The early termination clause outlines the conditions under which a contract can be ended before its agreed-upon expiry date, including any required notice periods and potential penalties or fees. This clause provides parties with a legal framework to exit the contract, ensuring clarity and protecting both parties' interests in unforeseen circumstances.
1. Landlord’s Early Termination Rights. Landlord is hereby granted rights to terminate the Lease with respect to all, but not less than all, of one or more of full floors 31 through 35, 41 and 42 of the Premises (each, an “Early Termination Right” and collectively, the “Early Termination Rights”) effective as of a termination date selected by Landlord for each Early Termination Right exercised by Landlord (each, an “Effective Termination Date”), which Effective Termination Date shall not be earlier than January 1, 2024 nor later than December 31, 2024, time being of the essence. The Early Termination Rights may be exercised separately or in combination with each other, and in one or multiple exercises. Any portion of the Premises as to which Landlord exercises an Early Termination Right is sometimes referred to herein as an “Early Termination Space”.
2. Exercise of Early Termination Right(s). Each Early Termination Right is exercisable by Landlord providing written notice to Tenant of such exercise, together with e-mail notice sent to the addresses set forth on Schedule 1 attached hereto (collectively, the “Termination Notice”). Each Termination Notice shall specify the Early Termination Space and the Effective Termination Date for such Early Termination Space. Subject to Landlord’s early access rights as set forth in Section 5 below, the Effective Termination Date for an Early Termination Space shall not be earlier than ninety (90) days after the date of Tenant’s receipt of the Termination Notice for such Early Termination Space.
3. Early Termination Fee. If Landlord exercises an Early Termination Right, then Tenant shall be required to pay Landlord a termination fee in consideration of the early termination of the Lease with respect to the applicable Early Termination Space (an “Early Termination Fee”). Except as expressly provided in Section 4 below, the Early Termination Fee shall be calculated in accordance with the following:
Floors 31 through 35. The Early Termination Fee for the early termination of the Lease with respect to any of floors 31 through 35 floors shall be an amount equal to ninety percent (90%) of the aggregate Monthly Base Rent and estimated Tenant’s Proportionate Share of Operating Expenses and Real Estate Taxes that would have been payable by Tenant under the Lease for the Early Termination Space for the period from the day following the Effective Termination Date for such Early Termination Space through December 31, 2024.
Alternative Early Termination Fee. For purposes of this Section 4, the “Alternative Early Termination Fee” with respect to particular Early Termination Space means the amount (if any) by which (i) the aggregate Monthly Base Rent and estimated Tenant’s Proportionate Share of Operating Expenses and Real Estate Taxes that would have been payable by Tenant under the Lease for such Early Termination Space during the period from the day following the Effective Termination Date for such Early Termination Space through (A) December 31, 2024 in the case of Early Termination Space located on floors 31-35, or (B) December 31, 2032 in the case of Early Termination Space located on floors 41-42, exceeds (ii) (A) the aggregate base rent and operating expenses and real estate taxes that would have been payable by the subtenant under the proposed sublease for such Early Termination Space during the term of such sublease, less (B) the aggregate amounts of any tenant improvement or other allowances or other amounts that would have been payable by Tenant to the subtenant under such proposed sublease for such Early Termination Space and the leasing commissions that would have been payable by Tenant in connection with the proposed sublease of such Early Termination Space.
Effect of Early Termination. If an Early Termination Right is exercised by Landlord, then (a) the Lease shall terminate with respect to the applicable Early Termination Space effective as of the Effective Termination Date for such Early Termination Space, and Tenant shall have no right to extend or renew the Term for such Early Termination Space, including for any Renewal Terms; (b) Tenant shall remain responsible for the performance of all of Tenant’s obligations and liabilities that accrue or arise under the Lease for such Early Termination Space up to and through the Effective Termination Date (including without limitation the payment of Monthly Base Rent and Tenant’s Proportionate Share of Operating Expenses and Real Estate Taxes through the Effective Termination Date, and the payment of the Early Termination Fee hereunder); (c) subject to Tenant’s ongoing maintenance and repair obligations as set forth in the Lease, Tenant shall surrender possession of the Early Termination Space to Landlord on or prior to the applicable Effective Termination Date in its “as-is” condition, with no removal or restoration obligation whatsoever (except as set forth below with respect to the Stairwell Removal Work, and except that Tenant shall remove its proprietary IT and network equipment and the personal items of its employees, with all other personal property of Tenant remaining in the Early Termination Space being considered to have been abandoned by Tenant); and (d) Tenant shall be relieved from any further obligations or liabilities with respect to an Early Termination Space after the Effective Termination Date for such Early Termination Space, except for Tenant’s surrender obligations pertaining to such Early Termination Space, all obligations and liabilities that accrue or arise prior to and through the Effective Termination Date, and all obligations and liabilities with respect to the Early Termination Space that pursuant to the terms of the Lease survive the expiration or termination of the Lease. In consideration of Landlord’s agreement to permit Tenant to leave its personal property in the Premises that is not required to be removed by Tenant under clause (c) above, Tenant agrees to provide Landlord with non-exclusive access to the Early Termination Space up to sixty (60) days prior to the Effective Termination Date to permit Landlord to remove and dispose of such Tenant personal property, so long as Landlord has timely provided the Termination Notice as set forth in Section 2 hereof. During any period of Landlord’s early access as provided herein, Landlord and Tenant shall cooperate reasonably and in good faith in connection with each party’s activities within the Premises. By way of example and for the avoidance of doubt, the parties hereto hereby agree that if and Landlord has timely provided the Termination Notice such that the Effective Termination Date is January 1, 2024 with respect to all of the Early Termination Space, Landlord shall have early access to the Early Termination Space as of November 1, 2023. If Tenant fails to surrender possession of an Early Termination Space to Landlord by the Effective Termination Date for such Early Termination Space, then the provisions of Article 34.11 of the Lease shall be applicable to such Early Termination Space. Notwithstanding any early termination of the Lease with respect to the 31st floor pursuant to this Agreement, Tenant shall remain responsible for the performance of Tenant’s obligations under Section 2 of the Seventh Amendment with respect to the removal of the Stairwell between the 30th and 31st floors; provided, however, that for purposes thereof Landlord shall be the party that performs the Stairwell Removal Work (as defined in Section 2 of the Seventh Amendment).
Proposal No. 3 — Early Termination Trust Amendment Proposal — To amend the Investment Management Trust Agreement, dated February 3, 2021 (the “Trust Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as trustee (“Continental”), to change the date on which Continental must commence liquidation of the trust account (the “Trust Account”) established in connection with the Company’s initial public offering (the “IPO”) from the Original Termination Date to the Early Termination Date (such proposal, the “Early Termination Trust Amendment Proposal”). A copy of the proposed amendment to the Trust Agreement is set forth in Annex C to the accompanying proxy statement; and
RENEWABLES EARLY TERMINATION 2.1 Subject to Section 2.3 and Section 3.6 below and notwithstanding anything to the contrary in Transaction Documents, the Parties hereby irrevocably and unconditionally (without representation, warranty or recourse, whether express or implied) agree that, with effect from (and including) May 24, 2024 or, if later, the date on which all amounts payable in connection with the Renewables Early Termination have been paid in full (such date, the “Renewables Early Termination Date”): (a) the Supply and Offtake Agreement, the Storage and Services Agreement, the Fee Letter, the Independent Amount Letter, the Lien Documents, the Master Agreement, the BWC Storage Rights Agreement and the Center Point Storage Rights Agreement shall immediately be terminated and cease to be in force and effect; (b) each Party will be irrevocably and unconditionally released and discharged from all its present and future obligations, claims and liabilities (both actual and contingent (including, without limitation, guarantee obligations) and whether as primary obligor or guarantor, as surety or in any other capacity whatsoever) under, pursuant to or in connection with the Transaction Documents; and (c) any power of attorney granted by any Party to the other Party under, pursuant to or in connection with any of the Transaction Documents will be irrevocably and unconditionally cancelled, terminated and revoked.
TERMINATION OF CERTAIN CONTRACTUAL ARRANGEMENTS 3.1 As soon as reasonably practicable following the entry into of this Agreement, Macquarie and the Company shall deliver a notice to Idemitsu in writing (in substantially the form appended to this Agreement as Schedule 1 (Form of Notice to Idemitsu)) and in accordance with the terms of the Idemtisu Tripartite Agreement, notifying Idemitsu that Macquarie and the Company (a) have agreed to terminate the Supply and Offtake Agreement with effect from (and including) the Renewables Early Termination Date; and (b) are exercising their right pursuant to section 6.1(c) of the Idemitsu Tripartite Agreement to terminate the Idemitsu Tripartite Agreement with effect from (and including) the Renewables Early Termination Date. 3.2 On or promptly following (and, in any event, within five (5) Business Days of) the earlier of (i) the Renewables Early Termination Date; and (ii) the date on which Macquarie determines, acting in good faith and in a commercially reasonable manner, that it no longer has title to any Permitted Feedstock or Renewable Product stored: (a) at the Center Point Storage Facilities and/or the BWC Storage Facilities, Macquarie shall deliver a notice to the Center Point Operator or the BWC Operator, as applicable, in substantially the form appended hereto as Schedule 2 (Form of Notice to Third Party Storage Provider) notifying them that the Contractual Arrangements (as defined in the BWC Consent Letter or the Center Point Consent Letter, as applicable) have been terminated; or (b) on an Included Permitted Feedstock Barge, the Company shall, promptly following a request by Macquarie, deliver a notice in writing to the relevant Barge Operator and the relevant Barge Owner, in substantially the form appended hereto as Schedule 3 (Form of Notice to each Barge Owner or Barge Operator) notifying them that such Barge Operator or Barge Owner, as applicable, shall be released from their obligation to comply with the terms of the irrevocable notices delivered to them by the Company.
Each of the Early Termination Proposal, the Early Termination Trust Amendment Proposal and the Adjournment Proposal are more fully described in the accompanying proxy statement. Please take the time to read carefully each of the Proposals in the accompanying proxy statement before you vote.
Early Termination Notice and Early Termination Schedule. Notice; Schedule. Delivery of Early Termination Notice and Early Termination Schedule. If the Corporation chooses to exercise its right of early termination under Section 3.01(a) above, or if there is a Deemed Early Termination Event under Section 3.01(b) above, the Corporation shall deliver to each TRA Holder whose rights are being terminated (A) a notice (an “Early Termination Notice”) specifying (x) such early termination and (y) the date on which the termination of rights is to be effective (the “Early Termination Date”), which date shall be not less than 30 days and not more than 120 days after the date of the Early Termination Notice, and (B) a schedule showing in reasonable detail the calculation of the Early Termination Payment with respect to each TRA Holder (the “Early Termination Schedule”). The Early Termination Notice shall be delivered within 30 days after the Corporation elects to terminate this Agreement or there is a Deemed Early Termination Event.
Finalization of Early Termination Schedule; Disputes. The applicable Early Termination Schedule delivered to a TRA Holder pursuant to Section 3.02(a)(i) shall become final and binding on the Corporation and such TRA Holder unless that TRA Holder, within 30 days after receiving the Early Termination Schedule, provides the Corporation with notice of a material objection to such schedule made in good faith (“Material Objection Notice”). If the Corporation and such TRA Holder are unable to successfully resolve the issues raised in the Material Objection Notice within 30 days after receipt by the Corporation of the Material Objection Notice, the Corporation and the TRA Holder shall employ the Dispute Resolution Procedures set forth in Section 6.08.
Withdrawal of Early Termination Notice. The Corporation may withdraw an Early Termination Notice before the Early Termination Payment is due and payable to any applicable TRA Holder(s).
Amendment of Early Termination Schedule. After finalization of an Early Termination Schedule in accordance with Section 3.02(a)(ii), any Early Termination Schedule may be amended by the Corporation at any time before the Early Termination Payment is made (i) in connection with a Determination affecting such schedule, (ii) to correct material inaccuracies in any such schedule, or (iii) to comply with the Arbitrators’ determination under Section 6.08. Any amendment shall be subject to the procedures of Section 3.02(a)(ii) and the Dispute Resolution Procedures set forth in Section 6.08.
Amount and Timing of Early Termination Payment. The payment due to a TRA Holder in connection with an early termination described in Section 3.01(a) (the “Early Termination Payment”) shall be an amount equal to the present value, discounted at the Early Termination Rate as of the Early Termination Date, of all Tax Benefit Payments that the Corporation would be required to pay to the TRA Holder beginning from the Early Termination Date and assuming that the Valuation Assumptions are applied. Not later than 10 days after an Early Termination Schedule delivered to a TRA Holder becomes final in accordance with Section 3.02(a)(ii), the Corporation shall pay to the TRA Holder the Early Termination Payment due to that TRA Holder.
Effect of Early Termination Payment. Upon payment of the Early Termination Payment by the Corporation under Section 3.03, neither the TRA Holder nor the Corporation shall have any further rights or obligations under this Agreement in respect of the Units (including those previously Exchanged) with respect to which the rights under this Agreement have been terminated in accordance with Section 3.01, other than for any (i) payment under this Agreement that is due and payable but has not been paid as of the Early Termination Notice and (ii) Tax Benefit Payment due for the Taxable Year ending with or including the date of the Early Termination Notice (except to the extent that the amount described in clause (ii) is included in the Early Termination Payment). For the avoidance of doubt, if an Exchange occurs after the Corporation has made an Early Termination Payments with respect to all Units (including those previously Exchanged), the Corporation shall have no obligations under this Agreement with respect to such Exchange other than any obligations described in clause (i) or (ii) of the preceding sentence.
Early Termination Election by Corporation. The Corporation may terminate all or a portion of the rights under this Agreement with respect to the Blocked TRA Holder and/or all or a portion of the Units held (including those previously Exchanged) by all TRA Holders at any time by (A) delivering an Early Termination Notice as provided in Section 3.02(a) and (B) paying the Early Termination Payment as provided in Section 3.03(a). If the Corporation terminates less than all of the rights under this Agreement with respect to the TRA Holders, such termination shall be made among the TRA Holders in such manner that it results in each TRA Holder receiving the same proportion of the Early Termination Payment made at that time as each TRA Holder would have received had the Corporation terminated all of the rights of the TRA Holders under this Agreement at that time.
Deemed Early Termination Event. Upon a Material Uncured Breach of this Agreement with respect to a TRA Holder (an “Affected TRA Holder”) or as soon as reasonably practicable before a Change of Control (each, a “Deemed Early Termination Event”), (A) the Corporation (or the TRA Representative (with a copy to the Corporation)) shall deliver to the Affected TRA Holder(s) with respect to a Material Uncured Breach or all TRA Holders with respect to a Change of Control, an Early Termination Notice as contemplated in Section 3.02(a), and (B) all obligations under this Agreement with respect to such TRA Holder(s) shall be accelerated. Notwithstanding the preceding sentence, if (x) there is a Material Uncured Breach with respect to fewer than all TRA Holders and (y) that Material Uncured Breach resulted from a willful and intentional breach of this Agreement by the Company, then all TRA Holders shall be considered an Affected TRA Holder.
Early termination refers to the process of concluding a contract or agreement before its original end date. This can occur due to various reasons, such as breaches of contract, mutual agreement, changes in circumstances, or specific terms outlined within the contract itself. This provision allows for flexibility in contractual relationships by giving parties an exit mechanism under predefined conditions.
You should consider early termination in the following situations:
When drafting an early termination clause, consider including the following elements:
Example:
“Either party may terminate this agreement prior to the expiration date upon providing thirty (30) days written notice to the other party. In the event of termination for breach of contract, the non-breaching party shall be entitled to compensation for damages incurred.”
Contracts that often include early termination clauses are:
Including a well-defined early termination clause provides a safeguard for all parties involved and can prevent disputes or legal complications.
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