<PAGE>   1
                                                                   EXHIBIT 10.59

                              ASSIGNMENT AGREEMENT

                This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by
and between the parties designated as Assignors ("ASSIGNORS") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, supplemented or otherwise modified
to the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).

                IN CONSIDERATION of the agreements, provisions and covenants
herein contained, the parties hereto hereby agree as follows:

SECTION 1. ASSIGNMENT AND ASSUMPTION.

                (a)     Effective upon the Settlement Date specified in Item 4
of the Schedule of Terms (the "SETTLEMENT DATE"), Assignors hereby sell and
assign to Assignee, without recourse, representation or warranty (except as
expressly set forth herein), and Assignee hereby purchases and assumes from
Assignors, (i) the principal amount of each Assignor's Series B Term Loans,
Series C Term Loans and Series A Revolving Loans set forth on Schedule I to the
Schedule of Terms which in the aggregate represents, as of the Settlement Date,
the percentage interest specified in Item 3 of the Schedule of Terms of all
rights and obligations of Lenders arising under the Credit Agreement and the
other Loan Documents with respect to the outstanding Loans (subject to the
restrictions on voting contained in subsection 9.6 of the Credit Agreement) (the
"ASSIGNED SHARE").

                (b)     In consideration of the assignment described above,
Assignee hereby agrees to pay to Administrative Agent, on behalf of and for
distribution to Assignors, on the Settlement Date, the aggregate principal
amount of the Loans set forth on Schedule I and included within the Assigned
Share, such payment to be made by wire transfer of immediately available funds
in accordance with the applicable payment instructions set forth in Item 5 of
the Schedule of Terms.

                (c)     Assignors hereby represent and warrant that Schedule I
to and Item 3 of the Schedule of Terms correctly sets forth the amount of the
outstanding Loans and the Pro Rata Share corresponding to the Assigned Share.

                (d)     Assignors and Assignee hereby agree that, upon giving
effect to the assignment and assumption described above, (i) Assignee shall be a
party to the Credit Agreement and shall have all of the rights and obligations
under the Loan Documents (subject to the restrictions on voting contained in
subsection 9.6 of the Credit Agreement), and shall be deemed to have made all of
the covenants and agreements contained in the Loan Documents, arising out of or
otherwise related to the Assigned Share, and (ii) Assignors shall be absolutely
released from any of such obligations, covenants and agreements assumed or made
by Assignee in respect of the Assigned Share. Assignee hereby acknowledges and
agrees that the agreement


<PAGE>   2


set forth in this Section 1(d) is expressly made for the benefit of Borrowers,
Administrative Agent, Assignors and the other Lenders and their respective
successors and permitted assigns.

                (e)     Assignors and Assignee hereby acknowledge and confirm
their understanding and intent that (i) this Agreement shall effect the
assignment by Assignors and the assumption by Assignee of Assignors' rights and
obligations with respect to the Assigned Share (subject to the restrictions on
voting contained in subsection 9.6 of the Credit Agreement), (ii) any other
assignments by Assignors of a portion of theirs rights and obligations with
respect to any outstanding Loans shall have no effect on the outstanding Loans
and the Pro Rata Share corresponding to the Assigned Share as set forth in Item
3 of the Schedule of Terms or on the interest of Assignee in any outstanding
Loans corresponding thereto, and (iii) from and after the Settlement Date,
Administrative Agent shall make all payments under the Credit Agreement in
respect of the Assigned Share (including all payments of principal and accrued
but unpaid interest with respect thereto) (1) in the case of any such interest
that shall have accrued prior to the Settlement Date, to Assignors, and (2) in
all other cases, to Assignee; provided that Assignors and Assignee shall make
payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignors and/or Assignee
by Administrative Agent under the Loan Documents in respect of the Assigned
Share in the event that, for any reason whatsoever, the payment of consideration
contemplated by Section 1(b) occurs on a date other than the Settlement Date.

SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

                (a)     Each Assignor severally represents and warrants that it
is the owner of the Loans included in the Assigned Share set forth opposite its
name on Schedule I, free and clear of any Lien created by Assignor or any
adverse claim.

                (b)     Assignors shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability, collectibility
or sufficiency of any of the Loan Documents or for any representations,
warranties, recitals or statements made therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Assignors to Assignee
or by or on behalf of Borrowers or any of their Subsidiaries to Assignors or
Assignee in connection with the Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of the Loan Parties
or any other Person liable for the payment of any Obligations, nor shall
Assignors be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or as to the existence or possible existence of any Event of Default or
Potential Event of Default.

                (c)     Assignee represents and warrants that it has experience
and expertise in the making of or investing in loans such as the Loans; that it
has acquired the Assigned Share for its own account in the ordinary course of
its business and without a view to distribution of the Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of subsection 9.1 of the Credit
Agreement, the disposition of the Assigned Share or any interests therein shall
at all times


                                       2
<PAGE>   3


remain within its exclusive control); and that it has received, reviewed and
approved a copy of the Credit Agreement (including all Exhibits and Schedules
thereto).

                (d)     Assignee represents and warrants that it has received
such financial information regarding Borrowers and their Subsidiaries as
Assignee has requested or has deemed necessary, that it has made its own
independent investigation of the financial condition and affairs of Borrowers
and their Subsidiaries in connection with the assignment evidenced by this
Agreement, and that it has made and shall continue to make its own appraisal of
the creditworthiness of Borrowers and their Subsidiaries. Assignors shall have
no duty or responsibility, either initially or on a continuing basis, to make
any such investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any other credit or other information with respect thereto,
whether coming into its possession before the making of the initial Loans or at
any time or times thereafter, and Assignors shall not have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Assignee.

                (e)     Each party to this Agreement severally represents and
warrants to the other parties hereto that it has full power and authority to
enter into this Agreement and to perform its obligations hereunder in accordance
with the provisions hereof, that this Agreement has been duly authorized,
executed and delivered by such party and that this Agreement constitutes a
legal, valid and binding obligation of such party, enforceable against such
party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity.

                (f)     Assignee acknowledges and agrees that as set forth in
subsection 9.6 of the Credit Agreement, neither Assignee nor any Affiliate of
Assignee as holder of any Loans included in the Assigned Share purchased by
Assignee pursuant to this Agreement shall have any voting rights under the
Credit Agreement or other Loan Documents or in respect of the Loans included in
the Assigned Share (including in any bankruptcy proceedings).

SECTION 3. MISCELLANEOUS.

                (a)     Each of the Assignors and Assignee hereby agrees from
time to time, upon request of the other such party hereto, to take such
additional actions and to execute and deliver such additional documents and
instruments as such other party may reasonably request to effect the
transactions contemplated by, and to carry out the intent of, this Agreement.

                (b)     Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the party (including, if applicable, any party required to evidence
its consent to or acceptance of this Agreement) against whom enforcement of such
change, waiver, discharge or termination is sought.

                (c)     Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given shall be
in writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service, upon receipt


                                       3
<PAGE>   4


of telefacsimile or telex, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed. For the purposes
hereof, the notice address of each of the Assignors and Assignee shall be as set
forth on Schedule II to the Schedule of Terms or, as to either such party, such
other address as shall be designated by such party in a written notice delivered
to the other parties. In addition, the notice address of Assignee set forth on
the Schedule of Terms shall serve as the initial notice address of Assignee for
purposes of subsection 9.7 of the Credit Agreement.

                (d)     In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

                (e)     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 SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO INCONSISTENT CONFLICTS OF LAWS PRINCIPLES.

                (f)     This Agreement shall be binding upon, and shall inure to
the benefit of, the parties hereto and their respective successors and assigns.

                (g)     This Agreement may be executed in one or more
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.

                (h)     This Agreement shall become effective upon the date (the
"EFFECTIVE DATE") upon which all of the following conditions are satisfied: (i)
the execution of a counterpart hereof by each of the Assignors and Assignee;
(ii) the execution of a counterpart hereof by Administrative Agent as evidence
of its acceptance hereof in accordance with subsection 9.1B(ii) of the Credit
Agreement; (iii) the receipt by Administrative Agent of originals or
telefacsimiles of the counterparts described above and authorization of delivery
thereof; and (iv) the recordation by Administrative Agent in the Register of the
pertinent information regarding the assignment effected hereby in accordance
with subsection 9.1B(ii) of the Credit Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       4
<PAGE>   5


        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.





                                       5
<PAGE>   6


                                SCHEDULE OF TERMS

1.      BORROWERS: e.spire COMMUNICATIONS, INC. and e.spire FINANCE CORPORATION.

2.      NAME AND DATE OF CREDIT AGREEMENT: First Amended and Restated Credit
        Agreement, dated as of September 19, 2000 (as amended or otherwise
        modified through the date hereof), by and among e.spire Communications,
        Inc., e.spire Finance Corporation, the financial institutions listed
        therein as Lenders, Goldman Sachs Credit Partners L.P., as Sole Lead
        Arranger and Syndication Agent, First Union National Bank, as
        Documentation Agent, CIT Lending Services Corporation, as Collateral
        Agent, and The Bank of New York, as Administrative Agent.

3.      AMOUNTS:

<TABLE>
<CAPTION>
                                                        Re: Series A           Re: Series B            Re: Series C
                                                      Revolving Loans           Term Loans              Term Loans
                                                      ---------------           ----------              ----------
        <S>     <C>                                   <C>                      <C>                    <C>
        (a)     Aggregate Loans of all Lenders:        $35,000,000.00          $3,536,955.25          $98,203,209.75
        (b)     Assigned Share/Pro Rata Share:             0.00%                  100.00%                 21.14%
        (c)     Amount of Assigned Share                   $0.00               $3,536,955.25          $20,763,044.75
</TABLE>

4.      SETTLEMENT DATE: December 8, 2000

5.      PAYMENT INSTRUCTIONS:

<TABLE>
        <S>                                   <C>
        ASSIGNORS:                            ASSIGNEE:
        The Bank of New York                  The Bank of New York
        ABA 021000018                         DDA# 890-0259-868
        A/C 803-329-7689                      ABA# 021-000-018
        Special Financial Products            Attention: Jerry Faulstich, 212-635-4920
        Re: E.spire Communications            Reference: Bankers Life & Casualty Company,
                                                         A/C# 014814

6.      NOTICE ADDRESSES:

        ASSIGNORS: See Schedule II hereto.    ASSIGNEE:
                                              The Huff Alternative Income Fund, L.P.
                                              c/o WR Huff Asset Management
                                              1776 on the Green
                                              67 Park Place
                                              Morristown, New Jersey  07960
</TABLE>


                                       6
<PAGE>   7


7.         SIGNATURES:

ASSIGNEE:

THE HUFF ALTERNATIVE INCOME FUND, L.P., as Assignee


By: [SIG]
    ------------------------------
    Name:
    Title:

ASSIGNORS:

THE BANK OF NEW YORK                         CONSECO ANNUITY ASSURANCE COMPANY

By:                                          By:
   -------------------------------              --------------------------------
   Name:                                        Name:
   Title:                                       Title:

BANKERS LIFE AND CASUALTY COMPANY            DEUTSCHE BANK AG NEW YORK BRANCH

By:                                          By: /s/ COLLEEN ROUX
   -------------------------------              --------------------------------
   Name:                                        Name: Colleen Roux
   Title:                                       Title: Director

                                             By: /s/ KELVIN CHENG
                                                --------------------------------
                                                Name: Kelvin Cheng
                                                Title: Associate

CARGILL FINANCIAL SERVICES CORPORATION       FOOTHILL CAPITAL CORPORATION

By: /s/ KELLY SCHREURS                       By:
   -------------------------------              --------------------------------
   Name: Kelly Schreurs                         Name:
   Title: Controller                            Title:

CIT LENDING SERVICES CORPORATION             FRANKLIN FLOATING RATE TRUST

By: /s/ JOHN P. SIRICO, II                   By:
   -------------------------------              --------------------------------
   Name: Jogn P. Sirico, II                     Name:
   Title: Vice President                        Title:





                                       7
<PAGE>   8


MERRILL LYNCH GLOBAL                         MERRILL LYNCH SENIOR
INVESTMENT SERIES-INCOME                     FLOATING RATE FUND INC.
STRATEGIES PORTFOLIO

By: Merrill Lynch Investment Managers,       By: /s/ ANDREW C. LIGGIO
L.P., as Investment Advisor                     --------------------------------
                                                Name: ANDREW C. LIGGIO
                                                Title: AUTHORIZED SIGNATORY

By: /s/ ANDREW C. LIGGIO
   -------------------------------
   Name: ANDREW C. LIGGIO
   Title: AUTHORIZED SIGNATORY




Consented to and accepted in accordance
with subsections 9.1B(i) and (ii) of the
Credit Agreement:

THE BANK OF NEW YORK,
as Administrative Agent


By: /s/ GERRY GRANOVSKY
   -------------------------------
   Name: Gerry Granovsky
   Title: Vice President



                                       8