An automatic renewal clause specifies that a contract will automatically renew for an additional term upon its expiration unless one party provides notice of termination within a designated period. This clause ensures continuity in the contractual relationship but requires parties to be vigilant about notification deadlines if they wish to terminate the agreement.
“This Agreement became effective on the Effective Date and shall continue in operation, unless terminated in accordance with the terms hereof, until the third anniversary of the Effective Date (the “Initial Term”). After the Initial Term, this Agreement shall be deemed renewed automatically each year for an additional one-year period (an “Automatic Renewal Term”), provided that the Automatic Renewal Term scheduled to expire on October 7, 2019 shall instead expire on December 31, 2019, with each successive Automatic Renewal Term expiring on December 31, in each case, unless the Company or the Manager elects not to renew this Agreement in accordance with Section 10(b) or Section 10(d), respectively.”
(a) Consultant’s engagement under this Agreement shall be for a three (3) year period beginning on the Effective Date and ending on the day preceding the third anniversary of the Effective Date (the “Initial Term”); provided that this Agreement shall automatically extend for additional one (1) year periods after the Initial Term (each an “Automatic Renewal Term” and the Initial Term together with all Automatic Renewal Terms, if any, the “Term”), subject to the Renewal Requirements, in the event that neither Party provides the other written notice of their intent not to automatically extend the term of this Agreement at least thirty (30) days prior to the end of the Initial Term or any Automatic Renewal Term, as applicable (each a “Non-Renewal Notice”). The Term shall only be extended for an Automatic Renewal Term, provided that with regards to being Co-Chairman (i) Consultant is re-elected to the Board at the Annual Meeting of Stockholders of the Company immediately preceding the date that such Automatic Renewal Term begins; (ii) the Board affirms his appointment as Co-Chairman for the applicable Automatic Renewal Term (or fails to appoint someone else as Co-Chairman prior to such applicable Automatic Renewal Term) and (iii) the Consultant is continuing in his role of having the responsibility for the scientific development for the Company’s á7nAChR platform (collectively, the “Renewal Requirements”).
On March 1, 2024, Dickerson Wright entered into an employment agreement governing his service as the Executive Chairman of NV5 Global, Inc. (the "NV5 Global" or "Company") effective March 1, 2024 for a term of two years with automatic renewal terms extended on an "at-will" basis. The employment agreement contains terms and provisions substantially consistent with Mr. Wright's existing employment agreement regarding service as the Company's Chief Executive Officer and Chairman, with a reduction in Mr. Wright’s annual salary severance benefits in the case of termination without Cause or resignation for Good Reason (including in the case of a Change of Control) from the greater of three years or the term remaining in respect of his previous five year employment agreement to the term remaining in respect of his new two year employment agreement plus an additional one year of annual salary, a shortening of automatic renewal terms to one year rather than two years, an increase in annual base salary to $800,000 and the minimum annual increase in his base pay was increased to 7%. In addition, customary notice, non-disparagement, whistleblower protection, incentive compensation clawback, confidentiality and cooperation provisions were included in his new employment agreement, together with a modification to the non-solicitation obligations applicable during the one year period following any termination of his employment applying such obligations to those clients as to which Mr. Wright supervised contact or service during the term of his employment.
Section 2.2 Term. This Agreement is effective as of the Effective Date and shall continue in operation, unless terminated in accordance with the terms hereof, until the third (3rd) anniversary of the Effective Date (the “Initial Term”). After the Initial Term, this Agreement shall be deemed renewed automatically each year for an additional one-year period (an “Automatic Renewal Term”) unless terminated in accordance with the terms hereof.
Effective as of September 29, 2020, the Company and Jon Kirchner, the Company’s Chief Executive Officer and President, entered into an amendment to the Employment and Severance Agreement between Xperi Corporation and Mr. Kirchner dated April 28, 2017 (the “Kirchner Agreement”). The amendment provides for the following material changes to the Kirchner Agreement: • the term was extended until June 1, 2024 (and continues to include a 12-month automatic renewal unless either party provides a timely notice of non-renewal);
(a) The Company and FGM shall have the right at any time during the term of this Agreement (including any Automatic Renewal Term) to jointly agree to change the Services provided by FGM.
Effective September 14, 2020 through January 28, 2023 at which time it will be subject to automatic renewal upon the effective date of the annual update to the Funds’ registration statement. 3 Effective December 11, 2020 through January 28, 2023 at which time it will be subject to automatic renewal upon the effective date of the annual update to the Funds’ registration statement.
In response to the Staff’s Comment 1, the Company has updated the Offering Circular to indicate that automatic renewal will be suspended until the offering is re-qualified by the SEC through post-qualification amendment, or through a separate offering.
On August 28, 2019, Navios Containers also entered into a first amendment (the “First Amendment”) to the Administrative Services Agreement (as amended, the “Administrative Services Agreement”) with Navios ShipManagement Inc. to extend the duration of the Administrative Services Agreement until January 1, 2025, with an automatic renewal for an additional five years, unless earlier terminated by either party. The First Amendment also provides for payment of a termination fee by Navios Containers in the event the Administrative Services Agreement is terminated on or before December 31, 2024. The First Amendment is attached as Exhibit 4.2 to this Report and is incorporated herein by reference.
On August 29, 2019, Navios Maritime Acquisition Corporation (“Navios Acquisition”) entered into a sixth amendment (the “Sixth Amendment”) to the Management Agreement (as amended, the “Management Agreement”) with Navios Tankers Management Inc. The Sixth Amendment, among other changes, extends the duration of the Management Agreement until January 1, 2025, with an automatic renewal for an additional five years, unless earlier terminated by either party, and provides for payment of a termination fee by Navios Acquisition in the event the Management Agreement is terminated on or before December 31, 2024.
Each of the Series A through Series D Bonds will bear interest during the initial term at a fixed rate of six percent (6%) per annum payable on an Interest Payment Date, which shall increase to six and three-quarter percent (6.75%) upon an automatic renewal event applicable to a given Series A through Series D Bond and for each additional term thereafter.
On November 20, 2019, the Company entered into the Non-Exclusive Distribution and Profit Sharing Agreement (the “Canntab Agreement”) with Canntab Therapeutics USA (Florida), Inc. (“Canntab”). Pursuant to the Canntab Agreement, which shall have a term of 2 years and is subject to automatic renewal, the Company has been appointed as the non-exclusive distributor of certain Canntab products throughout the United States. Canntab shall not grant a third party the right to promote, sell or deliver the products within the United States during the term of the Canntab Agreement, subject to certain exceptions. In addition, the Company and Canntab agree to share equally in the gross profits received from the Company’s sale of the products. With respect to sales of the products effected by Canntab, the Company shall receive 10% of the gross profits. In connection with the Canntab Agreement, the Company and Canntab also entered into a Supply Agreement, which shall have a term of 2 years and is subject to automatic renewal, pursuant to which the Company agrees to sell hemp extracts to Canntab (together with the Canntab Agreement, the “Canntab Agreements”).
On September 13, 2018, the Company entered into a Side Letter Agreement (“Note”) with Jordan Turk to amend and add certain terms to unsecured, non-interest bearing, due on demand notes payable totaling $40,000 issued by the Company during the period of July 10 to September 13, 2018. The issue price of the Note is $40,000 with a face value of $48,000 and the Note has an original maturity date of December 31, 2018 which is subject to automatic renewal. At the option of the Company, the Company may convert principal and interest at a fixed conversion price of $0.0001 per share of the Company’s common stock. The Note allows for the lender to secure a portion of the Company assets up to 200% of the face value of the Note. If the Note is not paid on the maturity date, the outstanding face amount of the Note shall increase by 20% on January 1, 2019. The outstanding face value of the Note shall increase by another 20% on January 1, 2020 and again on each one year anniversary of the Note until the Note has been paid in full. The condensed consolidated statement of operations includes interest expense of $4,761 and $0 for the six months ended June 30, 2019 and 2018, respectively and $2,393 and $0 for the three months ended June 30, 2019 and 2018, respectively. At June 30, 2019 and December 31, 2018, the carrying amount of the Note is $52,761 (face value of $57,600 less $4,839 unamortized discount) and $48,000 (face value of $48,000 less $0 unamortized discount), respectively.
As of the Effective Date, Executive agrees to continue employment with the Company pursuant to the terms of this Agreement. This Agreement shall have an initial term beginning on the Effective Date and expiring on December 31, 2019 (the “Initial Employment Term”) and a subsequent term beginning on January 1, 2020 and expiring on December 31, 2022 (the “Current Employment Term”). On the last day of the Current Employment Term, this Agreement will renew automatically for additional, successive one year terms (each, a “Renewal Term”) unless one Party provides the other Party with written notice of non-renewal at least 30 days prior to the date of automatic renewal, in which case this Agreement will expire at the end of the Current Employment Term or Renewal Term, as applicable (the Current Employment Term and any successive Renewal Terms during which this Agreement remains in effect, collectively, the “Term”). Non‑renewal at the end of the Current Employment Term or a Renewal Term shall constitute neither a termination without Cause (as defined below) nor a resignation for Good Reason (as defined below) under this Agreement.
Automatic renewal, often referred to as “autorew,” is a contractual provision that allows a contract to renew itself automatically at the end of its term, unless one of the parties gives notice to terminate the agreement. This clause is commonly included in subscription services and service agreements to ensure continuity of service without interruption.
Automatic renewal should be used when both parties anticipate a long-term relationship and want to avoid the hassle of manually renewing contracts. It is suitable for:
However, careful consideration should be given to consumer protection laws within specific jurisdictions, as some may require explicit consent for automatic renewals.
When drafting an automatic renewal clause, it’s essential to be clear and concise. The clause should detail the renewal process, notification requirements, and any options to opt-out. Here’s an example:
“This Agreement shall automatically renew for successive one-year terms unless either party provides written notice of its intention not to renew at least 30 days before the end of the current term. Such notice must be sent via certified mail.”
Key components to include in an automatic renewal clause:
Contracts that typically contain automatic renewal clauses include:
These contracts benefit from automatic renewals by ensuring service continuity and facilitating predictable revenue streams for providers. Consumers should review these clauses to understand their rights and obligations.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
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