exv10w1



 






Exhibit 10.1




FIRST AMENDMENT

TO LOAN AND SECURITY AGREEMENT




     This First Amendment to Loan and Security Agreement (this “Amendment”) is dated as of November
30, 2005, but effective as of November 9, 2005, by and between COMERICA BANK (“Bank”) and PAC-WEST
TELECOMM, INC., PAC-WEST TELECOM OF VIRGINIA, INC., PWT SERVICES, INC., and PWT OF NEW YORK, INC.
(each a “Borrower” and collectively, “Borrowers”).



RECITALS




     Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of
November 9, 2005, as amended from time to time (the “Agreement”). Due to a drafting error,
Sections 6.7(a) and 6.7(d) of the Agreement failed accurately to set forth the specific terms of
the financial covenants addressed in those sections in a manner intended by the Borrowers and Bank
consistent with the term sheet approved by all of them. The parties therefore desire to amend the
Agreement in accordance with the terms of this Amendment.



     NOW, THEREFORE, the parties agree as follows:



     1. The Agreement hereby is amended effective as of November 9, 2005.



     2. Section 6.7(a) of the Agreement hereby is amended and restated in its entirety to read as
follows:



          "(a) Adjusted Quick Ratio. A ratio of Cash plus eighty percent (80%) of net trade
Accounts receivable net ninety (90) days from invoice date, excluding contra accounts, to Current
Liabilities plus (to the extent not already included therein) all Indebtedness to Bank less
Deferred Revenue of at least (i) .80 to 1.00 from the Closing Date through December 30, 2006; and
(ii) .90 to 1.00 thereafter; measured monthly.”




     3. Section 6.7(d) of the Agreement hereby is amended and restated in its entirety to read as
follows:



          "(d) Total Liabilities to Effective Tangible Net Worth. A ratio of Total Liabilities
less Subordinated Debt to Effective Tangible Net Worth of not more than 1.00 to 1.00, measured
monthly.”




     4. No course of dealing on the part of Bank or its officers, nor any failure or delay in the
exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial
exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure
at any time to require strict performance by a Borrower of any provision shall not affect any right
of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a
right must be in writing signed by an officer of Bank.



     5. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as
defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and
effect in accordance with its respective terms and hereby is ratified and confirmed in all
respects. Except as expressly set forth herein, the execution, delivery, and performance of this
Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof.



     6. Each Borrower represents and warrants that the Representations and Warranties contained in
the Agreement are true and correct as of the date of this Amendment, and that no Event of Default
has occurred and is continuing.



     7. As a condition to the effectiveness of this Amendment, Bank shall have received, in form
and substance satisfactory to Bank, the following:



               (a) this Amendment, duly executed by Borrowers;



               (b) all reasonable Bank Expenses incurred through the date of this Amendment, which may be
debited from any of a Borrower’s accounts; and



 









 





               (c) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.



     8. This Amendment may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one instrument.



 









 






     IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above
written.



	 	 	 	 	 
	 	PAC-WEST TELECOMM, INC.

 	 
	 	By:  	/s/ Ravi Brar
 	 
	 
	 	 	 	 	 	 
	 	Title:	  CFO	 
	 	 	 
	 	 	 
	 	PAC-WEST TELECOM OF VIRGINIA, INC.

 	 
	 	By:  	/s/ Ravi Brar
 	 
	 
	 	 	 	 	 	 
	 	Title:	  President	 
	 	 	 
	 	 	 
	 	PWT SERVICES, INC.

 	 
	 	By:  	/s/ Ravi Brar 	 
	 
	 	 	 	 	 	 
	 	Title:	  President	 
	 	 	 	 
	 	 	 	 
	 	PWT OF NEW YORK, INC.

 	 
	 	By:  	/s/ Ravi Brar 	 
	 
	 	 	 	 	 	 
	 	Title:	  President	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	COMERICA BANK

 	 
	 	By:  	/s/ Rod Werner	 
	 
	 	 	 	 	 	 
	 	Title:	  S.V.P.	 



[Signature Page to First Amendment to Loan & Security Agreement]