Upgrade Allowance Clause Samples
An Upgrade Allowance clause defines the terms under which a party is permitted to make improvements or enhancements to a product, service, or property, often within a contractual or leasing context. Typically, this clause specifies the scope of permissible upgrades, any financial limits or reimbursement procedures, and the approval process required before upgrades can be made. Its core practical function is to provide clear guidelines and boundaries for upgrades, ensuring both parties understand their rights and obligations, and preventing disputes over unauthorized or excessive improvements.
Upgrade Allowance. From and after January 1, 2017, Landlord shall provide Tenant up to One Million Four Hundred Thousand Dollars ($1,400,000) minus the sum of all Related Lease Upgrade Disbursements (the “Upgrade Allowance”) (which is an aggregate amount and shall be allocated among the Facilities as mutually determined by Landlord and Tenant) as an allowance for the cost of certain Alterations and other upgrade and capital expenditures pertaining to the Premises (each an “Upgrade Expenditure”), upon the following terms and conditions and the other applicable terms and conditions of this Article VII and this Lease:
7.10.1 The Upgrade Allowance shall be used to pay for the cost of the Upgrade Expenditures identified by Tenant and approved by Landlord in its reasonable discretion as provided herein to the extent such identified and approved expenditures may be capitalized by Landlord in accordance with GAAP. Prior to commencing any work for which Tenant will request disbursement of the Upgrade Allowance, Tenant shall provide Landlord with a brief proposal summarizing the work to be completed together with such written documentation as may be reasonably requested by Landlord with respect thereto, which may include, to the extent applicable, plans and specifications, budgets, a work completion schedule, pro forma operating projections and copies of permits required in connection with such repairs or improvements, and Landlord shall have a reasonable period of time, not to exceed forty-five (45) days, to review and approve the same, which shall not be unreasonably withheld, conditioned or delayed.
7.10.2 Tenant shall have the right to request disbursements of the Upgrade Allowance from time to time, but not more frequently than once per calendar month, in increments of not less than Twenty-Five Thousand Dollars ($25,000). All such requests shall be in writing and shall be accompanied with such supporting documentation as may be reasonably requested by Landlord, which may include, without limitation, (a) an itemized account of expenditures to be paid or reimbursed from the requested disbursement, certified by Tenant to be true and correct expenditures which have already been paid or are due and owing and for which no previous disbursement was made hereunder, and (b) copies of invoices or purchase orders from each payee with an identifying reference to the applicable vendor or supplier, which invoices or purchase orders shall support the full amount of costs contained in the reques...