STEPHEN MITCHELL, Bankruptcy Judge
US Airways, Inc., a debtor in possession in the above-captioned case ("Debtor"), stipulates and agrees (this "1110 Agreement") as follows:
1. On September 12, 2004 (the "Petition Date"), the Debtor filed its voluntary petition in this Court for reorganization relief under chapter 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the "Bankruptcy Code"). The Debtor continues to operate its businesses and manage its properties as debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
2. The Debtor represents that it holds an air carrier operating certificate issued pursuant to chapter 447 of title 49, U.S. Code, for aircraft capable of carrying 10 or more individuals or 6,000 pounds or more of cargo, and is engaged in domestic and international scheduled air transportation in North America, the Caribbean and Europe.
3. The Debtor and Wilmington Trust Company, as Owner Trustee (the "Aircraft Creditor"), are parties to certain aircraft leases, security agreements or conditional sale contracts pursuant to which the Debtor has the right to use the aircraft and engines described on Exhibit A hereto, together with appliances and related parts and equipment (such aircraft, engines, appliances and related parts and equipment, including all technical records and documents relating thereto, the "Aircraft Equipment," and such leases, security agreements or conditional sale contracts relative to the Aircraft Equipment, as amended by the parties, the "Aircraft Agreements"). The Aircraft Equipment constitutes "equipment" within the meaning of sections 1110(a)(3)(A)(i) and 1110(a)(3)(B) of the Bankruptcy Code and together with the Aircraft Agreements are subject to the provisions of section 1110 of the Bankruptcy Code.
4. The Aircraft Creditor is entitled to section 1110 of the Bankruptcy Code protections with respect to the Aircraft Equipment and the Aircraft Agreements.
5. On November 10, 2004, pursuant to section 1110(b) of the Bankruptcy Code, the Debtor and the Aircraft Creditor entered into that certain Stipulation, Agreement and Order Providing for Section 1110(b) Extension Regarding Aircraft Agreements with Wilmington Trust Company, as Owner Trustee Under the US Airways Inc. Trust No. N653US (the "Section 1110(b) Stipulation"). As set forth in the Section 1110(b) Stipulation, the parties agreed to initially extend the 60-day period for all purposes provided for in section 1110(a)(2) of the Bankruptcy Code (the "Section 1110 Period") until 11:59 p.m. on January 14, 2005. Subsequently, in accordance with the procedures set forth in the Section 1110(b) Stipulation, the parties agreed to further extend the Section 1110 Period until 11:59 p.m. on April 30, 2005.
6. In connection with the parties' entry into the Section 1110(b) Stipulation, on November 10, 2004, the Debtor cured all Basic Rent payments in arrears as of said date. Further, during the Section 1110 Period, as extended by the Section 1110(b) Stipulation, the Debtor (a) made all Basic Rent payments that became due and owing under the Aircraft Agreements, (b) maintained all insurance required by such Aircraft Agreement, (c) maintained the Aircraft Equipment in compliance with FAA approved maintenance requirements, and (d) complied with operating, use and care provisions under the Aircraft Agreements, all as required by the Section 1110(b) Stipulation.
7. The Debtor represents that: (a) the Aircraft Equipment has been in the possession of the Debtor, and the Debtor has continued to use the Aircraft Equipment since September 12, 2004 in the operation of its business; (b) the Aircraft Equipment is essential to the continued operation and viability of the Debtor; and (c) it believes that this 1110 Agreement is beneficial to and in the best interests of the Debtor, its creditors and its estate.
8. The Debtor hereby agrees: (a) pursuant to section 1110(a)(2)(A) of the Bankruptcy Code to perform all of its obligations under the Aircraft Agreements, and (b) to cure all defaults under the Aircraft Agreements (other than defaults of the kind specified in section 365(b)(2) of the Bankruptcy Code) within the times prescribed in section 1110(a)(2)(B) of the Bankruptcy Code. A schedule of the cure payments to be made by the Debtor, as calculated by the Debtor, is set forth on saidExhibit A attached hereto. Without in any way affecting the conclusive determination that the Debtor has complied with Section 1110(a)(2)(B) of the Bankruptcy Code, any Aircraft Creditor may dispute the amount or method of calculation by the Debtor of the applicable cure payment as set forth on Exhibit A attached hereto by delivering written notice of such dispute to the Debtor on or before ten (10) days after the filing of this 1110 Agreement with the Court pursuant to paragraph 15 below;provided, that, in the event that any such dispute is not consensually resolved by the Debtor and such Aircraft Creditor within ten (10) days of the delivery of such written notice, such dispute shall be submitted to the Court for resolution at the next available hearing date by a notice filed by such Aircraft Creditor on or before fifteen (15) days after the delivery of the notice of dispute; provided, further, that the Debtors shall pay any additional cure amounts as determined by the Court within five (5) days of the Court's resolution thereof, or such other date as may be agreed to by the affected Aircraft Creditor, and any failure by the Debtor to make such payment within said five (5) day period shall be conclusively deemed to be a failure by the Debtor to comply with Section 1110(a)(2)(B).
9. This 1110 Agreement does not constitute an assumption of the Aircraft Agreements under section 365(a) of the Bankruptcy Code (to the extent such section is applicable) and nothing contained herein shall be construed to constitute such an assumption. The preceding sentence does not otherwise limit or affect the rights, remedies, or claims of the Aircraft Creditors or the Debtor under this 1110 Agreement or section 1110 of the Bankruptcy Code.
10. In accordance with section 1110(c) of the Bankruptcy Code, upon written demand, the Debtor will surrender and return Aircraft Equipment, and the Aircraft Agreement controlling the relevant Aircraft Equipment will be deemed rejected upon such surrender and return; provided, however, that nothing in this 1110 Agreement shall modify, abridge or otherwise affect the rights of the Debtors if permitted by law or the Aircraft Creditors if permitted by law under any order of the Bankruptcy Court entered in their chapter 11 cases.
11. This 1110 Agreement is an agreement within the meaning of section 1110(a)(2)(A) of the Bankruptcy Code. In the event the Debtor fails to perform any of its obligations under this 1110 Agreement or under the Aircraft Agreements, such failure shall constitute an event of default under this 1110 Agreement and the Aircraft Agreements unless cured in compliance with the terms of the agreements if cure is permitted thereunder. Upon the occurrence of such an event of default, (a) the Aircraft Creditor shall thereupon be permitted to exercise any and all rights, claims, and remedies with respect thereto as it may have under the relevant Aircraft Agreement and the Bankruptcy Code as permitted by section 1110 of the Bankruptcy Code and (b) upon written demand by the Aircraft Creditor, the Debtor shall surrender and return the Aircraft Equipment (including its records and all related equipment) as required by section 1110 of the Bankruptcy Code.
12. The Aircraft Creditor reserves its right to file any proof of claim and to apply to the Court for any order appropriate under the Bankruptcy Code, subject to any objection of the Debtor, the Committee or any party in interest.
13. This 1110 Agreement shall be binding upon (a) the Debtor, and any trustee or examiner in the pending chapter 11 case, or their respective successors and assigns, (b) the Aircraft Creditor and its respective successors and assigns, (c) the trustee in the event that the above-captioned case is converted to a case under chapter 7 of the Bankruptcy Code, and (d) all creditors and other parties in interest in this case.
14. This 1110 Agreement is subject to the final approval of the Court and, upon such approval, shall be effective as of April 30, 2005. The Debtor shall promptly cause this 1110 Agreement to be presented to the Court for approval in accordance with the Order Establishing Omnibus Hearing Dates and Authorizing Notice, Case Management and Administrative Procedures entered on September 15, 2004; provided, however, that the Debtors may seek Court approval of this 1110 Agreement on ten (10) days negative notice pursuant to Local Bankruptcy Rule 9013-1(M)(1).
15. Unless otherwise specifically provided herein, all notices required or permitted by the terms of the Aircraft Agreements or this 1110 Agreement shall be in writing, and any such notice shall become effective upon receipt by the addressee of such notice by certified mail, return receipt requested, overnight courier service or facsimile to the following addresses:
(A) If to the Debtor:
US Airways, Inc. 2345 Crystal Drive Arlington, VA 22227 Telephone: (703) 872-7000 Facsimile: (703) 872-5252 Attn: Maxine Schnitzer, Esq.
and
Arnold Porter LLP 399 Park Avenue New York, NY 10022 Telephone: (212) 715-1000 Facsimile: (212) 715-1399 Attn: Michael J. Canning, Esq.
(B) If to the Aircraft Creditor, then as provided in the Aircraft Agreements and to its counsel filing Notice of Appearance herein.
16. To the extent that there is an inconsistency between the terms of this 1110 Agreement and any provision of the Order Authorizing Entry Into 1110 Agreements and Stipulations Extending Time to Comply With Section 1110 of the Bankruptcy Code, or between the terms of this 1110 Agreement and any term of the Debtors' Motion with respect to the above-referenced Order, the terms of this 1110 Agreement shall control.
This Court having determined that the approval requested in this 1110 Agreement is in the best interests of the Debtors, their estates, and creditors; and it appearing that proper and adequate notice has been given and that no other or further notice is necessary; and upon the record herein; and after due deliberation thereon; and good and sufficient cause appearing therefor,
IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:
1. The 1110 Agreement is APPROVED in its entirety.
2. The Debtor is authorized to perform all obligations under the Aircraft Agreements in accordance with section 1110 of the Bankruptcy Code and to take all actions necessary to effectuate the terms thereof.
EXHIBIT A
Aircraft Related Engines Cure Amounts
FAA Reg. No. Engine Serial Engine Serial Number 1 Number 2
N653US 695567 695380 None