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<br />The City of San Marcos Facilities Service Contract <br /> <br />ARTICLE XII <br />BREACH, DEFAULT, REMEDIES AND TERMINATION <br /> <br />SECTION 12.1. REMEDIES FOR BREACH. The parties agree that with <br />respect to termination rights, in the event that either party breaches this Service Contract, the <br />other party may exercise any legal rights it has under this Service Contract, under the <br />Operations Performance Bond and under Applicable Law to recover damages or to secure <br />specific performance, and that such rights to recover damages and to secure specific <br />performance shall ordinarily constitute adequate remedies for any such breach. Neither party <br />shall have the right to terminate this Service Contract for cause except upon the occurrence of <br />an Event of Default. <br />SECTION 12.2. EVENTS OF DEFAULT BY THE COMPANY. (A) Events of <br />Default Requiring Previous Notice With No Further Cure Opportunity for Termination. Each of <br />the following shall constitute an Event of Default by the Company upon which the City, by <br />notice to the Company, may terminate this Service Contract without any requirement of <br />providing any cure opportunity: <br />(1) Failure of Performance. The failure of the Company to meet the <br />Performance Guarantees on a 12-month rolling average basis and such failure is not <br />due to an Uncontrollable Circumstance or City Breach; <br />(2) Failure to Perform a Material Obligation. The failure or refusal of the <br />Company to perform a material obligation hereunder, such that the failure or refusal <br />constitutes a gross misfeasance of duty and such failure is not due to an Uncontrollable <br />Circumstance or City Breach; <br />(3) Abandonment. The abandonment or failure to operate all or a <br />substantial portion of Facilities for a period of 24 hours (unless due to Uncontrollable <br />Circumstances); <br />(4) Insolvency. The insolvency of the Company as determined under the <br />Bankruptcy Code; <br />(5) Voluntary Bankruptcy. The filing by the Company of a petition of <br />voluntary bankruptcy under the Bankruptcy Code; the consenting of the Company to <br />the filing of any bankruptcy or reorganization petition against the Company under the <br />Bankruptcy Code; or the filing by the Company of a petition to reorganize the Company <br />pursuant to the Bankruptcy Code; and <br />(6) Involuntary Bankruptcv. The issuance of an order of a court of <br />competent jurisdiction appointing a receiver, liquidator, custodian or trustee of the <br /> <br />84 <br />