LANDLORD AND TENANT.
5.
COSTS.
(A)
BUDGET FOR TENANT IMPROVEMENTS. BEFORE THE COMMENCEMENT OF
CONSTRUCTION OF THE TENANT IMPROVEMENTS, LANDLORD SHALL OBTAIN FROM THE RICHMOND
GROUP OR ANOTHER CONTRACTOR REASONABLY APPROVED BY LANDLORD AND TENANT A
DETAILED BREAKDOWN BY TRADE OF THE COSTS INCURRED OR THAT WILL BE INCURRED IN
CONNECTION WITH THE DESIGN AND CONSTRUCTION OF THE TENANT IMPROVEMENTS (THE
"BUDGET"). THE BUDGET SHALL BE BASED UPON THE TI CONSTRUCTION DRAWINGS APPROVED
BY TENANT AND SHALL INCLUDE A PAYMENT TO LANDLORD OF ADMINISTRATIVE RENT
("ADMINISTRATIVE RENT") EQUAL TO 3% OF THE TI COSTS (NET OF SOFT COSTS,
INCLUDING ARCHITECTURAL, CONSULTING AND ENGINEERING COSTS) FOR MONITORING AND
INSPECTING THE CONSTRUCTION OF THE TENANT IMPROVEMENTS AND CHANGES, WHICH SUM
SHALL BE PAYABLE FROM THE TI FUND (AS DEFINED IN SECTION 5(D). ADMINISTRATIVE
RENT SHALL INCLUDE, WITHOUT LIMITATION, ALL OUT-OF-POCKET COSTS, EXPENSES AND
FEES INCURRED BY OR ON BEHALF OF LANDLORD ARISING FROM, OUT OF, OR IN CONNECTION
WITH MONITORING THE CONSTRUCTION OF THE TENANT IMPROVEMENTS AND CHANGES, AND
SHALL BE PAYABLE OUT OF THE TI FUND. IF THE BUDGET IS GREATER THAN THE TI
ALLOWANCE, TENANT SHALL DEPOSIT WITH LANDLORD THE DIFFERENCE, IN CASH, PRIOR TO
THE COMMENCEMENT OF CONSTRUCTION OF THE TENANT IMPROVEMENTS OR CHANGES, FOR
DISBURSEMENT BY LANDLORD AS DESCRIBED IN SECTION 5(D).
(B)
TI ALLOWANCE. LANDLORD SHALL PROVIDE TO TENANT A TENANT
IMPROVEMENT ALLOWANCE (THE "TI ALLOWANCE") OF $180.00 PER RENTABLE SQUARE FOOT
OF THE BASEMENT SPACE (WHICH, BASED ON 4,006 RENTABLE SQUARE FEET OF BASEMENT
SPACE DEMISED UNDER THE LEASE, EQUATES TO $721,080.00 IN THE AGGREGATE). WITHIN
10 BUSINESS DAYS OF RECEIPT OF THE BUDGET FROM LANDLORD, TENANT SHALL NOTIFY
LANDLORD HOW MUCH OF THE TI ALLOWANCE TENANT HAS ELECTED TO RECEIVE FROM
LANDLORD. SUCH ELECTION SHALL BE FINAL AND BINDING ON TENANT, AND MAY NOT
THEREAFTER BE MODIFIED WITHOUT LANDLORD'S CONSENT, WHICH MAY BE GRANTED OR
WITHHELD IN LANDLORD'S SOLE AND ABSOLUTE SUBJECTIVE DISCRETION. THE TI ALLOWANCE
SHALL BE DISBURSED IN ACCORDANCE WITH THIS WORK LETTER. TENANT SHALL HAVE NO
RIGHT TO THE USE OR BENEFIT (INCLUDING ANY REDUCTION TO OR PAYMENT OF BASE RENT)
OF ANY PORTION OF THE TI ALLOWANCE NOT REQUIRED FOR TI COSTS ("UNREQUIRED TI
ALLOWANCE"), EXCEPT THAT TENANT SHALL BE ENTITLED TO RECEIVE ANY UNREQUIRED TI
ALLOWANCE WITH RESPECT TO ANY SPACE LEASED TO TENANT DIRECTLY BY LANDLORD IN THE
BUILDING (PURSUANT TO THIS LEASE OR OTHERWISE), FOR ALTERATIONS THERETO PROVIDED
THAT (I) SUCH ALTERATIONS ARE COMPLETED NO LATER THAN TWENTY-FOUR (24) MONTHS
AFTER THE COMMENCEMENT DATE, (II) THE DISBURSEMENT OF SUCH UNREQUIRED TI
ALLOWANCE SHALL BE SUBJECT TO LANDLORD'S REASONABLE REQUIREMENTS CONSISTENT WITH
THE LEASE AND THIS WORK LETTER AND (III) A WRITTEN REQUEST FOR SUCH DISBURSEMENT
SATISFYING ALL SUCH REQUIREMENTS SHALL HAVE BEEN RECEIVED BY LANDLORD NO LATER
THAN TWENTY-FOUR (24) MONTHS AFTER THE COMMENCEMENT DATE.
5
(C)
COSTS INCLUDABLE IN TI FUND. THE TI FUND SHALL BE USED SOLELY FOR
THE PAYMENT OF DESIGN, PERMITS AND CONSTRUCTION COSTS IN CONNECTION WITH THE
CONSTRUCTION OF THE TENANT IMPROVEMENTS,