EXHIBIT 10.43
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
In re In Proceedings Under Chapter 11
BRIDGE INFORMATION SYSTEMS, Case No. 01-41593-293
INC.
Debtor. Honorable David P. McDonald
United States Bankruptcy Judge
- --------------------------------------
STIPULATION AND ORDER BY AND AMONG AT&T CORP.,
BRIDGE INFORMATION SYSTEMS, INC., AS DEBTOR AND DEBTOR-
IN-POSSESSION, AND SAVVIS COMMUNICATIONS CORPORATION
AT&T Corp. ("AT&T"), Bridge Information Systems, Inc., its related
debtor entities ("Bridge"), and Savvis Communications Corporation
("Savvis")(collectively "Bridge/Savvis")("AT&T", "Bridge" and "Savvis" are
collectively referred to as the "Parties"), by and through their respective
counsel of record, and having been fully advised and informed, do hereby
stipulate and agree as follows:
RECITALS
A. Bridge and 21 related entities filed a voluntary bankruptcy
petitions under Chapter 11 of the United States Bankruptcy Code on February 15,
2001 (the "Petition Date").
B. Bridge has continued to operate its business and manage its assets
as a debtor-in-possession pursuant to Sections 1107(a) and 1108 of the
Bankruptcy Code. Savvis is an affiliate of Bridge, has not filed a bankruptcy
petition, and is not a debtor or debtor-in-possession.
C. AT&T provides certain telecommunications and related service to
Bridge and Savvis under applicable tariffs and certain agreements between the
Parties. AT&T has undertaken to estimate the cost of the services desired by
Bridge and Savvis, and has concluded, with the consent of Bridge/Savvis, that in
the aggregate, regular recurring charges for such services are expected to run
approximately $450,000 per week.
D. Since the filing of the Bridge bankruptcy cases, AT&T has continued
to provide "local service" and "long distance service" (together, "Services") to
Bridge and Savvis. In addition, Upon motion of the Debtors, the Court entered an
ex parte order on February 16, 2001 (the "Utility Order") compelling AT&T, and
other utilities, to continue to render such Services during the pendency of this
Chapter 11 case to both Bridge and to Savvis - relative to Services provided by
AT&T, and other utilities, directly to Bridge and Services provided to Savvis
and then passed through to Bridge (the "Bridge Pass-Through").
E. Thereafter, pursuant to the provisions set forth in the Utility
Order, AT&T sent a demand for additional adequate assurances to the Debtor.
F. Thereafter, AT&T filed a Motion for an Order (A) Vacating the
Utility Order (1) Restraining Utilities from Discontinuing, Altering or Refusing
Service Pursuant to 11 U.S.C. ss. 366, and (2) Establishing Procedures for
Determining Adequate Assurances and (B) Declaring that AT&T Corp. is Authorized
to Terminate Services to Savvis Communications Corporation (the "Motion"). The
hearing relative to AT&T's Motion was scheduled for April 4, 2001.
2
G. The Parties have met and conferred in an effort to resolve disputes
concerning the terms under which AT&T will withdraw the Motion, without
prejudice, and will continue to render their Services to Bridge/Savvis.
H. The Parties agree that the total undisputed amount in arrears due to
AT&T by Bridge and Savvis through March 31, 2001, excluding costs associated
with pre-petition AT&T Services provided directly to Bridge, totals $5,235,000
(the "Undisputed Arrears").
I. This stipulation and proposed order is intended to resolve the
controversies described above, and set forth the terms and conditions under
which AT&T will provide Services to Bridge and Savvis during the Chapter 11
proceedings.
STIPULATION
NOW THEREFORE, in consideration of the foregoing, the Parties hereby
stipulate and agree:
1. Adequate Assurance Payments/Catch-up Payments. To provide adequate
assurance of payment to AT&T for Bridge's and Savvis's continued access to and
use of AT&T's Services, Bridge/Savvis shall make the following payments:
a. On or before 4:00 p.m. (Central Time) on April 5, 2001,
Bridge/Savvis shall pay AT&T a total of $3,000,000, which sum
represents (i) a $2,350,000 partial payment of the Undisputed
Arrears, (ii) a $200,000 partial refundable security deposit; and
(iii) a $450,000 payment for Services provided by AT&T to
Bridge/Savvis for the week beginning April 2, 2001.
3
b. On or before 4:00 p.m. (Central Time) on April 11, 2001,
Bridge/Savvis shall pay AT&T an additional $250,000 refundable
security deposit.
c. On or before 4:00 p.m. (Central Time) on May 1, 2001,
Bridge/Savvis shall pay AT&T a total amount of $1,442,500 as
partial payment of the Undisputed Arrears.
d. On or before 4:00 p.m. (Central Time) on May 15, 2001,
Bridge/Savvis shall pay AT&T a total amount of $1,442,500 as
final payment of the Undisputed Arrears (with the payments of the
Undisputed Arrears on April 5, 2001 and May 1, 2001, the
"Undisputed Arrears Payments").
e. On or before 4:00 p.m. (Central Time) on April 9, 2001, and
continuing on each Monday thereafter (each, a "Payment Date"),
Bridge/Savvis shall pay AT&T a total of $450,000 each week as
weekly prepayments for AT&T Services for the week following the
date of each such payment (each, a "Weekly Pre-payment(s)").
Additionally, the Weekly Pre-payments shall be adjusted on a
retrospective basis to reflect actual usage as set forth below.
f. All payments to AT&T shall be made via wire transfer, shall be
directed in the manner prescribed in written instructions which
AT&T has provided to Bridge/Savvis, and shall be accompanied by a
4
written notice, by 5:00 p.m. (Eastern Time) on the date due (by
facsimile or electronic mail), that each wire transfer has been
made. The written notice shall be sent to AT&T's counsel as
follows:
Vincent A. D'Agostino, Esq.,
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 07068
facsimile number (973) 597-2595
email: vdagostino@lowenstein.com.
2. Reconciliation/Adjustments. AT&T and Bridge agree that from time to
time, but in any event not later than the fifteenth (15th) day of each month
beginning on May 15, 2001, that the Parties shall confer in order to reconcile
and adjust the amounts payable pursuant to this Stipulation, as follows:
a. Should the Weekly Pre-payments be insufficient or should there be a
material increase or decrease in the post-petition charges due AT&T, AT&T or
Bridge/Savvis, should either party so request ("Adjustment Request"), is
entitled to an immediate increase or decrease in the amount of the Weekly
Pre-payments set forth in paragraph 1.e herein, commencing with the Weekly
Pre-payment following such Adjustment Request, and such amount shall be equal to
the total weekly charges that accrued during the week prior to any Adjustment
Request; provided however, in the event Bridge/Savvis or AT&T reasonably and in
good faith dispute any Adjustment Request, and Bridge, Savvis and AT&T are
unable to resolve any such dispute, Bridge/Savvis shall not be deemed to be in
violation or default under this Stipulation and Order so long as Bridge/Savvis
petitions the Bankruptcy Court within five (5) business days of the Adjustment
Request for resolution of the Adjustment Request, and agrees to abide by such
relief as the Bankruptcy Court may order.
5
b. To the extent that in any given month the charges due AT&T exceed
the Weekly Pre-payments made to AT&T by Bridge/Savvis in such month,
Bridge/Savvis shall, within three (3) business days of notification by AT&T (a
"Deficiency Request"), pay to AT&T sufficient funds to cure the deficiency,
provided however, in the event Bridge/Savvis reasonably and in good faith
dispute the Deficiency Request, and the Parties are unable to resolve the
dispute, Bridge/Savvis shall not be deemed to be in violation or default of this
Stipulation and Order so long as Bridge/Savvis petition the Bankruptcy Court
within five (5) business days of the Deficiency Request for resolution of the
Deficiency Request, and agree to abide by such relief as the Bankruptcy Court
may order.
c. To the extent Bridge/Savvis or AT&T asserts any disputes
("Disputes") with respect to any Adjustment Request or Deficiency Request,
Bridge/Savvis or AT&T, as the case may be, shall within two (2) business days of
an Adjustment Request or Deficiency Request present a detailed written statement
to the other parties which identifies and describes the dispute(s) in question.
All written disputes submitted by Bridge/Savvis or AT&T shall be accompanied by
supporting documentation to the extent possible. In addition, to the extent that
Bridge/Savvis or AT&T assert any Disputes with respect to the Adjustment Request
or Deficiency Request, Bridge/Savvis shall pay AT&T the undisputed amount
pursuant to the terms set forth in this Stipulation and Order, subject to
disgorgement as a result of Court Order pursuant to paragraph 2.a and 2.b
hereto.
6
d. To the extent that in any given month the charges due to AT&T are
less than the Weekly Pre-payments made by Bridge/Savvis in such month, AT&T
shall be permitted to apply such funds to any outstanding post-petition balance
due AT&T. To the extent there is no outstanding post-petition balance due to
AT&T, then such amounts shall be credited against the subsequent Weekly
Pre-payments which would be due from Bridge/Savvis to AT&T.
3. Default. If Bridge/Savvis fail to make any of the Weekly
Pre-payments on a Payment Date, AT&T is authorized to suspend all Services
rendered by AT&T to Bridge/Savvis unless, within 48 hours after AT&T provides
written notice of such default to Bridge/Savvis, Bridge/Savvis cure such default
(the "Weekly Pre-payment Cure Period"). If Bridge/Savvis fail to make any
payments, other than the Weekly Pre-payments, provided for in this Stipulation
and Order, or if Bridge/Savvis otherwise fail to comply with any other term
contained herein, or in any agreement between Bridge, Savvis and AT&T or the
tariffs filed by AT&T with the FCC or other regulatory bodies with respect to
Bridge/Savvis's post-petition obligations as set forth herein, AT&T is
authorized to suspend or terminate all Services rendered by AT&T to
Bridge/Savvis unless, within 24 hours after AT&T provides written notice of such
default to Bridge/Savvis, Bridge/Savvis cures such default (the "Cure Period").
Any payments by Bridge/Savvis within the Weekly Pre-payment Cure Period and/or
the Cure Period shall be made in compliance with paragraph 1.f above. Any notice
of default given by AT&T to Bridge/Savvis shall be directed to Bridge's counsel
and Savvis's counsel as follows:
7
AS TO BRIDGE:
------------
Thomas Moloney, Esq.
Seth Stuhl, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006-1470
212-225-2136 (telephone); 212-225-3999 (facsimile)
-with a copy to-
Sanker Krishnan
Bridge Information Systems, Inc.
3 World Financial Center
27th Floor
New York, New York 10281
212-372-7100 (telephone); 212-372-7190 (facsimile)
AS TO SAVVIS:
------------
Robert H. Brownlee, Esq.
Thompson Coburn LLP
One Firstar Plaza
St. Louis, Missouri 63101
314-552-6000 (telephone); 314-552-7000 (facsimile)
-with a copy to-
Steven M. Gallant, Esq.
Vice President and General Counsel
Savvis Communications Corporation
717 Office Parkway
St. Louis, Missouri 63141
314-468-7517 (telephone); 314-468-7550 (facsimile)
Notice is hereby deemed received when faxed by AT&T (and actually received by
Bridge/Savvis based upon a facsimile confirmation sheet). Should Bridge/Savvis
fail to cure their default within the Monthly Pre-Payment Cure Period or the
Cure Period after receipt of such notice, the automatic stay of 11 U.S.C.
ss.362(a) shall terminate and the Utility Order shall be vacated (solely and
exclusively with respect to AT&T), without further notice or hearing, to permit
AT&T to immediately suspend or terminate all Services rendered to both Bridge
and Savvis and to offset
8
against any deposit or Weekly Pre-payment held by AT&T with respect to
outstanding Bridge/Savvis obligations owed to AT&T (excluding pre-petition
Bridge direct accounts). In addition, in the event that Bridge/Savvis fail to
make any of the payments set forth herein, including the Weekly Pre-payments,
within the Weekly Pre-payment Cure Period or Cure Period, AT&T reserves any and
all rights to pursue outstanding amounts owed to AT&T by Bridge and Savvis.
4. Reconciliation of Disputed Amounts Not Included in the Undisputed
Arrears. The Parties agree to continue their efforts in reconciling any disputed
amounts that are not included in the Undisputed Arrears. Once the Parties have
completed and agreed upon their reconciliation, Bridge/Savvis will pay the
agreed upon amount within ten (10) business days of receiving an invoice from
AT&T.
5. Term. The term of this Stipulation and Order with respect to Bridge
only shall expire automatically on the following: (i) the effective date of
Bridge's confirmed Plan of Reorganization (on the condition that the effective
date is after all obligations contained in paragraphs 1.a through 1.d above are
paid), or (ii) the closing date of a sale of all of the assets of Bridge, or
(iii) the closing date of a final sale, in a series of sales, of all of the
assets of Bridge, or (iv) conversion of Bridge's Chapter 11 proceeding to a
Chapter 7 proceeding. Upon the happening of an event listed in sub-parts (i)
through (iv) of this paragraph, AT&T may apply any security deposit or remaining
weekly pre-payment to any outstanding amounts due and owing to AT&T by
Bridge/Savvis (excluding pre-petition Bridge direct accounts), and shall refund
to Bridge any remaining portion of any weekly pre-payment or security deposit
paid by Bridge. In the event that AT&T continues to provide local and/or
9
long distance services to Bridge post-sale, post-confirmation or
post-conversion, AT&T reserves its right to request additional adequate
assurances from Bridge. The term of this Stipulation and Order with respect to
Savvis only shall expire automatically on the following: (i) the effective date
of Bridge's confirmed Plan of Reorganization (on the condition that the
effective date is after all obligations contained in paragraphs 1.a through 1.d
above are paid), or (ii) conversion of Bridge's Chapter 11 proceeding to a
Chapter 7 proceeding. Upon the happening of an event listed in sub-parts (i) and
(ii) of this paragraph, AT&T may apply any security deposit or remaining weekly
pre-payment to any outstanding amounts due and owing to AT&T by Bridge/Savvis
(excluding pre-petition Bridge direct accounts). In the event that AT&T
continues to provide local and/or long distance services to Savvis
post-confirmation or post-conversion, Savvis shall provide AT&T with an
additional security deposit in the amount of $3,600,000 within five (5) days of
the happening of an event set forth in sub-parts (i) or (ii) above.
Bridge/Savvis's obligations to make the Undisputed Arrears Payments shall
survive such termination of this Stipulation and Order.
6. Reservation of Rights, Assignment. Except as expressly provided
herein, AT&T reserves and preserves all rights under applicable agreements, the
Bankruptcy Code and applicable law, including tariffs. This Stipulation and
Order shall be binding upon Bridge, Savvis and AT&T, and their respective
successors and assigns, including, but not limited to, any trustee appointed or
elected pursuant to the Bankruptcy Code or any subsequent bankruptcy proceeding
commenced by Savvis; provided however, that Bridge and Savvis shall not be
permitted to assign, subcontract, or transfer any part of the benefits they
receive under and contract or
10
agreement with AT&T, the tariffs, or this Stipulation and Order to any third
party without the express written consent of AT&T, or through compliance with
the assumption and cure provisions of 11 U.S.C. ss.365 and applicable law,
including tariffs filed by AT&T, and satisfaction of AT&T's claims; and further
provided however, this Stipulation and Order shall not be binding upon any
assignee of any agreements or contracts between AT&T and Bridge pursuant to the
assumption provisions of 11 U.S.C. ss. 365. AT&T reserves the right to request
security deposits and/or pre-payments from any assignee of the benefits they
receive under and contract or agreement with AT&T, the tariffs, or this
Stipulation and Order
7. AT&T reserves any and all rights with respect to New Services
requested by Bridge and Savvis that were not in existence at the time of the
Petition Date including, but not limited to, requests for additional security
deposits relative to the New Services and/or denial of Bridge's and/or Savvis's
request for New Services.
8. Regardless of the identity of the payor of the amounts paid pursuant
to the terms of this Stipulation and Order, all payments made pursuant to this
Stipulation and Order are hereby authorized by this Court pursuant to Section
105 and 363 of the Bankruptcy Code and shall not be subject to avoidance in
these proceedings or in any subsequent proceedings filed by or against Bridge or
Savvis.
9. This Stipulation and Order is subject to and shall become binding
upon the approval of the Bankruptcy Court. In the event that the Bankruptcy
Court does not approve this Stipulation and Order, the Parties shall be returned
to their respective positions, except that any monies received by AT&T pursuant
to the terms of this Stipulation and Order shall only be subject to disgorgement
upon further Order of the Bankruptcy Court.
11
10. The Bankruptcy Court shall retain jurisdiction to hear any and all
disputes arising from this Stipulation and Order.
11. This Stipulation and Order may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document. Facsimile signatures shall
be deemed
12
original signatures for purposes of this Stipulation and Order, with original
signatures to follow at a later date.
Dated: April 9, 2001 LOWENSTEIN SANDLER
65 Livingston Avenue
Roseland, New Jersey
(973) 597-2594
By: /s/ Vincent A. D'Agostino
------------------------------
Vincent A. D'Agostino
Attorneys for AT&T Corp.
Dated: April 9, 2001 CLEARY, GOTTLIEB, STEEN &
HAMILTON
One Liberty Plaza
New York, New York 10006
(212) 225-2000
By: /s/ Thomas J. Moloney
------------------------------
Thomas J. Moloney
Attorneys for Debtors
Dated: April 9, 2001 THOMPSON COBURN LLP
One Firstar Plaza
St. Louis, Missouri 63101
(314) 552-6000
By: /s/ Robert Brownlee
------------------------------
Robert Brownlee
Attorneys for Savvis Communications
Corporation
ORDER
IT IS SO ORDERED.
DATED: /s/ David P. McDonald
------------------------------------
UNITED STATES BANKRUPTCY COURT JUDGE
13