Exhibit 10.16.2
GENERAL REAFFIRMATION AND MODIFICATION AGREEMENT
This General Reaffirmation and Modification Agreement ("Agreement") is
made as of the 4th day of August, 2000 among PAETEC CORP., a Delaware
corporation ("PaeTec"), PAETEC COMMUNICATIONS, INC., a Delaware corporation
("PaeTec Communications"), PAETEC INTERNATIONAL, INC., a Delaware corporation
("International"), PAETEC ONLINE, INC., a Delaware corporation ("PaeTec
Online"), PAETEC COMMUNICATIONS OF VIRGINIA, INC., a Virginia corporation
("PaeTec Virginia"), PAETEC CAPITAL CORP., a Delaware corporation ("PaeTec
Capital"), PINNACLE SOFTWARE CORPORATION, a New York corporation ("Pinnacle"),
DATA VOICE NETWORKS, INC., a Delaware corporation ("DVN"), EAST FLORIDA
COMMUNICATIONS, INC., a Florida corporation ("Florida"; PaeTec, PaeTec
Communications, PaeTec International, PaeTec Online, PaeTec Virginia, PaeTec
Capital, Pinnacle, DVN and Florida being hereinafter collectively referred to
hereinafter as the "Loan Parties" ), Canadian Imperial Bank of Commerce, as
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"Administrative Agent" for the "Lenders" from time to time parties to that
certain Second Amended and Restated Loan and Security Agreement dated as of
August 4, 2000, and CIT Lending Services Corporation ("CIT LSC"), as "Collateral
Agent" for said Lenders (the "Amended Loan Agreement"), which Amended Loan
Agreement amends and restates that certain Amended and Restated Loan and
Security Agreement dated as of October 29, 1999 among PaeTec Communications,
International, PaeTec Online, PaeTec Virginia, PaeTec Capital, Florida, the
Lenders, the Administrative Agent and the Collateral Agent (the "Original Loan
Agreement"). Undefined capitalized terms which are used herein shall have the
meanings ascribed to such terms in the Amended Loan Agreement.
I. Reaffirmation of Loan Documents. In connection with the execution and
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delivery of the Amended Loan Agreement, each of the Loan Parties other than
Pinnacle and DVN, as debtors, grantors, pledgors, guarantors, or in other
similar capacities in which such Loan Parties grant liens or security
interests in their properties, in each case under the Loan Documents
heretofore executed and delivered in connection with or pursuant to the Loan
Agreement, including, without limitation, the Loan Documents described in
Schedule A hereto (as such Loan Documents may have been heretofore amended
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or modified), hereby each (a) ratifies and reaffirms all of its payment and
performance obligations, contingent or otherwise, under each of such Loan
Documents to which it is a party, (b) to the extent such Loan Party granted
liens on or security interests in any of its properties pursuant to any such
Loan Documents, hereby ratifies and reaffirms such grant of security and
confirms that such liens and security interests continue to secure the
Obligations, including, without limitation, all additional Obligations
resulting from or incurred pursuant to the Amended Loan Agreement and (c) to
the extent such Loan Party guaranteed the Obligations or any portion
thereof, hereby ratifies and reaffirms such guaranties.
II. Modification of Loan Documents.
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A. General. Each Loan Party further agrees that all references in the Loan
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Documents being reaffirmed pursuant to Section 1 of this Agreement to
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the Original Loan Agreement (including, without limitation, references
to definitions of capitalized terms contained in the Original Loan
Agreement) shall hereafter
mean and refer to the Original Loan Agreement as amended and restated by
the Amended Loan Agreement. All references in such Loan Documents to the
term "Obligations" shall hereafter mean and refer to the Obligations as
redefined in the Amended Loan Agreement and shall include all additional
Obligations resulting from or incurred pursuant to the Amended Loan
Agreement. Each Loan Party further agrees that (i) all references in the
Loan Documents to AT&T Commercial Finance Corporation or Newcourt
Commercial Finance Corporation shall hereafter mean and refer to CIT LSC
and (ii) that any references in the Loan Documents described in Schedule
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A to AT&T Commercial Finance Corporation or Newcourt Commercial Finance
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Corporation in its capacity as "Agent" shall hereafter mean and refer to
CIT LSC in its capacity as Collateral Agent.
B. Amendment of the Guaranty.
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1. The Guaranty is hereby amended to include Pinnacle and DVN as
Borrowers, the Obligations of which are guaranteed by the Guarantor.
2. Section 7(ii)(b)(3) of the Guaranty is hereby amended to delete the
amount "$100,000,000" in the fourth line thereof and to substitute
therefor the amount "$175,000,000 plus an amount equal to the net
cash proceeds of equity raised by the Guarantor after August 4, 2000
but not to exceed $75,000,000" and to add the following clause at
the end of such section: "; and provided, further, that the net
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proceeds of all such unsecured Debt shall be contributed as cash
equity to the Borrowers promptly after receipt thereof".
3. Section 7(ii)(b) of the Guaranty is hereby amended to add the
following clause (5) thereto: " (5) contingent obligations of the
Guarantor to pay true up adjustments to the former shareholders of
Pinnacle pursuant to Section 11.7 of that certain Agreement and Plan
of Merger by and among the Guarantor, PaeTec-PSC Acquisition Corp.,
Pinnacle and the principal shareholders of Pinnacle dated March 21,
2000 and to Data Voice Networks, Inc., a Pennsylvania corporation,
pursuant to Section 11.5 of that certain Asset Purchase Agreement
dated as of March 22, 2000 among PaeTec DVN Acquisition, Inc., Data
Voice Networks, Inc., a Pennsylvania corporation, Xxxxxxx Xxxxxxxx,
Xxxxx Xxxxx and Xxxxxx Xxxxxx."
4. Section 7(ii)(c)(3) of the Guaranty is hereby amended to add the
following clause: "and shall be generating positive EBITDA.
5. Section 7(ii)(c)(7) of the Guaranty is hereby amended to delete the
words "cash portion of the" in the first line thereof, to delete the
amount "$2,500,000" in clause (A) thereof and to substitute therefor
the amount "$7,500,000", and to amend and restate clause (B) thereof
in its entirety to read as follows: "(B) for all such transactions,
$60,000,000, which shall be applied from the following sources only:
subject to compliance with
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the terms and conditions of the Loan Agreement, $30,000,000 of the
Commitment Amount as provided in Section 2.02(a) thereof, cash
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equity received by the Guarantor after the Closing Date, Equity
Interests in the Guarantor given as consideration for payment of all
or a portion of the acquisition price (subject to compliance with
applicable anti-dilution provisions) and unsecured Debt of the
Guarantor not to exceed a principal amount of $10,000,000".
III. Governing Law. This Agreement shall be construed and enforced and the
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rights and duties of the parties shall be in all respects governed by and
in accordance with the internal laws and decisions (as opposed to the
conflict of laws provisions) of the State of New York.
IV. Headings. Section headings in this Agreement are included herein for
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convenience of reference only and shall not constitute part of this
Agreement.
V. Counterparts. This Agreement may be executed by one or more of the parties
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hereto on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same agreement.
* * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first above written.
PAETEC CORP.
PAETEC COMMUNICATIONS, INC.
PAETEC INTERNATIONAL, INC.
PAETEC ONLINE, INC.
PAETEC COMMUNICATIONS OF
VIRGINIA, INC.
PAETEC CAPITAL CORP.
PINNACLE SOFTWARE CORPORATION
DATA VOICE NETWORKS, INC
EAST FLORIDA COMMUNICATIONS, INC.
In each case:
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, Finance
GENERAL REAFFIRMATION AND MODIFICATION
AGREEMENT SIGNATURE PAGE
Agreed and Accepted as of
this 4th day of August, 2000:
CIT LENDING SERVICES CORPORATION,
as Collateral Agent
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President
GENERAL REAFFIRMATION AND MODIFICATION
AGREEMENT SIGNATURE PAGE
SCHEDULE A
TO
GENERAL REAFFIRMATION AND MODIFICATION AGREEMENT
Dated as of August 4, 2000
Capitalized terms which are used herein and not otherwise defined in the
foregoing Agreement shall have the meanings ascribed to such terms in the
"Amended Loan Agreement" (defined above).
1. Collateral Assignments of Leases by the Borrowers in favor of the
Collateral Agent;
2. Collateral Assignments of Licenses by the Borrowers in favor of the
Collateral Agent;
3. Trademark Security Agreement executed by PaeTec Online in favor of
the Collateral Agent;
4. Trademark Security Agreement executed by PaeTec Communications in
favor of the Collateral Agent;
5. Trademark Security Agreement executed by Campuslink Communications,
Inc. (now merged into PaeTec Communications) in favor of the
Collateral Agent;
6. Pledge Agreement and Supplements hereto executed by PaeTec in favor
of the Collateral Agent, for the benefit of the Lenders, with
respect to 100% of the outstanding capital stock of each Borrower
other than Florida (together with stock certificates and stock
powers);
7. Restricted Account Agreements among PaeTec Communications, the
Collateral Agent and First National Bank, PaeTec Communications, the
Collateral Agent and Bank One, N.A., and East Florida
Communications, Inc., the Collateral Agent and Coquina Bank.
8. Amended and Restated Guaranty executed by PaeTec Corp. in favor of
the Collateral Agent with respect to the Obligations of the
Borrowers.
