- Within your suite and club seat license agreements, is there a penalty clause for terminating the agreement early? If so, can you please share this language?
- Do you assess a "Late Fee" if the annual license payment is not received on time? Is this included in your agreement? Can you please share this language?
I don't do the sales side so I'm not sure about your first question. But from what I can tell, it's on a case-by-case basis. And I think we try to work with the donor to spread out the payments over a longer period of time. We've been very lucky, and have only had maybe three suite holders back out of a lease in the seven years I've been here.
We don't assess a late fee, instead we hold their tickets until we get their lease payment and their F/B payment. It's amazing how well that works! There's no language in the lease. I email them in early July with the amount that they still owe, and a very friendly reminder that they don't get their tickets until we get their money. We got a few complaints the first year, because some of them were waiting until October to pay their food bill that was due August 1. But now those same people are the first ones to get their money in.
Below is the language we use in our License agreement for early cancellation of a suite agreement. We currently have an extensive waiting list of customers waiting to obtain a suite and are confident we could fill a vacancy quickly, so the cancellation fee has remained at 10% of the remaining balance. Our Suite license agreements cover a three year term with annual payments due in May:
If this License is cancelled by Licensee or because of action by the Licensee, Licensee agrees to pay a 10% cancellation fee of the remaining amounts unpaid under this License. Cancellation of contract by the Licensee must be in writing and include a 10% cancellation fee to be valid.
Our license agreement doesn't address a specific late fee amount. We haven't enforced any concrete late fee, but rather just send out reminders if payments aren't received by the due date and then follow up with a personal phone call and handle the late payments on an individual basis.
The term and use thereof by Licensee as herein specified, shall be in the amounts and on or before the dates set forth on Schedule (the "License Fee"). The grant of the License is expressly conditioned upon the timely yearly payment.
We do not allow anybody to void a contract and we do not charge late fees.
Club Seats -- We charge them the entire amount when they sign the contract so their only option is just to not renew (annually).
Suites -- They can't leave unless they find a buyer. Here's the contract:
10. Default and Termination.
(a) Licensee shall be in default under this Agreement upon the occurrence of any one or more of the following events (the "Events of Default"):
1. Licensee fails to pay when due the License Fee (or any portion thereof), food, beverage or other service charge or any other amounts to be paid by Licensee hereunder and such failure continues for thirty (30) calendar days after written notice thereof is given by Licensor to Licensee; or
2. Other than as set forth in this Agreement, Licensee fails to perform or observe any of the terms, covenants or obligations under this Agreement and such failure continues for thirty (30) calendar days after written notice has been given by Licensor to Licensee; or
3. Licensee or any of its invitees engage in (i) illegal activity or (ii) in any repeat violation of Licensor's rules and regulations pertaining to the use of the Suite, after having received written notice of the initial violation, or (iii) Licensee or any of its invitees otherwise fail, after written notice from the Licensor, to maintain proper decorum while using the Suite; or
4. Licensee or any of its guests violates any of the covenants set forth in Section 10 hereof and such violation continues after notice thereof; or
5. (i) Licensee makes a general assignment for the benefit of creditors; (ii) Licensee becomes insolvent or generally fails to pay, or admits in writing its inability or unwillingness to pay, its debts as they become due, (iii) Licensee commences or consents to any case, proceeding or other action (a) seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of Licensee or of Licensee's debts under any law relating to bankruptcy, insolvency, receivership, reorganization or relief of debts, or (b) seeking appointment of a receiver, trustee or similar official for Licensee or for all or any part of Licensee's property; or (iv) any case, proceeding or other action against Licensee is commenced (a) seeking to have an order for relief entered against Licensee as debtor, (b) seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of Licensee or Licensee's debts under any law relating to bankruptcy, insolvency, receivership, reorganization or relief of debtors, or (c) seeking appointment of a receiver, trustee, or similar official for Licensee or for all or any part of Licensee's property.
(b) Upon the occurrence of any Events of Default and at any time thereafter, Licensor may, in addition to all other rights and remedies that it may have, upon notice to Licensee:
1. Withhold distribution of admissions tickets (including Suite Tickets) to Licensee until Licensee's default is cured or, if admissions tickets (including Suite Tickets) for any such events have already been distributed to Licensee, lock the Suite and deny Licensee and its invitees access to the Suite until Licensee's default is cured.
2. In the event of a monetary default, Licensor shall have the right to require that Licensee post an irrevocable bank letter of credit or provide other security reasonably acceptable to Licensor in an amount not to exceed future License Fees payable under this Agreement.
3. Revoke the License and terminate this Agreement, whereupon (A) all rights and privileges of Licensee hereunder shall immediately terminate and Licensee shall immediately return to Licensor any unused admission tickets to the Suite; (B) Licensor shall have no further obligation of any kind to Licensee; (C) Licensor lawfully may enter into the Suite and recover the same; and (D) Licensor may recover from Licensee, and Licensee shall pay to Licensor all actual damages Licensor may incur by reason of Licensee's default, including without limitation, the costs of recovering, redecorating the Suite, reasonable attorney's fees and costs incurred by Licensor in the enforcement of the Agreement or pursuit of any remedy authorized by this Agreement; and (E) Licensee shall continue to remain responsible for the amount of all License Fees, service charges and other sums then due and payable hereunder until the Suite is re licensed.
4. Any and all sums due hereunder shall bear interest at 12% per annum beginning fifteen (15) calendar days after from the date due and until fully paid.
(c) After any such revocation or termination under Section 10(b)(3), Licensor shall use commercially reasonable efforts to re license the right to use the Suite to another party, provided, however that if there are any other suites in the Facility available to be licensed, Licensor may give priority to licensing such other suites. If Licensor licenses the right to use the Suite to another party, then all amounts received from such other party applicable to the remainder of the Term (or the Additional Term, if applicable) shall be applied first to the expense of re licensing the Suite and then to the reduction of any obligations of Licensee to Licensor under this Agreement. No amounts received from such other party shall be paid to Licensee.
(d) The foregoing remedies of Licensor shall not be to the exclusion of any other right or remedy set forth herein or otherwise available to Licensor at law or in equity. No waiver by Licensor of any default or breach by Licensee of its obligations hereunder, shall be construed to be a waiver or release of a future default or breach and any remedy provided or available thereof.
(e) Should Licensor fail to perform or observe any material term, covenant, or obligation under this Agreement, and such failure continues for thirty (30) calendar days after written notice thereof is given by Licensee to Licensor, Licensee may terminate this Agreement upon written notice to Licensor and shall be refunded that portion of the License Fees paid to Licensor that relates to the period of time occurring after the date of termination of this Agreement.
(f) Licensor may immediately terminate this Agreement in the event that Licensee is convicted of any crime against the public treasury or that involves either federal or Commonwealth funds or property.