Contraction Right Clause Samples
A Contraction Right clause grants one party the ability to reduce the scope, quantity, or duration of goods or services under a contract. This right typically allows the party to decrease their commitments, such as ordering fewer units or shortening the contract term, often by providing advance notice to the other party. The core function of this clause is to provide flexibility and manage risk for the party holding the right, ensuring they are not locked into obligations that may no longer suit their needs.
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Contraction Right. Subtenant shall have the continuing right ("Contraction Right") to reduce the Rentable Premises Area by any amount up to eighty percent (80%) of the original Rentable Premises Area ("Contraction Space") effective on a date ("Contraction Right Date") not less than thirty (30) days after the date of Subtenant's written notice ("Contraction Right Notice"), upon and subject to the terms set forth in this Section 27. Any Subtenant's Contraction Right Notice shall, once given, be irrevocable. In the event that Subtenant properly exercises its Contraction Right, then:
(i) The Term shall terminate and expire with respect to the Contraction Space on the Contraction Right Date;
(ii) On or prior to the Contraction Right Date, Subtenant shall peaceably surrender to Sublandlord the Contraction Space in the condition required by the terms and provisions of this Sublease;
(iii) Upon the occurrence of the Contraction Right Date, the definition of Rentable Premises Area in this Sublease shall be reduced to reflect the deletion of the Contraction Space;
(iv) If Sublandlord or Subtenant so requests, the parties shall execute a written amendment to this Sublease, in a form reasonably satisfactory to the parties, to reflect such exercise; and
(v) If the Contraction Space is less than eighty percent (80%) of the original Subleased Premises, Subtenant's Contraction Right shall apply again to the reduced Subleased Premises and the same procedures shall be followed as provided herein for any subsequent exercise(s) of the Contraction Right by Subtenant.
Contraction Right. Provided that no Default by Tenant then exists under any provision of this Lease, either at the time of Tenant’s election of its right to terminate granted herein or as of the effective Termination Date, Tenant (i.e. Bloom Energy Corporation) and any Permitted Transferee shall have the one-time right to terminate this Lease (the “Early Termination Right”) solely as to the entire fourth (4th) floor of the Building or the entire sixth (6th) floor of the Building, as the case may be (the “Relinquished Floor”) effective as of the last day of the seventh (7th) year of the initial Term of the Lease (the “Termination Date”), provided Tenant has delivered its irrevocable written notice of such election to terminate (the “Termination Notice”) to Landlord not more than twelve (12) full calendar months prior to the Termination Date or less than nine (9) full calendar months prior to the Termination Date. Such Termination Notice shall state whether the Relinquished Floor is the entire fourth (4th) floor of the Building or the entire sixth (6th) floor of the Building. All rental and other costs due under this Lease allocable to the Relinquished Floor through the Termination Date shall remain due and payable by Tenant to Landlord. Any such termination by Tenant shall not abrogate any obligation existing under the Lease as of the Termination Date or otherwise attributable to Tenant’s occupancy thereof. Anything herein to the contrary notwithstanding, Tenant’s right to terminate this Lease as to the entire fourth (4th) floor of the Building or the entire sixth (6th) floor of the Building is personal to Bloom Energy Corporation and any Permitted Transferee, and shall not apply to any other assignee of this Lease. Tenant shall not have a right to terminate this Lease as to the entire fourth (4th) floor of the Building or the entire sixth (6th) floor of the Building if this Lease has been assigned (whether or not Landlord has consented to such assignment). Any exercise of such termination right referred to in this Paragraph 50 by any assignee of this Lease shall be void and of no force or effect. If Tenant timely exercises the Early Termination Right, then Landlord shall prepare, and Landlord and Tenant shall execute, an amendment to this Lease that memorializes the contraction of the size of the Premises by the amount of the Relinquished Floor and subjects the Premises less the Relinquished Floor to all of the terms and conditions of this Lease, except that effective as of ...
Contraction Right. (1) Tenant shall have the one-time right to elect to reduce the size of the Premises (“Tenant’s Contraction Right”). Tenant must notify Landlord, in writing, of Tenant’s election to reduce the size of the Premises no later than nine (9) months following the Commencement Date (“Tenant’s Contraction Notice”) subject to Force Majeure delays during the first seven (7) months following the Commencement Date. In Tenant’s Contraction Notice, Tenant shall identify the approximate amount of Rentable Area of the original Premises that Tenant wishes to relinquish, but in no event shall said portion of the Premises constitute greater than fifty percent (50%) of the Rentable Area of the original Premises as of the Commencement Date. The specific size and demising of the portion of space to be relinquished by Tenant shall be acceptable to Landlord in Landlord’s commercially-reasonable discretion in good faith cooperation with Tenant, it being reasonable for Landlord to consider, among other things, the layout of the multi-tenant corridor necessary to connect the two Building exit stairs, and the lease-ability of the portion of space being relinquished as an independent suite to third-party tenants. The portion of the original Premises to be so deleted from the Premises shall be referred to as the “Contraction Space”. Upon final determination of the Contraction Space pursuant to the above, Landlord shall promptly design and construct the necessary demising wall(s) and common area corridor pursuant to designs prepared by Landlord and reasonably approved by Tenant (the “Contraction Construction Work”). Tenant shall reimburse Landlord (as additional Rent under this Lease) for a portion of the cost of the Contraction Construction Work, which portion shall be equal to such cost, multiplied by the ratio of the Rentable Area of the Premises following deletion of the Contraction Space to the Rentable Area of the original Premises (the “Contraction Construction Cost Reimbursement”). To the extent any of the Tenant Improvement Allowance (as reduced pursuant to Section 2.1(c)(2) below) remains as of the date Landlord has determined the Contraction Construction Cost Reimbursement, Tenant may apply any unused portion of the Tenant Improvement Allowance towards the Contraction Construction Cost Reimbursement. Upon the later to occur of: (A) twelve (12) months following the Commencement Date and (B) full completion of Contraction Construction Work, the Contraction Space shall be delete...
Contraction Right. Article 30
Contraction Right. The 6th Floor — West Tower is hereby added as a block of space subject to contraction under Exhibit “B” — Eliminated Space Possibilities of the Second Amendment to Lease dated December 13, 2011.
Contraction Right. The Sixth Floor Expansion Space shall be specifically excluded from Tenant's contraction right in Section 10.0 of the Prime Lease.
Contraction Right. Subtenant shall have a one-time right to reduce the area of the Sublet Premises down to, but not less than, 5,920 rentable square feet. Subtenant must exercise its contraction right by giving written notice to Sublandlord at least 90 days before the first anniversary of the Commencement Date. If Sublandlord timely exercises its contraction right: (i) the Sublet Premises shall be reduced to the rentable square footage set forth in its notice, provided that the configuration of the remaining Sublet Premises shall be reasonably satisfactory to Sublandlord; (ii) Subtenant, at its sole cost and expense, shall re-demise the Sublet Premises and perform all other work necessitated by such exercise of the contraction right; and (iii) Rent shall be adjusted to reflect the reduced area of the Sublet Premises based on the per-rentable-square-foot rental rate set forth in Section 3, beginning on the later to occur of: (x) the first anniversary of the Commencement Date; or (y) the date Subtenant completes the re-demising work and vacates the relinquished portion of the Sublet Premises in the condition required under this Sublease. Subtenant may not exercise its right to reduce the area of the Sublet Premises if it is then in default under this Sublease. If the parties are unable to agree on the configuration of the remaining Sublet Premises under clause (i) above, then the dispute shall be referred to a mutually acceptable, independent Georgia-licensed architect. The architect shall determine the final configuration of the remaining Sublet Premises, and this determination shall be binding upon Sublandlord and Subtenant.