TENANT IMPROVEMENT WORK LETTER (ARIZONA)

1. DEFINITIONS

• "Plans": Final construction drawings approved by Landlord and Tenant.
• "Substantial Completion": Work sufficiently complete for occupancy subject only to punchlist items not materially interfering with use.
• "Allowance": $[AMOUNT]/SF (cap) for design/permits/constructing the Tenant Improvements (TI).
• "Landlord Delay": Delays caused by Landlord, its contractors, or failure to timely review/approve/deliver.
• "Tenant Delay": Delays caused by Tenant (late plans, changes, access issues, untimely approvals).
• "Force Majeure": As defined in the Lease (if applicable); excludes monetary obligations.

2. PLANS AND APPROVALS

• Tenant delivers preliminary plans by [DATE]; Landlord responds within [X] business days; mutual approval required.
• Changes require written approval; cost/time impacts allocated per Section 4.

3. CONSTRUCTION

• [ ] Landlord Build / [ ] Tenant Build (select).
• Contractor selection: [LANDLORD APPROVED LIST / TENANT SELECTS SUBJECT TO APPROVAL].
• Compliance with laws, codes, permits, insurance, lien waivers.
• Coordination with building rules; hours; staging and deliveries.

4. COSTS AND ALLOWANCE

• Allowance applied to TI costs; overages paid by Tenant; unused allowance reverts to Landlord unless otherwise agreed.
• Change orders must detail cost/time impact; overage funded by Tenant before commencement of change work.
• Draw Mechanics (if Tenant Build): Disbursements upon submission of (a) invoices, (b) conditional/unconditional lien waivers, (c) architect certification of percentage completion, within [X] days of a complete draw request.

5. SCHEDULE AND DELAYS

• Target Substantial Completion: [DATE].
• Extensions for Tenant Delay and Force Majeure; schedule relief matches actual delay duration.
• Landlord Delay: Tenant receives day-for-day relief plus, if Rent Commencement is tied to delivery, rent abatement equal to Base Rent for each day of Landlord Delay beyond a [GRACE] day grace period.
• Tenant Delay: Extends Target Substantial Completion and Rent Commencement accordingly; no abatement.

6. PUNCHLIST / DELIVERY

• Joint punchlist within [X] days of Substantial Completion; Landlord/Tenant complete their items within [Y] days.
• Final lien waivers and permits required before occupancy (if applicable).

7. ALLOWANCE DRAWS (IF TENANT BUILD)

• Draw process: invoices, lien waivers, architect certification; disbursed within [X] days.
• Landlord may withhold only for: incomplete documentation, defective work, or over-budget items; partial release for undisputed amounts.

8. WARRANTIES

• Standard contractor/subcontractor warranties assigned to Tenant (or Landlord) as applicable; defects corrected within warranty period.

9. MISCELLANEOUS

• Insurance and indemnity align with Lease; governing law/venue per Lease; survival of obligations.
• Self-Help/Fail-to-Fund (optional): If Landlord fails to fund undisputed Allowance draws after [NOTICE + X] days, Tenant may fund and offset against next Base Rent installments (subject to Lease limits) or seek specific performance.

[// GUIDANCE: Tie rent commencement to Substantial Completion/possession if negotiated; confirm ADA requirements; verify Arizona mechanics lien and lien release procedures under A.R.S. Title 33, Chapter 7; include right to self-help if Landlord fails to fund allowance (if negotiated).]