Pac-West Telecomm, Inc. Exhibit 10.80


    


    Exhibit
      10.80

    Confidential
      Treatment Requested by Pac-West Telecomm, Inc.

    


    
      	
              PAC-WEST
                TELECOMM, INC.

            	 	 
	
              October
                6, 2005

            	 	
              1776
                West March Lane,

              Suite
                250

              Stockton,
                CA 95207

            	 
	 
	 
	
              U.S.
                TelePacific Corp.

              515
                South Flower Street

              47th
                Floor

              Los
                Angeles, CA 90071

              Attention:
                President and Chief Executive Officer

            	 	
              Ravi
                Brar

            
	
               

            
	
               

            
	 


    

    


    
      	
              Re:

            	
              Accounts
                Receivable Reconciliation and TSA Open
                Items

            


    

    


    Dear
      Sir:

     

    Reference
      is hereby made to that certain (i) Asset Purchase Agreement, made as of
      December 17, 2004 (as amended, the “APA”),
      by
      and between U.S. TelePacific Corp., a California corporation (“Buyer”),
      and
      Pac-West Telecomm, Inc., a California corporation (“Seller”)
      and
      (ii) Transition Services Agreement, made as of December 17, 2004 (the
“TSA”),
      by
      and between Buyer and Seller. Unless otherwise provided herein, capitalized
      terms used herein without definition shall have the respective meanings assigned
      to such terms in the APA. The effective date of this letter agreement is
      September 30, 2005.

     

    This
      letter agreement is intended to set forth the agreements of the parties to
      resolve certain disputed matters arising out of the APA and to amend and modify
      the TSA in accordance with Section
      9.1
      thereof.

     

    1. Accounts
      Receivable Reconciliation.
      Buyer
      hereby agrees to pay to Seller, prior to the close of business on October 11,
      2005, an amount equal to One Million Two Hundred Thirty Six Thousand Eight
      Hundred Fifty Seven and 47/100 dollars ($1,236,857.47) (the “A/R
      Payment”),
      by
      wire transfer of immediately available funds to the account designated by
      Seller. Buyer and Seller agree that such payment shall constitute full
      performance by Buyer of its obligations under Section
      1.9
      of the
      APA and that, upon such payment being made, neither Buyer nor Seller shall
      have
      any further liabilities or obligations under Section
      1.9
      of the
      APA, or any further liabilities or obligations arising out of or relating to
      Accounts Receivable under any other term or provision of the APA or any document
      delivered in connection with the Closing thereof. 

     

    2. Mutual
      Release.
      Effective upon Seller’s receipt from Buyer of the A/R Payment and the Buyer Owed
      Amount, each of Buyer and Seller hereby releases and forever discharges the
      other and its respective officers, directors, affiliates, successors and assigns
      of and from any and all debts, demands, actions, causes of action, claims,
      suits, damages, costs, loss of services, expenses, and compensation of every
      kind and nature whatsoever, whether known or unknown, anticipated or
      unanticipated, in law or in equity, that Buyer or Seller (as the case may be)
      and/or any of its successors and assigns has, had or may have had (i) under
      Section
      1.9
      of the
      APA or (ii) under any other term or provision of the APA, or any document
      delivered in connection with the Closing thereof, with respect to Accounts
      Receivable.

     

    3. Seller
      Release.
      Effective upon Seller’s receipt from Buyer of the A/R Payment and the Buyer Owed
      Amount, Seller hereby releases and forever discharges Buyer and its officers,
      directors, affiliates, successors and assigns of and from any and all debts,
      demands, actions, causes of action, claims, suits, damages, costs, loss of
      services, expenses, and compensation of every kind and nature whatsoever,
      whether known or unknown, anticipated or unanticipated, in law or in equity,
      that Seller and/or any of its successors and assigns has, had or may have had
      with respect to any payment obligations or liabilities of Buyer under the TSA
      through and including August 31, 2005.

     

    4. TSA
      Amendment and Modification. Buyer
      and
      Seller hereby agree that, notwithstanding anything to the contrary in the
      TSA:

     

    (a) The
      Network Related Services Cap shall be eliminated, and Sections
      3.1(d)
      and
      3.1(e)
      of the
      TSA, and all references thereto, shall be deleted from the TSA and all Exhibits
      and Schedules thereto.

     

    (b) Seller
      shall furnish Buyer with a credit in an amount not to exceed one hundred
      sixty-six thousand six hundred sixty-seven dollars ($166,667) per invoice on
      the
      monthly invoice delivered in accordance with Section
      3.1(g)
      of the
      TSA in respect of Transition Services provided by Seller to Buyer for each
      of
      the calendar months of October, November and December of 2005.

     

    (c) Buyer
      shall pay all costs and expenses to the extent related to the DS-1 channels
      used
      or held for use in respect of Buyer’s business on any DS-3, and Seller shall pay
      all costs and expenses to the extent related to the DS-1 channels used or held
      for use in respect of Seller’s business on any DS-3.

    

      Confidential
        Information Redacted and Filed Separately with the Commission.


      Omitted
        Portions Indicated by [**].

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      Confidential
        Treatment Requested by Pac-West Telecomm, Inc.

    

     

          (d) Buyer
      and
      Seller shall allocate the costs and expenses relating to those DS-3 circuits
      in
      Seller’s network that are used or held for use for one or more of the respective
      customers of the businesses of each of Buyer and Seller and identified on
      Exhibit A (each, a “Shared
      DS-3”)
      as
      follows:

     

    (i)
       The
      quantity of unused DS-1 channels (“Unutilized
      DS-1s”)
      is
      defined as 28 less the aggregate number of DS-1 channels used by the business
      of
      Buyer, less the aggregate number of DS-1 channels used by the business of
      Seller, less the number of DS-1 channels used or held for use with respect
      to
“infrastructure” network services, including, but not limited to, FG-D and 911
      services.

     

    (ii)
       If
      each
      of Buyer and Seller has at least 1 DS-1 channel used by their respective
      businesses, Buyer and Seller shall each pay 50% of all costs and expenses
      related to Unutilized DS-1s (by
      way
      of example only: 
      if a Shared DS-3 had 10 out of 28 DS-1 channels in use, with Buyer using 8
      such
      DS-1 channels and Seller using 2 such DS-1 channels, Seller will invoice Buyer
      for, and Buyer would be responsible for paying, (A) 8/28ths of the costs and
      expenses relating to the Shared DS-3 for the DS-1 channels used by Buyer, plus
      (B) 9/18ths of costs and expenses relating to the Shared DS-3 representing
      50%
      of costs and expenses relating to the 18 Unutilized DS-1’s).

     

    (iii)
       If
      Buyer
      has at least 1 DS-1 channel used by its business and Seller has no DS-1 channels
      used by its business, Buyer shall pay 100% of all costs and expenses related
      to
      Unutilized DS-1s.

     

    (e) Notwithstanding
      anything in this letter agreement to the contrary, (i) “infrastructure” network
      services, including, but not limited to, FG-D and 911 services, shall continue
      to be allocated and billed pursuant to the TSA, and (ii) none of Seller’s
      termination liability, including early termination charges, termination
      liability adjustments and/or obligations with respect to minimum revenue
      commitments that may arise under any of Seller’s agreements, shall be the
      responsibility of Buyer, provided that this provision shall not modify the
      parties' obligations under Section 2.10 of the TSA or Section 1.3 of Exhibit
      3.1(d) of the TSA.

     

    (f) Using
      the
      allocation methodology set forth in Section
      3(c)
      above,
      Seller has re-calculated the allocation of the costs and expenses during the
      period from and including March 11, 2005 through August 31, 2005 (the
      “Shared
      Cost Period”)
      which
      relate to any and all DS-3 circuits that are presently Shared DS-3s, or that
      would have been Shared DS-3s at any time during the Shared Cost Period, which
      re-calculation results in Buyer being allocated a portion of such costs and
      expenses equal to Three Hundred Ninety Seven Thousand Six Hundred Eighty Six
      and
      60/100 dollars ($397,686.60) (the “Buyer
      Owed Amount”).
      Buyer
      shall pay the Buyer Owed Amount to Seller, prior to the close of business on
      October 11, 2005, by wire transfer of immediately available funds to the account
      designated by Seller. Upon such payment being made, Buyer shall have no further
      liability or obligation with respect to costs and expenses of Shared DS-3s
      in
      respect of the Shared Cost Period.

     

    (f) The
      TSA
      shall be deemed amended to the extent necessary (but only to the extent
      necessary) to effectuate the terms of this letter agreement. To the extent
      of
      any conflict between the TSA and this letter agreement, this letter agreement
      shall prevail.

     

    5. License
      Agreement.
      Buyer
      and Seller shall negotiate in good faith a perpetual, non-exclusive,
      royalty-free license for Buyer to use internally Seller's MSR software
      (including source code), which is the trouble ticketing system currently
      provided by Seller under the TSA. The license will include a knowledge qualified
      warranty that, except as may be disclosed in the license agreement, the licensed
      software does not infringe any intellectual property and that the Seller has
      not
      granted any exclusive rights to the software that would conflict with the
      license to be granted to Buyer. For purposes of this warranty, knowledge will
      mean the actual knowledge of specified individuals after reasonable inquiry
      of
      its employees. Any breaches of this warranty will be subject to a $25,000 cap.
      Except for the foregoing warranty, the software will be licensed "as is" with
      no
      warranties of any kind, and Seller will not provide any maintenance or support
      for the software. The license will not include any third-party software
      incorporated into or necessary for use of the software, and will not include
      any
      other systems with which the MSR software currently interacts (such as Seller's
      customer maintenance system). In connection with the license, Seller agrees
      to
      provide to Buyer one month of training and consulting time of one of Seller’s
      information technology employees or consultants in order to train and assist
      Buyer in understanding and implementing the MSR system. Buyer shall be required
      to provide Seller ninety (90) days written notice prior to Seller’s delivery of
      such services. Buyer shall be responsible for all reasonable travel expenses
      of
      such individual.

     

    6. Miscellaneous.
      Each of
      the APA and TSA, and their respective terms and conditions, and all exhibits
      thereto and agreements delivered thereunder, shall remain in full force and
      effect, except as otherwise expressly provided herein. This letter agreement
      may
      be amended, modified and supplemented only by a written instrument executed
      by
      the parties hereto. No waiver by either party of any of the provisions hereof
      shall be effective unless explicitly set forth in writing and executed by the
      party so waiving. Except as provided in the preceding sentence, no action taken
      pursuant to this letter agreement shall be deemed to constitute a waiver by
      the
      party taking such action of compliance with any agreements contained herein.
      The
      waiver by any party hereto of a breach of any provision of this letter agreement
      shall not operate or be construed as a waiver of any subsequent breach. All
      costs and expenses incurred in connection with this letter agreement and the
      consummation of the transactions contemplated hereby shall be paid by the party
      incurring such costs and expenses. This letter agreement may be executed in
      multiple counterparts, all of which shall together be considered one and the
      same agreement.

     

    [the
      remainder of this page is intentionally left blank]

    
       

      Confidential
        Information Redacted and Filed Separately with the Commission.


      Omitted
        Portions Indicated by [**].

    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      Confidential
        Treatment Requested by Pac-West Telecomm, Inc.

    

    


    If
      you
      are in agreement with the foregoing, please sign and date the enclosed copy
      of
      this letter agreement in the space indicated below and return it to
      me.

     

    Sincerely,

     

    /s/
      Ravi
      Brar

     

    Ravi
      Brar

     

    


     

    AGREED
      AND ACKNOWLEDGED

    this
      7th
      day of
      October 2005:

    


    U.S.
      TELEPACIFIC CORP.

    


    _/s/
      Richard A. Jalkut____________

    


    By:_Richard
      A. Jalkut____________

    


    Its:__CEO_____________________

    


    


    cc: General
      Counsel, U.S. TelePacific Corp.

    Bradford
      P. Weirick

     

    
      Confidential
        Information Redacted and Filed Separately with the Commission.


      Omitted
        Portions Indicated by [**].



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    
      Confidential
        Treatment Requested by Pac-West Telecomm, Inc.

       

    

    EXHIBIT
      A

    


    SHARED
      DS-3’S

    


    [**
      (All
      or part of 5 pages redacted)]

     

    
      Confidential
        Information Redacted and Filed Separately with the Commission.


      Omitted
        Portions Indicated by [**].