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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 April 13, 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"), Goldman Sachs 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 Waiver 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, Borrowers desire Lenders to waive compliance with
subsections 5.1(ii), (iii), (iv), (v), (viii) and (xii), 6.5(iii), 6.6(A)(ii)
and 6.6(A)(iii) to the extent described herein; and
WHEREAS, Lenders have agreed to waive compliance with such
subsections 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. WAIVERS
Subject to the terms and conditions set forth herein and in reliance
on the representations and warranties of Borrowers herein contained, Lenders
hereby waive compliance:
(a) with the provisions of subsections 5.1(ii), (iii), (iv) and (v)
of the Credit Agreement to the extent, and only to the extent, that
Borrowers deliver to Administrative Agent and Lenders the audited
financial statements for the Fiscal Year ended December 31, 1999 required
by subsection 5.1(ii), together with the Officers' Certificate and
Compliance Certificate required by subsection 5.1(iii) and the
accountants' certification
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required by subsection 5.1(v) by no later than April 17, 2000 and
any reconciliation statements required to be delivered by subsection
5.1(iv) by no later than April 24, 2000;
(b) with the provisions of subsection 5.1(viii) of the Credit
Agreement to the extent, and only to the extent, Borrowers did not deliver
to Administrative Agent and Lenders the Officers' Certificate required
under subsection 5.1(viii) promptly upon obtaining knowledge of the Events
of Default or Potential Events of Default being waived in this Section 1;
(c) with the provisions of subsection 5.1(xii) of the Credit
Agreement to the extent, and only to the extent, Borrowers deliver to
Administrative Agent and Lenders the Financial Plan required under
subsection 5.1(xii) no later than May 15, 2000;
(d) with the provisions of the proviso following clause (c) of
subsection 6.5(iii) of the Credit Agreement to the extent, and only to the
extent, the aggregate amount of Cash payments made pursuant to clauses (b)
and (c) of subsection 6.5(iii) do not exceed $200,000 in any Fiscal Year;
(e) with the provisions of subsection 6.6(A)(ii) of the Credit
Agreement to the extent, and only to the extent, Consolidated Quarterly
Adjusted Revenue for the Fiscal Quarter ended December 31, 1999 was
$51,014,000 rather than the minimum of $55,000,000 required by subsection
6.6(A)(ii);
(f) with the provisions of subsection 6.6(A)(iii) of the Credit
Agreement to the extent, and only to the extent, Consolidated Adjusted
EBITDA for the Fiscal Quarter ended December 31, 1999 was a minimum of
$(33,664,000) rather than the minimum of $(11,500,000) required by
subsection 6.6(A)(iii); and
(g) with the provisions of subsections 6.6(A)(ii) and 6.6(A)(iii) of
the Credit Agreement to the extent, and only to the extent, Consolidated
Quarterly Adjusted Revenue and Consolidated Adjusted EBITDA for the Fiscal
Quarter ended September 30, 1999 were less than the minimum amounts
required by such subsections.
SECTION 2. LIMITATION OF WAIVER
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 5.1(ii), (iii), (iv), (v), (viii) and (xii), 6.5(iii),
6.6(A)(ii) and 6.6(A)(iii) of the Credit Agreement in the manner and to the
extent described above, and nothing in this Waiver shall be deemed to:
(a) constitute a waiver of compliance by Company with respect to (i)
subsections 5.1(ii), (iii), (iv), (v), (viii) and (xii), 6.5(iii),
6.6(A)(ii) and 6.6(A)(iii) 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
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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 3. ADDITIONAL AGREEMENTS OF BORROWERS
In consideration of Lenders entering into this Waiver, Borrowers
hereby agree as follows:
A. LIMITATION ON ADDITIONAL LOANS. Notwithstanding anything in the
Credit Agreement to the contrary, no additional Loans shall be made to
Borrowers under the Credit Agreement unless the making of such Loans is
consented to in writing by Requisite Lenders.
B. LIMITATION ON CASH CAPITAL EXPENDITURES. Notwithstanding anything
in the Credit Agreement to the contrary, Company and its Restricted
Subsidiaries shall not be permitted to make or incur Consolidated Cash
Capital Expenditures in excess of $20,000,000 in the aggregate since the
Closing Date, except (i) within existing markets of Company and its
Restricted Subsidiaries as of the Closing Date or (ii) by ACSI Network
Technologies, Inc. to design and build networks for third parties in the
ordinary course of its business.
C. CONSULTANT. Borrowers further agree and acknowledge that Lenders
intend to engage, at the expense of Borrowers, The Management Network
Group, Inc. ("TMNG") to provide consulting and due diligence services to
the Lenders. Borrowers hereby agree (i) to cooperate with TMNG and provide
TMNG with all information reasonably requested by TMNG, (ii) to waive the
confidentiality provisions of any prior engagement letters or
confidentiality agreements entered into by TMNG and Borrowers with respect
to disclosure of information and reports to Agents and Lenders, (iii) to
waive any conflicts of interest arising as a result of TMNG previously
providing consulting services to Borrowers, (iv) to pay, concurrently with
the execution of this Waiver, all fees and expenses of TMNG incurred to
date in the amount of $81,369.61 and to deliver to Arranger an expense
deposit of $75,000 to cover the initial future expenses of TMNG.
D. EXPENSES. Borrowers acknowledge that all costs, fees and expenses
as described in subsection 9.2 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 execution and delivery of this Waiver
pay all accrued and unpaid legal fees of counsel to Arranger and all fees
and expenses estimated to be incurred in connection with amending the UCC
financing statements filed by Administrative Agent and the filing of new
UCC financing statements, in each case necessitated by Borrowers'
relocation of their principal executive offices from Maryland to Virginia.
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E. DELIVERY OF EXECUTED AMENDMENTS TO UCC FINANCING STATEMENTS.
Concurrently with the execution and delivery of this Waiver, Loan Parties
shall deliver executed copies of all amendments to UCC financing
statements previously delivered to Loan Parties for execution by counsel
to Lenders.
F. WAIVER FEE. Administrative Agent shall have received from or on
behalf of Borrowers, for distribution to each Lender who has executed and
delivered this Waiver to Administrative Agent on or prior to 5:00 p.m.
(New York time) on April 13, 2000, a waiver fee equal to 0.25% of the
aggregate amount of the Loans and Commitments outstanding, to be
distributed to each such Lender in proportion to such Lender's Pro Rata
Share of the Commitments.
Failure of Borrowers to comply with any of the agreements set forth
in this Section 3 shall constitute an Event of Default under the Credit
Agreement.
SECTION 4. 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 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
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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, 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 to be performed on its part as set
forth in the Credit Agreement.
SECTION 5. 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 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 6. AGREEMENT OF LENDERS
Lenders hereby agree that in the event the Borrowers fail 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 Quarter ended March
31, 2000, Lenders shall forebear exercising any remedies under the Loan
Documents as a result of the Events of Default caused thereby until June 15,
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
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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 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. COUNTERPARTS; EFFECTIVENESS. This Waiver 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 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, (ii) receipt by Administrative Agent of the waiver fee
referenced in Section 3E hereof, and (iii) the performance by Borrowers of each
agreement set forth in Section 3 hereof to be performed concurrently with the
execution and delivery of this Waiver.
[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:
--------------------------
e.spire FINANCE CORPORATION
By:
---------------------------------
Title:
--------------------------
LENDERS:
GOLDMAN SACHS CREDIT PARTNERS L.P.,
individually, as Arranger and as
Syndication Agent
By:
---------------------------------
Title:
--------------------------
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:
--------------------------------
Title:
-----------------------------
NEWCOURT COMMERCIAL FINANCE
CORPORATION, individually and as
Collateral Agent
By:
--------------------------------
Title:
-----------------------------
BANKERS LIFE AND CASUALTY COMPANY
By:
--------------------------------
Title:
-----------------------------
CONSECO ANNUITY ASSURANCE COMPANY
By:
--------------------------------
Title:
-----------------------------
DEUTSCHE BANK AG NEW YORK BRANCH
By:
--------------------------------
Title:
-----------------------------
By:
--------------------------------
Title:
-----------------------------
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FOOTHILL CAPITAL CORPORATION
By:
--------------------------------
Title:
--------------------------
FRANKLIN FLOATING RATE TRUST
By:
--------------------------------
Title:
--------------------------
MERRILL LYNCH GLOBAL INVESTMENT SERIES
INCOME STRATEGIES PORTFOLIO
By:
--------------------------------
Title:
--------------------------
MERRILL LYNCH SENIOR FLOATING RATE FUND
INC.
By:
--------------------------------
Title:
--------------------------
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SUBSIDIARY GUARANTORS:
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
JACKSON, 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
MONTGOMERY, 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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