The "Renewal Term" clause outlines the conditions under which a contract can be extended beyond its initial duration. It typically specifies the length of the renewal period, the notice requirements for opting into the renewal, and any changes in terms or pricing that may apply during the renewal period.
Effectiveness. Unless earlier terminated in accordance with its terms, this Agreement shall remain in full force and effect for a renewal term of four (4) years which shall commence on August 1, 2021 and end on July 31, 2025 (the “Renewal Term”). Either party may terminate this Agreement at the end of such Renewal Term by giving 90 days prior written notification of termination. In the event no written notification is given as set forth above, this Agreement shall remain in effect and may be terminated by either party at any time after the conclusion of the Renewal Term by giving 90 days prior written notification of termination and such termination shall be effective as of the end of such 90-day period. As used herein, (i) “term” or “term of the Agreement” shall mean the period commencing on the Effective Date and ending on the date that this Agreement is terminated in accordance with its terms; and (ii) the term “Amendment Effective Date” shall mean the date on which the amendment that adds this paragraph to the Agreement becomes effective.
On or about July 10, 2014, the Lessee and the Lessor entered into Amendment No. 3 to the Facility Lease in connection with the Lessee’s exercise of its right to renew the Facility Lease for a Fixed Rate Renewal Term ending December 31, 2023. The parties now desire to further amend the Facility Lease to extend the Fixed Rate Renewal Term through December 31, 2033, on the terms and subject to the conditions set forth herein.
Renewal Term. Landlord and Tenant acknowledge and agree that the Lease Term is scheduled to expire on January 31, 2016 (the "Scheduled Expiration Date"), Notwithstanding the foregoing or any provision to the contrary contained In the Lease, the Scheduled Expiration Date Is hereby extended to January 31, 2021 (the "Renewal Term Expiration Date"). The period commencing on February 1, 2016 (the "Renewal Term Commencement Date") and expiring (unless sooner terminated as provided In the Lease, as amended) on the Renewal Term Expiration Date shall be referred to herein as the "Renewal Term".
Prior to the Renewal Term Commencement Date, Tenant shall continue to pay to Landlord monthly installments of Base Rent for the Premises in accordance with the terms and conditions of the Lease. Notwithstanding any provision contained In the Lease to the contrary, commencing on the Renewal Term Commencement Date and continuing throughout the Renewal Term, Tenant shall pay to Landlord monthly Installments of Base Rent for the Premises in the amounts set forth In the schedule below, but otherwise in accordance with the terms and conditions of the Lease.
Renewal Term. Tenant shall continue to have the right to extend the Lease Term pursuant to Tenant's Renewal Option set forth in Section 2.2 of the Office Lease, as amended by Section 3,2 of the Second Amendment provided, however, that the following shall apply; (I) all references to the term "Extension Term" set forth in Section 2.2 of the Office Lease, as amended by Section 3.2 of the Second Amendment, shall be deemed to refer to the Renewal Term, (ii) Tenant shall deliver the Renewal Notice to Landlord no earlier than November 1, 2019 and no later than May 1, 2020, (III) In calculating the rent for the Renewal Term, no consideration shall be given to any period of rental abatement, if any, granted to tenants in Comparable Transactions in connection with the design, permitting and construction of tenant Improvements In comparable spaces, (iv) in determining the Market Rent, Comparable Transactions In the Project shall be taken into consideration first, and in the event that there are not a sufficient number of Comparable Transactions in the Project to determine the Market Rent, then the Market Rent shall be determined by taking Into consideration Comparable Transactions In Comparable Buildings, and (v) the definition of "Comparable Buildings" as set forth in Section 2.2(c). of the Office Lease shall be deleted and shall be replaced with the following: "Comparable Buildings shall mean first-class office buildings of comparable age and quality located in the Miracle Mile area of Los Angeles, California".
Provided Lessee has never been in default in any of the agreements, covenants, terms or conditions of this Lease, Lessee shall have the Option to Renew the term of this Lease for ONE (1) FIVE (5)YEAR TERM following the expiration of the initial term (herein called "renewal term") provided written notice is delivered to Lessor at least NINE (9) months before the expiration of the initial term of this Lease (or, as to any successive renewals, written notice to Lessor at least three months (3) prior to the expiration of the immediately preceding term). The terms and conditions of this Lease shall remain in full force and effect during the renewal term, except that:
The monthly rent shall be equal to the rent charged for comparable space in the geographical area ("market rate"). However, in no event will the monthly rent during the renewal term be less than the monthly rent for the last month of the initial Lease term or any extensions thereto. If the renewal term is greater than one (1) year, the rent for the first year of the renewal term shall be at market rate; thereafter, on each yearly anniversary of the renewal term, the rent shall be increased as set forth in the Addendum to Option to Renew. If successive options are granted, this Option to Renew shall apply to each renewal term.
The security deposit shall be increased in direct proportion to each and every rent increase. Promptly upon Lessee's receipt of written notification from Lessor as to the rent applicable to such renewal term, at Lessors direction, Lessor may request that Lessee pay to Lessor the rent for the first month of the renewal term and the amount of any increase in security deposit.
OPTION TO EXTEND TERM: Provided Lessee is not in an uncured breach or default of any of its obligations under the Lease on the date of Lessee’s delivery to Lessor of Lessee’s intent to exercise its renewal option. Lessee shall have one option to renew the Lease for a term of five (5) years at the-then-current market rent; however, in no event will the Base Rent during the first month of the renewal term be less than the monthly Base Rent for the last month of the initial lease term, or any extensions. The Base Rent during the renewal term shall be increased by three percent (3%) each year, adjusting on the anniversary of the renewal term commencement date. Lessee shall provide Lessor not less than nine (9) months prior written notice of its intent to exercise its renewal option.
Renewal Options. (a) Provided Subtenant is not in default hereunder beyond the expiration of any applicable notice and cure period, either at the time of the exercise of the option or at the commencement of the applicable renewal term, Subtenant shall have two (2) options to renew this Sublease by delivering written notice of the exercise thereof as provided below. All of the terms and conditions of this Sublease shall apply during any such renewal term, except that Subtenant shall have no further right to extend the term of this Sublease following the Second Renewal Term (as defined below). (b) The first renewal term (the “First Renewal Term”) shall be for a period of one (1) year, commencing on July 1, 2023 and ending at 11:59 p.m. on June 30, 2024. If Subtenant has not provided notice to Sublandlord and Landlord (the “First Renewal Notice”) on or before December 31, 2022 that Subtenant shall not exercise its option to renew for the First Renewal Term, Subtenant shall be deemed to have exercised its option to renew the term of the Sublease for the First Renewal Term. (c) Provided Subtenant exercised its right to the First Renewal Term, as provided herein, the second renewal term (the “Second Renewal Term”) shall be for a period of one (1) year, commencing on July 1, 2024 and ending at 11:59 p.m. on June 29, 2025. If Subtenant has not provided notice to Sublandlord and Landlord (the “Second Renewal Notice”) on or before December 31, 2023 that Subtenant shall not exercise its option to renew for the Second Renewal Term, Subtenant shall be deemed to have exercised its option to renew the term of the Sublease for the Second Renewal Term.
Renewal Term. Provided that no Event of Default has occurred and is continuing, Lessee shall have the option to extend the Term for one (1) period of thirty-six (36) months (the “Renewal Term”), subject to the terms of this paragraph. The term “Term” in the Lease shall be deemed to mean the initial Term, and the Renewal Term, if the same is validly exercised under this paragraph. Lessee may exercise its option for a Renewal Term only by giving written notice to Lessor at least three (3) months prior to the end of the Term. Each Renewal Term shall be upon the same terms and conditions as the Lease, except that the Base Rent during the first twelve (12) months of the Renewal Term shall be the prevailing market rent for comparable space in the Building and comparable buildings in the vicinity of the Building, taking into account the size of the Premises, the length of the renewal term, market escalations and the credit of Lessee (the “Fair Market Rent”). In no event shall the Fair Market Rent during the first twelve (12) months of the Renewal Term be less than 103% of the Base Rent in effect for the period immediately preceding the commencement of the Renewal Term. Base Rent during each subsequent twelve (12) month period during the Renewal Term shall increase by not less than 3% annually until the expiration of the Renewal Term. Within a reasonable time after Lessor’s receipt of the Lessee’s notice of election to exercise its option for a Renewal Term, Lessor shall inform Lessee of Lessor’s determination of the Fair Market Rent for the first twelve (12) months of the Renewal Term and annual escalations thereafter. If Lessee does not approve Lessor’s determination, Lessee may elect to revoke its election to proceed with a Renewal Term, by written notice to Lessor prior to the expiration of the then-current Term. The Base Rent for the Renewal Term shall not be reduced by reason of any costs or expenses saved by Lessor by reason of Lessor’s not having to find a new Lessee for such premises (including, without limitation, brokerage commissions, costs of improvements, rent concessions or lost rental income during any vacancy period).
Renewal Term. The Term of the Lease shall be extended for a period of five years (“Renewal Term”), commencing on March 1, 2020 and ending February 28, 2025 (the “Termination Date”). Landlord and Tenant hereby agree and acknowledge that Tenant shall not have any rights to extend or renew the Term of the Lease after the Termination Date.
Renewal Term. Upon expiration of the Initial Term, the term of this Agreement will automatically renew for up to twenty-four (24) additional successive months unless either ABS or Elegance provides written Notice of non-renewal at least 60 days prior to the end of the then-current term (each, a “Renewal Term” and together with the Initial Term, the “Term”), unless any Renewal Term is earlier terminated pursuant to the terms of this Agreement or applicable Law. If the Initial Term or any Renewal Term is renewed for any Renewal Term(s) pursuant to this Section 4.2, the terms and conditions of this Agreement during each such Renewal Term will be the same as the terms in effect immediately prior to such renewal. In the event either Party provides timely Notice of its intent not to renew this Agreement, then, unless earlier terminated in accordance with its terms, this Agreement terminates on the expiration of the Initial Term or then-current Renewal Term, as applicable.
A Renewal Term refers to a specific duration that follows the initial term of a contract, during which the contract can continue to be in effect as originally negotiated. Typically, a Renewal Term automatically extends the contract unless one of the parties opts out or provides notice to terminate. This concept ensures that business relationships, services, or leases can carry on seamlessly without having to renegotiate and draft a new contract from scratch each time the original term expires.
Incorporating a Renewal Term is advisable in several situations, including:
Writing a Renewal Term involves specifying the conditions under which the contract is renewed and the length of each renewal. Here is an approach to crafting this clause:
Specify the Duration: Clearly state the length of the Renewal Term. For example, “The Renewal Term shall be for an additional period of one year.”
Set Conditions for Renewal: Define what needs to happen for renewal to occur. This could include automatic renewal unless notice is given, or the need for explicit agreement from both parties.
Notice Period: Include a notice period if one or both parties should have the option to decline the renewal. For example, “Either party may elect not to renew the contract by providing written notice at least 60 days prior to the expiration of the initial term or any renewal term.”
Additional Terms: Specify any changes to terms or conditions during the Renewal Term, such as adjustments in pricing or services.
Example
“This Agreement shall automatically renew for successive one-year Renewal Terms unless either Party provides written notice of its intention not to renew at least 30 days prior to the end of the current Term. During each Renewal Term, the terms and conditions of this Agreement shall remain the same unless otherwise agreed by the Parties in writing.”
Renewal Terms are commonly found in various types of contracts, including:
Including a Renewal Term in these contracts provides a clear pathway for continuing business relationships without unnecessary disruptions or renegotiations.
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