OPERATIONS DEFAULT Clause Samples
The OPERATIONS DEFAULT clause defines what constitutes a default or failure in the performance of operational obligations under an agreement. Typically, this clause outlines specific actions or omissions—such as failing to meet service levels, deadlines, or regulatory requirements—that would trigger a default. For example, if a party does not maintain required operational standards or fails to deliver agreed-upon services, this clause would specify the consequences or remedies available to the non-defaulting party. Its core function is to provide a clear framework for identifying and addressing operational failures, thereby allocating risk and ensuring accountability between the parties.
OPERATIONS DEFAULT. 1. If either party becomes insolvent; if the other party is not regularly paying its bills when due without just cause; if either party 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 if either party 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 ten (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 thirty (30) 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. If a bankruptcy proceeding is commenced with respect to Contractor, Contractor and United hereby agree that Contractor’s obligations under this Agreement, the Aircraft Leases and the Additional Aircraft Leases must be fully performed pursuant to the terms of this Agreement, the Aircraft Leases and the Additional Aircraft Leases, and that in the event United provides written notice to Contractor and/or its trustee in bankruptcy of United’s demand that this Agreement, the Aircraft Lease...
OPERATIONS DEFAULT. Failure to operate the Premises in accordance with the Permitted Operations or to maintain the Premises or Assets in the Basic Condition in all material respects and/or failure to comply in all material respects with the applicable safety and security standards set forth in this Agreement;