Frontier Airlines 2006 Annual Report Download - page 175

D. BANKRUPTCY PROVISION
Except as provided in this paragraph, United’s obligations under this Agreement shall be allowable post-petition,
administrative expense obligations of United’s bankruptcy estate under Section 503 of the Bankruptcy Code. If United breaches this
Agreement before the effective date of its plan of reorganization, Contractor shall have, subject to objection as provided below,
allowed post-petition administrative expense claims as provided in the Bankruptcy Code. In addition, and notwithstanding the
foregoing, this Agreement shall be terminated upon the happening of either of the following events: (i) United’s plan of reorganization
(the “Plan”) in its Chapter 11 bankruptcy case (the “Case”) under which United continues to operate as an airline is not confirmed by
the Bankruptcy Court and United discontinues all or substantially all flight operations, or (ii) the Case is dismissed or converted to a
case under Chapter 7 of the Bankruptcy Code and United suspends or discontinues flight operations. In the event of such termination,
United shall be deemed to have breached the Agreement as of the effective date of such termination (the “Breach Date”) and
Contractor shall have, subject to objection as provided below, allowed administrative expense claims (the “Claims”) (a) for any
obligations of United under this Agreement arising before the Breach Date, provided, however, that this administrative expense claim
shall be limited to actual services rendered at the contract rate and shall not include any claim for future damages or lost profits
resulting from such termination, (b) for any amounts paid or required to be paid by Contractor (i) to United Express passengers, (ii)
under interline and clearinghouse agreements and (iii) to Contractor’s United Express employees in each case for which Contractor
has not already been reimbursed by United; (c) for any sums paid or required to be paid by Contractor to third parties in connection
with the manufacture, purchase, lease or financing of aircraft undertaken as part of Contractor’s commitments under this Agreement
and any maintenance equipment or services or spare parts associated with such aircraft , including, but not limited to, deposits, down
payments, prepayments and financing and similar fees; (d) for two year’s aircraft ownership costs, calculated as provided in Section
VIII.A.8 for each aircraft as to which Contractor has taken delivery prior to the Breach Date, provided that if Contractor is able to
utilize such aircraft in some other manner then United will only be responsible for the variance between the cost stated in section
VIII.A.8 and the aircraft ownership costs recovered by Contractor during such two year period in connection with such utilization; (e)
for [*] in respect of Contractor’s reasonable startup costs and expenses such as pilot training expenses and certification costs;
provided, however, that Contractor shall take commercially reasonable actions to mitigate its damages from the the categories of
activities set forth in clauses (a) through (d) above upon a termination of this Agreement. All of Contractor’s obligations to United
under the Agreement shall immediately terminate as of the Breach Date. Any party in interest, including United, shall retain the right,
during the normal claims objection process, to object to the amount (but not the administrative claim character or priority) of any
claim filed by Contractor except with respect to the damages set forth in clause (e) above. In addition, subject to Contractor’s rights of
setoff and recoupment under Section 553 of the Bankruptcy Code, Contractor agrees to refund to United any amounts prepaid on
account of services to be performed after the Breach Date by Contractor or its agents pursuant to this Agreement, but only to the
extent such services are not subsequently performed upon request of United and that Contractor realizes an actual savings by not
performing such services. United agrees to file and diligently prosecute a motion seeking bankruptcy court approval of the terms and
conditions of this Agreement. In the event United does not obtain such bankruptcy court approval in an order in form and substance
satisfactory to Contractor by no later than March 19, 2004, Contractor shall have the right to terminate this Agreement. Unless waived
by United, Contractor must make such termination decision by March 23, 2004.
III. SUPPORT SERVICES AND FACILITIES
A. GENERAL
1. Support Services.
United and Contractor will provide Support Services and facilities to the extent and in the manner set forth in the subsequent
provisions of this Article III. All such Support Services and facilities set forth in this Article III will be furnished only with respect to
Contractor’s United Express Services.
2. Approval of Support Services.
United reserves the right to approve or disapprove the implementation of any Support Services or facilities offered to
Contractor for Contractor’s United Express Services by any third party at any location. Such approval shall not be unreasonably
withheld.
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠