TENANT IMPROVEMENT COST-SHARING AGREEMENT
This Tenant Improvement Cost-Sharing Agreement (this "Agreement") is made at __________ on __________.
BETWEEN
__________, __________, of __________ (the "Landlord", which expression includes its successors in interest and permitted assigns);
AND
__________, __________, of __________ (the "Tenant", which expression includes its successors in interest and permitted assigns).
The Landlord and the Tenant are each a "Party" and together the "Parties".
RECITALS
A. By a __________ dated __________ between the Parties (the "Lease"), the Landlord granted, or is granting, the Tenant the right to occupy the premises described in clause 1.1 (the "Premises"), situated in __________, for a term expiring on __________, rent under the Lease running from __________ (the "Rent Commencement Date").
B. The Tenant intends to carry out fit-out works at the Premises (the "Works"), and the Landlord has agreed to contribute towards the Tenant's cost of the Works by way of a Tenant Improvement Allowance, over and above any rent-free period given for the Works under the Lease.
C. The Parties wish to record the amount or basis of that Allowance, the costs it may be applied against, how and when it is paid, released or credited, what happens to any part not used, and what happens to it if the Tenant leaves the Premises before the end of the Term of the Lease.
D. This Agreement is supplemental to the Lease and to the instrument, if any, recording the Landlord's consent to the Works. It does not vary the Lease except as clause 8 expressly states, does not grant that consent, and does not create, transfer or enlarge any interest in the Premises.
IT IS AGREED AS FOLLOWS
- THE PREMISES AND THE LEASE
1.1 The Premises are: __________, admeasuring __________ square feet of __________.
1.2 The Term of the Lease referred to in Recital A is the period from the date the Lease records as its commencement until __________ (the "Term").
1.3 __________
- THE ALLOWANCE
2.1 The Landlord shall contribute towards the Tenant's cost of the Works by way of a Tenant Improvement Allowance (the "Allowance"), calculated on __________.
2.3 The Allowance shall not exceed __________ in aggregate. Where the Allowance is calculated under clause 2.2, __________ is the figure the Parties intend that calculation to produce on the area stated in clause 1.1, and if the two are inconsistent this clause 2.3 prevails.
2.4 The Landlord owes the Allowance, and any part of it, only in the manner and subject to the conditions stated in clauses 3 to 6, and does not owe it as a debt due on demand independently of them.
- QUALIFYING COSTS
3.1 The Allowance may be applied only against the following costs of the Works, actually and reasonably incurred by the Tenant after the date of this Agreement (the "Qualifying Costs"): __________
3.3 The Tenant shall claim the Allowance against Qualifying Costs, and reach any milestone that releases it, no later than __________ (the "Allowance Claim Deadline").
- DISBURSEMENT OF THE ALLOWANCE
4.1 __________
- UNSPENT ALLOWANCE
5.1 __________
- REPAYMENT IF THE TENANT LEAVES EARLY
6.1 __________
6.3 This clause 6 is the Landlord's only right to recover any part of the Allowance once disbursed, released or credited, and clause 6.1 states exhaustively when that right arises.
- TAXES
7.1 All amounts payable, reimbursed, released or credited under this Agreement are exclusive of goods and services tax. Where GST is chargeable on a supply made under or in connection with this Agreement, the recipient of that supply shall pay it in addition, against a valid tax invoice containing the particulars the law requires, and the supplier shall report the supply correctly and on time so that the recipient can claim any input tax credit to which it is entitled. Where a recipient is liable to pay GST under reverse charge on an amount payable under this Agreement, it shall pay that tax to the Government and not to the supplier, and shall issue a self-invoice under Section 31(3)(f) of the CGST Act, 2017.
7.2 Where the Income-tax Act, 1961 requires tax to be deducted at source from a payment under this Agreement, the payer shall deduct it, deposit it within time, and issue the certificate; a deduction so made and deposited discharges the payment to that extent. Where the mechanism chosen in clause 4.1 credits the Allowance against Rent, the Tenant shall continue to deduct tax at source on the Rent as if no credit had been allowed, and the credit under clause 4.1 takes effect between the Parties net of that deduction.
- RELATIONSHIP WITH THE LEASE
8.1 This Agreement is supplemental to the Lease and, where one exists or is entered into, to the instrument referred to in clause 1.3. A term defined in the Lease has the same meaning in this Agreement unless this Agreement defines it differently.
8.2 Except to the extent clause 4.1 allows a credit against Rent under the mechanism chosen there, this Agreement does not vary the Rent, the Term, the security deposit or any other term of the Lease, and every sum stated in the Lease continues to be payable in full according to its terms. Nothing in this Agreement transfers, creates, limits or extinguishes any right, title or interest in the Premises, or grants or agrees to grant possession or occupation of them; the Tenant's right to occupy the Premises arises only under the Lease.
8.3 This Agreement does not grant, and does not operate as, the Landlord's consent to the Tenant carrying out the Works. That consent is given, or is to be given, in the manner clause 1.3 records, and the Tenant shall not treat this Agreement as authority to begin the Works.
8.4 If there is a conflict between this Agreement and the Lease on the Allowance, its disbursement, or the repayment dealt with in clause 6, this Agreement prevails; on every other matter the Lease prevails.
- NOTICES
9.1 A notice under this Agreement shall be in writing and delivered by hand against written acknowledgement, by reputed courier, or by registered post with acknowledgement due, to the address of the receiving Party stated in this Agreement.
9.2 A Party that changes its address or email for notices shall notify the other Party in writing, and until it does so a notice to the last notified address is validly given.
- DISPUTE RESOLUTION AND JURISDICTION
10.1 __________
10.2 The seat and venue referred to in clause 10.1, and the courts having jurisdiction over any matter arising out of this Agreement, are at __________.
10.3 This Agreement is governed by the laws of India.
- GENERAL
11.1 This Agreement may not be assigned separately from the Lease. It binds and benefits each Party's successors in interest and permitted assigns under the Lease, including a person who takes an assignment of the Landlord's reversion or of the Tenant's leasehold interest together with the Lease.
11.2 This Agreement, read with the Lease and the instrument referred to in clause 1.3, is the entire agreement between the Parties on the Allowance, and supersedes all prior correspondence and understanding on it.
11.3 An amendment to this Agreement must be in writing and signed by both Parties. A Party's failure or delay in enforcing a term is not a waiver of it.
11.4 If any provision of this Agreement is held invalid or unenforceable, the remaining provisions continue in full force, and the Parties shall replace the affected provision with a valid one closest to their original intention.
11.5 This Agreement may be executed in two counterparts, each an original and together one agreement, one counterpart being retained by each Party.
IN WITNESS WHEREOF the Parties have signed this Agreement at __________ on __________.
FOR THE LANDLORD, __________
Signature: ______________________________
FOR THE TENANT, __________
Signature: ______________________________
WITNESSES
- Signature: ______________________________
Address: ______________________________
- Signature: ______________________________
Address: ______________________________