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EXECUTION
E.SPIRE COMMUNICATIONS, INC.
E.SPIRE FINANCE CORPORATION
LIMITED WAIVER
TO CREDIT AGREEMENT
THIS LIMITED WAIVER TO CREDIT AGREEMENT (this "WAIVER") is dated as
of June 14, 2000 and entered into by and among e.spire Communications, Inc., a
Delaware corporation ("COMPANY"), e.spire Finance Corporation, a Delaware
corporation ("FINANCE SUB"; Finance Sub and the Company, collectively referred
to as "BORROWERS"), the financial institutions listed on the signature pages
hereof ("LENDERS"), Xxxxxxx Xxxxx Credit Partners L.P., as sole Lead Arranger
and Syndication Agent, The Bank of New York, as Administrative Agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT"), First Union National Bank, as
Documentation Agent, and Newcourt Commercial Finance Corporation, as Collateral
Agent, and, for purposes of Section 6 hereof, the Subsidiaries of Finance Sub
listed on the signature pages hereof ("SUBSIDIARY GUARANTORS") and is made with
reference to that certain Credit Agreement, dated as of August 11, 1999 (as
amended by the First Amendment dated November 24, 1999, the "CREDIT AGREEMENT"),
by and among Company, Finance Sub, Lenders and Agents. Capitalized terms used
herein without definition shall have the same meanings herein as set forth in
the Credit Agreement.
RECITALS
WHEREAS, Lenders have agreed to extend their forbearance of exercise
of remedies under the Loan Documents as a result of certain Events of Default
subject to the terms, conditions and agreements set forth herein;
WHEREAS, Borrowers (i) desire to make an Asset Sale consisting of
certain office furniture located at its former headquarters set forth on Exhibit
A hereto which assets constitute Collateral (the "DESIGNATED ASSETS"), (ii)
desire that Lenders waive compliance with certain of the requirements of
subsections 2.4B(iii)(a) and 8.6 of the Credit Agreement and consent to
Administrative Agent's release of the Lien granted on the Designated Assets
under the Collateral Documents; and
WHEREAS, Lenders have agreed to waive compliance with subsections
2.4B(iii)(a) and 8.6 and consent to the release of the Lien on Designated Assets
subject to the terms, conditions and agreements set forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
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SECTION 1. AGREEMENT OF LENDERS
Lenders hereby agree to forebear, until July 10, 2000, exercising
any remedies under the Loan Documents as a result of the Events of Default
caused by Borrowers failure to be in compliance with the covenants set forth in
subsection 6.6A(ii) or subsection 6.6A(iii) of the Credit Agreement for the
Fiscal Quarters ended March 31, 2000 and June 30, 2000, as long as no other
holder of Indebtedness of any Loan Party has accelerated such Indebtedness or is
otherwise exercising any remedies with respect thereto. Such delay or failure by
Agents or Lenders to exercise during such time any of their other rights and
remedies, shall not impair any power, right or privilege granted to Agents or
Lenders in the Credit Agreement or any other Loan Document or by law available
to them or be construed to be a waiver of or acquiescence in any Event of
Default under the Credit Agreement or any other Loan Document or a forbearance
of the exercise of remedies as a result of any other Event of Default under the
Credit Agreement.
SECTION 2. WAIVERS
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrowers herein contained:
(a) Lenders hereby waive compliance with the provisions of
subsection 2.4B(iii)(a) of the Credit Agreement to the extent, and only to
the extent, that such provisions would not permit Borrowers to reinvest
the Net Asset Sale Proceeds received from the Designated Assets in lieu of
making a mandatory prepayment because the Events of Default subject to the
forbearance agreement of Lenders have occurred and are continuing,
provided that the Borrowers reinvest such Net Asset Sale Proceeds in
Telecommunications Assets in the manner described in subsection
2.4B(iii)(a). In connection with the reinvestment of such Net Asset Sale
Proceeds from the Designated Assets, Lenders hereby waive compliance with
the certification provisions of subsection 2.4B(iii)(a)(1), but not (2),
to the extent, and only to the extent, that Borrowers deliver to
Administrative Agent an Officers' Certificate in the form attached hereto
as Exhibit B.
(b) Lenders hereby consent to the release of the Liens under the
Collateral Documents on the Designated Assets, such release to be
effective upon the sale thereof in accordance with subsection 6.8. In
connection with such release of Liens under the Collateral Documents on
the Designated Assets, Lenders hereby waive compliance with the notice and
certification provisions of subsection 8.6 of the Credit Agreement
relating to the release of Liens in connection with permitted Asset Sales
to the extent, and only to the extent, that Borrowers deliver to
Administrative Agent an Officers' Certificate in the form attached hereto
as Exhibit B.
SECTION 3. LIMITATION OF WAIVERS
Without limiting the generality of the provisions of subsection 9.6
of the Credit Agreement, the waiver set forth above shall be limited precisely
as written and relates solely to the noncompliance by Company with the
provisions of subsections 2.4B(iii)(a) and 8.6 of the Credit Agreement in the
manner and to the extent described above, and nothing in this Waiver shall be
deemed to:
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(a) constitute a waiver of compliance by Company with respect to
(i) subsections 2.4B(iii)(a) and 8.6 of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agents or any Lender may
now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this Waiver)
or may have in the future under or in connection with the Credit Agreement
or any other instrument or agreement referred to therein.
Except as expressly set forth in this Waiver, the terms, provisions
and conditions of the Credit Agreement and the other Loan Documents shall
remain in full force and effect and in all other respects are hereby ratified
and confirmed.
SECTION 4. ADDITIONAL AGREEMENT OF BORROWERS
In consideration of Lenders entering into this Waiver, Borrowers
hereby agree to provide Administrative Agent and Lenders as soon as available,
and in any event within 30 days after the end of each month (other than the last
month of each Fiscal Quarter), the consolidated balance sheets of Company and
its Subsidiaries as at the end of such month and the related consolidated
statements of income and cash flows of Company and its Subsidiaries for such
month and for the period from the beginning of the then current Fiscal Year to
the end of such month, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, to the extent prepared on a monthly basis, all in reasonable detail and
certified by the chief financial officer of Company that they fairly present, in
all material respects, the financial condition of Company and its Subsidiaries
as at the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from audit and
normal quarterly and year-end adjustments. Failure of Borrowers to comply with
the agreement set forth in this Section 4 shall constitute an Event of Default
under the Credit Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Waiver, Borrowers
hereby represent and warrant that:
(a) each Borrower has all requisite corporate power and authority
to enter into this Waiver;
(b) the execution and delivery of this Waiver and the performance
of this Waiver have been duly authorized by all necessary corporate action
on the part of each Borrower;
(c) the execution and delivery by each Borrower of this Waiver and
the performance by each Borrower of this Waiver do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to each Borrower or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of each Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other
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agency of government binding on a Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any Contractual Obligation of
any Borrower or any of its Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
any Borrower or any of its Subsidiaries (other than Liens created under
any of the Loan Documents in favor of Agent on behalf of Lenders), or (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of any Borrower or any of its
Subsidiaries;
(d) the execution and delivery by each Borrower of this Waiver and
the performance by each Borrower of this Waiver do not and will not
require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental
authority or regulatory body;
(e) this Waiver has been duly executed and delivered by each
Borrower and constitutes the legally valid and binding obligations of each
Borrower, enforceable against each Borrower in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability;
(f) as of the date hereof after giving effect to this Waiver and
excluding any Event of Default or Potential Event of Default which has
been cured or is subject to a forbearance agreement between the Borrowers
and the Lenders, there exists no Event of Default or Potential Event of
Default under the Credit Agreement;
(g) all representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date; and
(h) as of the date hereof and after giving effect to this Waiver,
Borrowers have performed all agreements (other than compliance with the
financial covenants subject to the forbearance agreement between Borrowers
and Lenders) to be performed on its part as set forth in the Credit
Agreement.
SECTION 6. ACKNOWLEDGMENT AND CONSENT
The Company Guaranty, Subsidiary Guaranty and Collateral Documents
to which each Subsidiary Guarantor and Borrowers, as applicable, are party are
herein referred to collectively as the "CREDIT SUPPORT DOCUMENTS". Each Loan
Party hereby acknowledges that it has reviewed the terms and provisions of the
Credit Agreement and this Waiver. Each Loan Party hereby confirms that each
Credit Support Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible the payment and performance of all
"Guarantied Obligations" and "Secured Obligations" as the case may be (in each
case as such terms are defined in the applicable Credit Support Document),
including without limitation the payment and performance
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of all such "Guarantied Obligations" or "Secured Obligations," as the case may
be, in respect of the Obligations of Borrowers now or hereafter existing under
or in respect of the Credit Agreement. Each Credit Support Party acknowledges
and agrees that any of the Credit Support Documents to which it is a party or
otherwise bound shall continue in full force and effect and that all of its
obligations thereunder shall be valid and enforceable and shall not be impaired
or limited by the execution or effectiveness of this Waiver. Each Credit Support
Party (other than Borrowers) acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Waiver, such Credit Support
Party is not required by the terms of the Credit Agreement or any other Loan
Document to consent to this Waiver and (ii) nothing in the Credit Agreement,
this Waiver or any other Loan Document shall be deemed to require the consent of
such Credit Support Party to any future consents or waivers to the Credit
Agreement.
SECTION 7. MISCELLANEOUS
A. EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.
(i) Except as specifically modified by this Waiver, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(ii) The execution, delivery and performance of this Waiver shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Agents or any Lender under, the Credit Agreement or any of the other Loan
Documents.
B. HEADINGS. Section and subsection headings in this Waiver are
included herein for convenience of reference only and shall not constitute a
part of this Waiver for any other purpose or be given any substantive effect.
C. APPLICABLE LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO INCONSISTENT CONFLICTS OF LAWS PRINCIPLES.
D. FEES AND EXPENSES. Borrowers acknowledge that all costs, fees and
expenses as described in subsection 9.3 of the Credit Agreement incurred by
Agents and their counsel with respect to this Waiver and the documents and
transactions contemplated hereby shall be for the account of Borrowers.
Borrowers shall concurrently with the execution and delivery of this Waiver pay
all accrued and unpaid legal fees of counsel to Arranger. In addition, Borrowers
shall concurrently with the execution and delivery of this Waiver pay all
accrued and unpaid fees and expenses of The Management Network Group, Inc.
incurred to date in the amount of $220,100.
E. COUNTERPARTS; EFFECTIVENESS. This Waiver may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which
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when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Waiver shall become effective upon (i) the execution of
counterparts hereof by Borrowers and Subsidiary Guarantors and by Lenders
constituting Requisite Lenders and receipt by Borrowers and Administrative Agent
of written or telephonic notification of such execution and authorization of
delivery thereof and (ii) payment of the expenses referenced in Section 7.D
hereof.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWERS:
e.spire COMMUNICATIONS, INC.
By:
--------------------------------
Title:
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e.spire FINANCE CORPORATION
By:
--------------------------------
Title:
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LENDERS:
XXXXXXX SACHS CREDIT PARTNERS L.P.,
individually, as Arranger and as
Syndication Agent
By:
--------------------------------
Title:
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THE BANK OF NEW YORK, individually and
as Administrative Agent
By:
--------------------------------
Title:
-----------------------------
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FIRST UNION NATIONAL BANK, individually
and as Documentation Agent
By:
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Title:
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CIT LENDING SERVICES CORPORATION (f/k/a
Newcourt Commercial Finance Corporation),
an affiliate of The CIT Group, Inc.,
individually and as Collateral Agent
By:
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Title:
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BANKERS LIFE AND CASUALTY COMPANY
By:
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Title:
-----------------------------
CONSECO ANNUITY ASSURANCE COMPANY
By:
------------------------------------
Title:
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DEUTSCHE BANK AG NEW YORK BRANCH
By:
------------------------------------
Title:
-----------------------------
By:
------------------------------------
Title:
-----------------------------
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0
XXXXXXXX XXXXXXX XXXXXXXXXXX
By:
------------------------------------
Title:
------------------------------
FRANKLIN FLOATING RATE TRUST
By:
------------------------------------
Title:
------------------------------
XXXXXXX XXXXX GLOBAL INVESTMENT SERIES
INCOME STRATEGIES PORTFOLIO
By:
------------------------------------
Title:
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XXXXXXX XXXXX SENIOR FLOATING RATE FUND
INC.
By:
------------------------------------
Title:
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X-0
00
XXXXXXXXXX XXXXXXXXXX:
e.spire LEASING CORPORATION
e.spireDATA, INC.
ACSI LOCAL SWITCHED SERVICES, INC.
ACSI LOCAL SWITCHED SERVICES OF
VIRGINIA, INC.
ACSI LONG DISTANCE, INC.
ACSI NETWORK TECHNOLOGIES, INC.
AMERICAN COMMUNICATION SERVICES OF
ALBUQUERQUE, INC.
AMERICAN COMMUNICATION SERVICES OF
AMARILLO, INC.
AMERICAN COMMUNICATION SERVICES OF
ATLANTA, INC.
AMERICAN COMMUNICATION SERVICES OF
AUSTIN, INC.
AMERICAN COMMUNICATION SERVICES OF
BATON ROUGE, INC.
AMERICAN COMMUNICATION SERVICES OF
BIRMINGHAM, INC.
AMERICAN COMMUNICATION SERVICES OF
BOISE, INC.
AMERICAN COMMUNICATION SERVICES OF
CHARLESTON, INC.
AMERICAN COMMUNICATION SERVICES OF
CHATTANOOGA, INC.
AMERICAN COMMUNICATION SERVICES OF
COLORADO SPRINGS, INC.
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AMERICAN COMMUNICATION SERVICES OF
COLUMBIA, INC.
AMERICAN COMMUNICATION SERVICES OF
COLUMBUS, INC.
AMERICAN COMMUNICATION SERVICES OF
CORPUS CHRISTI, INC.
AMERICAN COMMUNICATION SERVICES OF
DALLAS, INC.
AMERICAN COMMUNICATION SERVICES OF
D.C., INC.
AMERICAN COMMUNICATION SERVICES OF EL
PASO, INC.
AMERICAN COMMUNICATION SERVICES OF FORT
WORTH, INC.
AMERICAN COMMUNICATION SERVICES OF
GREENVILLE, INC.
AMERICAN COMMUNICATION SERVICES OF
HUNTSVILLE, INC.
AMERICAN COMMUNICATION SERVICES OF
IRVING, INC.
AMERICAN COMMUNICATION SERVICES OF
XXXXXXX, INC.
AMERICAN COMMUNICATION SERVICES OF
JACKSONVILLE, INC.
AMERICAN COMMUNICATION SERVICES OF
KANSAS CITY, INC.
AMERICAN COMMUNICATION SERVICES OF
KNOXVILLE, INC.
AMERICAN COMMUNICATION SERVICES OF LAS
VEGAS, INC.
AMERICAN COMMUNICATION SERVICES OF
LEXINGTON, INC.
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AMERICAN COMMUNICATION SERVICES OF
LITTLE ROCK, INC.
AMERICAN COMMUNICATION SERVICES, OF
LOUISIANA, INC.
AMERICAN COMMUNICATION SERVICES OF
LOUISVILLE, INC.
AMERICAN COMMUNICATION SERVICES OF
LUBBOCK, INC.
AMERICAN COMMUNICATION SERVICES OF
MARYLAND, INC.
AMERICAN COMMUNICATION SERVICES OF
MIAMI, INC.
AMERICAN COMMUNICATION SERVICES OF
MOBILE, INC.
AMERICAN COMMUNICATION SERVICES OF
XXXXXXXXXX, INC.
AMERICAN COMMUNICATION SERVICES OF
PENSACOLA, INC.
AMERICAN COMMUNICATION SERVICES OF PIMA
COUNTY, INC.
AMERICAN COMMUNICATION SERVICES OF
RALEIGH - DURHAM, INC.
AMERICAN COMMUNICATION SERVICES OF RIO
RANCHO, INC.
AMERICAN COMMUNICATION SERVICES OF
ROANOKE, INC.
AMERICAN COMMUNICATION SERVICES OF SAN
ANTONIO, INC.
AMERICAN COMMUNICATION SERVICES OF
SAVANNAH, INC.
AMERICAN COMMUNICATION SERVICES OF
SHREVEPORT, INC.
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AMERICAN COMMUNICATION SERVICES OF
SPARTANBURG, INC.
AMERICAN COMMUNICATION SERVICES OF
TALLAHASSEE, INC.
AMERICAN COMMUNICATION SERVICES OF
TAMPA, INC.
AMERICAN COMMUNICATION SERVICES OF
TULSA, INC.
AMERICAN COMMUNICATION SERVICES OF
VIRGINIA, INC.
AMERICAN COMMUNICATION SERVICES OF
WILMINGTON, INC.
AMERICAN COMMUNICATIONS SERVICES
INTERNATIONAL, INC.
CYBERGATE, INC.
FLORIDANET, INC.
Each by:
----------------------------
Title: Authorized Signatory of
each of the foregoing
Subsidiary Guarantors
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EXHIBIT B
E.SPIRE COMMUNICATIONS, INC.
OFFICERS' CERTIFICATE
Reference is hereby made to the Credit Agreement (as amended, the
"CREDIT AGREEMENT"), dated as of August 11, 1999, among e.spire Finance
Corporation and e.spire Communications, Inc., as borrowers (the "BORROWERS"),
the financial institutions listed therein as Lenders, Xxxxxxx Xxxxx Credit
Partners L.P., as Arranger and Syndication Agent, First Union National Bank, as
Documentation Agent, Newcourt Commercial Finance Corporation, as Collateral
Agent, and The Bank of New York, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT"). Capitalized terms used herein and not defined herein
have the meanings assigned to such terms in the Credit Agreement.
Borrowers are in the process of consummating an Asset Sale to
Mentor, Inc. ("BUYER"). In connection with such sale, Borrowers request that
Administrative Agent release the Lien on the Designated Assets (as defined
below) granted under the Collateral Documents, and this Officers' Certificate is
being delivered pursuant to subsection 8.6 of the Credit Agreement to request
such release.
The undersigned hereby certify as follows:
(i) Schedule I hereto sets forth a detailed description of the
Collateral to be sold in the Asset Sale to Buyer (the "DESIGNATED ASSETS") and
demonstrates the derivation of the Net Asset Sale Proceeds of such Asset Sale
from the gross sale prices thereof.
(ii) The Asset Sale of the Designated Assets is permitted under the
Credit Agreement and all conditions precedent have been met.
(iii) The Company elects to reinvest all such Net Asset Sale
Proceeds from the Asset Sale of the Designated Assets in Telecommunications
Assets.
Please indicate below your acknowledgment that the Administrative
Agent, as the Secured Party and on behalf of the Lenders, does hereby, effective
upon the consummation of the sale of the Designated Assets to Buyer, release any
and all Liens upon the Designated Assets. Upon the effectiveness of the
foregoing release, Administrative Agent shall, at Borrowers' expense, execute
and deliver such documents (without recourse or representation or warranty) as
reasonably requested by Borrowers to evidence such release
[Signature page to follow]
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IN WITNESS WHEREOF, the undersigned officers of Borrowers have duly
executed this Certificate as of June 14, 2000.
E.SPIRE COMMUNICATIONS, INC.
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Acting Chief Executive Officer
E.SPIRE FINANCE CORPORATION
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Acting Chief Executive Officer
ACKNOWLEDGED AND AGREED:
THE BANK OF NEW YORK,
as Administrative Agent
By:
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
Date:
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