The extension fee is the most predictable cost on the TSA table, which makes it the cheapest to cap at signature and the most expensive to meet on the seller's terms.
Run past the initial TSA term and the price steps up — often to 110, 125, then 150 percent of the base rate as the months pass. The escalation is designed to bite precisely when you have the least leverage: mid-exit, behind schedule, and out of alternatives.
The mistake is treating the extension fee as a future problem. It is a signature problem. The curve is fully knowable on day one, which means it is fully negotiable on day one, when you still have leverage and a walk-away.
| Period | Default | Capped |
|---|---|---|
| Initial term | 100% | 100% |
| Extension months 1–3 | 110% | 100% |
| Extension months 4–6 | 125% | 100% |
| Extension months 7+ | 150% | 105% |
On a 900,000-dollar monthly base, a six-month overrun on the default curve costs about 360,000 dollars more than the capped curve — a representative benchmark, not a quote. Cap the curve and the trigger in the pricing schedule, and a slipped exit stops being a financial event.
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