXHIBIT C
BUILDING RULES AND REGULATIONS
The terms, covenants and conditi ons of the Lease will remain unmodified and in full force and effect. The Lease constitutes the entire agreemen t of the Parties concerning the subject matter hereof, and supersedes and conceals any and all previous negotiations, agreements, or understandings, if any, regarding the matters contained in this Lease, including these Building Rules and Regulations.
1. All loading and unloading of goods will be done only at such time, in the areas, and through the entrances designated for such purposes by Landlord.
2. The delivery or shipping of merchandise, supplies, and fixtures to and from the premises will be subject to such rules and regulations as in the judgment of Landlord are necessary for the proper operation of the Premises and/or the Property.
3. No aerial or other improvement wi ll be erected on the roof or exterior walls of the Premises or the grounds, nor will any penetration be made in the roof or exterior walls of the Premises, without in each instance, the written consent of the Landlord. Any work or improvement so completed without such written consent will be subject to removal without notice at any time at the sole cost of City.
4. No loudspeakers, televisions, phonographs, radios, or other devices will be used in a manner so as to be heard or seen outside of the Premises without the prior written consent of Landlord. City will conduct its business in a qu iet and orderly manner so as not to create unreasonable noise.
5. The outside areas immediately adjoining the Premises will be kept clear and free from obstruction by City and City will not place or permit any merchandise or conduct any sales in such areas.
6. Subject to the provisions of Section 2.3 of the Lease, City and City’s employees will not park automobiles in the Property Common Area (i ncluding parking area s) unless Landlord designates a specific area for such parking. Un less Landlord designates such an area, all parking areas in the Property are to be reserved for patrons. In the event City or City’s employees park automobiles in the Property, in an area othe r than that designated by Landlord, then Landlord at its op tion may cause the vehicle to be towed from the Parking or Common Area at the vehicle owner’s expense.
7. The plumbing facilities will not be used for any other purpose than that for which they are constructed, and no foreign substance of any kind will be thrown therein, and the expense of any breakage, stoppage, or damage resulting from a violation of this provision will be borne by City.
8. City will not cause or permit any obnoxious or foul odors that disturb the public or other tenants. Should such odors be evident, City will be required to take immediate steps to remedy any obnoxious or foul or der caused or permitted by C ity upon written notice from Landlord.
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9. Subject to the provisions of Section 8.2 [City’s Re pairs] of the Lease, City will not contract for any work or service that might involve the employment of labor incompat ible with the Property employees or employees of contractors doing work or performing services by or on behalf of the Landlord.
10. The Premises will not be used for lodging, and no cooking will be done or permitted by City on the Premises except as speci fically permitted in the Leas e to which these Rules and Regulations are attached.
11. No animal or bird of any kind will be brought in to or kept in or about the premises of the Building.
12. Neither City nor any of City’s agents, servants, employees, contra ctors, visitors, or licensees will at any time bring or keep upon the Premises any inflammable, combustible, or explosive fluid, chemical, or substance.
13. No additional locks, bolts, or mail slots of a ny kind will be placed upon any of the doors or windows by City, nor will any change be made in existing locks or the mechanism thereof.
City will, upon the termination of the tenancy, restore to Landlor d all keys of stores, offices and toilet rooms, either furnis hed to, or otherwise procured by City, and in the event of the loss of any keys so furnished, City will pay to Landlord the cost thereof.
14. City’s contractors will, while in the building or elsewhere in the Prope rty, be subject to and under the control and direction of the Landlord (but not as agent or servant of Landlord).
15. If the Premises is or becomes infested with ve rmin as a result of the use of any misuse or neglect of the Premises by City, its agents, se rvants, employees, contractors’ visitors or licensees, City will forthwith at City’s expense cause the same to be exterminated from time to time to the satisfaction of Landlord and will employ such licensed exterminators as will be approved in writing in advance by Landlord.
16. The requirements of City will be attended to only upon application to the manager of the Property. Property personnel will not perform any work or do anything outsi de of their regular duties, unless under special instructions from Landlord.
17. City will install and maintain, at City’s sole co st expense, an adequate visibly marked (at all times properly operational) fi re extinguisher next to an y duplicating or photocopying machine or similar heat-produc ing equipment, which may or may not contain combustible material, in the Premises.
18. City will not use the name of the Property for any purpose other than as the address of the business to be conducted by City in the Prem ises, nor will City use any picture of the Property in its advertising, st ationery, or any other manne r without the prior written permission of the Landlord. Landlor d expressly Reserves the right at any time to change the name of the Property without in any manner being liable to City therefor.
Landlord reserves the right from time to time to amend or suppl ement the foregoing rules and regulations, and to adopt additiona l rules and regulations applicable to the Premises. City will comply with all equitably enforced rules and regulations upon reasonable notice to City from DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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Landlord. Reasonable notice of such rules and regulations and amendm ents and supplements thereof, if any, will be given to City.
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EXHIBIT D
STANDARDS FOR UTILITIES AND SERVICES
Landlord will provide the following utilities and services, at cost:
(a) Elevators. Unattended automatic passenger elevator facilities serving the floor(s) on which the Premises are located, on a 24-hours a day, 7-days a week basis. (b) Ventilation; Heating, and Air-Conditioni ng. Ventilation to the Premises and air-conditioning and heating to the Premises in season, five-days per week, Monday through Friday, except during holidays generally recognized in the City of San Francisco, from 7:00 a.m. to 6:00 p.m., and at the temperatures and in th e amounts as City deems reasonably necessary for the comfortable occupancy of the Premises, subject to applicable governmental laws, ordinances, rules, and regulations. In addi tion to the above hours, Landlord will provide ventilation to the Premises and air-conditioning, and heating to the Premises in season, after hours or on weekends, or during holidays, on twenty-four (24) hours’ notice from City, provided that City will reimburse Landlord for Landlord’s actual cost for providing the additional ventilation to the Premises and air-conditioning and h eating to the Premises in season. City may not alter, adjust, or tamper with the installations or facilities supplying climate control to the Building or the Premises.
(c) Electricity. Electric current to the Premises 24-hours a day, seven (7) days per week, as required by the Building standard office lighting and for person al computers and other normal fractional horsepower office machines. If City’s electric al installation or electrical consumption is more than the quantity descri bed above, City will reimburse Landlord monthly for the additional consumption following Landlord providing evidence to City of City’s additional consumption. City wi ll not connect any apparatus or device with wires, conduits, or pipes, or other means by which the services are supplied, for the purpose of using additional or extraordinary amounts of the serv ices without the prio r written consent of Landlord. At all times, City’s use of electric current at the Premises may not exceed the capacity of feeders to the Building or the risers or wiring installation, except as provided in working drawings to City. (d) Water. Water available at current points of supply in public areas for drinking and lavatory purposes only, and hot and cold water in the Premises for drinking and kitchen purposes 24-hours per day, seven (7) days per week.
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EXHIBIT E
STANDARDS FOR JANITORIAL SERVICE
3801 Third Street, Suite 600
I. SPECIFICATION OF SERVICES TO BE PERFORMED - SCOPE OF WORK A. Landlord’s janitorial contractor (the “ Contractor”) will furnish all labor, materials, and equipment re quired to perform exterior and interior janitorial service to maintain the Premises, the Bu ilding, and the Property in a first-class clean and sanitary condition five days a week, Monday through Friday, excluding holidays, at the above location in accord ance with the specifications in this Exhibit E.
B. All windows and glass broken by the Contract or will be replaced at no cost to City.
C. The Contractor must, at all times, main tain adequate staffing that meets these specifications. The Contractor’s employees must wear uniforms (See Section II).
City may request Landlord to remove any Contractor employees from the Premises at any time City desires a nd for any reason whatsoever, and Landlord must ensure that the Contractor provid es an immediate repl acement. All written notices regarding an employee replacement are to be submitted to:
San Francisco Public Utilities Commission
3801 Third Street, Suite 600
San Francisco, CA 94124
Attn.: Mabel Chow, SFPUC Wastewater Enterprise
D. All services must be performed after 5:00 p.m.
E. All employees of the Contractor must be fully trained and experienced in the custodial service trade.
F. Landlord will assign space in the Building to the Contractor to store supplies and equipment. The Contractor must store supplies, and equipment must be neatly stored only in the areas pr ovided by Landlord. No s upplies or equipment may be stored in the Premises without City’s prior written approval.
G. City’s Recycling Program includes recycling materials from offices in the Building. Landlord or the Contractor may obtain bins for r ecyclable materials from City.
H. On or before the Commencement Date, th e Contractor will provide City with a schedule for all of the periodic services specified in this Exhibit E.
I. Janitorial Service Specifications for the Premises and the Common Areas:
1. Nightly Services
a. Turn off all lights as soon as possible each night.
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b. Vacuum all carpets. Move electric cords to prevent damage to the corner bead.
c. Dust-mop all resilient and com position floors with treated dust mops. Damp mop to remove spills and water stains as required. d. Spot-clean any stains on the carpet.
e. Dust all desks and office furniture with treated dust cloths. f. Papers and folders on desks are not to be moved.
g. Sanitize all telephone receivers.
h. Empty all wastepaper baskets an d other trash containers and remove all trash from floors to the designated trash areas. Sort and put ALL RECYCLABLE MATERIAL into bins provided by City. i. Remove fingerprints, dirt smudges, graffiti, etc ., from all doors, frames, glass partitions, windows, light switches, and walls. j. Return chairs and wastebaskets to proper positions.
k. Clean, sanitize, and polish drinking fountains.
l. Monitor any interior public planters and remove extraneous items. m. Dust and remove debris from all metal door thresholds. n. Wipe clean smudged brightwork.
o. Spot-clean resilient and composition floors as required. p. Service all walk-off mats as required.
q. Close all window coverings.
r. Check for burnt-out lights and replace them from building stock (to be supplied by Landlord).
2. Weekly Services
a. Dust all low-reach areas including chair rungs, structural and furniture ledges, baseboards, window sills, door louvers, wood paneling, molding, etc.
b. Dust inside of all door jambs.
c. Clean and polish all metal door thresholds.
d. Wipe clean and polish all brightwork
e. Sweep the service stairwell.
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f. Damp mop all vinyl bases.
g. Edge all carpeted areas.
3. Monthly Services
a. Dust all high-reaching areas in cluding tops of doors, frames, structural and furniture ledges, air conditioning diffusers and return grilles, tops of partitions, picture frames, etc.
b. Vacuum upholstered furniture.
c. Move all plastic carpet protec tors and thoroughly vacuum under and around all desks and office furniture.
d. Clean and buff all building standa rd resilient and/or composite flooring.
4. Quarterly Services
a. Shower-scrub or otherwise recond ition all resilient or composition flooring to provide a level of appearance equivalent to a completely refinished floor.
b. Wash all chair pads.
5. Semi-Annual Services
a. Dust and/or vacuum all window coverings.
b. Dust light diffusers.
6. Annual Services
a. Shampoo carpets in offices (schedule to be approved in advance), using products and methods recommended by the manufacturer and/or carpet installation contractor.
J. Rest Room Service Specifications
1. Daily Service
a. Re-stock all restrooms with s upplies from the Landlord’s stock, including paper towels, toilet tissue, seat covers, and hand soap, as required.
b. Re-stock all sanita ry napkin and tampon dispensers from the Contractor’s stock, as required.
c. Wash and polish all mirrors, dispen sers, faucets, flushometers, and brightwork with non-scratch disi nfectant cleaner. Wipe dry all sinks.
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d. Wash and sanitize all toilets, toilet seats, urinals, and sinks with non-scratch disinfectant cleaner.
e. Remove stains, scale toilets, urinals, and sinks, as required. f. Mop all restroom floors with disi nfectant, and germicidal solution, including scrubbing all bases, insi de corners, and hard-to-reach areas.
g. Empty and sanitize all waste and sanitary napkin and tampon receptacles.
h. Remove all restroom trash.
i. Spot-clean fingerprints, dirt, marks, and graffiti from walls, partitions, glass, aluminum, and light switches as required. j. Check for burnt-out lights and replace them from building stock (supplied by Landlord).
k. Ventilate restrooms.
2. Weekly Services
a. Dust all low-reaching and high-reach ing areas, including structural ledges, mirror tops, partition tops and edges, air conditioning diffusers, and return air grilles.
3. Monthly Services
a. Wipe down all walls and metal part itions. Partitions must be left clean and not streaked after this work.
b. Clean all ventilation grilles.
c. Dust all doors and door jambs.
4. Quarterly Services
a. Thoroughly clean and reseal all ceramic tile floors, using approved sealers.
K. Main Floor Elevator Lobbies, Stairs , Stairwells, and Public Corridors Specifications
1. Nightly Services
a. Spot-clean all glass including low partitions and the corridor side of all windows and glass doors to City’s Premises and other tenants’ premises.
b. Spot-clean all chrome bright work including swinging door hardware, kick plates, base part ition tops, handrails, wastepaper DocuSign Envelope ID: 04CB260E-EB0E-42FF-84B7-70655855F514
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receptacles, planters, elevator call button plates, hose cabinets, and visible hardware on the corridor side of tenant entry doors. c. Thoroughly clean all door saddles of dirt and debris. d. Empty, clean, and sanitize all wa stepaper baskets and refuse receptacles as required.
e. Vacuum and spot-clean all carpets as necessary.
f. Spot-clean all elevator doors and frames.
L. Exterior Structure and Grounds
1. Daily Service
a. Spot-clean accumulations of dirt, papers, and leaves in all corner areas where winds tend to cause collections of debris.
b. Spot-clean all exterior glass at building entrances. c. Lift nap on all entry walk-off ma ts as necessary with a heavy bristle brush and vacuum.
d. Empty all waste receptacles and remove trash, recycling, and composting to designated trash areas.
e. Clean sidewalk, steps, landscaped area, walks, and benches; including gum removal.
2. Monthly Weekend Services
a. Steam clean exterior sidewalk and walkway areas.
M. Carpet Cleaning
1. Provide spot-cleaning to tenant spa ce as necessary and shampoo carpets in tenant office space and any common ar eas once each year (exact schedule to be approved in advance by City).
N. Window Cleaning
1. All work is to be performed in accordance with generally accepted industry standards for office buildings.
2. Proper safety standards are to be main tained at all times, including the use of proper warning signs and the clean- up of water in compliance with all City, state, and federal laws (including OSHA).
3. Window cleaning standards are to incl ude clean-up of water and wiping down of adjacent window mullions and ledges to prevent streaking, spotting, and excessive runoff.
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4. When necessary, drop cloths are to be used to prevent damage to floors and adjacent surfaces.
5. Interior and exterior window washing will be scheduled immediately before the Lease Commencement Date. Interior glass will be cleaned not less than once per year. Exterior gla ss will be cleaned as needed, but not less than once every six (6) months, including May of each year.
6. The Contractor will provide City with at least seven (7) days’ prior written notice of the scheduled window cleaning.
7. The Contractor will be responsible fo r removing paint and putty etc. from both glass and plastic windows.
8. Exterior surfaces of windows are not to be washed when it is raining.
9. The words “window” and “light” as used in this Exhibit E are synonymous and are to be construed to mean any pane of glass or glass substitute.
II. UNIFORMS
A. All Contractor personnel, including the coor dinator and supervisors, must wear uniforms whenever on duty. All personnel must have a visible company name, logo, badge, etc., on their uniforms.
III. EMPLOYEE SAFETY
The Contractor will accept res ponsibility for determining that all necessary worker safeguards for the protection of the Contractor’s employees are available or will be furnished. All work performed must conform to CAL-OSHA standards.
IV. SUPPLIES
Landlord or the Contractor wi ll supply floor wax, wax stri pper, and other expendable supplies required for daily cleaning and maintena nce, as well as janitorial supplies such as hand soap, paper hand towels, paper toilet tissue, paper s eat covers, and deodorants.
Furthermore, Landlord or its Contractor wi ll supply all equipmen t including ladders, vacuum cleaners, extractors, floor machines, mops, and buckets.
V. APPROVAL OF PRODUCTS
City will have the right to prohibit the use of any product proposed or being used by the Contractor if City deems the product to be unsafe or harmful to those items being cleaned or to City’s staff. In this regard, Landlor d must provide on request a complete list of products to be used in the course of this Lease, together with Material Safety Data Sheets for each cleaning chemical.
VI. DISPOSITION OF REFUSE
All trash and refuse collected by the Contra ctor will be deposited in a debris box as designated by Landlord. (Landlord will pay for the debris box service).
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VII. MAINTENANCE PROBLEMS
The Contractor employees will report maintenance problems (such as broken glass, light bulbs missing or burnt-out, inoperative fixt ures, etc.) in writing to Landlord. Any problem that prevents performan ce of their services must be noted in the Janitorial Log (Section VIII) before the end of the shift. The Contractor will not claim, and City will not entertain, any claim that any maintena nce problem prevente d the Contractor’s performance of any task required by this Exhibit E if the Contractor did not enter the maintenance problem in the Janitorial Log.
VIII. JANITORIAL LOG
The Contractor will provide, and City will keep, a janitorial log noting any deficiencies in performance, special problems, or instructions . The Contractor will check the janitorial log daily, as arranged with City, and correct any deficiencies noted on the janitorial log within twenty-four (24) hours of the log entry. The Contractor will initial and date each entry when a deficiency has been corrected.
IX. EMERGENCY CONTACT
The Contractor will provide City with an emergency telephone number where the Contractor may be reached at any time during normal business hours (Monday – Friday, 8:00 a.m. – 5:00 p.m.). The C ontractor must respond to emer gency calls relating to any deficiency of service by corr ecting the deficiency within two hours after receipt of the call.
X. PERFORMANCE
Landlord and the Contractor will guarantee that the workmanship required for the performance of this Lease will be in accordan ce with the highest level of workmanship and accomplished according to the highest prof essional standards. The determination as to the adequacy of performance will be ma de by City, through the SFPUC Wastewater Enterprise Maintenance Manager or Tenant ’s Key Contact. The Contractor or the Contractor’s agent must be available to participate in inspection walk-throughs of the Premises on the first Monday of every mont h at 10:00 a.m., holidays excluded, when the walkthrough will occur on the next day following the holiday at 10:00 a.m. The Contractor will supervise all employees during all shifts at the Premises.
XI. VERIFICATION OF SERVICE
City may provide, install, or establish a system of approval slips, service receipts, or room service approval cards. The Contractor will faithfully comply with the same by initialing, dating, and indicating the time that the service was completed. It is agreed that no service has been completed unless signed off by the Contractor and countersigned by City if said system so requires.
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XII. HOLIDAY SCHEDULE FOR CITY
New Year’s Day
Dr. Martin Luther King Day
Presidents’ Day
Memorial Day
Juneteenth
Independence Day
Labor Day
Indigenous Peoples Day, Italian American Heritage Day
Veterans Day
Thanksgiving Day
Friday after Thanksgiving Day
Christmas Day
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EXHIBIT F
STANDARDS FOR SECURITY SERVICE
Landlord will furnish security services as follows:
SECURITY GUARDS:
OTHER SECURITY SERVICES:
At least one (1) security guar
d patrolling the
Building entrance and the parking lot of the
Property from 12:00 p.m. to 8:00 p.m., seven
days a week
Landlord’s security serv ice will patrol the
Property from 9:00 p.m. to 6:00 a.m., seven (7)
days a week.
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