Expansion Contracts Clause Samples
An Expansion Contracts clause defines the terms and conditions under which a party, typically a tenant or licensee, may increase the scope of their agreement, such as by leasing additional space or purchasing more services. This clause outlines the process for requesting expansion, any limitations or priority rights, and the pricing or terms that will apply to the expanded portion. Its core function is to provide a clear, pre-negotiated framework for growth, reducing uncertainty and potential disputes when a party wishes to expand their involvement under the contract.
Expansion Contracts. The Obligors shall not enter into a construction contract or contracts with respect to the development of any mixed refrigerant liquefaction blocks, modules and supporting facilities in addition to the Project Facilities, and related loading, transportation and storage facilities, in addition to the Development then in operation or under construction (an “Expansion”) that contain obligations and liabilities of any Obligor, which, in the aggregate, are in excess of $750 million without the prior consent of the Intercreditor Agent acting at the instruction of the Requisite Intercreditor Parties (not to be unreasonably withheld, conditioned or delayed); provided that without such consent the Obligors may:
(a) conduct front-end engineering, development and design work using Equity Funding not otherwise committed to other expenditures for the Development;
(b) prepare and submit applications for Permits related to any such Expansion;
(c) undertake pre-construction activities and early works activities associated with an Expansion; and
(d) enter into one or more contracts or agreements in respect of any Expansion so long as any such expenditures do not have any material impact on the construction or operations of the Phase 1 Project Facilities or the Phase 2 LNG Facility; provided that, the cost of all obligations and liabilities in respect of any Expansion and the activities described in sub-clauses (a) through (d) above that are undertaken by the Obligors (or in respect of which an Obligor has obligations or liabilities) shall be pre-funded into the Excess Equity Proceeds Account in accordance with the Common Security and Account Agreement, in each case as expressly permitted under the Finance Documents and which use for the contemplated development (i) could not reasonably be expected to have a Material Adverse Effect and (ii) in the case of the activities described in sub-clauses (c) and (d) to the extent undertaken at the Site, could not reasonably be expected to impair, delay or adversely affect the Development in any material respect (as certified by the Independent Engineer).
Expansion Contracts. (a) The Obligors shall not enter into a construction contract or contracts with respect to the development of any mixed refrigerant liquefaction blocks, modules and supporting facilities in addition to the LNG Facilities, and related loading, transportation and storage facilities, in addition to the Development then in operation or under construction that contain obligations and liabilities which, in the aggregate, are in excess of $50 million (an “Expansion”) without the prior consent of the Intercreditor Agent acting at the instruction of the Requisite Intercreditor Parties; provided that without such consent the Obligors may:
(i) conduct front-end engineering, development and design work using Equity Funding not otherwise committed to other expenditures for the Development;
(ii) prepare and submit applications for Permits related to any such Expansion; and
(iii) undertake pre-construction activities and early works activities associated with an Expansion; provided that such activities shall be funded from (A) Equity Funding not otherwise committed to other expenditures for the Development, or (B) Retained Excess Cash Flow, in the case of each of the foregoing sub-clauses (A) and (B), in each case as expressly permitted under the Finance Documents and which use for the contemplated development could not reasonably be expected to have a Material Adverse Effect.
Expansion Contracts. Expansion Contracts" is as defined in Section 4.6(a).