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3
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Alexandria Division
In re Chapter 11
PATHNET TELECOMMUNICATIONS, Case No. 01-12264-SSM
INC., et al., Jointly Administered
Debtors.
------------------------------------------
STIPULATION AND CONSENT ORDER (1) CONVERTING CASES TO CHAPTER 7
AND (2) AUTHORIZING THE EXTENSION OF LIMITED USE OF CASH
COLLATERAL
Upon the Joint Motion of Nortel Networks Inc. ("Nortel") and
Cisco Systems Capital Corporation ("Cisco") (collectively, the Secured
Lenders") for Entry of an Order to Convert Chapter 11 Case to Chapter 7 (the
"Motion to Convert") with respect to debtors and debtors in possession
Pathnet Operating, Inc. ("POI"), Pathnet Real Estate LLC ("PRE"), and Pathnet
Fiber Equipment LLC ("PFE") (collectively, the "Converted Debtors"), seeking
an order under Section 1112(b) of the Bankruptcy Code converting the cases of
the Converted Debtors to Chapter 7 and whereas the Secured Lenders have
declined, except as provided in this Stipulation and Consent Order, to extend
their consent for use of cash collateral, as that term is defined in Section
363 of the Bankruptcy Code ("Cash Collateral"), from and after June 30, 2001,
upon the expiration of the Stipulation and Consent Final Order Authorizing
Debtor's Use of Cash Collateral and Granting Adequate Protection entered on
June 12, 2001 (the "Cash Collateral Order");
ACCORDINGLY THE PARTIES STIPULATE AND AGREE AND THE COURT ORDERS
AS FOLLOWS:
1. The pending Chapter 11 cases of Pathnet Operating, Inc. (Case No.
01-12266), Pathnet Real Estate LLC (Case No. 01-12269), and Pathnet Fiber
Equipment LLC (Case No. 01-12268) are hereby converted to cases under Chapter
7 pursuant to Section 1112(a) of the Bankruptcy Code;
2. By agreement of the Converted Debtors and the Secured Lenders, the
Termination Date set forth in paragraph 19 of the Cash Collateral Order is
extended through and including August 10, 2001, and the Converted Debtors may
continue to use Cash Collateral in accordance with the Cash Collateral Order
in accordance with the Budget attached as Exhibit A hereto up to a maximum
amount of $115,348.00; provided, HOWEVER, that Cash Collateral may be used
only for (1) compensation for the employees identified on the Budget in the
amounts designated thereon, and (2) the provision of security services as
approved by the Secured Lenders for the protection of the Prepetition
Collateral and Postpetition Collateral; and provided, FURTHER, that nothing
herein shall be deemed to be binding on a Chapter 7 Trustee appointed in the
cases of the Converted Debtors. All other terms and conditions of the Cash
Collateral Order shall continue and remain in full force and effect.
Entered this ________ day of July, 2001
JUDGE STEPHEN S.Mitchell
United States Bankruptcy Judge
WE ASK FOR THIS:
/S/ K. STEWART EVANS, JR
K. Stewart Evans, Jr.
Virginia State Bar #12710
PEPPER HAMILTON LLP
600 Fourteenth Street, N.W.
Washington, D.C. 20005-20004 NOTICE OF JUDGMENT OR ORDER
(202) 220-1230 Entered On Docket 7/19/01
2
Patrick A. Murphy
Cecily A. Dumas
Gail S. Greenwood
MURPHY SHENEMAN JULIAN & ROGERS
A Professional Corporation
101 California Street, 39th Floor
San Francisco, CA 94111
(415) 398-4700
ATTORNEYS FOR CISCO SYSTEMS CAPITAL CORPORATION
/S/ JOHN G. MCJUNKIN
John G. McJunkin
Virginia State Bar #31011
PIPER, MARBURY, RUDNICK & WOLFE
1200 Nineteenth Street, N.W.
Washington, D.C. 20036
Telephone: (202) 861-6005
Telecopy: (202) 233-2085
ATTORNEYS FOR CISCO SYSTEMS CAPITAL CORPORATION
/S/ H. JASON GOLD
H. Jason Gold
Virginia State Bar #25237
Alexander M. Laughlin
GOLD MORRISON & LAUGHLIN PC
1660 International Drive, Suite 450
McLean, VA 22012-4848
(703) 836-7004
Michael B. Hopkins
Charles H. Jeanfreau
COVINGTON & BURLING
1330 Avenue of the Americas
New York, N.Y. 10019
(212) 841-1000
Michael St. Patrick Baxter
COVINGTON & BURLING
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 662-6000
ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION
3
EXHIBIT A
Page 1
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EMPLOYEE NAME TITLE MONTHLY SALARY LOCATIONJOB DESCRIPTION ESTIMATED
SALARY EXPENSES 6/30 TO LAST DAY OF
8/10 WORK
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Smith, Troy Provisioning $4,375 $6,058 TX Responsible for moving 10-Aug
Coordinator customers off the POI
fiber network during
the liquidation process
until August 1.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Grill, Thomas Director, Advanced $10,058 $13,927 VA Responsible for the 10-Aug
Convergence Eng. management of POI
softswitch and media
gateway physical assets
during the liquidation
process including all
of our Super POPs.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Harbaugh, Sr. Manager, Collo & $7,263 $10,056 TX Responsible for 10-Aug
Diane Interconnect submitting POI
termination notices at
all ILEC Collocations,
and submitting all
applications to ILEC
retrieval of POI
equipment.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Walls, Robert Sr. Manager, Capacity $6,967 $9,646 VA Responsible for 10-Aug
M. Planning transitioning customers
off of POI fiber
network and terminating
all POI leases.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Pierce, Director, Network $7,989 $11,061 VA Responsible for 10-Aug
Sherrie L. Planning transitioning customers
off to POI fiber
network and terminating
all POI leases. Bill
resolution for POI
Network Leases, POI
Collocation analysis
and with ILEC's.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Mueller, Project Manager $6,064 $8,396 VA Responsible for 10-Aug
Margaret project-managing the
shut down of the POI
fiber network and
dispute resolution with
McLeod and contractors
on ALB-EL PASO route.
Needed for retrieval of
POI equipment at Super
POP sites.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Elkins, Anita Project Manager $7,141 $9,887 VA Responsible for 10-Aug
project-managing the
shut down of the POI
fiber network and
dispute resolution with
360 Networks. Needed
for retrieval of POI
equipment as Super POP
sites.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Steelman, Roy Manager, Outside $7,521 $10,413 TX Responsible for the 10-Aug
Plant Engineering management & retrieval
of POI outside plant
physical assets during
liquidation process.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Varney, Paul Manager, Network Imp. $7,816 $10,821 TX Responsible for the 10-Aug
Engineering management and
retrieval of the POI
long haul physical
assets during
liquidation process.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Hensley, Provisioning Circuit $5,001 $6,924 VA Responsible for moving 10-Aug
Stacie Engineer customers off of the
POI fiber network
during the liquidation
process until August 1.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
McCarthy, Central Office Field $4,859 $6,727 NE Responsible for 10-Aug
Larry Technician escorting liquidators
in to ILEC Collo
facilities and for
retrieval of POI fiber
equipment from
facilities, and
performing maintenance
on POI network.
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
TOTAL BASE SALARY COST: $103,917
---------------------------------------------------------------------------------------------------------------------
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ADD EMPLOYER FICA/FUTA/SUTA: $11,431
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TOTAL COST: $115,348
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