Document:

EXHIBIT 10.16.2

 Exhibit 10.16.2 
  
 AMENDMENT NO. 1 TO EQUITY PURCHASE AGREEMENT 
  
 THIS AMENDMENT NO. 1 TO EQUITY PURCHASE AGREEMENT (this “Amendment”), is made as of this 22nd day of
April 2005, by and among PaeTec Corp., a Delaware corporation (the “Company”); Madison Dearborn Capital Partners III L.P., a Delaware limited partnership, Madison Dearborn Special Equity III, a Delaware limited partnership, and Special
Advisors Fund I LLC, a Delaware limited liability company (collectively, “MDCP”); Blackstone CCC Capital Partners, L.P., a Delaware limited partnership, Blackstone CCC Offshore Capital Partners, L.P., a Cayman Islands limited
partnership, and Blackstone Family Investment Partnership III, L.P., a Delaware limited partnership (collectively, “Blackstone”); and Ares Leveraged Investment Fund L.P., a Delaware limited partnership, Ares Leveraged Investment
Fund L.P. II, a Delaware limited partnership, CIT Lending Services Corporation (f/k/a Newcourt Commercial Finance Corporation), a Delaware corporation, Caravelle Investment Fund, L.L.C., a Delaware limited liability company, UnionBanCal Equities,
Inc., a California corporation, and GE Capital Equity Investments, Inc., a Delaware corporation (MDCP, Blackstone and such other entities collectively referred to herein as the “Purchasers” and, individually, as a
“Purchaser”). 
  
 RECITALS

  
 WHEREAS, the Company wishes (i) to consummate a
recapitalization (the “Recapitalization”) pursuant to which, among other transactions, the Class A common stock, par value $0.01 per share, of the Company and the Class B common stock, par value $0.01 per share, of the Company will
be reclassified into a single class of common stock, par value $0.01 per share, of the Company (the “New Common Stock”) and (ii) immediately after the consummation of the Recapitalization, to offer, issue and sell shares of the New
Common Stock in an underwritten initial public offering (the “IPO”) registered under the Securities Act of 1933, as amended; and 
  
 WHEREAS, the Company and the Purchasers are parties to an Equity Purchase Agreement, dated as of February 4, 2000 (the “Agreement”), and
wish to amend such Agreement pursuant to the terms of this Amendment; 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows: 
  
 1. Effectiveness of Amendment. This
Amendment shall become effective with full force and effect as of the day and year first written above; provided that the provisions of Section 4 of this Amendment shall only become effective immediately following the consummation of a Qualified
Public Offering (as defined in the Agreement, as amended by Section 3 of this Amendment); and provided further that, if the Company shall not have entered into a definitive underwriting agreement with respect to a potential Qualified 

  

 
Public Offering on or before December 31, 2005, the provisions of Section 4 of this Amendment shall not become effective and shall have no force or effect.

  
 2. Amendment to Section 5C. Section 5C of the Agreement
is hereby amended by adding after “Section 2.1 of the Voting Agreement” in the first sentence of Section 5C the following: 
  
 “or any comparable provision of any voting agreement which replaces the Voting Agreement,” 
  
 3. Qualified Public Offering. The definition of “Qualified Public
Offering” set forth in Section 8 of the Agreement is hereby amended and replaced in its entirety to read as follows: 
  
 “Qualified Public Offering” shall mean a “Qualified Public Offering” as defined in the Company’s restated
certificate of incorporation, as amended from time to time. 
  
 4.
Termination of Provisions. The Company and the Purchasers hereby agree and acknowledge that, immediately following the consummation of a Qualified Public Offering (as defined in the Agreement, as amended by Section 3 of this Amendment), only
the provisions set forth in Sections 3A, 3B, 3C, 3D, 3K, 3T, 4A, 4C, 5A, 5B, 5C (as amended by Section 2 of this Amendment), 5F, 5G, 5J, 7, 8 and 9 of the Agreement, and any other provision (or portion thereof) of the Agreement to the extent, and
only to the extent, that the application of such provision (or portion thereof) is necessary to construe or interpret the foregoing enumerated surviving sections of the Agreement, shall remain in effect, and all other provisions of the Agreement
shall automatically terminate and be of no further force or effect. 
  
 5. Consent Concerning Public Disclosures. Each Purchaser hereby consents pursuant to Section 5I of the Agreement to the Company’s disclosure of such Purchaser’s name and identity as an investor in the Company (i) in any
press release or other public announcement relating to the IPO and (ii) in any document or material filed with any governmental entity in connection with the IPO, including, without limitation, a Registration Statement on Form S-1 and any
prospectus, pre-effective amendment, post-effective amendment or supplement to such registration statement or such prospectus. 
  
 6. Governing Law. The corporate law of the State of Delaware shall govern all issues and questions concerning the relative rights and
obligations of the Company and its stockholders. All other issues and questions concerning the construction, validity, enforcement and interpretation of this Amendment, shall be governed by, and construed in accordance with, the laws of the State of
New York, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New
York. In furtherance of the foregoing, the internal law of the State of New York shall control the interpretation and construction of this Amendment, 

  

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even though under that jurisdiction’s choice of law or conflict of law analysis, the substantive law of some other jurisdiction would ordinarily
apply. 
  
 7. Counterparts. This Amendment may be
executed in counterparts, all of which shall together constitute a single agreement. 
  
 8. Delivery by Facsimile and Electronic Mail. This Amendment, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or electronic mail, shall be treated in all manner and
respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such amendment, each
other party hereto or thereto shall reexecute original forms thereof and deliver them to all other parties. No party hereto or to any such amendment shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact
that any amendment was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense. 
  
 [signature pages follow] 
  

 3 

 IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment No. 1 to Equity
Purchase Agreement with full force and effect as of the day and year first written above. 
  

					
	THE CORPORATION:
		
	 	 	PAETEC CORP.
			
	 	 	By:	 	/s/    ARUNAS A.
CHESONIS        
	 	 	 Its:
	 	Chairman, Pres. & CEO
	
	MDCP:
		
	 	 	MADISON DEARBORN CAPITAL PARTNERS III, L.P.
			
	 	 	By:	 	Madison Dearborn Partners III, L.P.
	 	 	 Its:
	 	 General Partner

			
	 	 	By:	 	 Madison Dearborn Partners, LLC

	 	 	 Its:
	 	 General Partner

			
	 	 	By:	 	/s/
	 	 	 Its:
	 	Managing Director
		
	 	 	MADISON DEARBORN SPECIAL EQUITY III, L.P.
			
	 	 	By:	 	Madison Dearborn Partners III, L.P.
	 	 	 Its:
	 	 General Partner

			
	 	 	By:	 	 Madison Dearborn Partners, LLC

	 	 	 Its:
	 	 General Partner

			
	 	 	By:	 	/s/
	 	 	 Its:
	 	Managing Director
		
	 	 	SPECIAL ADVISORS FUND I, LLC
			
	 	 	By:	 	Madison Dearborn Partners III, L.P.
	 	 	 Its:
	 	 Manager

			
	 	 	By:	 	 Madison Dearborn Partners, LLC

	 	 	 Its:
	 	 General Partner

			
	 	 	By:	 	/s/
	 	 	 Its:
	 	Managing Director

  

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	BLACKSTONE GROUP STOCKHOLDERS:
		
	 	 	BLACKSTONE CCC CAPITAL PARTNERS L.P.
		
	 	 	 By: Blackstone Management Associates III
 L.L.C.

			
	 	 	By:	 	/s/    MICHAEL CHAE        
	 	 	 Name:
	 	Michael Chae
	 	 	 Title:
	 	Member
		
	 	 	BLACKSTONE CCC OFFSHORE CAPITAL PARTNERS L.P.
		
	 	 	 By: Blackstone Management Associates III
 L.L.C.

			
	 	 	By:	 	/s/    MICHAEL CHAE        
	 	 	 Name:
	 	Michael Chae
	 	 	 Title:
	 	Member
		
	 	 	BLACKSTONE FAMILY INVESTMENT PARTNERSHIP III L.P.
		
	 	 	 By: Blackstone Management Associates III
 L.L.C.

			
	 	 	By:	 	/s/    MICHAEL CHAE        
	 	 	 Name:
	 	Michael Chae
	 	 	 Title:
	 	Member

  

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	OTHER INVESTOR STOCKHOLDERS:
		
	 	 	CIT LENDING SERVICES CORPORATION
			
	 	 	 By:
	 	/s/    JOSEPH JUNDA        
	 	 	 Its:
	 	Vice President
		
	 	 	CARAVELLE INVESTMENT FUND, L.L.C.
	 	 	 By:
	 	 Trimuran Advisors, L.L.C.

	 	 	 Its:
	 	 Investment Manager and Attorney-in-Fact

			
	 	 	 By:
	 	/s/
	 	 	 Its:
	 	Managing Director
		
	 	 	UNIONBANCAL EQUITIES, INC.
			
	 	 	 By:
	 	/s/                        /s/
	 	 	 Its:
	 	Vice President        Sr. Vice President
		
	 	 	ARES LEVERAGED INVESTMENT FUND, L.P.
	 	 	 By:
	 	 ARES Management, L.P.

	 	 	 Its:
	 	 General Partner

			
	 	 	 By:
	 	/s/
	 	 	 Its:
	 	Vice President
		
	 	 	ARES LEVERAGED INVESTMENT FUND II, L.P.
	 	 	 By:
	 	 ARES Management II, L.P.

	 	 	 Its:
	 	 General Partner

			
	 	 	 By:
	 	/s/
	 	 	 Its:
	 	Vice President
		
	 	 	GE CAPITAL EQUITY INVESTMENTS, INC.
			
	 	 	 By:
	 	/s/    GREGORY J.
JANIA        
	 	 	 Its:
	 	Authorized Signatory
	 	 	 	 	Gregory J. Jania

  

 6EXHIBIT 10.17

 Exhibit 10.17 
  
 PAETEC CORP. 
  
 Description of Non-Employee Director Compensation 
  
 Under a policy in effect as of March 31, 2005, non-employee directors of PAETEC Corp. (the “Company”), other than directors designated for
nomination for election or for appointment to the board of directors by Madison Dearborn Partners or The Blackstone Group, receive cash and receive equity-based fees pursuant to the PAETEC Corp. Sixth Amended Stock Option and Incentive Plan (the
“Stock Incentive Plan”). Non-employee directors also are entitled to reimbursement for reasonable out-of-pocket expenses they incur to attend board and committee meetings. 
  
 The policy in effect as of March 31, 2005 is to pay each non-employee director, other than directors designated for
nomination for election or for appointment to the board of directors by Madison Dearborn Partners or The Blackstone Group, an annual fee for service on the board of directors of $25,000 in cash, which is payable in four equal quarterly installments
in arrears, and annual awards of options to purchase 10,000 shares of Class A common stock or, in the case of each director that serves as a chairman of any board committee, options to purchase 20,000 shares of Class A common stock. These annual
awards are made on each anniversary of the director’s initial election or appointment. Each of these non-employee directors also is entitled to receive options to purchase 75,000 shares of Class A common stock upon that director’s initial
election or appointment to the board of directors. 
  
 Annual
option awards typically vest with respect to all of the shares subject to such option on the first anniversary of the date of grant. Options awarded upon a non-employee director’s initial election or appointment to the board of directors
typically vest and become exercisable in four equal annual installments beginning on the first anniversary of the date of grant. Upon the termination of a director’s service, the director typically will have the right, at any time within a
specified period after the date of termination of service and prior to termination of the options, to exercise any options that are vested as of the service termination date. Options that are unvested as of the service termination date are not
exercisable. 
  
 In the event that the Class A common stock is
reclassified, the number of shares subject to options previously awarded, and the number of shares to which non-employee directors will be entitled in accordance with the foregoing policies, generally will be equitably and proportionately adjusted.

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