Frontier Airlines 2006 Annual Report Download - page 207

XVI. DEFAULT AND TERMINATION
A. OPERATIONS DEFAULT
1. If either party becomes insolvent; is not regularly paying its bills when due without just cause; takes any step leading
to its cessation as a going concern; makes an assignment of substantially all of its assets for the benefit of creditors or a similar
disposition of the assets of the business; or either ceases or suspends operations for reasons other than an Article XXVI Force
Majeure condition (a “Section A Default”), then the other party (the “Insecure Party”) may terminate this Agreement on not less
than 10 days written notice (the “Notice Period”) to such party (the “Section A Defaulting Party”) unless the Section A Defaulting
Party immediately gives adequate assurance of the future performance of this Agreement within the Notice Period by establishing an
irrevocable letter of credit—issued by a U.S. bank acceptable to the Insecure Party, on terms and conditions acceptable to the Insecure
Party, and in an amount sufficient to cover all amounts potentially due from the Section A Defaulting Party under this
Agreement—that may be drawn upon by the Insecure Party if the Section A Defaulting Party does not fulfill its obligations under this
Agreement in a timely manner.
2. If bankruptcy proceedings are commenced with respect to the Section A Defaulting Party and if this Agreement has
not otherwise terminated, then to the extent permitted by the Bankruptcy Court, the Insecure Party may upon ninety (90) days’ prior
written notice suspend all further performance of this Agreement until the Section A Defaulting Party assumes or rejects this
Agreement pursuant to Section 365 of the Bankruptcy Code or any similar or successor provision. Any such suspension of further
performance by the Insecure Party pending the Section A Defaulting Party’s assumption or rejection will not be a breach of this
Agreement and will not affect the Insecure Party’s right to pursue or enforce any of its rights under this Agreement or otherwise.
B. COVENANT DEFAULT
If either party (the “Section B Defaulting Party”) shall refuse, neglect or fail to perform, observe, or keep any material
covenants, agreements, terms or conditions contained herein on its part to be performed, observed, and kept (other than any such
covenant or agreement for which this Agreement provides an exclusive remedy and other than the covenants described in Article
XVI.D), and such refusal, neglect or failure (individually and collectively, a “Breach”) shall continue for a period of thirty (30) days
after written notice to cure such Breach to the Section B Defaulting Party thereof or such longer period as may be demonstrably
necessary to complete the cure of such failure (but such longer period may not exceed 60 days after the receipt of the notice to cure) (a
“Section B Default”) then the other party may upon thirty (30) days’ notice to the Section B Defaulting Party terminate this
Agreement. If a notice of Breach is delivered and a notice of termination is not delivered within forty-five (45) days after the end of
the 30 or 60 day cure period, as applicable, the other party shall be deemed to have waived its right hereunder to terminate for the
particular occurrence of Breach for which the Section B Defaulting Party received notice. Notwithstanding the foregoing, if United
shall permanently cease operations as a certificated air carrier, Contractor may give written notice and terminate the Agreement
effective immediately after such cessation of operations.
C. DEFAULT BY CONTRACTOR
If Contractor shall refuse, neglect or fail to cure or perform any one of the following conditions outlined in Article XVI.C.1
or Article XVI,C.2 below , United may give Contractor written notice to correct such condition or cure such breach. Upon written
notice of breach, Contractor shall have thirty (30) days in order to cure such breach, and if any such condition or breach shall continue
beyond thirty (30) days after notice to Contractor thereof (a “Section C Default”), then United may terminate this Agreement upon
thirty (30) days’ written notice to Contractor if:
1. Contractor’s operations fall below C level performance in all of the following three goals for a period of three (3)
consecutive months OR for a period of 6 months within a 12-month period:
a. Controllable Flight Completion;
b. Mishandled Bags; or
c. On-Time Zero;
Source: REPUBLIC AIRWAYS HOLDINGS INC, 10-K, March 15, 2007 Powered by Morningstar® Document Research℠