Costs and Construction Management Fee. The Tenant Improvement Allowance shall be used only for the payment of costs relating to the construction of the Tenant Improvements (including # the cost of preparing the Tenant Phase 1 Working Drawings and the Tenant Phase 2 Working Drawings and # payment of a construction management fee payable to Landlord's construction manager in the amount of two percent (2%) of the total cost of the Tenant Improvements eligible for payment from the Tenant Improvement Allowance), which costs Landlord shall pay directly out of the Tenant Improvement Allowance, for the credit of Tenant, and in no event shall any part of the Tenant Improvement Allowance be paid to or payable to Tenant, except for the portion that is allocable to the purchase by Tenant of FF&E as set forth below.

Construction. Tenant has the right, subject to Landlord approval, which approval shall not be unreasonably withheld, conditioned or delayed, to retain its own contractor (the “Outside Contractor”), designers and engineers to perform the Tenant Improvements. Once commenced, Tenant shall complete the Tenant Improvements in material compliance with the Tenant Working Drawings. Landlord and Tenant have agreed that the costs of such Tenant Improvements shall be paid by Tenant, although Landlord shall provide Tenant an allowance of up to 32.81 per rentable square foot of office spaced leased to be utilized toward the cost of the Tenant Improvements (hereafter called the “T. I. Allowance”). The T. I. Allowance shall be used only for the payment of costs relating to the construction of the Tenant Improvements (including the cost of preparing the Tenant Working Drawings and a construction management fee payable to Landlord’s construction manager in the total amount of three percent (3%) of the total cost of the Tenant Improvements), which costs Landlord shall pay directly out of the T. I. Allowance, for the credit of Tenant, and in no event shall any part of the T. I. Allowance be paid to or payable to Tenant, except for the portion that is allocable to the purchase by Tenant of FF&E. Any costs of the Tenant Improvements which exceed the T. I. Allowance shall be the financial responsibility of Tenant. Any improvements to the Premises, other than as shown on the Tenant Working Drawings, and the furnishing of the Premises, shall be made by Tenant at the sole cost and expense of Tenant, subject to all other provisions of this Lease Agreement, including compliance with all applicable governmental laws, ordinances and regulationsTenant may apply 10% of the T.I. Allowance for the purchase and installation of FF&E. The T.I. Allowance shall be paid monthly in arrears during completion of the Tenant Improvements in accordance with usual and customary construction disbursement procedures.

Payment of Costs. Tenant shall pay for the Tenant Improvements, except for the Allowance which Landlord shall advance as hereinafter provided. Landlord shall only be responsible for payment of up to the amount of the Allowance for the Tenant Improvements. If the Construction Costs for the Tenant Improvements are greater than the amount of the Allowance, Tenant shall be solely responsible for such additional costs. As provided in the definition of the Allowance, if funds of the Allowance are still available, Tenant must use up to $250,000.00 out of the Allowance for payment of FF&E acquired and installed in the Leased Premises.