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EXECUTION VERSION
E.SPIRE COMMUNICATIONS,INC.
E.SPIRE FINANCE CORPORATION
FORBEARANCE AGREEMENT
TO CREDIT AGREEMENT
THIS FORBEARANCE AGREEMENT TO CREDIT AGREEMENT (this "AGREEMENT") is
dated as of July 10, 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 3 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;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AGREEMENT OF LENDERS
Lenders hereby agree to forebear, until July 14, 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.
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SECTION 2. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement, Borrowers
hereby represent and warrant that:
(a) each Borrower has all requisite corporate power and authority to
enter into this Agreement;
(b) the execution and delivery of this Agreement and the performance
of this Agreement 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 Agreement
and the performance by each Borrower of this Agreement 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
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 Agreement
and the performance by each Borrower of this Agreement 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 Agreement 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) excluding any Event of Default or Potential Event of Default
which 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
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(h) 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 3. ACKNOWLEDGMENT AND CONSENT
Borrowers and Subsidiary Guarantors are collectively referred to
herein as "CREDIT SUPPORT PARTIES" and the Company Guaranty, the Subsidiary
Guaranty and the Collateral Documents to which each Borrower and Subsidiary
Guarantor, 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 Agreement.
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 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 Agreement. Each
Credit Support Party (other than Borrowers) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Agreement,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Loan Document to consent to this Agreement and (ii) nothing in the
Credit Agreement, this Agreement 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.
Each of the Credit Support Parties hereby acknowledges and confirms
that it does not have any grounds and hereby agrees not to challenge (or to
allege or to pursue any matter, cause or claim arising under or with respect to)
the Credit Agreement or any of the other Loan Documents (including, without
limitation, any of the Credit Support Documents), any of the terms or conditions
thereof or thereunder, or the status of any thereof as legal, valid and binding
obligations enforceable in accordance with their respective terms; and it does
not possess (and hereby forever waives, remises, releases, discharges and holds
harmless the Lenders and the Agent, and their respective affiliates,
stockholders, directors, officers, employees, attorneys, agents and
representatives and each of their respective heirs, executors, administrators,
successors and assigns (collectively, the "INDEMNIFIED PARTIES") from and
against, and agrees not to allege or pursue) any action, cause of action, suit,
debt, claim, counterclaim, cross-claim, demand, defense, offset, opposition,
demand and other right of action whatsoever, whether in law, equity or otherwise
(which it, all those claiming by, through or under it, or its successors or
assigns, have or may have) against the Indemnified Parties, or any of them,
prior to or as of the date of this Agreement and the effective date of this
Agreement for, upon, or by reason of, any matter, cause or thing whatsoever,
arising out of, or relating to the Credit Agreement or any of the other Loan
Documents (including, without limitation, any of the Credit Support Documents)
(including, without limitation, any payment, performance, validity or
enforceability of any or all
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of the terms or conditions thereof or thereunder) or any transaction relating to
any of the foregoing, or any or all actions, courses of conduct or other matters
in any manner whatsoever relating to or otherwise connected with any of the
foregoing.
SECTION 4. MISCELLANEOUS
A. EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) Except as specifically modified by this Agreement, 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 Agreement 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
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
C. APPLICABLE LAW. THIS AGREEMENT 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 Agreement and the documents and
transactions contemplated hereby shall be for the account of Borrowers.
Borrowers shall concurrently with the execution and delivery of this Agreement
pay all accrued and unpaid legal fees of counsel to Arranger.
E. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which 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 Agreement 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 4.D hereof.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement 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:
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Title:
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e.spire FINANCE CORPORATION
By:
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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:
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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:
--------------------------------
Title:
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BANKERS LIFE AND CASUALTY COMPANY
By:
--------------------------------
Title:
--------------------------
CONSECO ANNUITY ASSURANCE COMPANY
By:
--------------------------------
Title:
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DEUTSCHE BANK AG NEW YORK BRANCH
By:
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Title:
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By:
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Title:
--------------------------
X-0
0
XXXXXXXX XXXXXXX XXXXXXXXXXX
By:
--------------------------------
Title:
--------------------------
FRANKLIN FLOATING RATE TRUST
By:
--------------------------------
Title:
--------------------------
XXXXXXX XXXXX GLOBAL INVESTMENT
SERIES INCOME STRATEGIES PORTFOLIO
By:
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Title:
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XXXXXXX XXXXX SENIOR FLOATING RATE
FUND INC.
By:
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Title:
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X-0
0
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:
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Title:Authorized Signatory of
each of the foregoing
Subsidiary Guarantors
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