Document:

exv10w1

 

Confidential Treatment Requested by      Pac-West Telecomm, Inc.

Exhibit 10.1

 

PAC-WEST TELECOMM, INC.

PAC-WEST TELECOM OF VIRGINIA, INC.

PWT SERVICES, INC.

PWT OF NEW YORK, INC.

 

 

LOAN AND SECURITY AGREEMENT

 

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

     This LOAN AND SECURITY AGREEMENT is entered into 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 wishes to obtain credit from time to time from Bank, and Bank desires to extend
credit to Borrowers. This Agreement sets forth the terms on which Bank will advance credit to
Borrowers, and Borrowers will repay the amounts owing to Bank.

AGREEMENT

     The parties agree as follows:

     1. DEFINITIONS AND CONSTRUCTION.

          1.1 Definitions. As used in this Agreement, the following terms shall have the
following definitions:

               “Accounts” means all presently existing and hereafter arising accounts, contract rights,
payment intangibles, and all other forms of obligations owing to a Borrower arising out of the sale
or lease of goods (including, without limitation, the licensing of software and other technology)
or the rendering of services (including, without limitation, amounts owed to a Borrower pursuant to
intercarrier and interconnection arrangements) by a Borrower, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by a Borrower and each Borrower’s Books relating to any of the
foregoing.

               “Advance” or “Advances” means a cash advance or cash advances under the Revolving Line.

               “Affiliate” means, with respect to any Person, any Person that owns or controls directly or
indirectly such Person, any Person that controls or is controlled by or is under common control
with such Person, and each of such Person’s senior executive officers, directors, and partners.

               “Bank Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees
and expenses, whether generated in-house or by outside counsel) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses (whether generated
in-house or by outside counsel) incurred in amending, enforcing or defending the Loan Documents
(including fees and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

               “Borrower State” means (a) California, the state under whose laws Parent is organized and, if
Parent is converted, merged or consolidated into a Permitted Successor Corporation, Delaware, the
state under whose laws the Permitted Successor Corporation shall be organized; (b) Delaware, the
state under whose laws Borrowers PWT of New York, Inc. and PWT Services, Inc. are organized; and
(c) Virginia, the state under whose laws Pac-West Telecom of Virginia, Inc. is organized.

               “Borrower’s Books” means all of a Borrower’s books and records including: ledgers; records
concerning such Borrower’s assets or liabilities, the Collateral, business operations or financial
condition; and all computer programs, or tape files, and the equipment, containing such
information.

               “Borrowing Base” means an amount equal to eighty percent (80%) of Eligible Accounts, as
determined by Bank with reference to the most recent Borrowing Base Certificate delivered by
Parent.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

               “Business Day” means any day that is not a Saturday, Sunday, or other day on which banks in
the State of California are authorized or required to close.

               “Capital Expenditures” means current period cash expenditures that are amortized over a period
of time in accordance with GAAP.

               “Cash” means unrestricted cash and cash equivalents.

               “Change in Control” shall mean a transaction in which any “person” or “group” (within the
meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934), directly
or indirectly, of a sufficient number of shares of all classes of stock then outstanding of a
Borrower ordinarily entitled to vote in the election of directors, empowering such “person” or
“group” to elect a majority of the Board of Directors of such Borrower, who did not have such power
before such transaction.

               “Chief Executive Office State” means California, where Borrowers’ chief executive office is
located.

               “Closing Date” means the date of this Agreement.

               “Code” means the California Uniform Commercial Code, as amended or supplemented from time to
time.

               “Collateral” means the property described on Exhibit A attached hereto and all Negotiable
Collateral and Intellectual Property Collateral to the extent not described on Exhibit A; except to
the extent any such property (i) is nonassignable by its terms without the consent of the licensor
thereof or another party (but only to the extent such prohibition on transfer is enforceable under
applicable law, including, without limitation, Sections 9406 and 9408 of the Code), or (ii) the
granting of a security interest therein is contrary to applicable law, provided that upon the
cessation of any such restriction or prohibition, such property shall automatically become part of
the Collateral; provided that in no case shall the definition of “Collateral” exclude any Accounts,
proceeds of the disposition of any property, or general intangibles consisting of rights to
payment.

               “Collateral State” means the state or states where the Collateral currently is located, which
are Arizona, California, Nevada, Oregon, and Washington, and every other state or states where the
Collateral may be located in the future pursuant to Section 7.10.

               “Consolidated Net Income (or Deficit)” means the consolidated net income (or deficit) of any
Person and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges,
determined in accordance with GAAP, after eliminating therefrom all extraordinary nonrecurring
items of income.

               “Consolidated Total Interest Expense” means with respect to any Person for any period, the
aggregate amount of interest required to be paid or accrued by a Person and its Subsidiaries during
such period on all Indebtedness of such Person and its Subsidiaries outstanding during all or any
part of such period, whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of any capitalized lease or
any synthetic lease, and including commitment fees, agency fees, facility fees, balance deficiency
fees and similar fees or expenses in connection with the borrowing of money.

               “Contingent Obligation” means, as applied to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend,
letter of credit or other obligation of another, including, without limitation, any such obligation
directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any
obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services
issued for the account of that Person; and (iii) all obligations arising under any interest rate,
currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement,
or other agreement or arrangement designated to protect a Person against fluctuation in interest
rates, currency exchange rates or

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

commodity prices; provided, however, that the term “Contingent Obligation” shall not include
(a) any direct or indirect liability for obligations (including representations and warranties)
arising under contracts entered into in the ordinary course of a Borrower’s business, (b)
endorsements for collection or deposit in the ordinary course of business, or (c) obligations
arising under the TSA. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determined amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith; provided, however, that
such amount shall not in any event exceed the maximum amount of the obligations under the guarantee
or other support arrangement.

               “Copyrights” means any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative work thereof, whether
published or unpublished and whether or not the same also constitutes a trade secret, now or
hereafter existing, created, acquired or held.

               “Credit Extension” means each Advance, Term Loan, or any other extension of credit by Bank to
or for the benefit of Borrowers hereunder.

               “Current Liabilities” means, as of any applicable date, all amounts that should, in accordance
with GAAP, be included as current liabilities on the consolidated balance sheet of Borrowers and
their Subsidiaries, as at such date, but specifically excluding any cash-secured Obligations.

               “Debt Service Coverage Ratio” means, as of any date of determination, a ratio of (a) the
preceding three (3) months annualized EBITDA, to (b) the sum of (i) annualized interest expense,
(ii) the amount of principal repaid or scheduled to be repaid on term debt and capitalized leases,
(iii) non-financial Capital Expenditures, plus (iv) taxes.

               “Deferred Revenue” means all amounts received in advance of performance under contracts and
not yet recognized as revenue.

               “EBITDA” means with respect to any fiscal period an amount equal to the sum of (a)
Consolidated Net Income of the Borrowers and their Subsidiaries for such fiscal period, plus (b) in
each case to the extent deducted in the calculation of the Borrowers’ Consolidated Net Income and
without duplication, (i) depreciation and amortization for such period, plus (ii) income tax
expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such
period, plus (iv) non-cash expense associated with granting stock options, and minus, to the extent
added in computing Consolidated Net Income, and without duplication, all extraordinary and
non-recurring revenue and gains (including income tax benefits but specifically excluding from the
phrase “extraordinary and non-recurring revenue and gains” revenue and expense settlements with
Borrowers’ customers and other telecomm carrier(s), and expense reimbursements arising under the
TSA; each, occurring in the ordinary course of Borrowers business) for such period, all as
determined in accordance with GAAP.

               “Effective Tangible Net Worth” means at any date as of which the amount thereof shall be
determined, the sum of the shareholder’s equity, partnership interest or limited liability company
interest of Borrowers and their Subsidiaries minus goodwill and other intangible assets, plus
Subordinated Debt; all as determined in accordance with GAAP.

               “Eligible Accounts” means those net trade Accounts receivable that arise in the ordinary
course of Borrowers’ business that comply with all of Borrowers’ representations and warranties to
Bank set forth in Section 5.3; provided, that Bank may change the standards of eligibility
prospectively by giving Parent thirty (30) days prior written notice. Unless otherwise agreed to
by Bank, Eligible Accounts shall not include the following:

               (a) Accounts that the account debtor has failed to pay in full within ninety (90) days of
invoice date; and

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               (b) Accounts with respect to which a Borrower is liable to the account debtor for goods sold
or services rendered by the account debtor to such Borrower, but only to the extent of any amounts
owing to the account debtor against amounts owed to such Borrower.

               “Environmental Laws” means all laws, rules, regulations, orders and the like issued by any
federal state, local foreign or other governmental or quasi-governmental authority or any agency
pertaining to the environment or to any hazardous materials or wastes, toxic substances, flammable,
explosive or radioactive materials, asbestos or other similar materials.

               “Equipment” means all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which a Borrower has any interest.

               “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.

               “Event of Default” has the meaning assigned in Article 8.

               “GAAP” means generally accepted accounting principles, consistently applied, as in effect from
time to time.

               “Indebtedness” means (a) all indebtedness for borrowed money or the deferred purchase price of
property or services, including without limitation reimbursement and other obligations with respect
to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or
similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations.

               “Insolvency Proceeding” means any proceeding commenced by or against any Person or entity
under any provision of the United States Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking
reorganization, arrangement, or other relief.

               “Intellectual Property Collateral” means all of a Borrower’s right, title, and interest in and
to the following:

               (a) Copyrights, Trademarks and Patents;

               (b) Any and all trade secrets, and any and all intellectual property rights in computer
software and computer software products now or hereafter existing, created, acquired or held;

               (c) Any and all design rights which may be available to a Borrower now or hereafter existing,
created, acquired or held;

               (d) Any and all claims for damages by way of past, present and future infringement of any of
the rights included above, with the right, but not the obligation, to sue for and collect such
damages for said use or infringement of the intellectual property rights identified above;

               (e) All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all
license fees and royalties arising from such use to the extent permitted by such license or rights;

               (f) All amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents;
and

               (g) All proceeds and products of the foregoing, including without limitation all payments
under insurance or any indemnity or warranty payable in respect of any of the foregoing.

               “Inventory” means all present and future inventory in which a Borrower has any interest.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               “Investment” means any beneficial ownership of (including stock, partnership or limited
liability company interest other securities) any Person, or any loan, advance or capital
contribution to any Person.

               “IRC” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

               “Lien” means any mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

               “Loan Documents” means, collectively, this Agreement, any note or notes executed by Borrower,
and any other document, instrument or agreement entered into in connection with this Agreement, all
as amended or extended from time to time.

               “Material Adverse Effect” means a material adverse effect on (i) the business operations,
condition (financial or otherwise) or prospects of Borrowers and their Subsidiaries taken as a
whole, (ii) the ability of Borrowers to repay the Obligations or otherwise perform their
obligations under the Loan Documents, (iii) Borrowers’ interest in, or the value, perfection or
priority of Bank’s security interest in the Collateral.

               “Negotiable Collateral” means all of a Borrower’s present and future letters of credit of
which it is a beneficiary, drafts, instruments (including promissory notes), securities, documents
of title, and chattel paper, and such Borrower’s Books relating to any of the foregoing.

               “New Equity” means cash proceeds received after the Closing Date from the sale or issuance of
Parent’s equity securities.

               “Obligations” means all debt, principal, interest, Bank Expenses and other amounts owed to
Bank by a Borrower pursuant to this Agreement or any other agreement, whether absolute or
contingent, due or to become due, now existing or hereafter arising, including any interest that
accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or
obligation owing from a Borrower to others that Bank may have obtained by assignment or otherwise.

               “Parent” means Borrower PAC-WEST TELECOMM, INC., a California corporation.

               “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same.

               “Periodic Payments” means all installments or similar recurring payments that a Borrower may
now or hereafter become obligated to pay to Bank pursuant to the terms and provisions of any
instrument, or agreement now or hereafter in existence between a Borrower and Bank.

               “Permitted Indebtedness” means:

               (a) Indebtedness of Borrowers in favor of Bank arising under this Agreement or any other Loan
Document;

               (b) Indebtedness permitted under subsection (e) of the defined term “Permitted Investment;”

               (c) Indebtedness existing on the Closing Date and disclosed in the Schedule;

               (d) Indebtedness not to exceed Fifteen Million Dollars ($15,000,000) in the aggregate in any
fiscal year of Borrowers, secured by a lien described in clause (c) of the defined term “Permitted
Liens;” provided such Indebtedness does not exceed the lesser of the cost or fair market value of
the equipment financed with such Indebtedness;

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               (e) Subordinated Debt;

               (f) Indebtedness to trade creditors incurred in the ordinary course of business; and

               (g) Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided
that the principal amount is not increased or the terms modified to impose more burdensome terms
upon Borrowers or their Subsidiaries, as the case may be.

               “Permitted Investment” means:

               (a) Investments existing on the Closing Date disclosed in the Schedule;

               (b) (i) Marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency or any State thereof maturing within one (1) year from the date of
acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of
creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more
than one year from the date of investment therein, (iv) Bank’s money market accounts, and (v)
Corporate bonds, including Eurodollar issues of U.S. corporations, and U.S. denominated issues of
foreign corporations, with a rating of A2 or better by Moody’s Investor Services or a rating of A
or better by Standard and Poor’s Corporation, at the time of purchase;

               (c) Repurchases of stock from former employees or directors of Borrowers under the terms of
applicable repurchase agreements (i) in an aggregate amount not to exceed One Hundred Thousand
Dollars ($100,000) in any fiscal year, provided that no Event of Default has occurred, is
continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the
consideration for the repurchase is the cancellation of indebtedness owed by such former employees
to a Borrower regardless of whether an Event of Default exists;

               (d) Investments accepted in connection with Permitted Transfers;

               (e) Investments of one Borrower in or to other Borrowers;

               (f) Investments not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any
fiscal year consisting of (i) travel advances and employee relocation loans and other employee
loans and advances in the ordinary course of business, and (ii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrowers or their Subsidiaries pursuant
to employee stock purchase plan agreements approved by such Borrower’s Board of Directors;

               (g) Investments (including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent obligations of, and other
disputes with, customers or suppliers arising in the ordinary course of a Borrower’s business;

               (h) Investments consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business,
provided that this subparagraph (h) shall not apply to Investments of a Borrower in any Subsidiary;
and

               (i) Joint ventures or strategic alliances in the ordinary course of a Borrower’s business
consisting of the non-exclusive licensing of technology, the development of technology or the
providing of technical support, provided that any cash Investments by Borrowers do not exceed One
Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.

               “Permitted Liens” means the following:

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               (a) Any Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to
be satisfied with the proceeds of the Advances) or arising under this Agreement or the other Loan
Documents;

               (b) Liens for taxes, fees, assessments or other governmental charges or levies, either not
delinquent or being contested in good faith by appropriate proceedings and for which Borrowers
maintain adequate reserves, provided the same have no priority over any of Bank’s security
interests;

               (c) Liens not to exceed Fifteen Million Dollars ($15,000,000) in the aggregate (i) upon or in
any Equipment acquired or held by a Borrower or any of their Subsidiaries to secure the purchase
price of such Equipment or indebtedness incurred solely for the purpose of financing the
acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its
acquisition, provided that the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such Equipment;

               (d) Leases or subleases and licenses or sublicenses granted to others in the ordinary course
of Borrowers’ business not interfering in any material respect with the business of Borrowers and
their Subsidiaries taken as a whole;

               (e) Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (c) above, provided that
any extension, renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced
does not increase;

               (f) Liens arising from judgments, decrees or attachments in circumstances not constituting an
Event of Default under Sections 8.5 or 8.9;

               (g) Inchoate Liens arising in the ordinary course of Borrowers’ business and securing
obligations which are not delinquent; and

               (h) Liens in favor of other financial institutions arising in connection with Borrowers’
deposit accounts held at such institutions to secured standard fees for deposit services charged
by, but not financing made available by such institutions, provided that Bank has a perfected
security interest in the amounts held in such deposit accounts.

               “Permitted Successor Corporation” means any Delaware corporation into which Borrower is
converted, merged or consolidated (it being understood that Parent may create a Delaware
corporation into which Parent is merged, with such corporation surviving such merger and Parent
merging out of existence), so long as:

               (a) Parent shall request Bank’s prior written consent to such conversion, merger or
consolidation at least thirty (30) days prior thereto, which consent shall not be unreasonably
withheld or delayed;

               (b) Such surviving corporation shall be a corporation organized and existing under the laws of
the state of Delaware, shall expressly assume all of Parent’s Obligations and shall expressly
affirm all of Parent’s Representations and Warranties made herein, as if such surviving corporation
were the “Parent” for all purposes;

               (b) Parent shall cause such surviving corporation to authorize Bank to file, prior to the
effective date of any such conversion, merger or consolidation, such financing statements,
continuation statements, or amendments as Bank deems necessary or advisable to perfect and maintain
the perfection of Bank’s security interest in the Collateral;

               (c) Such conversion, merger or consolidation shall contemplate the transfer to the surviving
corporation of all of Parent’s right, title and interest in and to all of Parent’s assets, and
Parent and such surviving corporation shall provide evidence of such transfer satisfactory to Bank;

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               (d) No Event of Default exists before or would result after giving effect to such conversion,
merger or consolidation;

               (e) No Change of Control, and no change in executive management of Parent, has occurred as a
result of such conversion, merger or consolidation;

               (f) Immediately after giving effect to such conversion, merger or consolidation, Parent and
the surviving corporation shall have delivered to Bank a certificate signed by a Responsible
Officer of each stating that such conversion, merger or consolidation complies with the
requirements for a Permitted Successor Corporation and that all conditions precedent herein
provided for relating to such conversion, merger or consolidation have been satisfied; and

               (g) On or prior to the closing of any such conversion, merger or consolidation, such
conversion, merger or consolidation shall have been approved by the Board of Directors of Parent
and the surviving corporation.

               “Permitted Transfer” means the conveyance, sale, lease, transfer or disposition by Borrowers
or any Subsidiary of:

               (a) Inventory in the ordinary course of business;

               (b) (i) any assets of a Borrower to another Borrower; and (ii) all, but not less than all,
assets of Parent to a Permitted Successor Corporation (but only in connection with the conversion,
merger or consolidation of Parent into or with such Permitted Successor Corporation;

               (c) licenses and similar arrangements for the use of the property of Borrowers or their
Subsidiaries in the ordinary course of business;

               (d) worn-out or obsolete Equipment not financed with the proceeds of Advances; or

               (e) other assets of Borrowers or their Subsidiaries that do not in the aggregate exceed One
Hundred Thousand Dollars ($100,000) during any fiscal year.

               “Person” means any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation, institution, public
benefit corporation, firm, joint stock company, estate, entity or governmental agency.

               “Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank,
as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.

               “Regulatory Agency” means the Public Utilities Commission, or comparable state agency, in a
particular jurisdiction.

               “Regulatory Approval” means approval, where required, by the Regulatory Agencies, of the
states in which the Borrowers operate, for the incurrence of the Indebtedness evidenced by this
Agreement and/or the encumbrance of the Collateral, including but not limited to the respective
Regulatory Certificates.

               “Regulatory Certificates” means the “certificates of convenience” (or comparable approval
irrespective of its form) issued by the Regulatory Agencies, which permit the respective Borrowers
to operate their business in the respective jurisdictions.

               “Responsible Officer” means each of the Chief Executive Officer and the Chief Financial
Officer of Parent.

               “Revolving Line” means a Credit Extension of up to Five Million Dollars ($5,000,000).

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               “Revolving Maturity Date” means November 9, 2007.

               “Schedule” means the schedule of exceptions attached hereto and approved by Bank, if any.

               “Shares” means (i) sixty-six and two-thirds percent (66-2/3%) of the issued and outstanding
capital stock, membership units or other securities owned or held of record by any Borrower in any
Subsidiary of such Borrower which is not an entity organized under the laws of the United States or
any territory thereof, and (ii) one hundred percent (100%) of the issued and outstanding capital
stock, membership units or other securities owned or held of record by any Borrower in any
Subsidiary of such Borrower which is an entity organized under the laws of the United States or any
territory thereof.

               “SOS Reports” means the official reports from the Secretaries of State of each Collateral
State, Chief Executive Office State and the Borrower State and other applicable federal, state or
local government offices identifying all current security interests filed in the Collateral and
Liens of record as of the date of such report.

               “Subordinated Debt” means any debt incurred by a Borrower that is subordinated in writing to
the debt owing by Borrowers to Bank on terms reasonably acceptable to Bank (and identified as being
such by Borrowers and Bank), including but not limited to the Subordinated Notes.

               “Subordinated Notes” means those Series A and Series B Senior Notes issued by Parent in the
aggregate principal amount of Thirty Six Million One Hundred Two Thousand Dollars ($36,102,000)
bearing interest at the rate of thirteen and one half percent (13.50%), all due and payable
February 1, 2009.

               “Subsidiary” means any corporation, partnership or limited liability company or joint venture
in which (i) any general partnership interest or (ii) more than fifty percent (50%) of the stock,
limited liability company interest or joint venture of which by the terms thereof has the ordinary
voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of
which any determination is being made, is owned by a Borrower, either directly or through an
Affiliate.

               “Term Loan” has the meaning set forth in Section 2.1(c).

               “Term Loan Maturity Date” means December 31, 2008.

               “Total Liabilities” means at any date as of which the amount thereof shall be determined, all
obligations that should, in accordance with GAAP be classified as liabilities on the consolidated
balance sheet of Borrowers, including in any event, to the extent not already included, all
Indebtedness.

               “Trademarks” means any trademark and servicemark rights, whether registered or not,
applications to register and registrations of the same and like protections, and the entire
goodwill of the business of a Borrower connected with and symbolized by such trademarks.

               “Tranche A” has the meaning assigned in Section 2.1(c)(i).

               “Tranche A Availability End Date” means June 9, 2006.

               “Tranche A Term Loan” or “Tranche A Term Loans” means any Term Loan(s) made under Tranche A.

               “Tranche B” has the meaning assigned in Section 2.1(c)(i).

               “Tranche B Availability End Date” means January 9, 2007.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               “Tranche B Term Loan” or “Tranche B Term Loan” means any Term Loan (s) made under Tranche B.

               “TSA” means that certain Transition Services Agreement dated December 17, 2004, by and between
Parent and U.S. TelePacific Corp., a California corporation.

          1.2 Accounting Terms. Any accounting term not specifically defined herein shall be
construed in accordance with GAAP and all calculations shall be made in accordance with GAAP. The
term “financial statements” shall include the accompanying notes and schedules.

     2. LOAN AND TERMS OF PAYMENT.

          2.1 Credit Extensions.

               (a) Promise to Pay. Borrowers promise to pay to Bank, in lawful money of the United
States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to
Borrowers, together with interest on the unpaid principal amount of such Credit Extensions at rates
in accordance with the terms hereof.

               (b) Advances Under Revolving Line.

                    (i) Amount. Subject to and upon the terms and conditions of this Agreement, following
an audit of the Collateral, the results of which shall be satisfactory to Bank, (1) Parent may
request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving
Line or (B) the Borrowing Base, and (2) amounts borrowed pursuant to this Section 2.1(b) may be
repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances
under this Section 2.1(b) shall be immediately due and payable. Borrowers may prepay any Advances
without penalty or premium.

                    (ii) Form of Request. Whenever Parent desires an Advance, Parent will notify Bank by
facsimile transmission or telephone no later than 3:00 p.m. Pacific time (1:00 p.m. Pacific time
for wire transfers), on the Business Day that the Advance is to be made. Each such notification
shall be promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit B
hereto. Bank is authorized to make Advances under this Agreement, based upon instructions received
from a Responsible Officer, or without instructions if in Bank’s discretion such Advances are
necessary to meet Obligations which have become due and remain unpaid. Bank shall be entitled to
rely on any telephonic notice given by a person who Bank reasonably believes to be a Responsible
Officer, and Borrowers shall indemnify and hold Bank harmless for any damages or loss suffered by
Bank as a result of such reliance. Bank will credit the amount of Advances made under this Section
2.1(b) to Parent’s deposit account.

               (c) Term Loan.

                    (i) Subject to and upon the terms and conditions of this Agreement, Parent may request and
Bank shall make one (1) or more term loans (each, a “Term Loan” and collectively, the “Term Loans”)
in two (2) tranches, Tranche A and Tranche B, in an aggregate amount not to exceed Fifteen Million
Dollars ($15,000,000), which amount shall be used to finance Capital Expenditures and acquisitions
and/or to refinance a portion of the Subordinated Notes. Notwithstanding the foregoing, Term Loans
shall not exceed (A) one hundred percent (100%) of the invoice amount of equipment approved by Bank
from time to time, excluding software, taxes, shipping, warranty charges, freight discounts and
installation expense (collectively, “Soft Costs”); (B) Four Million Five Hundred Thousand Dollars
($4,500,000) toward the invoice amount (or other substantiated cost) of aggregate Soft Costs; in
the case of (A) and (B), above, which Borrowers shall, in any case, have purchased (or expended)
since June 1, 2005; (C) Five Million Dollars ($5,000,000) toward the repurchase of the Subordinated
Notes; and (D) Five Million Dollars ($5,000,000) in the aggregate at any time for strategic
acquisitions.

                    (ii) Interest shall accrue from the date the first Term Loan is made at the rate specified in
Section 2.3(a), and shall be payable in accordance with Section 2.3(c). Any Term Loans that are

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

outstanding under Tranche A on the Tranche A Availability End Date shall be payable in thirty
one (31) equal monthly installments of principal, plus all accrued interest, beginning on July 1,
2006, and continuing on the same day of each month thereafter until paid in full. Any Term Loans
that are outstanding under Tranche B on the Tranche B Availability End Date shall be payable in
twenty-four (24) equal monthly installments of principal, plus all accrued interest, commencing on
February 1, 2007, and continuing on the same day of each month thereafter through the Term Loan
Maturity Date, at which time all amounts owing under this Section 2.1(c) shall be immediately due
and payable. The Term Loans, once repaid, may not be reborrowed. Borrowers may prepay the Term
Loans without penalty or premium.

                    (iii) When Parent desires to obtain a Term Loan, Parent shall notify Bank (which notice shall
be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three
(3) Business Days before the day on which the Term Loan is to be made. Such notice shall be
substantially in the form of Exhibit B. The notice shall be signed by a Responsible Officer.

          2.2 Overadvances. If the aggregate amount of the outstanding Advances exceeds the
lesser of the Revolving Line or the Borrowing Base at any time, Borrowers shall immediately upon
notice pay to Bank, in cash, the amount of such excess.

          2.3 Interest Rates, Payments, and Calculations.

               (a) Interest Rates.

                    (i) Advances. Except as set forth in Section 2.3(b), the Advances shall bear
interest, on the outstanding daily balance thereof, as set forth in the Eurodollar Addendum to Loan
& Security Agreement attached as Annex I.

                    (ii) Term Loan. Except as set forth in Section 2.3(b), the Term Loan shall bear
interest, on the outstanding daily balance thereof, as set forth in the Eurodollar Addendum to Loan
& Security Agreement attached as Exhibit I.

               (b) Late Fee; Default Rate. If any payment is not made within ten (10) days after the
date such payment is due, Borrowers shall pay Bank a late fee equal to the lesser of (i) five
percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged
under applicable law. All Obligations shall bear interest, from and after the occurrence and
during the continuance of an Event of Default, at a rate equal to five (5) percentage points above
the interest rate applicable immediately prior to the occurrence of the Event of Default.

               (c) Payments. Interest hereunder shall be due and payable on the first calendar day
of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank
Expenses, and all Periodic Payments against any of a Borrower’s deposit accounts or against the
Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then
applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the
Obligations, and such interest shall thereafter accrue interest at the rate then applicable
hereunder.

               (d) Computation. In the event the Prime Rate is changed from time to time hereafter,
the applicable rate of interest hereunder shall be increased or decreased, effective as of the day
the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest
chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360)
day year for the actual number of days elapsed.

          2.4 Crediting Payments. Prior to the occurrence of an Event of Default, Bank shall
credit a wire transfer of funds, check or other item of payment to such deposit account or
Obligation as Parent specifies, except that to the extent a Borrower uses the Advances to purchase
Collateral, Borrowers’ repayment of the Advances shall apply on a “first-in-first-out” basis so
that the portion of the Advances used to purchase a particular item of Collateral shall be paid in
the chronological order such Borrower purchased the Collateral. After the

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

occurrence of an Event of Default, Bank shall have the right, in its sole discretion, to
immediately apply any wire transfer of funds, check, or other item of payment Bank may receive to
conditionally reduce Obligations, but such applications of funds shall not be considered a payment
on account unless such payment is of immediately available federal funds or unless and until such
check or other item of payment is honored when presented for payment. Notwithstanding anything to
the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon
Pacific time shall be deemed to have been received by Bank as of the opening of business on the
immediately following Business Day. Whenever any payment to Bank under the Loan Documents would
otherwise be due (except by reason of acceleration) on a date that is not a Business Day, such
payment shall instead be due on the next Business Day, and additional fees or interest, as the case
may be, shall accrue and be payable for the period of such extension.

          2.5 Fees. Borrowers shall pay to Bank the following:

               (a) Facility Fee. On the Closing Date and each anniversary thereof, a fee equal to
$25,000 on account of the Revolving Line; and, on the Closing Date, a fee equal to $75,000 on
account of the Term Loan (receipt of $50,000 of which hereby is acknowledged); each of which shall
be nonrefundable; and

               (b) Bank Expenses. On the Closing Date, all Bank Expenses incurred through the
Closing Date, and, after the Closing Date, all Bank Expenses as and when they become due.

          2.6 Term. This Agreement shall become effective on the Closing Date and, subject to
Section 13.7, shall continue in full force and effect for so long as any Obligations remain
outstanding or Bank has any obligation to make Credit Extensions under this Agreement.
Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit
Extensions under this Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default.

     3. CONDITIONS OF LOANS.

          3.1 Conditions Precedent to Initial Credit Extension. The obligation of Bank to make
the initial Credit Extension is subject to the condition precedent that Bank shall have received,
in form and substance satisfactory to Bank, the following:

               (a) this Agreement;

               (b) an officer’s certificate of each Borrower with respect to incumbency and resolutions
authorizing the execution and delivery of this Agreement;

               (c) UCC National Form Financing Statement for each Borrower;

               (d) an intellectual property security agreement from each Borrower;

               (e) current SOS Reports indicating that except for Permitted Liens, there are no other
security interests or Liens of record in the Collateral;

               (f) the certificate(s) for the Shares, together with Assignment(s) Separate from Certificate,
duly executed by in blank;

               (g) securities and/or deposit account control agreements with respect to any accounts
permitted hereunder to be maintained outside Bank;

               (h) approval from the Regulatory Agencies of each of the District of Columbia, New York and
Pennsylvania of the incurrence of the Indebtedness evidenced by this Agreement by the respective
Borrowers, and approval from the Regulatory Agency for New York of the encumbrance of the
Regulatory Certificate(s) issued any Borrower by such agency;

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

               (i) agreement to provide insurance;

               (j) payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;

               (k) current financial statements, including audited statements for Parent’s most recently
ended fiscal year, together with an unqualified opinion, company prepared consolidated and
consolidating balance sheets and income statements for the most recently ended month in accordance
with Section 6.2, and such other updated financial information as Bank may reasonably request;

               (l) current Compliance Certificate in accordance with Section 6.2;

               (m) appraisal of Borrowers’ unencumbered Equipment reflecting a forced sale value thereof of
at least Eight Million Dollars ($8,000,000); and

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

          3.2 Conditions Precedent to all Credit Extensions. The obligation of Bank to make
each Credit Extension, including the initial Credit Extension, is further subject to the following
conditions:

               (a) timely receipt by Bank of the Payment/Advance Form as provided in Section 2.1; and

               (b) the representations and warranties contained in Section 5 shall be true and correct in all
material respects on and as of the date of such Payment/Advance Form and on the effective date of
each Credit Extension as though made at and as of each such date, and no Event of Default shall
have occurred and be continuing, or would exist after giving effect to such Credit Extension
(provided, however, that those representations and warranties expressly referring to another date
shall be true, correct and complete in all material respects as of such date). The making of each
Credit Extension shall be deemed to be a representation and warranty by Borrower on the date of
such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

     4. CREATION OF SECURITY INTEREST.

          4.1 Grant of Security Interest. Subject to Regulatory Approval, where required, each
Borrower grants and pledges to Bank a continuing security interest in the Collateral to secure
prompt repayment of any and all Obligations and to secure prompt performance by such Borrower of
each of its covenants and duties under the Loan Documents. Except for Permitted Liens, such
security interest constitutes a valid, first priority security interest in the presently existing
Collateral, and will constitute a valid, first priority security interest in later-acquired
Collateral. Notwithstanding any termination, Bank’s Lien on the Collateral shall remain in effect
for so long as any Obligations are outstanding.

          4.2 Perfection of Security Interest. Each Borrower authorizes Bank to file at any
time financing statements, continuation statements, and amendments thereto that (i) either
specifically describe the Collateral or describe the Collateral as all assets of such Borrower of
the kind pledged hereunder, and (ii) contain any other information required by the Code for the
sufficiency of filing office acceptance of any financing statement, continuation statement, or
amendment, including whether such Borrower is an organization, the type of organization and any
organizational identification number issued to such Borrower, if applicable. Any such financing
statements may be signed by Bank on behalf of Borrowers, as provided in the Code, and may be filed
at any time in any jurisdiction whether or not Revised Article 9 of the Code is then in effect in
that jurisdiction. Each Borrower shall from time to time endorse and deliver to Bank, at the
request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue perfected Bank’s security interests in the
Collateral and in order to fully consummate all of the transactions contemplated under the Loan
Documents. Each Borrower shall have possession of the tangible Collateral, except where expressly
otherwise provided in this Agreement or where Bank chooses to perfect its security interest by
possession of non-tangible Collateral in addition to the filing of a financing statement. Where
Collateral is in possession of a third

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

party bailee, each Borrower shall take such steps as Bank reasonably requests for Bank to (i)
obtain an acknowledgment, in form and substance satisfactory to Bank, of the bailee that the bailee
holds such Collateral for the benefit of Bank, (ii) obtain “control” of any Collateral consisting
of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as
such items and the term “control” are defined in Revised Article 9 of the Code) by causing the
securities intermediary or depositary institution or issuing bank to execute a control agreement in
form and substance satisfactory to Bank. No Borrower will create any chattel paper without placing
a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in
the chattel paper. Each Borrower from time to time may deposit with Bank specific cash collateral
to secure specific Obligations; each Borrower authorizes Bank to hold such specific balances in
pledge and to decline to honor any drafts thereon or any request by a Borrower or any other Person
to pay or otherwise transfer any part of such balances for so long as the specific Obligations are
outstanding.

          4.3 Right to Inspect. Bank (through any of its officers, employees, or agents) shall
have the right, upon reasonable prior notice, from time to time during Borrowers’ usual business
hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to
inspect each Borrower’s Books and to make copies thereof and to check, test, and appraise the
Collateral in order to verify Borrowers’ financial condition or the amount, condition of, or any
other matter relating to, the Collateral.

          4.4 Pledge of Collateral. Subject to Regulatory Approval, where required, each
Borrower hereby pledges, assigns and grants to Bank a security interest in all the Shares, together
with all proceeds and substitutions thereof, all cash, stock and other moneys and property paid
thereon, all rights to subscribe for securities declared or granted in connection therewith, and
all other cash and noncash proceeds of the foregoing, as security for the performance of the
Obligations. On the Closing Date, or as soon thereafter as Regulatory Approval is obtained, where
required, the certificate or certificates for the Shares will be delivered to Bank, accompanied by
an instrument of assignment duly executed in blank by the appropriate Borrower. To the extent
required by the terms and conditions governing the Shares, the appropriate Borrower shall cause the
books of each entity whose Shares are part of the Collateral and any transfer agent to reflect the
pledge of the Shares. Upon the occurrence of an Event of Default hereunder, Bank may effect the
transfer of any securities included in the Collateral (including but not limited to the Shares)
into the name of Bank and cause new certificates representing such securities to be issued in the
name of Bank or its transferee. Each Borrower will execute and deliver such documents, and take or
cause to be taken such actions, as Bank may reasonably request to perfect or continue the
perfection of Bank’s security interest in the Shares. Unless an Event of Default shall have
occurred and be continuing, Borrowers shall be entitled to exercise any voting rights with respect
to the Shares and to give consents, waivers and ratifications in respect thereof, provided that no
vote shall be cast or consent, waiver or ratification given or action taken which would be
inconsistent with any of the terms of this Agreement or which would constitute or create any
violation of any of such terms. All such rights to vote and give consents, waivers and
ratifications shall terminate upon the occurrence and continuance of an Event of Default.

     5. REPRESENTATIONS AND WARRANTIES.

          Each Borrower represents and warrants as follows:

          5.1 Due Organization and Qualification. Borrower and each Subsidiary is duly existing
under the laws of the state in which it is organized and qualified and licensed to do business in
any state in which the conduct of its business or its ownership of property requires that it be so
qualified, except where the failure to do so could not reasonably be expected to cause a Material
Adverse Effect.

          5.2 Due Authorization; No Conflict. The execution, delivery, and performance of the
Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict
with nor constitute a breach of any provision contained in Borrower’s Articles of Incorporation or
Bylaws, nor will they constitute an event of default under any material agreement by which Borrower
is bound. Borrower is not in default under any agreement by which it is bound, except to the
extent such default could not reasonably be expected to cause a Material Adverse Effect.

          5.3 Collateral. Subject to Section 6.11, Borrower has rights in or the power to
transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse
claims, and restrictions on transfer or

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

pledge except for Permitted Liens. All Collateral is located solely in the Collateral States.
The Eligible Accounts are bona fide existing obligations. The property or services giving rise to
such Eligible Accounts has been delivered or rendered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account debtor. Borrower has not
received notice of actual or imminent Insolvency Proceeding of any account debtor whose accounts
are included in any Borrowing Base Certificate as an Eligible Account. All Inventory is in all
material respects of good and merchantable quality, free from all material defects, except for
Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of
the Collateral is maintained or invested with a Person other than Bank or Bank’s Affiliates.

          5.4 Intellectual Property Collateral. Borrower is the sole owner of the Intellectual
Property Collateral, except for non-exclusive licenses (and with respect to Parent, other rights
under the TSA), granted by Borrower to its customers (or other third parties, in the case of the
TSA), or any other alliance or business relationship with regards to the development and marketing
of products; each in the ordinary course of business. To the best of Borrower’s knowledge, each of
the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual
Property Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has
been made to Borrower that any part of the Intellectual Property Collateral violates the rights of
any third party except to the extent such claim could not reasonably be expected to cause a
Material Adverse Effect. Except as set forth in the Schedule and except for “shrink-wrap” and
other “off-the-shelf” software, Borrower’s rights as a licensee of intellectual property do not
give rise to more than five percent (5%) of its gross revenue in any given month, including without
limitation revenue derived from the sale, licensing, rendering or disposition of any product or
service.

          5.5 Name; Location of Chief Executive Office. Except as disclosed in the Schedule,
Borrower has not done business under any name other than that specified on the signature page
hereof, and its exact legal name is as set forth in the first paragraph of this Agreement. The
chief executive office of Borrower is located in the Chief Executive Office State at the address
indicated in Section 10 hereof.

          5.6 Litigation. Except as set forth in the Schedule, there are no actions or
proceedings pending by or against Borrower or any Subsidiary before any court or administrative
agency in which a likely adverse decision could reasonably be expected to have a Material Adverse
Effect.

          5.7 No Material Adverse Change in Financial Statements. All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that are delivered by
Borrower to Bank fairly present in all material respects Borrower’s consolidated and consolidating
financial condition as of the date thereof and Borrower’s consolidated and consolidating results of
operations for the period then ended. There has not been a material adverse change in the
consolidated or in the consolidating financial condition of Borrower since the date of the most
recent of such financial statements submitted to Bank.

          5.8 Solvency, Payment of Debts. Borrower is able to pay its debts (including trade
debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with
unreasonably small capital after the transactions contemplated by this Agreement.

          5.9 Compliance with Laws and Regulations. Borrower and each Subsidiary have met the
minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.
No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably
likely to result in Borrower’s incurring any liability that could have a Material Adverse Effect.
Borrower is not an “investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one
of the important activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the
Federal Reserve System). Borrower has complied in all material respects with all the provisions of
the Federal Fair Labor Standards Act. Borrower is in compliance with all environmental laws,
regulations and ordinances except where the failure to comply is not reasonably likely to have a
Material Adverse Effect. Borrower has not violated any statutes, laws, ordinances or rules
applicable to it, the violation of which could reasonably be expected to have a Material Adverse
Effect. Borrower and each Subsidiary have filed or caused to be filed all tax returns required to
be filed, or have been granted an extension to file, and have paid, or have made

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

adequate provision for the payment of, all taxes reflected therein except those being
contested in good faith with adequate reserves under GAAP or where the failure to file such returns
or pay such taxes could not reasonably be expected to have a Material Adverse Effect.

          5.10 Subsidiaries. Borrower does not own any stock, partnership interest or other
equity securities of any Person, except for Permitted Investments.

          5.11 Government Consents. Subject to Section 6.11, Borrower and each Subsidiary have
obtained all consents, approvals and authorizations of, made all declarations or filings with, and
given all notices to, all governmental authorities that are necessary for the continued operation
of Borrower’s business as currently conducted, except where the failure to do so could not
reasonably be expected to cause a Material Adverse Effect.

          5.12 Inbound Licenses. Except as disclosed on the Schedule and except for
“shrink-wrap” and other “off-the-shelf” software, Borrower is not a party to, nor is bound by, any
license to which Borrower is a licensee or other agreement that prohibits or otherwise restricts
Borrower from granting a security interest in Borrower’s interest in such license or agreement or
any other property where such prohibition and/or restriction could reasonably be expected to have a
Material Adverse Effect.

          5.13 Shares. Subject to Section 3.1(h) and Section 6.11, Borrower has full power and
authority to create a first lien on the Shares and no disability or contractual obligation exists
that would prohibit Borrower from pledging the Shares pursuant to this Agreement. To Borrower’s
knowledge, there are no subscriptions, warrants, rights of first refusal or other restrictions on
transfer relative to, or options exercisable with respect to the Shares. The Shares have been and
will be duly authorized and validly issued, and are fully paid and non-assessable. To Borrower’s
knowledge, the Shares are not the subject of any present or threatened suit, action, arbitration,
administrative or other proceeding, and Borrower knows of no reasonable grounds for the institution
of any such proceedings.

          5.14 Full Disclosure. No representation, warranty or other statement made by Borrower
in any certificate or written statement furnished to Bank taken together with all such certificates
and written statements furnished to Bank contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained in such certificates
or statements not misleading, it being recognized by Bank that the projections and forecasts
provided by Borrower in good faith and based upon reasonable assumptions are not to be viewed as
facts and that actual results during the period or periods covered by any such projections and
forecasts may differ from the projected or forecasted results.

     6. AFFIRMATIVE COVENANTS.

          Each Borrower covenants and agrees that, until payment in full of all outstanding Obligations,
and for so long as Bank may have any commitment to make a Credit Extension hereunder, such Borrower
shall do all of the following:

          6.1 Good Standing and Government Compliance. Borrower shall maintain its and each of
its Subsidiaries’ corporate existence and good standing in the respective states of organization,
shall maintain qualification and good standing in each other jurisdiction in which the failure to
so qualify could have a Material Adverse Effect, and shall furnish to Bank the organizational
identification number issued to Borrower by the authorities of the state in which Borrower is
organized, if applicable. Borrower shall meet, and shall cause each Subsidiary to meet, the
minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA.
Borrower shall comply in all material respects with all applicable Environmental Laws, and maintain
all material permits, licenses and approvals required thereunder where the failure to do so could
have a Material Adverse Effect. Borrower shall comply, and shall cause each Subsidiary to comply,
with all statutes, laws, ordinances and government rules and regulations to which it is subject,
and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses,
approvals and agreements, the loss of which or failure to comply with which could reasonably be
expected to have a Material Adverse Effect.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

          6.2 Financial Statements, Reports, Certificates. Borrower shall deliver the following
to Bank: (i) as soon as available, but in any event within thirty (30) days after the end of each
calendar month, a company prepared consolidated and consolidating balance sheet and income
statement covering Borrower’s operations during such period, in a form reasonably acceptable to
Bank and certified by a Responsible Officer; (ii) within five (5) days of filing, all reports on
Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (iv) promptly upon receipt
of notice thereof, a report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred
Thousand Dollars ($100,000) or more; (v) promptly upon receipt, each management letter prepared by
Borrower’s independent certified public accounting firm regarding Borrower’s management control
systems; (vi) such budgets, sales projections, operating plans or other financial information
generally prepared by Borrower in the ordinary course of business as Bank may reasonably request
from time to time, including Borrower’s annual projections within thirty (30) days prior to
Borrower’s fiscal year end; and (vii) within thirty (30) days of the last day of each fiscal
quarter, a report signed by Borrower, in form reasonably acceptable to Bank, listing any
applications or registrations that Borrower has made or filed in respect of any Patents, Copyrights
or Trademarks and the status of any outstanding applications or registrations, as well as any
material change in Borrower’s Intellectual Property Collateral, including but not limited to any
subsequent ownership right of Borrower in or to any Trademark, Patent or Copyright not specified in
Exhibits A, B, and C of any Intellectual Property Security
Agreement delivered to Bank by Borrower in connection with this Agreement.

               (a) Within thirty days after the last day of each month, Borrower shall deliver to Bank a
Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C
hereto, together with aged listings by invoice date of accounts receivable and accounts payable.

               (b) Within thirty (30) days after the last day of each month, Borrower shall deliver to Bank
with the monthly financial statements, a Compliance Certificate certified as of the last day of the
applicable month and signed by a Responsible Officer in substantially the form of Exhibit D
hereto.

               (c) As soon as possible and in any event within five (5) calendar days after becoming aware of
the occurrence or existence of an Event of Default hereunder, a written statement of a Responsible
Officer setting forth details of the Event of Default, and the action which Borrower has taken or
proposes to take with respect thereto.

               (d) Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and
appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more
often than every six (6) months unless an Event of Default has occurred and is continuing.

     Borrower may deliver to Bank on an electronic basis any certificates, reports or information
required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information
contained in the electronic files, provided that Bank in good faith believes that the files were
delivered by a Responsible Officer. If Borrower delivers this information electronically, it shall
also deliver to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days of submission of the unsigned electronic copy the
certification of monthly financial statements, the intellectual property report, the Borrowing Base
Certificate and the Compliance Certificate, each bearing the physical signature of the Responsible
Officer.

          6.3 Inventory; Returns. Borrower shall keep all Inventory in good and merchantable
condition, free from all material defects except for Inventory for which adequate reserves have
been made. Returns and allowances of Inventory, if any, as between Borrower and its account
debtors shall be on the same basis and in accordance with the usual customary practices of
Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns
and recoveries of Inventory and of all disputes and claims involving Inventory in an amount more
than One Hundred Thousand Dollars ($100,000).

          6.4 Taxes. Borrower shall make, and cause each Subsidiary to make, due and timely
payment or deposit of all material federal, state, and local taxes, assessments, or contributions
required of it by law, including, but not limited to, those laws concerning income taxes, F.I.C.A.,
F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof satisfactory
to Bank indicating that Borrower or a Subsidiary has made such payments or deposits and any
appropriate certificates attesting to the payment or deposit thereof;

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

provided that Borrower or a Subsidiary need not make any payment if the amount or validity of
such payment is contested in good faith by appropriate proceedings and is reserved against (to the
extent required by GAAP) by Borrower.

          6.5 Insurance.

               (a) Borrower, at its expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks (excluding earthquake and
flood), and in such amounts, as ordinarily insured against by other owners in similar businesses
conducted in the locations where Borrower’s business is conducted on the date hereof. Borrower
shall also maintain liability and other insurance in amounts and of a type that are customary to
businesses similar to Borrower’s.

               (b) All such policies of insurance shall be in such form, with such companies, and in such
amounts as reasonably satisfactory to Bank. All policies of property insurance shall contain a
lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional
loss payee, and all liability insurance policies shall show Bank as an additional insured and
specify that the insurer must give at least 20 days notice to Bank before canceling its policy for
any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies
of insurance and evidence of all premium payments. If no Event of Default has occurred and is
continuing, proceeds payable under any casualty policy will, at Borrower’s option, be payable to
Borrower to replace the property subject to the claim, provided that any such replacement property
shall be deemed Collateral in which Bank has been granted a first priority security interest. If
an Event of Default has occurred and is continuing, all proceeds payable under any such policy
shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.

          6.6 Accounts. Borrower shall maintain at least eighty percent (80%) of its Cash in
depository, operating and/or investment accounts with Bank or Bank’s Affiliates subject to a
control agreement in form and content reasonably acceptable to Bank. Borrower’s Cash maintained
outside Bank or Bank’s Affiliates shall be subject to control agreements in form and content
reasonably acceptable to Bank.

          6.7 Financial Covenants. Borrowers, on a consolidated basis, shall at all times
maintain the following financial ratios and covenants:

               (a) Adjusted Quick Ratio. A ratio of Cash plus Eligible 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.

               (b) Minimum Cash. A balance of Cash at Bank at all times of not less Fifteen Million
Dollars ($15,000,000). Notwithstanding the foregoing, provided no Event of Default has occurred and
is continuing, Borrower shall maintain a balance of Cash at Bank of not less than (i) Twelve
Million Five Hundred Thousand Dollars ($12,500,000) from December 31, 2006 through June 29, 2007;
and (ii) Ten Million Dollars ($10,000,000) thereafter.

               (c) Debt Service Coverage Ratio. A Debt Service Coverage Ratio of at least (i) 1.00
to 1.00 from the earlier of (x) Borrower’s Cash at Bank falling below Twenty Million Dollars
($20,000,000) or (y) September 30, 2006; through June 29, 2007; and (ii) 1.25 to 1.00 thereafter;
measured monthly.

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

          6.8 Intellectual Property Rights.

               (a) Borrower shall register or cause to be registered on an expedited basis (to the extent not
already registered) with the United States Patent and Trademark Office or the United States
Copyright Office, as the case may be, those registrable intellectual property rights now owned or
hereafter developed or

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems
it appropriate to so protect such intellectual property rights.

               (b) Borrower shall promptly give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark Office, including
the date of such filing and the registration or application numbers, if any.

               (c) Borrower shall (i) give Bank not less than thirty (30) days prior written notice of the
filing of any applications or registrations with the United States Copyright Office, including the
title of such intellectual property rights to be registered, as such title will appear on such
applications or registrations, and the date such applications or registrations will be filed; (ii)
prior to the filing of any such applications or registrations, execute such documents as Bank may
reasonably request for Bank to maintain its perfection in such intellectual property rights to be
registered by Borrower; (iii) upon the request of Bank, either deliver to Bank or file such
documents simultaneously with the filing of any such applications or registrations; (iv) upon
filing any such applications or registrations, promptly provide Bank with a copy of such
applications or registrations together with any exhibits, evidence of the filing of any documents
requested by Bank to be filed for Bank to maintain the perfection and priority of its security
interest in such intellectual property rights, and the date of such filing.

               (d) Borrower shall execute and deliver such additional instruments and documents from time to
time as Bank shall reasonably request to perfect and maintain the perfection and priority of Bank’s
security interest in the Intellectual Property Collateral.

               (e) Borrower shall (i) protect, defend and maintain the validity and enforceability of the
trade secrets, Trademarks, Patents and Copyrights, (ii) use commercially reasonable efforts to
detect infringements of the Trademarks, Patents and Copyrights and promptly advise Bank in writing
of material infringements detected and (iii) not allow any material Trademarks, Patents or
Copyrights to be abandoned, forfeited or dedicated to the public without the written consent of
Bank, which shall not be unreasonably withheld.

               (f) Bank may audit Borrower’s Intellectual Property Collateral to confirm compliance with this
Section, provided such audit may not occur more often than twice per year, unless an Event of
Default has occurred and is continuing. Bank shall have the right, but not the obligation, to
take, at Borrower’s sole expense, any actions that Borrower is required under this Section to take
but which Borrower fails to take, after fifteen (15) days’ notice to Borrower. Borrower shall
reimburse and indemnify Bank for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section.

          6.9 Consent of Inbound Licensors. Not less than fifteen (15) days prior to entering
into or becoming bound by any license or agreement to which Borrower is (or is contemplated to be)
a party, other than interconnection agreements, the failure, breach or termination of which could
reasonably be expected to have a Material Adverse Effect, Parent shall: (i) provide written notice
to Bank of such license or agreement, including the name of the non-Borrower party to the license
or agreement; the term of such license or agreement; and the estimated dollar value to the Borrower
of such license or agreement; and (ii) in good faith use commercially reasonable efforts to obtain
the consent of, or waiver by, any person whose consent or waiver is necessary for such Borrower’s
interest in such licenses or contract rights to be deemed Collateral and for Bank to have a
security interest in it that might otherwise be restricted by the terms of the applicable license
or agreement, whether now existing or entered into in the future, provided, however, that the
failure to obtain any such consent or waiver shall not constitute a default under this Agreement.

          6.10 Creation/Acquisition of Subsidiaries. In the event Borrower or any Subsidiary
creates or acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the
creation or acquisition of such new Subsidiary and take all such action as may be reasonably
required by Bank to cause such Subsidiary to become a co-Borrower hereunder, and Borrower shall
grant and pledge to Bank a perfected security interest in the stock, units or other evidence of
ownership of such Subsidiary.

          6.11 Regulatory Approval. Except as set forth in Section 3.1(h), within sixty (60)
days of the Closing Date (or such additional period as Bank may consent to in writing, not to be
unreasonably withheld or delayed) with respect to all applicable states (the “Relevant States”)
other than New Jersey and Louisiana (the

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

“Delayed States”), Borrowers shall use their best, commercially reasonably efforts to receive
approval from the Regulatory Agencies of the Relevant States for the incurrence of the Indebtedness
evidenced by this Agreement by the respective Borrowers, where such approval is required by such
Regulatory Agencies, and where permitted the encumbrance of the Regulatory Certificates issued any
Borrower by each such agency, and the other Collateral located in such states, where approval of
such encumbrance is so required. Within six (6) months of the Closing Date (or such additional
period as Bank may consent to writing, not to be unreasonably withheld or delayed) with respect to
the Delayed States, Borrowers shall receive approval from the Regulatory Agencies of the Delayed
States for the incurrence of the Indebtedness evidenced by this Agreement by the respective
Borrowers, where such approval is required by such Regulatory Agencies, and the encumbrance of the
Regulatory Certificates issued any Borrower by each such agency, and the other Collateral located
in such states, where approval of such encumbrance is so required.

          6.12 Further Assurances. At any time and from time to time Borrower shall execute and
deliver such further instruments and take such further action as may reasonably be requested by
Bank to effect the purposes of this Agreement.

     7. NEGATIVE COVENANTS.

          Each Borrower covenants and agrees that, so long as any credit hereunder shall be available
and until the outstanding Obligations are paid in full or for so long as Bank may have any
commitment to make any Credit Extensions, such Borrower will not do any of the following without
Bank’s prior written consent, which shall not be unreasonably withheld:

          7.1 Dispositions. Convey, sell, lease, license, transfer or otherwise dispose of
(collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, or move cash balances on deposit with Bank to accounts opened at another
financial institution, other than Permitted Transfers.

          7.2 Change in Name, Location, Executive Office, or Executive Management; Change in
Business; Change in Fiscal Year; Change in Control. Change its name or the Borrower State or
relocate its chief executive office without thirty (30) days prior written notification to Bank;
replace its chief executive officer or chief financial officer without prompt written notification
to Bank thereafter; engage in any business, or permit any of its Subsidiaries to engage in any
business, other than or reasonably related or incidental to the businesses currently engaged in by
Borrower; change its fiscal year end; suffer or permit a Change in Control.

          7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries
to merge or consolidate, with or into any other business organization (other than (x) mergers or
consolidations of a Subsidiary into another Subsidiary or into Borrower, and (y) the conversion,
merger or consolidation of Borrower with or into a Permitted Successor Corporation), or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person except where (i) such transactions do not in the aggregate exceed Five
Million Dollars ($5,000,000) during any fiscal year, (ii) no Event of Default has occurred, is
continuing or would exist after giving effect to such transactions, (iii) such transactions do not
result in a Change in Control, and (iv) Borrower is the surviving entity.

          7.4 Indebtedness. Create, incur, assume, guarantee or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness,
or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any
Indebtedness, except Indebtedness to Bank and except as permitted under Section 7.9 hereof.

          7.5 Encumbrances. Create, incur, assume or allow any Lien with respect to any of its
property, or assign or otherwise convey any right to receive income, including the sale of any
Accounts (except in connection with the conversion, merger or consolidation of Borrower with or
into a Permitted Successor Corporation), or permit any of its Subsidiaries so to do, except for
Permitted Liens, or covenant to any other Person that Borrower in the future will refrain from
creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

          7.6 Distributions. Pay any dividends or make any other distribution or payment on
account of or in redemption, retirement or purchase of any capital stock, except that Borrower may
(i) repurchase the stock of former employees pursuant to stock repurchase agreements as long as an
Event of Default does not exist prior to such repurchase or would not exist after giving effect to
such repurchase, (ii) repurchase the stock of former employees pursuant to stock repurchase
agreements by the cancellation of indebtedness owed by such former employees to Borrower regardless
of whether an Event of Default exists, and (iii) redeem the Subordinated Notes in an aggregate
amount not to exceed (x) Five Million Dollars ($5,000,000) from other than the proceeds of New
Equity, plus (y) an amount equal to the net proceeds of New Equity, from the proceeds of such New
Equity; in each case provided no Event of Default has occurred, is continuing or would exist after
giving effect to such redemption.

          7.7 Investments. Directly or indirectly acquire or own, or make any Investment in or
to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments, or
maintain or invest any of its property with a Person other than Bank or Bank’s Affiliates or permit
any Subsidiary to do so unless such Person has entered into a control agreement with Bank, in form
and substance satisfactory to Bank, or suffer or permit any Subsidiary to be a party to, or be
bound by, an agreement that restricts such Subsidiary from paying dividends or otherwise
distributing property to Borrower.

          7.8 Transactions with Affiliates. Except as otherwise expressly permitted hereunder,
directly or indirectly enter into or permit to exist any material transaction with any Affiliate of
Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s
length transaction with a non-affiliated Person.

          7.9 Subordinated Debt. Make any payment in respect of any Subordinated Debt, or
permit any of its Subsidiaries to make any such payment, except in compliance with the terms of
such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any
documentation relating to the Subordinated Debt without Bank’s prior written consent.
Notwithstanding the foregoing, Parent may repurchase the Subordinated Notes with the proceeds of
the Term Loan and New Equity in accordance with the terms and conditions of this Agreement.

          7.10 Inventory and Equipment. Store the Inventory or the Equipment with a bailee,
warehouseman, or similar third party unless the third party has been notified of Bank’s security
interest and Bank (a) has received an acknowledgment from the third party that it is holding or
will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse
receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the
ordinary course of business and except for such other locations as Bank may approve in writing, and
except as set forth in the Schedule, Borrower shall keep the Inventory and Equipment only at the
location set forth in Section 10 and such other locations of which Borrower gives Bank at least ten
(10) days prior written notice and as to which Bank takes action, where needed, to perfect or
continue the perfection of its security interest.

          7.11 No Investment Company; Margin Regulation. Become or be controlled by an
“investment company,” within the meaning of the Investment Company Act of 1940, or become
principally engaged in, or undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit
Extension for such purpose.

          7.12 Capital Expenditures. Notwithstanding any other provision in this Agreement,
incur Capital Expenditures in excess of (i) Sixteen Million Five Hundred Thousand Dollars
($16,500,000) for fiscal year 2005; (ii) Fifteen Million Five Hundred Thousand Dollars
($15,500,000) for fiscal year 2006; and (iii) Ten Million Dollars ($10,000,000) for fiscal year
2007; in each case, in the aggregate in the respective fiscal year of Borrowers.

     8. EVENTS OF DEFAULT.

          Any one or more of the following events shall constitute an Event of Default by Borrowers
under this Agreement:

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

          8.1 Payment Default. If a Borrower fails to pay any of the Obligations when due;

          8.2 Covenant Default.

               (a) If a Borrower fails to perform any obligation under Article 6 or violates any of the
covenants contained in Article 7 of this Agreement; or

               (b) If a Borrower fails or neglects to perform or observe any other material term, provision,
condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other
present or future agreement between a Borrower and Bank and as to any default under such other
term, provision, condition or covenant that can be cured, has failed to cure such default within
ten (10) days after a Borrower receives notice thereof or any officer of a Borrower becomes aware
thereof; provided, however, that if the default cannot by its nature be cured within the ten (10)
day period or cannot after diligent attempts by Borrowers be cured within such ten (10) day period,
and such default is likely to be cured within a reasonable time, then Borrowers shall have an
additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to
cure such default, and within such reasonable time period the failure to have cured such default
shall not be deemed an Event of Default but no Credit Extensions will be made;

          8.3 Defective Perfection. If Bank shall receive at any time following the Closing
Date an SOS Report indicating that except for Permitted Liens, Bank’s security interest in the
Collateral is not prior to all other security interests or Liens of record reflected in such SOS
Report;

          8.4 Material Adverse Effect. If there occurs any circumstance or circumstances that
could have a Material Adverse Effect;

          8.5 Attachment. If any material portion of a Borrower’s assets is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the possession of any
trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or
distress warrant or levy has not been removed, discharged or rescinded within ten (10) days, or if
a Borrower is enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or other claim becomes a
lien or encumbrance upon any material portion of a Borrower’s assets, or if a notice of lien, levy,
or assessment is filed of record with respect to any of a Borrower’s assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, and the same is not paid within ten (10) days after such
Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of
Default where such action or event is stayed or an adequate bond has been posted pending a good
faith contest by such Borrower (provided that no Credit Extensions will be made during such cure
period);

          8.6 Insolvency. If a Borrower becomes insolvent, or if an Insolvency Proceeding is
commenced by a Borrower, or if an Insolvency Proceeding is commenced against a Borrower and is not
dismissed or stayed within thirty (30) days (provided that no Credit Extensions will be made prior
to the dismissal of such Insolvency Proceeding);

          8.7 Other Agreements. If there is a default or other failure to perform in any
agreement to which a Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in
an amount in excess of One Hundred Thousand Dollars ($100,000) or that could have a Material
Adverse Effect;

          8.8 Subordinated Debt. If a Borrower makes any payment on account of Subordinated
Debt, except to the extent such payment is allowed hereunder or under any subordination agreement
entered into with Bank;

          8.9 Judgments. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) shall be
rendered against a Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days
(provided that no Credit Extensions will be made prior to the satisfaction or stay of such
judgment); or

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

          8.10 Misrepresentations. If any material misrepresentation or material misstatement
exists now or hereafter in any warranty or representation set forth herein or in any certificate
delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document.

     9. BANK’S RIGHTS AND REMEDIES.

          9.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event
of Default, Bank may, at its election, without notice of its election and without demand, do any
one or more of the following, all of which are authorized by Borrowers:

               (a) Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event
of Default described in Section 8.6, all Obligations shall become immediately due and payable
without any action by Bank);

               (b) Demand that Borrowers (i) deposit cash with Bank in an amount equal to the amount of any
Letters of Credit remaining undrawn, as collateral security for the repayment of any future
drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled
to be paid or payable over the remaining term of the Letters of Credit, and Borrowers shall
promptly deposit and pay such amounts;

               (c) Cease advancing money or extending credit to or for the benefit of Borrower under this
Agreement or under any other agreement between a Borrower and Bank;

               (d) Settle or adjust disputes and claims directly with account debtors for amounts, upon terms
and in whatever order that Bank reasonably considers advisable;

               (e) Make such payments and do such acts as Bank considers necessary or reasonable to protect
its security interest in the Collateral. Each Borrower agrees to assemble the Collateral if Bank
so requires, and to make the Collateral available to Bank as Bank may designate. Each Borrower
authorizes Bank to enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its
security interest and to pay all expenses incurred in connection therewith. With respect to any of
a Borrower’s owned premises, each Borrower hereby grants Bank a license to enter into possession of
such premises and to occupy the same, without charge, in order to exercise any of Bank’s rights or
remedies provided herein, at law, in equity, or otherwise;

               (f) Set off and apply to the Obligations any and all (i) balances and deposits of Borrower
held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account of a
Borrower held by Bank;

               (g) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for
sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted a
license or other right, solely pursuant to the provisions of this Section 9.1, to use, without
charge, each Borrower’s labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in connection with Bank’s exercise of its rights under this Section
9.1, each Borrower’s rights under all licenses and all franchise agreements shall inure to Bank’s
benefit;

               (h) Sell the Collateral at either a public or private sale, or both, by way of one or more
contracts or transactions, for cash or on terms, in such manner and at such places (including
Borrowers’ premises) as Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate. Bank may sell the Collateral
without giving any warranties as to the Collateral. Bank may specifically disclaim any warranties
of title or the like. This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If Bank sells any of the Collateral

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

upon credit, Borrowers will be credited only with payments actually made by the purchaser,
received by Bank, and applied to the indebtedness of the purchaser. If the purchaser fails to pay
for the Collateral, Bank may resell the Collateral and Borrowers shall be credited with the
proceeds of the sale;

               (i) Bank may credit bid and purchase at any public sale;

               (j) Apply for the appointment of a receiver, trustee, liquidator or conservator of the
Collateral, without notice and without regard to the adequacy of the security for the Obligations
and without regard to the solvency of a Borrower, any guarantor or any other Person liable for any
of the Obligations; and

               (k) Any deficiency that exists after disposition of the Collateral as provided above will be
paid immediately by Borrowers.

Bank may comply with any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered adversely to affect the
commercial reasonableness of any sale of the Collateral.

Notwithstanding anything to the contrary contained in this Agreement, (i) Bank shall not take any
action hereunder that would constitute or result in any transfer of control of the certificates of
authority without obtaining all necessary approvals of the FCC and all other Regulatory Agencies,
and (ii) Bank shall not foreclose on, sell, transfer or otherwise dispose of, or exercise any right
to control the certificates of authority or other regulated assets as provided herein or take any
other action that would affect the operational, voting, or other control of the Borrowers, unless
such action is taken in accordance with the provisions of the Communications Act of 1934, as
amended, and the rules, regulations and policies of the FCC and all other applicable laws.

          9.2 Power of Attorney. Effective only upon the occurrence and during the continuance
of an Event of Default, each Borrower hereby irrevocably appoints Bank (and any of Bank’s
designated officers, or employees) as such Borrower’s true and lawful attorney to: (a) send
requests for verification of Accounts or notify account debtors of Bank’s security interest in the
Accounts; (b) endorse such Borrower’s name on any checks or other forms of payment or security that
may come into Bank’s possession; (c) sign such Borrower’s name on any invoice or bill of lading
relating to any Account, drafts against account debtors, schedules and assignments of Accounts,
verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make,
settle, and adjust all claims under and decisions with respect to such Borrower’s policies of
insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; (g) to modify, in its
sole discretion, any intellectual property security agreement entered into between such Borrower
and Bank without first obtaining such Borrower’s approval of or signature to such modification by
amending Exhibits A, B, and C, thereof, as appropriate, to include
reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by such
Borrower after the execution hereof or to delete any reference to any right, title or interest in
any Copyrights, Patents or Trademarks in which such Borrower no longer has or claims to have any
right, title or interest; and (h) to file, in its sole discretion, one or more financing or
continuation statements and amendments thereto, relative to any of the Collateral without the
signature of such Borrower where permitted by law; provided Bank may exercise such power of
attorney to sign the name of such Borrower on any of the documents described in clauses (g) and (h)
above, regardless of whether an Event of Default has occurred. The appointment of Bank as each
Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with
an interest, is irrevocable until all of the Obligations have been fully repaid and performed and
Bank’s obligation to provide Credit Extensions hereunder is terminated.

          9.3 Accounts Collection. At any time after the occurrence and during the continuance
of an Event of Default, Bank may notify any Person owing funds to a Borrower of Bank’s security
interest in such funds and verify the amount of such Account. Each Borrower shall collect all
amounts owing to such Borrower for Bank, receive in trust all payments as Bank’s trustee, and
immediately deliver such payments to Bank in their original form as received from the account
debtor, with proper endorsements for deposit.

          9.4 Bank Expenses. If a Borrower fails to pay any amounts or furnish any required
proof of payment due to third persons or entities, as required under the terms of this Agreement,
then Bank may do any or all of the following after reasonable notice to Parent: (a) make payment
of the same or any part thereof; (b) set up such

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

24

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

reserves under the Revolving Line as Bank deems necessary to protect Bank from the exposure
created by such failure; or (c) obtain and maintain insurance policies of the type discussed in
Section 6.5 of this Agreement, and take any action with respect to such policies as Bank deems
prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be
immediately due and payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute
an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of
Default under this Agreement.

          9.5 Bank’s Liability for Collateral. Bank has no obligation to clean up or otherwise
prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall
be borne by Borrowers.

          9.6 No Obligation to Pursue Others. Bank has no obligation to attempt to satisfy the
Obligations by collecting them from any other Person liable for them and Bank may release, modify
or waive any collateral provided by any other Person to secure any of the Obligations, all without
affecting Bank’s rights against Borrowers. Each Borrower waives any right it may have to require
Bank to pursue any other Person for any of the Obligations.

          9.7 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan
Documents, and all other agreements shall be cumulative. Bank shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise
by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of
Default on a Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless
made in a written document signed on behalf of Bank and then shall be effective only in the
specific instance and for the specific purpose for which it was given. Each Borrower expressly
agrees that this Section may not be waived or modified by Bank by course of performance, conduct,
estoppel or otherwise.

          9.8 Demand; Protest. Except as otherwise provided in this Agreement, each Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment and any other notices relating to the Obligations.

     10. NOTICES.

          Unless otherwise provided in this Agreement, all notices or demands by any party relating to
this Agreement or any other agreement entered into in connection herewith shall be in writing and
(except for financial statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Parent
or to Bank, as the case may be, at its addresses set forth below:

	 	 	 
	If to a Borrower:

	 	PAC-WEST TELECOMM, INC.
	 

	 	1776 W. March Lane, Ste. 250
	 

	 	Stockton, CA 95207
	 

	 	Attn: Chief Financial Officer
	 

	 	FAX: (209) 926-4444
	 
	 	 
	If to Bank:

	 	Comerica Bank
	 

	 	75 E. Trimble Road, M/C 4770
	 

	 	San Jose, CA 95131
	 

	 	Attn: Manager
	 

	 	FAX: (408) 556-5091
	 
	 	 
	with a copy to:

	 	Comerica Bank
	 

	 	Five Palo Alto Square, Suite 800
	 

	 	Palo Alto, CA 94306
	 

	 	Attn: Rod J. Werner, Vice President
	 

	 	FAX: (650) 213-1710

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

25

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

     The parties hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other.

     11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          This Agreement shall be governed by, and construed in accordance with, the internal laws of
the State of California, without regard to principles of conflicts of law. Each of Borrowers and
Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the
County of Santa Clara, State of California. BANK AND BORROWERS EACH ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH OF THEM, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED INSTRUMENT OR LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN), OR ACTION OF ANY OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN
MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER, EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY EACH OF THEM.

     12. REFERENCE PROVISION.

          If and only if the jury trial waiver set forth in Section 11 of this Agreement is invalidated
for any reason by a court of law, statute or otherwise, the reference provisions set forth below
shall be substituted in place of the jury trial waiver. So long as the jury trial waiver remains
valid, the reference provisions set forth in this Section shall be inapplicable.

          12.1 Mechanics.

               (a) Other than (i) nonjudicial foreclosure of security interests in real or personal property,
(ii) the appointment of a receiver or (iii) the exercise of other provisional remedies (any of
which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a
“Claim”) between the parties arising out of or relating to this Agreement or any other document,
instrument or agreement between the Bank and the undersigned (collectively in this Section, the
“Loan Documents”), will be resolved by a reference proceeding in California in accordance with the
provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their
successor sections, which shall constitute the exclusive remedy for the resolution of any Claim,
including whether the Claim is subject to the reference proceeding. Except as otherwise provided
in the Loan Documents, venue for the reference proceeding will be in the Superior Court or Federal
District Court in the County or District where venue is otherwise appropriate under applicable law
(the “Court”).

               (b) The referee shall be a retired Judge or Justice selected by mutual written agreement of
the parties. If the parties do not agree, the referee shall be selected by the Presiding Judge of
the Court (or his or her representative). A request for appointment of a referee may be heard on
an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex
parte relief is not granted. The referee shall be appointed to sit with all the powers provided by
law. Each party shall have one peremptory challenge pursuant to CCP §170.6. Pending appointment
of the referee, the Court has power to issue temporary or provisional remedies.

               (c) The parties agree that time is of the essence in conducting the reference proceedings.
Accordingly, the referee shall be requested to (a) set the matter for a status and trial-setting
conference within fifteen (15) days after the date of selection of the referee, (b) if practicable,
try all issues of law or fact within ninety (90) days after the date of the conference and (c)
report a statement of decision within twenty (20) days after the matter has been submitted for
decision. Any decision rendered by the referee will be final, binding and conclusive, and judgment
shall be entered pursuant to CCP §644, except as provided in Section 12.3.

               (d) The referee will have power to expand or limit the amount and duration of discovery. The
referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s
failure

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

26

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

to provide requested discovery for any reason whatsoever. Unless otherwise ordered, no party
shall be entitled to “priority” in conducting discovery, depositions may be taken by either party
upon seven (7) days written notice, and all other discovery shall be responded to within fifteen
(15) days after service. All disputes relating to discovery which cannot be resolved by the
parties shall be submitted to the referee whose decision shall be final and binding.

          12.2 Procedures. Except as expressly set forth in this Agreement, the referee shall
determine the manner in which the reference proceeding is conducted including the time and place of
hearings, the order of presentation of evidence, and all other questions that arise with respect to
the course of the reference proceeding. All proceedings and hearings conducted before the referee,
except for trial, shall be conducted without a court reporter, except that when any party so
requests, a court reporter will be used at any hearing conducted before the referee, and the
referee will be provided a courtesy copy of the transcript. The party making such a request shall
have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to
award costs to the prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.

          12.3 Application of Law. The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of California. The rules of
evidence applicable to proceedings at law in the State of California will be applicable to the
reference proceeding. The referee shall be empowered to enter equitable as well as legal relief,
provide all temporary or provisional remedies, enter equitable orders that will be binding on the
parties and rule on any motion which would be authorized in a trial, including without limitation
motions for summary judgment or summary adjudication . The referee shall issue a decision at the
close of the reference proceeding which disposes of all claims of the parties that are the subject
of the reference. The referee’s decision shall be entered by the Court as a judgment or an order
in the same manner as if the action had been tried by the Court. The parties reserve the right to
findings of fact, conclusions of laws, a written statement of decision, and the right to move for a
new trial or a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision. The parties reserve the right to appeal from the final judgment
or order or from any appealable decision or order entered by the referee.

          12.4 Repeal. If the enabling legislation which provides for appointment of a referee
is repealed (and no successor statute is enacted), any dispute between the parties that would
otherwise be determined by reference procedure will be resolved and determined by arbitration. The
arbitration will be conducted by a retired judge or Justice, in accordance with the California
Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations
with respect to discovery set forth above shall apply to any such arbitration proceeding.

          12.5 THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION
WILL BE DECIDED BY A REFEREE AND NOT BY A JURY, AND THAT THEY ARE IN EFFECT WAIVING THEIR RIGHT TO
TRIAL BY JURY IN AGREEING TO THIS REFERENCE PROVISION. AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND
FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN
THEM WHICH ARISES OUT OF OR IS RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.

     13. CO-BORROWERS.

          13.1 Co-Borrowers. Borrowers are jointly and severally liable for the Obligations and
Bank may proceed against one Borrower to enforce the Obligations without waiving its right to
proceed against the other Borrower. This Agreement and the Loan Documents are a primary and
original obligation of each Borrower and shall remain in effect notwithstanding future changes in
conditions, including any change of law or any invalidity or irregularity in the creation or
acquisition of any Obligations or in the execution or delivery of any agreement between Bank and
any Borrower. Each Borrower shall be liable for existing and future Obligations as fully as if all
of the Credit Extensions were advanced to such Borrower. Bank may rely on any certificate or
representation made by any Borrower as made on behalf of, and binding on, all Borrowers, including
without limitation Advance Request Forms (delivered by a Responsible Officer), Borrowing Base
Certificates and Compliance Certificates. Borrowers are jointly and severally liable for the
Obligations and Bank may proceed against one or more of the Borrowers to enforce the Obligations
without waiving its right to proceed against any of the other Borrowers. Each

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

27

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Borrower appoints each other Borrower as its agent with all necessary power and authority to
give and receive notices, certificates or demands for and on behalf of both Borrowers, to act as
disbursing agent for receipt of any Advances on behalf of each Borrower and to apply to Bank on
behalf of each Borrower for Advances, any waivers and any consents. This authorization cannot be
revoked, and Bank need not inquire as to one Borrower’s authority to act for or on behalf of
another Borrower.

          13.2 Subrogation and Similar Rights. Notwithstanding any other provision of this
Agreement or any other Loan Document, each Borrower irrevocably waives, until all obligations are
paid in full and Bank has no further obligation to make Credit Extensions to Borrower, all rights
that it may have at law or in equity (including, without limitation, any law subrogating the
Borrower to the rights of Bank under the Loan Documents) to seek contribution, indemnification, or
any other form of reimbursement from any other Borrower, or any other Person now or hereafter
primarily or secondarily liable for any of the Obligations, for any payment made by the Borrower
with respect to the Obligations in connection with the Loan Documents or otherwise and all rights
that it might have to benefit from, or to participate in, any security for the Obligations as a
result of any payment made by the Borrower with respect to the Obligations in connection with the
Loan Documents or otherwise. Any agreement providing for indemnification, reimbursement or any
other arrangement prohibited under this Section shall be null and void. If any payment is made to
a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for
Bank and such payment shall be promptly delivered to Bank for application to the Obligations,
whether matured or unmatured.

          13.3 Waivers of Notice. Each Borrower waives, to the extent permitted by law, notice
of acceptance hereof; notice of the existence, creation or acquisition of any of the Obligations;
notice of an Event of Default except as set forth herein; notice of the amount of the Obligations
outstanding at any time; notice of any adverse change in the financial condition of any other
Borrower or of any other fact that might increase the Borrower’s risk; presentment for payment;
demand; protest and notice thereof as to any instrument; and all other notices and demands to which
the Borrower would otherwise be entitled by virtue of being a co-borrower or a surety. Each
Borrower waives any defense arising from any defense of any other Borrower, or by reason of the
cessation from any cause whatsoever of the liability of any other Borrower. Bank’s failure at any
time to require strict performance by any Borrower of any provision of the Loan Documents shall not
waive, alter or diminish any right of Bank thereafter to demand strict compliance and performance
therewith. Each Borrower also waives any defense arising from any act or omission of Bank that
changes the scope of the Borrower’s risks hereunder. Each Borrower hereby waives any right to
assert against Bank any defense (legal or equitable), setoff, counterclaim, or claims that such
Borrower individually may now or hereafter have against another Borrower or any other Person liable
to Bank with respect to the Obligations in any manner or whatsoever.

          13.4 Subrogation Defenses. Until all Obligations are paid in full and Bank has no
further obligation to make Credit Extensions to Borrower, each Borrower hereby waives any defense
based on impairment or destruction of its subrogation or other rights against any other Borrower
and waives all benefits which might otherwise be available to it under California Civil Code
Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850, 2899, and 3433 and California Code of
Civil Procedure Sections 580a, 580b, 580d and 726, as those statutory provisions are now in effect
and hereafter amended, and under any other similar statutes now and hereafter in effect.

          13.5 Right to Settle, Release.

               13.5.1 The liability of Borrowers hereunder shall not be diminished by (i) any agreement,
understanding or representation that any of the Obligations is or was to be guaranteed by another
Person or secured by other property, or (ii) any release or unenforceability, whether partial or
total, of rights, if any, which Bank may now or hereafter have against any other Person, including
another Borrower, or property with respect to any of the Obligations.

               13.5.2 Without notice to any Borrower and without affecting the liability of any Borrower
hereunder, Bank may (i) compromise, settle, renew, extend the time for payment, change the manner
or terms of payment, discharge the performance of, decline to enforce, or release all or any of the
Obligations with respect to a Borrower, (ii) grant other indulgences to a Borrower in respect of
the Obligations, (iii) modify in any manner any documents relating to the Obligations with respect
to a Borrower, (iv) release, surrender or exchange any deposits or other property securing the
Obligations, whether pledged by a Borrower or any other Person, or (v)

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

28

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

compromise, settle, renew, or extend the time for payment, discharge the performance of, decline to
enforce, or release all or any obligations of any guarantor, endorser or other Person who is now or
may hereafter be liable with respect to any of the Obligations.

          13.6 Subordination. All indebtedness of a Borrower now or hereafter arising held by
another Borrower is subordinated to the Obligations and the Borrower holding the indebtedness shall
take all actions reasonably requested by Bank to effect, to enforce and to give notice of such
subordination.

     14. GENERAL PROVISIONS.

          14.1 Successors and Assigns. This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties and shall bind all Persons
who become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor
any rights hereunder may be assigned by a Borrower without Bank’s prior written consent, which
consent may be granted or withheld in Bank’s sole discretion. Bank shall have the right without
the consent of or notice to a Borrower to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.

          14.2 Indemnification. Each Borrower shall defend, indemnify and hold harmless Bank
and its officers, employees, and agents against: (a) all obligations, demands, claims, and
liabilities claimed or asserted by any other party in connection with the transactions contemplated
by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank, its officers, employees and agents as a result of or in any way arising out of, following, or
consequential to transactions between Bank and a Borrower whether under this Agreement, or
otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses
caused by Bank’s gross negligence or willful misconduct.

          14.3 Time of Essence. Time is of the essence for the performance of all obligations
set forth in this Agreement.

          14.4 Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

          14.5 Amendments in Writing, Integration. All amendments to or terminations of this
Agreement or the other Loan Documents must be in writing. All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with respect to the
subject matter of this Agreement and the other Loan Documents, if any, are merged into this
Agreement and the Loan Documents.

          14.6 Counterparts. This Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and delivered, shall be
deemed to be an original, and all of which, when taken together, shall constitute but one and the
same Agreement.

          14.7 Survival. All covenants, representations and warranties made in this Agreement
shall continue in full force and effect so long as any Obligations remain outstanding or Bank has
any obligation to make any Credit Extension to a Borrower. The obligations of Borrowers to
indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in
Section 13.2 shall survive until all applicable statute of limitations periods with respect to
actions that may be brought against Bank have run.

          14.8 Confidentiality. In handling any confidential information, Bank and all
employees and agents of Bank shall exercise the same degree of care that Bank exercises with
respect to its own proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Agreement except that
disclosure of such information may be made (i) to the subsidiaries or Affiliates of Bank in
connection with their present or prospective business relations with a Borrower, (ii) to
prospective transferees or purchasers of any interest in the Loans, provided that they have entered
into a comparable confidentiality agreement in favor of Borrowers and have delivered a copy to
Parent, (iii) as required by law, regulations, rule or order, subpoena, judicial order or similar
order, (iv) as may be required in connection with the

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

29

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

examination, audit or similar investigation of Bank and (v) as Bank may reasonably determine
to be necessary in connection with the enforcement of any remedies hereunder (except as may be
required to be maintained in confidence pursuant to SEC rule or other legal requirement binding
upon Bank). Confidential information hereunder shall not include information that either: (a) is
in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes
part of the public domain after disclosure to Bank through no fault of Bank; or (b) is disclosed to
Bank by a third party, provided Bank does not have actual knowledge that such third party is
prohibited from disclosing such information.

[Balance of Page Intentionally Left Blank]

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

30

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.

	 	 	 
	PAC-WEST TELECOMM, INC.
	 
	 	 
	By:
	 	/s/ Ravi Brar 
	 

	 	 
	 
	 	 
	Title:
	 	Chief Financial Officer 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

	 	 
	 
	 	 
	COMERICA BANK
	 
	 	 
	By:
	 	/s/ Rod Werner 
	 

	 	 
	 
	 	 
	Title:
	 	S.V.P. 
	 

	 	 

[Signature Page to Loan and Security Agreement]

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PAC-WEST TELECOMM, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

               (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

               (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

               (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

               (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

               (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PAC-WEST TELECOM OF VIRGINIA, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

               (f) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

               (g) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

               (h) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

               (i) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

               (j) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PWT SERVICES, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

               (k) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

               (l) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

               (m) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

               (n) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

               (o) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PWT OF NEW YORK, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

               (p) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

               (q) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

               (r) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

               (s) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

               (t) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

EXHIBIT B

TECHNOLOGY & LIFE SCIENCES DIVISION

LOAN ANALYSIS

LOAN ADVANCE/PAYDOWN REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS [3:00* P.M., Pacific Time/ 3:30 P.M. Eastern Time]

FORMULA BASED LINES: DEADLINE FOR NEXT DAY PROCESSING IS [3:00* P.M., Pacific Time/ 3:30 P.M. Eastern Time]

DEADLINE FOR EQUIPMENT ADVANCES IS [3:00 P.M., Pacific Time/ 3:30 P.M. Eastern Time ]**

DEADLINE FOR WIRE TRANSFERS IS [1:30 P.M., Pacific Time/ 3:30 P.M. Eastern Time]

[*At month end and the day before a holiday, the cut off time is 1:30 P.M., Pacific Time]

**Subject to 3 day advance notice.

	 	 	 	 	 	 
	To: Loan Analysis

	 	 	 	 	  DATE:  
                     
        TIME:                               
	FAX #: (650) 846-6840	 	 	 
	 	 	 	 
	FROM:

	 	PAC-WEST TELECOMM, INC., on
	 	 	TELEPHONE REQUEST (For Bank Use Only):
	 

	 	behalf of all Borrowers	 	 	 
	FROM:

	 	 	 	 	The following person is authorized to request the loan payment
transfer/loan advance on the designated account and is known to me.
	 	 	 

Authorized Signer’s Name
	 	 	 
	 
	 	 	 	 	 
	FROM:

	 	 	 	 	 
	 

	 	 

Authorized Signer’s Name
	 	 	 

Authorized Request & Phone #
	 
	 	 	 	 	 
	PHONE #:

	 	 

	 	 	 
	 
	 	 

	 	 	 

Received by (Bank) & Phone #
	FROM ACCOUNT#:
	 	 	 	 	 
	(please include Note number, if applicable)	 	 	 
	TO ACCOUNT #:

	 	 	 	 	Authorized Signature (Bank)
	(please include Note number, if applicable)	 	 	 

 

	REQUESTED TRANSACTION TYPE

	 	REQUESTED DOLLAR AMOUNT
	 	 	For Bank Use Only
	 
	 	 	 	 	 
	PRINCIPAL INCREASE* (ADVANCE)

	 	$                                                            
	 	 	Date Rec’d:
	PRINCIPAL PAYMENT (ONLY)

	 	$                                                            
	 	 	Time:
	 

	 	 	 	 	Comp. Status:     YES      NO
	OTHER INSTRUCTIONS:

	 	 	 	 	Status Date:
	 
	 	 	 	 	 
	 	 	 	Time:
	 
	 	 	 	 	 
	 	 	 	Approval:
	 	 	 	 	 	 

All representations and warranties of Borrowers stated in the Loan Agreement are true, correct and
complete in all material respects as of the date of the telephone request for and advance confirmed
by this Borrowing Certificate, including without limitation the representation that Borrowers have
paid for and owns the equipment financed by the Bank; provided, however, that those representations
and warranties the date expressly referring to another date shall be true, correct and complete in
all material respects as of such date.

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE      YES      NO

If YES, the Outgoing Wire Transfer Instructions must be completed below.

	 	 	 	 
	OUTGOING WIRE TRANSFER INSTRUCTIONS

	 	 	Fed Reference Number           Bank Transfer Number
	 
	 	 	 
	The items marked with an asterisk (*) are required to be completed.

	 
	 	 	 
	*Beneficiary Name
	 	 	 
	*Beneficiary Account Number
	 	 	 
	*Beneficiary Address
	 	 	 
	Currency Type

	 	 	US DOLLARS ONLY
	*ABA Routing Number (9 Digits)
	 	 	 
	*Receiving Institution Name
	 	 	 
	*Receiving Institution Address
	 	 	 
	*Wire Account

	 	 	$

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

EXHIBIT C

BORROWING BASE CERTIFICATE

 

	 	 	 	 	 
	Borrower:

	 	PAC-WEST TELECOMM, INC.
	 	Lender: Comerica Bank
	 

	 	on behalf of all Borrowers	 	 
	 
	 	 	 	 
	Commitment Amount: $5,000,000	 	 

 

	 	 	 	 	 	 	 
	NET TRADE ACCOUNTS RECEIVABLE
	 	 	 	 	 	 
	1. Net Trade Accounts Receivable Book Value as of ___

	 	 	 	$                                        

	2. Additions (please explain on reverse)

	 	 	 	$                                        

	3. TOTAL NET TRADE ACCOUNTS RECEIVABLE

	 	 	 	$                                        

	 
	 	 	 	 	 	 
	ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
	 	 	 	 	 	 
	4. Amounts over 90 days due

	 	$                                        	 	 	 	 
	5. Contra Accounts

	 	$                                        	 	 	 	 
	6. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS

	 	 	 	$                                        

	7. Eligible Accounts (#3 minus #6)

	 	 	 	$                                        

	8. LOAN VALUE OF ACCOUNTS (80% of #7)

	 	 	 	$                                        

	 
	 	 	 	 	 	 
	BALANCES
	 	 	 	 	 	 
	9. Maximum Loan Amount

	 	 	 	$5,000,000	 
	10. Total Funds Available [Lesser of #9 or #8]

	 	 	 	$                                        

	11. Present balance owing on Line of Credit

	 	 	 	$                                        

	12. Outstanding under Sublimits (e.g., Letters of
Credit)

	 	 	 	$                                        

	13. RESERVE POSITION (#10 minus #11 and #12)

	 	 	 	$                                        

The undersigned represents and warrants that the foregoing is true, complete and correct, and
that the information reflected in this Borrowing Base Certificate complies with the
representations and warranties set forth in the Loan and Security Agreement between the
undersigned and Comerica Bank.

PAC-WEST TELECOMM, INC.

for itself and on behalf of all Borrowers

By:                                                                                

          Authorized Signer

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

EXHIBIT D

COMPLIANCE CERTIFICATE

	 	 	 
	TO:

	 	COMERICA BANK
	 
	 	 
	FROM:

	 	PAC-WEST TELECOMM, INC., for itself and on behalf of all Borrowers

     The undersigned authorized officer of PAC-WEST TELECOMM, INC., for itself and on behalf of all
Borrowers, hereby certifies that in accordance with the terms and conditions of the Loan and
Security Agreement between Borrowers and Bank (the “Agreement”), (i) Borrowers are in complete
compliance for the period ending                                          with all required covenants except as noted below
and (ii) all representations and warranties of each Borrower stated in the Agreement are true and
correct as of the date hereof. Attached herewith are the required documents supporting the above
certification. The Officer further certifies that these are prepared in accordance with Generally
Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next
except as explained in an accompanying letter or footnotes.

Please indicate compliance status by circling Yes/No under “Complies” column.

	 	 	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	 
	 	 	 	 	 	 
	Monthly financial statements

	 	Monthly within 30 days
	 	Yes
	 	No
	10K and 10Q

	 	Within 5 days of filing
	 	Yes
	 	No
	A/R & A/P Agings, Borrowing Base Cert.

	 	Monthly within 20 days when Advances exceed Non-Formula Portion;
otherwise,
30 days
	 	Yes

Yes
	 	No

No
	Compliance Cert.

	 	Monthly within 30 days
	 	Yes
	 	No
	A/R Audit

	 	Initial and Semi-Annual
	 	Yes
	 	No
	IP Report

	 	Quarterly within 30 days
	 	Yes
	 	No
	Projections

	 	Annual within 30 days prior to FYE
	 	Yes
	 	No
	Total amount of Borrower’s cash and investments

	 	Amount: $                    	 	 	 	 
	Total amount of Borrower’s cash and investments
maintained with Bank

	 	Amount: $                    ;      % of total Cash
	 	Yes
	 	No

	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	Actual	 	Complies
	Maintain at all Time; Measured on a Monthly Basis:
	 	 	 	 	 	 	 	 
	                Minimum Adjusted Quick Ratio

	 	0.80:1.001
	 	     :1.00
	 	Yes
	 	No
	                Minimum Cash at Bank

	 	$15,000,000; 2 80%
	 	$     ;      %
	 	Yes
	 	No
	                Minimum Debt Service Coverage Ratio

	 	1.00:1.003
	 	     :1.00
	 	Yes
	 	No
	                Maximum Debt-TNW

	 	1.00:1.00
	 	     :1.00
	 	Yes
	 	No

 

			
	1	 	through 12/30/05; then .90:1.00.
	 
	2	 	through 12/30/06; then, as long as no Event of Default, (i) $12,500,000 thru 6/29/07; and (ii) $10,000,000 thereafter.
	 
	3	 	upon the earlier of (i) Cash at Bank below $20,000,000 and (ii) through 6/29/07; then 1.25:1.00.

	 	 	 	 	 	 	 
	Comments Regarding Exceptions: See Attached.	 	BANK USE ONLY
	 
	 	 	 	 	 	 
	 	 	 	 	Received by:
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	AUTHORIZED SIGNER
	Sincerely,

PAC-WEST TELECOMM, INC.,

for itself and on behalf of all Borrowers	 	Date:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Verified:	 	 
	 

	 	 
	 	 	 	 
	 

	 	SIGNATURE
	 	 	 	AUTHORIZED SIGNER
	 

	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 
	 

	 	TITLE	 	 	 	 
	 	 	 	 	Compliance Status                                         Yes      No
	 

	 	 	 	 	 	 
	 

	 	DATE	 	 	 	 

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

SCHEDULE
OF EXCEPTIONS

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

PERMITTED
INDEBTEDNESS (Section 1.1)

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	1.	 	Merrill Lynch Capital — Term Loan and Security Agreement dated May 21,
2004 for the loan amount of $2,400,887.18. Balance at September 30, 2005 -
$1,410,758.68.
	 
	2.	 	Merrill Lynch Capital — Term Loan and Security Agreement dated May 27,
2005 for the loan amount of $1,949,090.94. Balance at September 30, 2005 -
$1,758,081.93.
	 
	3.	 	Merrill Lynch Capital — Term Loan and Security Agreement dated July 2,
2004 for the loan amount of $2,996,445.82. Balance at September 30, 2005 -
$1,922,968.59.
	 
	4.	 	Indenture, dated as of January 29, 1999, relating to the 13.5% Series A and B
Senior Notes due 2009 combined with the First Supplemental Indenture dated
as of November 25, 2003. Balance at September 30, 2005 — $36,102,000.00.
	 
	5.	 	Chase Automotive Finance via Lexus of Pleasanton for the purchase of a
Lexus LX 470 2003 VIN#JTJHTOOW833527914 for the amount of
$48,775.48 dated January 24, 2003. Balance at September 30, 2005 -
$25,147.51.
	 
	6.	 	Software/Services Payment Reimbursement Agreement No.4575 SA001-0
dated April 27, 2004, by Cisco Systems Capital Corporation, a Nevada
corporation for the amount of $1,624,163.91. Balance at September 30, 2005
-$857,136.49.
	 
	7.	 	Schedule No 015-000 dated as of March 12, 2004 with Cisco Systems Capital
Corporation which supplemented the Master Agreement to Lease Equipment
No. 3332. Balance at September 30, 2005 — $726,055.31.
	 
	8.	 	Amendment 1 to Schedule No 015-000 dated as of December 8, 2004 with
Cisco Systems Capital Corporation which supplemented the Master
Agreement to Lease Equipment No. 3332. Balance at September 30, 2005 -
$5,248.46
	 
	9.	 	Schedule No 015-010 dated as of April 2, 2004 with Cisco Systems Capital
Corporation which supplemented the Master Agreement to Lease Equipment
No. 3332. Balance at September 30, 2005 — $34,126.83

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

PERMITTED INVESTMENTS (Section 1.1)

	 	 	Any investment by a Borrower in another Borrower
	 
	 	 	Investment by Pac-West Telecomm, Inc. in the following inactive California shell corporations:

U.S. Net Solutions, Inc.

Installnet, Inc.

See Following Spreadsheet

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

PERMITTED INVESTMENTS

Schedule 1.1 (a)

September 30, 2005

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Security Type	 	 	 	 	 	 	 	 	 	Minimum Credit
	 	 	 	 	 	 	Concentration Limit	 	Maximum Maturity Days	 	Rating
	Security	 	Market Value	 	Percent Assets	 	Original Holding Period	 	Days to Maturity	 	Current Credit Rating
	 
	Money Market Funds

	 	 	 	 	 	No Limit
	 	 	N/A	 	 	 	N/A	 	 	N/A
	 
	FEDERATED PRIME VALUE OBLIGATIONS INSTL (60934N9A4)

	 	$	551,668	 	 	 	5.22%	 	 	Overnight
	 	Overnight
	 	/
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	U.S. Agency — Discount Notes

	 	 	 	 	 	 	40%	 	 	1095 Days
	 	1095 Days
	 	A-1+/P-1
	 
	FREDDIE
MAC (Due 10/11/05 — 313397MVO)

	 	$	524,580	 	 	 	4.97%	 	 	 	25	 	 	 	11	 	 	A-1+/P-1
	FREDDIE
MAC (Due 10/18/05 — 313397NC1)

	 	$	174,738	 	 	 	1.65%	 	 	 	29	 	 	 	18	 	 	A-1+/P-1
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Corporate Debentures/Bonds

	 	 	 	 	 	 	50%	 	 	1095 Days
	 	1095 Days
	 	BBB/Baa2
	 
	BANK ONE CORP (Due 02/01/06 — 06423AAM5)

	 	$	1,108,217	 	 	 	10.49%*	 	 	 	664	 	 	 	124	 	 	A+/Aa3
	BEAR STEARNS CO INC (Due 03/30/06 — 073902CB2)

	 	$	795,016	 	 	 	7.53%*	 	 	 	717	 	 	 	181	 	 	A/A1
	CIT GROUP INC GLOBAL SR NT (Due 02/21/06 — 125577AN6)

	 	$	1,099,802	 	 	 	10.41%*	 	 	 	684	 	 	 	144	 	 	A/A2
	CITIGROUP INC (Due 12/01/05 — 172967BA8)

	 	$	1,104,455	 	 	 	10.46%*	 	 	 	598	 	 	 	62	 	 	AA-/Aa1
	DONALDSON LUFKIN JENRETT (Due 11/01/05 — 257661 AA6)

	 	$	1,202,388	 	 	 	11.38%*	 	 	 	567	 	 	 	32	 	 	A+/Aa3
	HELLER FINANCIAL INC (Due 03/15/06 — 423328BS1)

	 	$	1,110,120	 	 	 	10.51%*	 	 	 	702	 	 	 	166	 	 	AAA/Aaa
	HOUSEHOLD FINANCE CORP (Due 02/21/06 — 44181KQ80)

	 	$	1,096,458

	 	 	 	10.38%*
	 	 	 	684	 	 	 	144	 	 	A/A1
	
JP MORGAN CHASE & CO (Due 01/15/06 — 46625HAEO)

	 	
$	
703,836	 	 	 	
6.66%*	 	 	 	
643	 	 	 	
107	 	 	
A/A1
	MERRILL LYNCH & CO (Due 03/10/06 — 59018YQN4)

	 	$	1,091,794	 	 	 	10.34%*	 	 	 	695	 	 	 	161	 	 	A+/Aa3
	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Maximum Weighted Average Maturity	 	N/A	 	 	 	 	 	 	 	 	 	 
	Current Weighted Average Maturity	 	109 Days	 	 	 	 	 	 	 	 	 	 
	In Compliance? Yes or No	 	Yes	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Issuer Limit	 	5%	 	 	 	 	 	 	 	 	 	 
	Current Maximum Issuer	 	17.15% — JPMorgan Chase & Co*	 	 	 	 	 	 	 	 	 	 
	In Compliance? Yes or No	 	Yes	 	 	 	 	 	 	 	 	 	 

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

PERMITTED
LIENS (Section 1.1)

All such liens existing in connection with Permitted Indebtedness disclosed on the Permitted
Indebtedness Schedule.

PRIOR
NAMES (Section 5.5)

The company previously used the dba AmeriCall in connection with the offering of certain
products.

From time to time the company has been referred to in writing or verbally with the following
variations to its legal name:

Pac-West 

Pac-West Telecomm

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

LITIGATION
(Section 5.6)

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Krim vs Pac-West Telecomm, Inc., et al., Civil Action No. 01-CV-11217. On December
6, 2001, a complaint captioned was filed in United States District Court for the Southern
District of New York against the Company, certain executive officers, and various
underwriters in connection with our initial public offering. An amended complaint was
filed on April 19, 2002. The plaintiffs allege that the Company and its officers failed to
disclose alleged allocations of shares of the Company’s common stock in exchange for
excessive brokerage commissions or agreements to purchase shares at higher prices in the
aftermarket, in violation of Section 11 of the Securities Act of 1933 and Section 10(b) of
the Securities Exchange Act of 1934. Substantially similar actions have been filed
concerning the initial public offerings for more than 300 different issuers, and the cases
have been consolidated as In re Initial Public Offering Securities Litigation, 21 MC 92.
The complaint against the Company seeks unspecified damages on behalf of a purported
class of purchasers of its common stock. In October 2002, the executive officers of the
Company were dismissed from the action without prejudice by agreement with the
plaintiffs, which also resulted in tolling of the statute of limitations. The court dismissed
the Section 10(b) claim against the Company in 2002.

On July 10, 2003, a committee of the Company’s board of directors conditionally
approved a proposed settlement with the plaintiffs in this matter. The settlement would
provide, among other things, a release of the Company and of the individual defendants
for the conduct alleged in the action to be wrongful in the plaintiff’s complaint. The
Company would agree to undertake other responsibilities under the settlement, including
agreeing to assign away, not assert, or release certain potential claims the Company may
have against its underwriters. Any direct financial impact of the proposed settlement is
expected to be borne by the Company’s insurers who participated in the negotiation of
the settlement together with insurers representing other issuers in the class action case
and who have agreed to fund the settlement. The settlement is subject to a hearing on
fairness and approval by the court overseeing the litigation. A hearing with respect to
final approval of the settlement is in the process of being noticed for next spring. The
court has signaled its preliminary intention to approve the terms of the settlement.

California Sales Tax Audit The State of California has assessed Pac-West for sales tax
for the years ended 2001, 2002, 2003 and the first two quarters of 2004. Pac-West has
appealed and is awaiting hearing date.

City of Los Angeles Utility Tax Audit The City of Los Angeles has assessed utility tax
for the years ended 2001, 2002 and 2003. Pac-West is currently appealing the
assessment.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Pac-West Telecomm, Inc.

Regulatory

	 	 	 	 	 	 	 	 	 	 	 
	Case # or Matter	 	 	 	Body/Court of	 	 	 	 	 	 
	#	 	Docket #	 	Jurisdiction	 	Issue	 	Summary	 	Impact
	D05-10-012

	 	 	 	CPUC
	 	AT&T Call Termination
	 	AT&T local refused to pay Pac-West’s tariffed termination rate for
local traffic. Pac-West filed a complaint with the California Public
Utilities Commission (“CPUC”). CPUC Administrative Law Judge
(“ALJ”) ruled in favor of Pac-West and ordered AT&T to pay $7.1
million within 30 days of effective date. AT&T and Pac-West both
filed protests prior to effective date of the ALJ ruling requiring further
Commission action.
	 	[**]
	 
	 	 	 	 	 	 	 	 	 	 
	FCC 05-33

	 	CC01-92 CC96-98
	 	FCC
	 	FCC NPRM intercarrier

compensation
	 	FCC established this Notice of Proposed Rulemaking (“NPRM”) to
achieve a uniform intercarrier compensation scheme to replace
access charges, Universal Service Fund (“USF”), reciprocal
compensation, etc. Intercarrier Compensation Forum (“ICF”)
proposing bill and keep. National Association of Regulatory Utility
Commissioners (“NARUC”) proposing intrastate rate. NPRM
released 3/3/05. Comments filed 5/23/05 and Reply Comments filed
8/8/05.
	 	[**]
	 
	 	 	 	 	 	 	 	 	 	 
	WC04-36

	 	 	 	FCC
	 	FCC VoIP proceeding
	 	FCC released Interim Order requiring Voice Over Internet Protocol
(“VoIP”) providers to comply with 911 regulations. The dangers of
this proceeding are (1) the deregulation of ILECs (2) asymmetrical
intercarrier compensation that benefits the ILECs only.
	 	[**]
	 
	 	 	 	 	 	 	 	 	 	 
	04-16382

	 	C03-03441CW
	 	9th Circuit
Court of
California
	 	Appeal of Point of
Interconnection (“POI”)
and Call Origination
Charge (“COC”)
	 	Pac-West and Verizon appealing District Court ruling upholding the
CPUC’s arbitration order. Pac-West filed notice to appeal to the 9th
Circuit Court challenging the CPUC’s imposition of Call Origination
Charges (COC) if Pac-West fails to move its Point of
Interconnection (POI) to each ILEC Tandem. Verizon challenging
the CPUC’s interpretation that the prior Interconnection Agreement
(“ICA”) required an amendment to effectuate Verizon’s
implementation of the FCC ISP order. Opening briefs filed on
1/10/05. Final briefs filed 3/11/05.
	 	[**]

Confidential and Proprietary Information of Pac-West Telecomm, Inc.

Subject to NDA

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

INBOUND
LICENSES (Section 5.12)

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Stockton Office and Switch Site lease (4202 and 4210 Coronado) with Pilot
Communications as Landlord contains prohibition on assignment, mortgage,
hypothecation of interest in lease without written consent of Landlord.

All Oakland Switch Site leases (1624 Franklin Street) with Balco Properties as
Landlord prohibit mortgage or hypothecation of interest in lease.

All Los Angeles Switch Site leases (624 S. Grand) with Carlyle One Wilshire as
Landlord and Global Crossing Telecomm, as sub lessor prohibit mortgage or
hypothecation of interest in lease.

Las Vegas Switch Site lease (302\304 E. Carson) prohibits assignment of Pac-West’s
interest in the lease without written consent of the Landlord.

Phoenix Switch Site lease (3110 N. Central) prohibits assignment, hypothecation of
interest or transfer of Pac-West’s interest in the lease without the written consent of
Landlord.

Seattle (Tukwilla) Switch Site lease (12201 Tukwilla International Blvd.) requires
Pac-West’s interest in the lease be kept free of liens and prohibits assignment, mortgage,
pledge of Pac-West’s interest in the lease without the written consent of Landlord

Stockton Warehouse lease (4203 Coronado, Unit 3) with Coronado Partners as
Landlord prohibits assignment of Pac-West’s interest in the lease without the written
consent of Landlord.

Stockton Office and storage leases (4203 Coronado, Unit 4 and 4217 Coronado Units
A, B, C, D & E) with Coronado Partners as Landlord prohibit assignment of Pac-West’s
interest in the lease without the written consent of Landlord.

San Jose Equipment lease with MACANAN Investments as Landlord prohibits
assignment, encumbering or transfer of Pac-West’s interest in the lease without the
written consent of Landlord.

Sacramento Equipment Lease (770 L Street) with L Street Investment Group, Inc. as
Landlord prohibits assignment, encumbering or other transfer of Pac-West’s interest in
the lease without the written consent of Landlord.

Volo Communications, Inc. Master agreement dated March 9, 2005 prohibits
assignment of Pac-West’s interest without written consent of Volo (Section 5.0).

Billsoft Inc. Software License Agreement dated October 2004 prohibits license nontransferable
(Section 2 (C) and assignment of Pac-West’s interest without written consent
of Billsoft (Section 7).

Daleen Technologies, Inc. Maintenance Agreement dated June 20, 2003 prohibits
assignment of Pac-West’s interest without written consent of Daleen (Section 6.6).

Daleen Technologies, Inc. Software License agreement dated March 29, 1999 prohibits
(except in case of merger) assignment of Pac West’s interest without written consent of
Daleen (Section XIV).

AOL Network Services Agreement dated September 20, 2005 prohibits assignment of
Pac West’s interest without written consent of AOL (Section 14.7).

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Level 3 Communications, LLC Reciprocal Master Voice Termination Services
Agreement prohibits assignment of Pac-West’s interest without written consent of Level
3 (Section 6.2).

Quest Dial Access Services Agreement dated January 31, 2002 (as amended) prohibits
assignment of Pac-West’s interest without written consent of Quest (Section 23).

United Online, Inc Service Provider Agreement dated January 1, 2003 prohibits
assignment of Pac-West’s interest without written consent of United Online (Section
14.2).

Vonage Holding Corp. Master Services Agreement dated March 3, 2005 prohibits
assignment of Pac-West’s interest without written consent of Vonage (Section 6.0).

All certificates of authority from governmental utility commissions.

AT&T Wireless (CMRS) Agreement for Transport and Termination of Traffic prohibits
assignment of Pac-West’s interest without written consent of AT&T (Section 10.0).

Citizens (CA) Agreement for Local Wireline Network Interconnection prohibits
assignment of Pac-West’s interest without written consent of Citizens (Section 17).

Cox Communications (AZ) Network Interconnection Agreement prohibits assignment
of Pac-West’s interest without written consent of Cox (Section 24.7).

Cox Communications (CA) Network Interconnection Agreement prohibits assignment
of Pac-West’s interest without written consent of Cox (Section 24.7).

Mpower (CA) Network Interconnection Agreement prohibits assignment of Pac-West’s
interest without written consent of Mpower (Section 17.7).

Quest (AZ) Agreement for Local Wireline Network Interconnection and Service Resale
prohibits assignment of Pac-West’s interest without written
consent of Quest (Section 30).

Quest (CO) Interconnection, Unbundled Network Elements, Ancillary Services, and
Resale of Telecommunications Services agreement prohibits assignment of Pac-West’s
interest without written consent of Quest (Section HH).

Quest (OR) Interconnection Agreement prohibits assignment of Pac-West’s interest
without written consent of Quest (Section HH).

Quest (UT) Interconnection, Unbundled Network Elements, Ancillary Services, and
Resale of Telecommunication Services agreement prohibits assignment of Pac-West’s
interest without written consent of Quest (Section 5.12).

Quest (WA) Local Interconnection Agreement prohibits assignment of Pac-West’s
without written consent of Quest (Section (A) 3.12).

SBC/Nevada Bell (NV) Interconnection Agreement Sections 251 and 252 of the
Telecommunications Act of 1996 prohibits assignment of Pac-West’s interest without
written consent of SBC/Nevada Bell (Section 30.9).

SBC/Pacific Bell (CA) Interconnection Agreement Under Sections 251 and 252 of the
Telecommunications Act of 1996 prohibits assignment of Pac-West’s interest without
written consent of SBC/Pacific Bell (Pg. 3 Section 4).

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

SBC/Nevada Bell (NV) Interconnection Agreement Under Sections 251 and 252 of the
Telecommunications Act of 1996 prohibits assignment of Pac-West’s interest without
written consent of SBC/Nevada Bell (Section 30.9).

Sprint (NV) Master Interconnection, Collocation and Resale Agreement prohibits
assignment of Pac-West’s interest without written consent of Sprint (Section 16).

Sprint Spectrum (CMRS) Agreement for Transport and Termination of Traffic
prohibits assignment of Pac-West’s interest without written consent of Sprint (Section
8.0).

SureWest Telephone (CA) Agreement prohibits assignment of Pac-West’s interest
without written consent of SureWest (Section 1.19.12).

Verizon (CA) Agreement prohibits assignment of Pac-West’s interest without written
consent of Verizon (Section 5).

Verizon (OR) Interconnection, Resale and Unbundling Agreement prohibits assignment
of Pac-West’s interest without written consent of Verizon (Section 4).

Verizon (NV) Interconnection Agreement between GTE California Incorporated and
Pac-West Telecomm, Inc. prohibits assignment of Pac-West’s interest without written
consent of Verizon (Section 4).

Verizon (WA) Interconnection, Resale and Unbundling Agreement prohibits assignment
of Pac-West’s interest without written consent of Verizon (Section 4).

Active Networks Software License Agreement dated July 1, 2004 prohibits assignment,
liens, and encumbrances of Pac-West’s interest without written consent of Active
Networks (5.1).

Alcatel Services Agreement dated July 29, 2004 prohibits assignment of Pac-West’s
interest without written consent of Alcatel (14.1).

Cisco Systems Resale Master Services Agreement dated prohibits assignment of Pac-
West’s interest without written consent Cisco (Section 4.4.3).

Cyberlog Services, Inc. Cyberlog Maintenance Agreement prohibits assignment of Pac-
West’s interest without written consent of Cyberlog.

DPS Telecom Inc. Maintenance Agreement dated January 13, 2004 prohibits
assignment of Pac-West’s interest without written consent of DPS (1.E).

Glenayre Electronics Maintenance Services Agreement dated March 1, 2003 prohibits
assignment of Pac-West’s interest without written consent of Glenayre (Section 7.7.1).

Lucent Technologies Inc. General Purchase Agreement dated September 30, 2003
prohibits assignment of Pac-West’s interest without written consent of Lucent (Section
22).

Lucent Tecnologies, Inc. Remote VPN Brick Maintenance agreement dated December
28, 2004 prohibits assignment of Pac West’s interest without written consent of Lucent.

Neustar Professional Services Agreement dated August 26, 2004 prohibits assignment of
Pac-West’s interest without written consent of Neustar (14.5).

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Oracle Corporation Services Agreement, Fixed Price Engagement Contract and Fixed
Price Engagement Contract and Time and Materials Contract all with Oracle Corporation
and all dated May 12, 2000. Pac-West is prohibited from assigning or transferring its
interest or rights without the written consent of Oracle.

Quest Communications Corporation IRU Agreement dated June 30, 2000 prohibits
assignment of Pac-West’s interest and rights in the agreement without written consent of
Quest.

Quest Communications Corporation Collocation License Agreement dated May 17,
2002 prohibits assignment of Pac-West’s interest and rights in the agreement without the
written consent of Quest.

SS8 Networks dated July 26, 2004 prohibits assignment of Pac-West’s interest without
written consent of SS8 Networks (14.0).

Telecordia Technologies Supplement for Master License Agreement for Common
Language Products prohibits assignment of Pac-West’s interest without written consent
of Telcordia.

Tekelec Custom Extended Warrant Services dated March 26, 2004 prohibits assignment
of Pac-West’s interest without written consent of Tekelec (13.0).

Tekelec Master Procurement Agreement dated March 26, 2004 prohibits assignment of
Pac-West’s interest without written consent of Tekelec (Section 15.8).

Tekelec Materials Loan Agreement dated October 5, 2005 prohibits assignment of Pac-
West’s interest without written consent of Tekelec (Section 2.1).

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

INVENTORY
AND EQUIPMENT (Section 7.10)

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

INVENTORY AND EQUIPMENT

AS OF SEPT. 2005

SCHEDULE 7.10

	 	 	 	 	 	 	 	 	 
	 	 	SPACE	 	 	 	 	 	CONTACT NAME
	LOCATION	 	USAGE	 	PROPERTY ADDRESS	 	LESSOR	 	PHONE NUMBER
	 
	OFFICE LEASES:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	STOCKTON 33,000 sq. ft.

	 	OFFICE SWITCH
	 	4202 & 4210
CORONADO AVE.
STOCKTON, CA 95204
	 	PILOT
COMMUNICATIONS P.O.
BOX 77766 STOCKTON,
CA 95257
	 	KEITH BUSSMAN (209) 477-3161
	 
	 	 	 	 	 	 	 	 
	STOCKTON
2640 sq. ft.

	 	OFFICE
	 	4203 CORONADO UNIT

4 STOCKTON, CA

95204
	 	CORONADO PARTNERS
51 UNIVERSITY AVE.
SUITE M LOS GATOS,
CA 95030
	 	BOB MORGAN (209) 462-8538
	 
	 	 	 	 	 	 	 	 
	STOCKTON 2640 sq. ft.

	 	WAREHOUSE
	 	4203 CORONADO UNIT

3 STOCKTON, CA

95204
	 	CORONADO PARTNERS
51 UNIVERSITY AVE.
SUITE M LOS GATOS,
CA 95030
	 	BOB MORGAN (209) 462-8538
	 
	 	 	 	 	 	 	 	 
	STOCKTON
4,132 sq. ft.

	 	D=FACILITIES

E=WAREHOUSE
	 	4211 CORONADO UNITS

D&E STOCKTON, CA

95204
	 	4211 CORONADO

ASSOCIATES 51

UNIVERSITY AVE

SUITE M LOS GATOS,

CA 95030
	 	BOB MORGAN (209) 462-8538
	 
	 	 	 	 	 	 	 	 
	STOCKTON 12,000 sq. ft.

	 	A&B=OFFICES

D=OFFICE E=STORAGE

C=STORAGE
	 	4217 CORONADO UNITS

A,B,C,D&E STOCKTON,

CA 95204
	 	CORONADO PARTNERS
51 UNIVERSITY AVE.
SUITE M LOS GATOS,
CA 95030
	 	BOB MORGAN (209) 462-8538
	 
	 	 	 	 	 	 	 	 
	BREA 2,238 sq. ft.

	 	OFFICE
	 	500 S. KRAEMER
BLVD. #215 BREA, CA
92821
	 	EQUITY OFFICE
PROPERTIES TRUST
145 S. STATE
COLLEGE BLVD. SUITE
G105 BREA, CA 92821
	 	BRAD SIMPKINS (714) 634-4100
	 
	 	 	 	 	 	 	 	 
	STOCKTON 30,046 sq. ft.

	 	OFFICE
	 	1776 W MARCH LN.
STOCKTON, CA 95207
#180,210,240,250
140,150,190
SUB-LEASE TO TP
	 	J.J D. STOCKTON
ADVENTURE LLC C/0
CB RICHARD ELLIS
555 CAPITOL MALL
SUITE 215
SACRAMENTO, CA
95814
	 	LIZA MORRIS (916) 446-8259
	 
	 	 	 	 	 	 	 	 
	STOCKTON 7,246 sq. ft.

	 	OFFICE
	 	1776 W. MARCH LN.
STOCKTON, CA 95207
#300,370
	 	J.J.D. STOCKTON
ADVENTURE LLC C/O
CB RICHARD ELLIS
555 CAPITOL MALL
SUITE 215
SACRAMENTO, CA
95814
	 	LIZA MORRIS (916) 446-8259
	 
	 	 	 	 	 	 	 	 
	SAN FRANCISCO 1,449 sq. ft.

	 	100% SPACE SUB-LEASE
	 	90 NEW MONTGOMERY
ST. SUITE 420 SAN
FRANCISCO, CA 94105
	 	THE CANADA LIFE
INSURANCE, 90 NEW
MONTGOMERY ST.
SUITE 201 SAN
FRANCISCO, CA 94105
	 	DAVID Q. DUBLE (415) 773-3568
	 
	 	 	 	 	 	 	 	 
	NAPA 1,800 sq. ft.

	 	OFFICE
	 	NAPA VALLEY GATEWAY

#8 SUITE 206 NAPA,

CA 94458
	 	NAPA VALLEY GATEWAY
BUS. 499 DELVLIN
ROAD NAPA, CA 94558
	 	VINCENT BUTLER (707) 252-8533
	NETWORK FACILITY LEASES:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SACRAMENTO
218 sq. ft.

	 	EQUIPMENT
	 	770 L STREET

SUITE #170

SACRAMENTO, CA 95814
	 	770 L STREET

INVESTMENT  GROUP, INC. C/O JONES

 LANG LA SALLE

AMERICAS III, SACRAMENTO,

CA 95814
	 	SHARON CAWEY (916) 492-7120
	 
	 	 	 	 	 	 	 	 
	SAN JOSE
200 sq. ft.

	 	EQUIPMENT
	 	SUITE 450

SAN JOSE, CA 95113

ROOF LEASE
	 	MACANAN INVESTMENTS
333 W. SANTA CLARA
SUITE 280
SAN JOSE, CA 95113
	 	DONALD MACANAN (408) 280-6300

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

INVENTORY AND EQUIPMENT

AS OF SEPT. 2005

SCHEDULE 7.10

	 	 	 	 	 	 	 	 	 
	 	 	SPACE	 	 	 	 	 	CONTACT NAME
	LOCATION	 	USAGE	 	PROPERTY ADDRESS	 	LESSOR	 	PHONE NUMBER
	LOS ANGELES 5,000 sq. ft.

	 	SWITCH
	 	624 S. GRAND SUITE
1210 LOS ANGELES,
CA 9001 7 BASE
RENT, CPI, RTX, OES
GENERATOR MAIN FEE
CONDUIT RENT, CPI
ADD, CONDUIT ADD,
GENERATOR POWER
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-1831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 2,140 sq. ft.

	 	SWITCH
	 	624 S. GRAND SUITE
1204 LOS ANGELES,
CA 90017 BASE RENT,
CPI RTX, OES
GENERATOR ROOF RENT
& CPI CABINET, CPI
CONDUIT
	 	CARLYLE ONE WILSHIRE. LP
FILE#53077 LOS ANGELES, CA
90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 665 sq, ft.

	 	SWITCH
	 	624 S, GRAND SUITE

1214 LOS ANGELES,

CA 90017
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 653 sq. ft.

	 	SWITCH
	 	624 S. GRAND SUITE
1209 LOS ANGELES,
CA 90017
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 6,062 sq. ft.

	 	SWITCH
	 	624 S. GRAND UNIT
#1500 LOS ANGELES,
CA 90017 BASE RENT,
CPI, RTX, OES ROOF
CONDUIT RENT, CPI
GENERATOR ADD
GENERTOR POWER ADD.
CONDUIT
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA 90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 3,129 sq. ft.

	 	SWITCH
	 	624 S. GRAND UNIT

#1207 LOS ANGELES,

CA 90017
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 1,974 sq. ft.

	 	SWITCH
	 	624 S. GRAND UNIT
#1200 LOS ANGELES,
CA 90017
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES 2,562 sq. ft.

	 	SWITCH
	 	624 S, GRAND UNIT

#1120 LOS ANGELES,

CA 90017 BASE RENT

GENERATOR CONDUIT

COOLING TOWER
	 	CARLYLE ONE WILSHIRE, LP

FILE#53077 LOS ANGELES, CA

90074
	 	CHRIS GALANTE (213) 629-4831
	 
	 	 	 	 	 	 	 	 
	LOS ANGELES (Space for a
Rack of equipment)

	 	EQUIPMENT
	 	ONE WILSHIRE SUITE

1225 LOS ANGELES,

CA 90017
	 	GLOBAL CROSSING TELECOMM, INC.
C/O REAL ESTATE LEASE ADM. 1080
PITTSFORD-VICTOR RD. #100
PITTSFORD,NY 14534-3805
	 	BARBRA VASSALLO (585) 255-1274
	 
	 	 	 	 	 	 	 	 
	LAS VEGAS 12,065 sq. ft.

	 	SWITCH
	 	302/304 E. CARSON
LAS VEGAS, NV 89101
	 	CARSON STREET INVEST. C/O
BURNHAM REAL ESTATE 300 S. 4TH
ST. SUITE 504 LAS VEGAS, NV
89109
	 	SUNSHINE (702) 384-4488

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

2 of 3

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

INVENTORY AND EQUIPMENT

AS OF SEPT. 2005

SCHEDULE 7.10

	 	 	 	 	 	 	 	 	 
	LOCATION	 	SPACE USAGE	 	PROPERTY ADDRESS	 	LESSOR	 	CONTACT NAME PHONE NUMBER
	OAKLAND 9,971 sq, ft,

	 	SWITCH
	 	1624 FRANLKIN ST

SUITES 40,100,201,

203 210, 214, 222,

& MEZZANINE Roof

Oakland, CA 94612
	 	BALCO PROPERTIES

925 YGNACIO VALLEY

RD WALNUT CREEK, CA

94596
	 	LUCAS HELLER (510) 763-2911
	 
	 	 	 	 	 	 	 	 
	OAKLAND 5,267 sq. ft.

	 	SWITCH
	 	1624 FRANKLIN ST.
SUITES 5,30, &
FRONT MEZZANINE
Oakland, CA 94612
	 	BALCO PROPERTIES

925 YGNACIO VALLEY

RD, WALNUT CREEK,

CA 94596
	 	LUCAS HELLER (510) 763-2911
	 
	 	 	 	 	 	 	 	 
	OAKLAND (cabinet with

equipment)

	 	EQUIPMENT
	 	1624 FRANKLIN ST.
SUITE 20 Oakland,
CA 94612
	 	BALCO PROPERTIES

925 YGNACIO VALLEY

RD, WALNUT CREEK,

CA 94596
	 	LUCAS HELLER (510) 763-2911
	 
	 	 	 	 	 	 	 	 
	PHOENIX 12,321 sq. ft.

	 	SWITCH
	 	3110 NORTH CENTRAL

#75 PHOENIX, AZ

65012
	 	MALL SPE, LLC 3121
N. 3RD AVE. SUITE
200 PHOENIX, AZ
85013
	 	JOEL ST. GERMAIN (602) 264-5575
	 
	 	 	 	 	 	 	 	 
	THORNTON 26,504 sq. ft.

	 	VACANT
	 	500 E, 84TH AVE,

#100 THORNTON, CO

80229
	 	ARI-NORTH VALLEY
TECH CENTER, LLC
P.O. BOX 738 SAN
FRANCISO, CA
94120-7383
	 	JACQUELYN CURTIS (303) 288-2580
	 
	 	 	 	 	 	 	 	 
	TUKWILA 16,851 sq. ft.

	 	SWITCH
	 	12201 TUKWILA INT’L
BLVD. TUKWILA, WA
98168-5121
	 	INTERNATIONAL
GATEWAY WEST LLC
C/O SABEY CORP.
P.O. BOX 34108
SEATTLE, WA 98124
	 	DEBBIE SABEY (206) 277-5228
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	BASE RENT BLDG.
COSTS TTS (84
MONTHS)	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SALINAS COLLOCATION

	 	EQUIPMENT
	 	915 C&D HARKINS

ROAD SALINAS, CA

93901-4565
	 	QWEST
COMMUNICATIONS
CORP. 555 17TH
STREET, 7TH FLOOR
DENVER, CO 80202
	 	VP, TRANSPORT ENGINEERING
	 
	 	 	 	 	 	 	 	 
	SAN LUIS OBISPO

COLLOCATION

	 	EQUIPMENT
	 	2466 Victoria Ave

SAN LUIS OBISPO, CA

93401
	 	QWEST
COMMUNICATIONS
CORP. 555 17TH
STREET, 7TH FLOOR
DENVER, CO 80202
	 	VP, TRANSPORT ENGINEERING
	 
	 	 	 	 	 	 	 	 
	SANTA BARBARA

COLLOCATION

	 	EQUIPMENT
	 	27E COTA STREET

SANTA BARBARA, CA

93101
	 	QWEST
COMMUNICATIONS
CORP. 555 17TH
STREET, 7TH FLOOR
DENVER, CO 80202
	 	VP, TRANSPORT ENGINEERING
	 
	 	 	 	 	 	 	 	 
	
NEW YORK COLLOCATION

	 	
SWITCH
	 	
16TH FLOOR, 60

HUDSON NEW YORK, NY

10013
	 	 
	 	  

Sub-Lease
Properties:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	PROPERTY LOCATION	 	LANDORD	 	SUB-LESSEE
	STOCKTON

	 	TOWER
	 	4210 CORONADO
	 	PILOT COMMUNICATIONS
	 	PILOT COMMUNICATIONS
	SAN FRANCISCO

	 	OFFICE
	 	90 NEW MONTGOMERY ST
	 	THE CANADA LIFE INSURANCE,
	 	MUSEUM OF THE AFRICAN
	STOCKTON

	 	OFFICE
	 	1 776 W. MARCH LN #300
	 	J.J.D STOCKTON ADVENTURE LLC
	 	WELLS FARGO HOME MORTGAGE
	NAPA

	 	OFFICE
	 	CAM PUS #8, SUITE 206
	 	NAPA VALLEY GATEWAY BUS.
	 	TELEPACIFIC
	STOCKTON

	 	OFFICE
	 	1776 W. MARCH LN. 140,150.190
	 	J.J.D STOCKTON ADVENTURE LLC
	 	TELEPACIFIC
	STOCKTON

	 	OFFICE
	 	4211 CORONADO, D & E
	 	4211 CORONADO ASSOCIATES
	 	TELEPACIFIC

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

3 of 3

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Corporation Resolutions and Incumbency Certification

Authority to Procure Loans

 

[hardcopy to be inserted for each Borrower]

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

ATTN:

PAC-WEST TELECOMM, INC.

PAC-WEST TELECOM OF VIRGINIA, INC.

PWT SERVICES, INC.

PWT OF NEW YORK, INC.

USA PATRIOT ACT

NOTICE

OF

CUSTOMER IDENTIFICATION

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

     To help the government fight the funding of terrorism and money laundering activities, Federal
law requires all financial institutions to obtain, verify, and record information that identifies
each person who opens an account.

     WHAT THIS MEANS FOR YOU: when you open an account, we will ask your name, address, date of
birth, and other information that will allow us to identify you. We may also ask to see your
driver’s license or other identifying documents.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

COMERICA BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Revolver)

			
	Name(s): PAC-WEST TELECOMM, INC.

           for itself and on behalf of all Borrowers
	 	Date: November 9, 2005

     $5,000,000                     credited to deposit account No. 1892-989573 when Advances are requested by Parent

Amounts paid to others on your behalf:

	 	 	 
	$

	 	to Comerica Bank for Loan Fee
	 
	 	 
	$

	 	to Comerica Bank for Document Fee
	 
	 	 
	$

	 	to Comerica Bank for accounts receivable audit (estimate)
	 
	 	 
	$

	 	to Bank counsel fees and expenses (estimate)
	 
	 	 
	$

	 	to                     
	 
	 	 
	$

	 	to                     
	 
	 	 
	$5,000,000

	 	TOTAL (AMOUNT FINANCED)

Upon consummation of this transaction, this document will also serve as the authorization for
Comerica Bank to disburse the loan proceeds as stated above.

 

	 	 	 
	/s/ Ravi Brar

	 	 
	 

	 	 
	Signature

	 	Signature

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

COMERICA BANK

Member FDIC

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Term Loan)

			
	Name(s): PAC-WEST TELECOMM, INC.

           for itself and on behalf of all Borrowers
	 	Date: November 9, 2005

     $15,000,000                    credited to deposit account No. 1892-989573 when Advances are requested by Parent

Amounts paid to others on your behalf:

	 	 	 
	$

	 	to Comerica Bank for Loan Fee
	 
	 	 
	$

	 	to Comerica Bank for Document Fee
	 
	 	 
	$

	 	to Comerica Bank for equipment appraisal (estimate)
	 
	 	 
	$

	 	to                     
	 
	 	 
	$

	 	to                     
	 
	 	 
	$15,000,000

	 	TOTAL (AMOUNT FINANCED)

Upon consummation of this transaction, this document will also serve as the authorization for
Comerica Bank to disburse the loan proceeds as stated above.

 

	 	 	 
	/s/ Ravi
Brar
	 	 
	 	 	 
	Signature

	 	Signature

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

AGREEMENT TO PROVIDE INSURANCE

	 	 	 	 	 	 	 
	TO:

	 	COMERICA BANK
	 	 	 	Date: November 9, 2005
	 

	 	Attn: Deni M. Snider, MC 4770	 	 	 	 
	 

	 	75 E. Trimble Road	 	 	 	 
	 

	 	San Jose, CA 95131
	 	Borrower:
	 	PAC-WEST TELECOMM, INC.,
	 

	 	 	 	 	 	for itself and on behalf of all Borrowers

     In consideration of a loan in the amount of $20,000,000, secured by all tangible and
intangible personal property including inventory and equipment.

     I/We agree to obtain adequate insurance coverage to remain in force during the term of the
loan.

     I/We also agree to advise the below named agent to add Comerica Bank as lender’s loss payable
on the new or existing insurance policy, and to furnish Bank at above address with a copy of said
policy/endorsements and any subsequent renewal policies.

     I/We understand that the policy must contain:

     1. Fire and extended coverage in an amount sufficient to cover:

The amount of the loan, OR

All existing encumbrances, whichever is greater,

     But not in excess of the replacement value of the improvements on the real property.

     2. Lender’s “Loss Payable” Endorsement Form 438 BFU in favor of Comerica Bank, or any other
form acceptable to Bank.

INSURANCE INFORMATION

	 	 	 	 
	Insurance Co./Agent:
	Lockton Insurance Brokers
Attention: Tad Brockie	 	Telephone
No.:  (415) 568-4101
	 
	 	 
	Agent’s Address:
	Two Embarcadero
Center
Suite 1700
San Francisco, California 94111	 	 

	 
	Signature
of Obligor:   /s/ Ravi Brar                                                        
	 

	Signature of Obligor:                                                                                  

 

 

                                        FOR BANK USE ONLY

INSURANCE VERIFICATION: Date:

Person Spoken to:

Policy Number:

Effective From:                     To:

Verified by:

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	COMERICA BANK
	 	 
	                    Member FDIC

	 	AUTOMATIC DEBIT AUTHORIZATION

To: Comerica Bank

Re: Loan #                                                             

You are hereby authorized and instructed to charge account No. 1892-989573 in the name of PAC-WEST
TELECOMM, INC. (or any of the Borrowers)

 

for principal, interest and other payments due on above referenced loan as set forth below and credit the
loan referenced above.

	 
	ý Debit each interest payment as it becomes due according to the terms of
the Loan and Security Agreement and any renewals or amendments thereof.

	 

	ý Debit each principal payment as it becomes due according to the terms of
the Loan and Security Agreement and any renewals or amendments thereof.

	 

	ý Debit each payment for Bank Expenses as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

	 	 	 	 
	Signature of PAC-WEST TELECOMM, INC.,
	 	 	 
	for itself and on behalf of all Borrowers

	 	 	Date
	 
	 	 	 
	 

	 	 	November 9, 2005
	/s/ Ravi
Brar
	 	 	 
	 

	 	 	November 9, 2005

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	COMERICA BANK
	 	 
	                    Member FDIC

	 	AUTOMATIC DEBIT AUTHORIZATION

To: Comerica Bank

Re: Loan #                                                             

You are hereby authorized and instructed to charge account No. 1892-989573 in the name of PAC-WEST
TELECOMM, INC. (or any of the Borrowers)

 

for principal, interest and other payments due on above referenced loan as set forth below and credit the
loan referenced above.

	 
	ý Debit each interest payment as it becomes due according to the terms of
the Loan and Security Agreement and any renewals or amendments thereof.

	 

	ý Debit each principal payment as it becomes due according to the terms of
the Loan and Security Agreement and any renewals or amendments thereof.

	 

	ý Debit each payment for Bank Expenses as it becomes due according to the
terms of the Loan and Security Agreement and any renewals or amendments thereof.

This Authorization is to remain in full force and effect until revoked in writing.

	 	 	 	 
	Signature of PAC-WEST TELECOMM, INC.,
for itself and on behalf of all Borrowers

	 	 	Date
	 
	 	 	 
	 
	 	 	November 9, 2005
	/s/ Ravi Brar 
	 	 	 
	 

	 	 	November 9, 2005

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

COMERICA BANK

COMERICA BANK

CLIENT AUTHORIZATION

	 
	Fax (650) 213-1710

 

General Authorization

I hereby authorize Comerica Bank to use my company name, logo, and information relating to our
banking relationship in its marketing and advertising campaigns which is intended for Comerica
Bank’s customers, prospects and shareholders.

Comerica Bank will forward any advertising or article including client for prior review and
approval.

	 
	/s/
Ravi Brar

	Signature

	 

	Ravi Brar 
       
       
          Chief Financial Officer

	Printed Name                     Title

	 

	PAC-WEST TELECOMM, INC.

	Company

	 

	1776 W. March Lane, Suite 250

	Mailing Address

	 

	Stockton, California 95207

	City, State, Zip Code

	 

	(209) 926-3250

	Phone Number

	 

	(209) 926-4444

	Fax Number

	 

	rbrar@pacwest.com

	E-Mail

	 

	November 9, 2005

	Date

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PAC-WEST TELECOMM, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO UCC NATIONAL FORM FINANCING STATEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

          (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

          (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

          (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

          (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

          (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PAC-WEST TELECOM OF VIRGINIA, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO UCC NATIONAL FORM FINANCING STATEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

          (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

          (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

          (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

          (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

          (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PWT SERVICES, INC.
	 
	 	 
	SECURED PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO UCC NATIONAL FORM FINANCING STATEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

          (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

          (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

          (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

          (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

          (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

	 	 	 
	DEBTOR

	 	PWT OF NEW YORK, INC.
	 
	 	 
	SECURED
PARTY:

	 	COMERICA BANK

EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT

TO UCC NATIONAL FORM FINANCING STATEMENT

     All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether
presently existing or hereafter created or acquired, and wherever located, including, but not
limited to:

          (a) all accounts (including health-care-insurance receivables), chattel paper (including
tangible and electronic chattel paper), deposit accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general intangibles
(including payment intangibles and software), goods (including fixtures), instruments (including
promissory notes), inventory (including all goods held for sale or lease or to be furnished under a
contract of service, and including returns and repossessions), investment property (including
securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books
and records with respect to any of the foregoing, and the computers and equipment containing said
books and records;

          (b) all common law and statutory copyrights and copyright registrations, applications for
registration, now existing or hereafter arising, in the United States of America or in any foreign
jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any
parts thereof or any underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the right (but not the
obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of copyright;

          (c) all trademarks, service marks, trade names and service names and the goodwill associated
therewith, together with the right to trademark and all rights to renew or extend such trademarks
and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name
of the Debtor for past, present and future infringements of trademark;

          (d) all (i) patents and patent applications filed in the United States Patent and Trademark
Office or any similar office of any foreign jurisdiction, and interests under patent license
agreements, including, without limitation, the inventions and improvements described and claimed
therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii)
income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages and payments for
past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the
name of Debtor and/or in the name of Secured Party for past, present and future infringements
thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such
patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals,
extensions and continuations-in-part with respect to any of the foregoing; and

          (e) any and all cash proceeds and/or noncash proceeds of any of the foregoing, including,
without limitation, insurance proceeds, and all supporting obligations and the security therefor or
for any right to payment. All terms above have the meanings given to them in the California
Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9
of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section
35, operative July 1, 2001.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

 

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Eurodollar Addendum 

to Loan and Security Agreement

     This Eurodollar Addendum to Loan and Security Agreement (this “Addendum”) is entered into as
of this day 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. (collectively,
“Borrower”). This addendum supplements the terms of the Loan and Security Agreement (the “Loan
Agreement”) of even date herewith.

1. Definitions.

     a. Business Day. As used herein, “Business Day” means any day except a Saturday,
Sunday or any other day designated as a holiday under Federal or California statute or regulation.

     b. Eurodollar. As used herein, “Eurodollar” means the rate per annum (rounded upward,
if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the following formula:

	 	 	 	 	 
	 

	 	Base Eurodollar
	 	 
	 

	 	 	 	 
	Eurodollar =

	 	100%- Eurodollar Reserve Percentage	 	 

          (1) “Base Eurodollar” means the rate per annum determined by the Bank at which deposits for
the relevant Eurodollar Period would be offered to the Bank in the approximate amount of the
relevant Eurodollar Option Extension in the interbank Eurodollar market selected by the Bank, upon
request of the Bank at 10:00 a.m., California time, on the day that is the first day of such
Eurodollar Period.

          (2) “Eurodollar Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserved System (or any successor) for “Eurocurrency Liabilities” (as
defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected
changes in such reserve percentage during the applicable Eurodollar Period.

     c. Eurodollar Business Day. As used herein, “Eurodollar Business Day” means a
Business Day on which dealings in Dollar deposits may be carried out in the interbank Eurodollar
market.

     d. Eurodollar Option Advance. As used herein, “Eurodollar Option Advance” means an
Advance under the Revolving Line bearing interest at the Eurodollar rate for the applicable
Eurodollar Period.

     e. Eurodollar Option Extensions. As used herein, “Eurodollar Option Extensions” means
either or both of the “Eurodollar Option Advance” or the “Eurodollar Option Term Loan,” as the
context suggests.

     f. Eurodollar Option Term Loan. As used herein, “Eurodollar Option Term Loan” means a
Term Loan under (and as defined in) the Loan Agreement bearing interest at the Eurodollar rate for
the applicable Eurodollar Period.

     g. Eurodollar Period. As used herein, “Eurodollar Period” means,

          (1) with respect to a Eurodollar Option Advance:

               a. initially, the period commencing on, as the case may be, the date the Advance is made or
the date on which the Advance is converted to a Eurodollar Option Advance, and continuing for, in
every case, a period of ninety (90) to one hundred eighty (180) days thereafter so long as the
Eurodollar Option is quoted for such period in the applicable interbank Eurodollar market, as such
period is selected by Borrower in the notice of Advance as provided in the Loan Agreement or in the
notice of conversion as provided in this Addendum; and

               b. thereafter, each period commencing on the last day of the next preceding Eurodollar Period
applicable to such Eurodollar Option Extension and continuing for, in every case, a period of

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

-1-

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

ninety (90) to one hundred eighty (180) days thereafter so long as the Eurodollar Option is
quoted for such period in the applicable interbank Eurodollar market, as such period is selected by
Borrower in the notice of continuation as provided in this Addendum; and

          (2) with respect to a Eurodollar Option Term Loan:

               initially, the period commencing on, as the case may be, the date the Term Loan is made or the
date on which the Term Loan is converted to a Eurodollar Option Extension, and continuing for, in
every case, a period of twenty-four (24) to thirty-six (36) months thereafter so long as the
Eurodollar Option is quoted for such period in the applicable interbank Eurodollar market, as such
period is selected by Borrower in the notice of Advance as provided in the Loan Agreement or in the
notice of conversion as provided in this Addendum.

     h. Interest Period. As used herein, “Interest Period” means a Eurodollar Period, as
the context may imply, provided that all Eurodollar Periods are subject to the following:

          (1) if any Eurodollar Period would otherwise end on a day that is not a Eurodollar Business
Day, that Eurodollar Period shall be extended to the next succeeding Eurodollar Business Day;

          (2) there shall be no more than three (3) Interest Periods outstanding any one time; and

          (3) no Interest Period shall extend beyond the maturity date of the Loan Agreement.

     i. Loan Agreement. As used herein, “Loan Agreement” means the Loan and Security
Agreement of even date herewith.

     j. Prime Rate. As used herein, “Prime Rate” has the meaning given in the Loan
Agreement.

     k. Prime Rate Option Advance. As used herein, “Prime Rate Option Advances” means
Advances under (and as defined in) the Loan Agreement bearing interest at the Prime Rate.

     l. Prime Rate Option Extensions. As used herein, “Prime Rate Option Extensions” means
either or both of the “Prime Rate Option Advance” or the “Prime Rate Option Term Loan,” as the
context suggests.

     m. Prime Rate Option Term Loan. As used herein, “Prime Rate Option Term Loan” means a
Term Loan under (and as defined in) the Loan Agreement bearing interest at the Prime Rate.

     n. Regulation D. As used herein, “Regulation D” means Regulation D of the Board of
Governors of the Federal Reserve System as amended or supplemented from time to time.

     o. Regulatory Development. As used herein, “Regulatory Development” means any or all
of the following: (i) any change in any law, regulation or interpretation thereof by any public
authority (whether or not having the force of law); (ii) the application of any existing law,
regulation or the interpretation thereof by any public authority (whether or not having the force
of law); and (iii) compliance by Bank with any request or directive (whether or not having the
force of law) of any public authority.

2. Selection of Interest Rate Options. Borrower shall have the following options regarding
the interest rate to be paid by Borrower on Credit Extensions under the Loan Agreement:

     a. With respect to Eurodollar Option Advances, a rate equal to two and three quarters percent
(2.75%) above Eurodollar, as in effect during the relevant Eurodollar Period;

     b. With respect to Eurodollar Option Term Loans, a rate equal to three and one quarter percent
(3.25%) above Eurodollar, as in effect during the relevant Eurodollar Period; and

     c. With respect to Prime Rate Option Advances, a rate equal to the Prime Rate; and

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

          d. With respect to Prime Rate Option Term Loans, a rate equal to one half of one percent
(0.50%) above the Prime Rate.

3. Eurodollar Option Extensions. The minimum Eurodollar Option Extension(s) will be not
less than One Million Dollars ($1,000,000) for any Eurodollar Option Extension.

4. Payment of Eurodollar Option Extensions. Interest on each Eurodollar Option Extension
shall be payable pursuant to the terms of the Loan Agreement. Interest on each Eurodollar Option
Extension shall be computed on the basis of a 360-day year and shall be assessed for the actual
number of days elapsed from the first day of the Eurodollar Period applicable thereto but not
including the last day thereof.

5. Bank’s Records Re: Eurodollar Option Extensions. With respect to each Eurodollar Option
Extension, Bank is hereby authorized to note the date, principal amount, interest rate and
Eurodollar Interest Period applicable thereto and any payments made thereon on Bank’s books and
records (either manually or by electronic entry) and/or on any schedule attached to the Loan
Agreement, which notations shall be prima facie evidence of the accuracy of the information Loan
Agreement.

6. Conversion of Interest Rate Options. Borrower may elect from time to time to convert
outstanding Credit Extensions under the Loan Agreement from Credit Extensions bearing interest at a
rate determined by reference to one basis to Credit Extensions bearing interest at a rate
determined by reference to an alternative basis by giving the Bank (i) on any Eurodollar Business
Day, irrevocable notice of an election to convert Prime Rate Option Extensions to Eurodollar Option
Extensions, and (ii) at least two (2) Eurodollar Business Days’ prior irrevocable notice of an
election to convert Eurodollar Option Extensions to Prime Rate Option Advances; provided that any
conversion of Eurodollar Option Extensions shall only be made on the last day of the Interest
Period applicable thereto, and provided further that no Prime Rate Option Extension may be
converted to a Eurodollar Option Extension so long as a default is continuing under the Loan
Agreement. Borrower may elect from time to time to continue its outstanding Eurodollar Option
Extensions upon the expiration of the Interest Period applicable thereto if Borrower gives to the
Bank irrevocable notice of continuation of such Eurodollar Option, on a Eurodollar Business Day or
at least two (2) Eurodollar Business Days’ prior to the expiration thereof, and so long as no
default under the Loan Agreement is then continuing. Each notice of an election to convert or
continue a Credit Extension shall specify (a) the proposed conversion/continuation date; (b) the
amount of the Credit Extension to be converted/continued; (c) the nature of the proposed
conversion/continuation; and (d) in the case of a conversion to, or a continuation of a Eurodollar
Option Extension, the requested Interest Period, and shall certify that no default is continuing
under the Loan Agreement. On the date on which such conversion or continuation is effective, the
Bank shall take such action as is necessary to effect such conversion or continuation. In the
event that no notice of continuation or conversion is received by the Bank with respect to
outstanding Eurodollar Option Extensions, upon expiration of the Interest Period applicable
thereto, such Credit Extensions shall convert to Prime Rate Option Extensions. Any notice of
conversion or continuation may be given by telephone so long as (I) with respect to each Eurodollar
Option selected by Borrower, Bank receives written confirmation from Borrower not later than two
(2) Eurodollar Business Days after such telephone notice is given, and (II) with respect to each
Eurodollar Option selected by Borrower, Bank receives written confirmation from Borrower not later
than the Eurodollar Business Day that such telephone notice is given, and (III) with respect to
each Eurodollar Option selected by Borrower, Bank receives written confirmation thereof not later
than 10:00 a.m., California time, on the first day of the Interest Period selected by Borrower.

7. Default Interest. From and after the maturity date of the Loan Agreement, or such
earlier date as all principal owing hereunder becomes due and payable by acceleration or otherwise,
the outstanding principal balance of the Loan Agreement shall bear interest until paid in full at
an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to
five percent (5.00%) above the rate of interest from time to time applicable to the Loan Agreement.

8. Prepayment. In the event that the Eurodollar Option is the applicable interest rate for
all or any part of the outstanding principal balance of the Loan Agreement, and any payment or
prepayment of any such outstanding principal balance of the Loan Agreement shall occur on any day
other than the last day of the applicable Eurodollar Option (whether voluntarily, by acceleration,
required payment, or otherwise), or if Borrower elects the Eurodollar Option as the applicable
interest rate for all or any part of the outstanding principal balance of the Loan Agreement in
accordance with the terms and conditions hereof, and, subsequent to such election, but prior to the

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

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Confidential Treatment Requested by Pac-West Telecomm, Inc.

commencement of the applicable Eurodollar Option, Borrower revokes such election for any reason
whatsoever, or if the applicable interest rate in respect of any outstanding principal balance of
the Loan Agreement hereunder shall be changed, for any reason whatsoever, from the Eurodollar
Option to the Prime Rate Option prior to the last day of the applicable Eurodollar Option, or if
Borrower shall fail to make any payment of principal or interest hereunder at any time that the
Eurodollar Option is the applicable interest rate hereunder in respect of such outstanding
principal balance of the Loan Agreement, Borrower shall reimburse Bank, on demand, for any
resulting loss, cost or expense incurred by Bank as a result thereof, including, without
limitation, any such loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties. Such amount payable by Borrower to Bank may include,
without limitation, an amount equal to the excess, if any, of (a) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, refunded or converted, for the
period from the date of such prepayment or of such failure to borrow, refund or convert, through
the last day of the relevant Eurodollar Option, at the applicable rate of interest for such
outstanding principal balance of the Loan Agreement, as provided under this Loan Agreement, over
(b) the amount of interest (as reasonably determined by Bank) which would have accrued to Bank on
such amount by placing such amount on deposit for a comparable period with leading banks in the
interbank eurodollar market. Calculation of any amounts payable to Bank under this paragraph shall
be made as though Bank shall have actually funded or committed to fund the relevant outstanding
principal balance of the Loan Agreement hereunder through the purchase of an underlying deposit in
an amount equal to the amount of such outstanding principal balance of the Loan Agreement and
having a maturity comparable to the relevant Eurodollar Option; provided, however, that Bank may
fund the outstanding principal balance of the Loan Agreement hereunder in any manner it deems fit
and the foregoing assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Borrower, Bank shall deliver to Borrower
a certificate setting forth the basis for determining such losses, costs and expenses, which
certificate shall be conclusively presumed correct, absent manifest error. Any prepayment
hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount
so prepaid. Any outstanding principal balance of the Loan Agreement which is bearing interest at
such time at the Prime Rate Option may be prepaid without penalty or premium. Partial prepayments
hereunder shall be applied to the installments hereunder in the inverse order of their maturities.

BY INITIALING BELOW, EACH BORROWER ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE IS NO RIGHT TO
PREPAY ANY EURODOLLAR OPTION EXTENSION, IN WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT
SET FORTH HEREIN (“PREPAYMENT AMOUNT”), EXCEPT AS OTHERWISE REQUIRED UNDER APPLICABLE LAW; (B)
BORROWER SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF BANK EXERCISES ITS RIGHT TO
ACCELERATE PAYMENT OF ANY EURODOLLAR OPTION EXTENSION AS PART OR ALL OF THE OBLIGATIONS OWING UNDER
THE LOAN AGREEMENT, INCLUDING WITHOUT LIMITATION, ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C)
BORROWER WAIVES ANY RIGHTS UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, OR ANY SUCCESSOR
STATUTE; AND (D) BANK HAS MADE EACH EURODOLLAR OPTION EXTENSION PURSUANT TO THE LOAN AGREEMENT IN
RELIANCE ON THESE AGREEMENTS.

/s/ Ravi Brar      
                  
                   
    
             

BORROWER’S INITIALS (PAC-WEST TELECOMM, INC.)

/s/ Ravi Brar      
                  
                  
                  

BORROWER’S INITIALS (PAC-WEST TELECOM OF VIRGINIA, INC.)

/s/ Ravi Brar     
                 
                   
                   

BORROWER’S INITIALS (PWT SERVICES, INC.)

/s/ Ravi Brar        
                  
                   
               

BORROWER’S INITIALS (PWT OF NEW YORK, INC.)

9. Hold Harmless and Indemnification. Borrower agrees to indemnify Bank and to hold Bank
harmless from, and to reimburse Bank on demand for, all losses and expenses which Bank sustains or
incurs as a result of (i) any payment of a Eurodollar Option Extension prior to the last day of the
Interest Period applicable to such Credit

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

-4-

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

Extension for any reason, including termination of the Loan Agreement, whether pursuant to this
Addendum or the occurrence of an Event of Default for any reason; (ii) any termination of a
Interest Period in accordance with this Addendum; or (iii) any failure by Borrower, for any reason,
to borrow any portion of a Eurodollar Option Extension, except illegality or impracticality as set
forth in Section 11, below.

10. Funding Losses. The indemnification and hold harmless provisions set forth in this
Addendum shall include, without limitation, all losses and expenses arising from interest and fees
that Bank pays to lenders of funds it obtained in order to fund the loans to Borrower on the basis
of the and Eurodollar Option(s) and all losses incurred in liquidating or re-deploying deposits
from which such funds were obtained and loss of profit for the period after termination. A written
statement by Bank to Borrower of such losses and expenses shall be conclusive and binding, absent
manifest error, for all purposes. This obligation shall survive the termination of this Addendum
and the payment of the Loan Agreement.

11. Regulatory Developments or Other Circumstances Relating to Illegality or Impracticality of
Eurodollar. If any Regulatory Development or other circumstances relating to the interbank
Eurodollar markets shall, at any time, in Bank’s reasonable determination, make it unlawful or
impractical for Bank to fund or maintain, during any Interest Period, to determine or charge
interest rates based upon the Eurodollar, Bank shall give notice of such circumstances to Borrower
and:

     a. In the case of an Interest Period in progress, Borrower shall, if requested by Bank,
promptly pay any interest which had accrued prior to such request and the date of such request
shall be deemed to be the last day of the term of such Interest Period; and

     b. No Interest Period may be designated thereafter until Bank determines that such would be
practical.

12. Additional Costs. Borrower shall pay to Bank from time to time, upon Bank’s request,
such amounts as Bank determines are needed to compensate Bank for any costs it incurred which are
attributable to Bank’s having made or maintained a Eurodollar Option Extension or to Bank’s
obligation to make a Eurodollar Option Extension, or any reduction in any amount receivable by Bank
hereunder with respect to any Eurodollar Option or such obligation (such increases in costs and
reductions in amounts receivable being herein called “Additional Costs”), resulting from any
Regulatory Developments, which (i) change the basis of taxation of any amounts payable to Bank
hereunder with respect to any Eurodollar Option Extension (other than taxes imposed on the overall
net income of Bank for any Eurodollar Option Extension by the jurisdiction where Bank is
headquartered or the jurisdiction where Bank extends the Eurodollar Option Extension); (ii) impose
or modify any reserve, special deposit, or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, Bank including Eurodollar
Option Extension or any deposits referred to in the definition of Eurodollar); or (iii) impose any
other condition affecting this Addendum (or any of such extension of credit or liabilities). Bank
shall notify Borrower of any event occurring after the date hereof which entitles Bank to
compensation pursuant to this paragraph as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation. Determinations by Bank for purposes of this
paragraph, shall be conclusive, provided that such determinations are made on a reasonable basis.

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

-5-

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

13. Legal Effect. Except as specifically modified hereby, all of the terms and conditions
of the Loan Agreement remain in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.

	 	 	 
	PAC-WEST TELECOMM, INC.
	 
	 	 
	By:
	 	/s/ Ravi Brar 
	 

	 	 
	 
	 	 
	Title:
	 	Chief Financial Officer 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

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

	 	 
	 
	 	 
	Title:
	 	C.E.O. & President 
	 

	 	 
	 
	 	 
	COMERICA BANK
	 
	 	 
	By:
	 	/s/ Rod Werner
	 

	 	 
	 
	 	 
	Title:
	 	S.V.P. 
	 

	 	 

[Signature Page to Eurodollar Addendum to Loan and Security Agreement]

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].

-6-

 

Confidential Treatment Requested by Pac-West Telecomm, Inc.

EURODOLLAR/PRIME RATE ADVANCE REQUEST FORM

     The undersigned hereby certifies as follows:

     I,                                         , am the duly elected and acting                                          of
PAC-WEST TELECOMM, INC.

     This Eurodollar/Prime Rate Advance Request Form is delivered on behalf of PAC-WEST TELECOMM,
INC., PAC-WEST TELECOM OF VIRGINIA, INC., PWT SERVICES, INC., and PWT OF NEW YORK, INC.
(collectively, “Borrower”) to Comerica Bank, pursuant to that certain Loan and Security Agreement
among Borrower and Comerica Bank, dated as of November 9, 2005 (the “Agreement”). The terms used
herein which are defined in the Agreement have the same meaning herein as ascribed to them therein.

     Borrower hereby requests on                                         , 20     , an Credit Extension/conversion from one
rate to another, as follows:

     (a) The date on which the Credit Extension is to be made/converted is                                         , 20     .

     (b) The amount of the Credit Extension /conversion is to be                                         
($                                        ), in the form of a [circle one:] Prime Rate Advance/Prime Rate Term Loan of
$                                        ; and/or a [circle one:] Eurodollar Rate Advance/Eurodollar Term Loan of
$                                         for a Eurodollar Interest Period of                      days.

     All representations and warranties of Borrower stated in the Agreement are true, correct and
complete in all material respects as of the date of this Request; provided, however, that those
representations and warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date.

     IN WITNESS WHEREOF, this Eurodollar/Prime Rate Advance Request Form is executed by the
undersigned as of this                      day of                                         , 20     .

	 	 	 
	PAC-WEST TELECOMM, INC.
	for itself and on behalf of all Borrowers
	 
	 	 
	By:
	 	 
	 

	 	 
	 
	 	 
	Title:
	 	 
	 

	 	 

Confidential Information Redacted and Filed Separately with the Commission.

Omitted Portions Indicated by [**].<PAGE>
                                  EXHIBIT (10k)

Adopted by the Board of Directors on July 11, 2005.

                                  AMENDMENT TO

                            LINDSAY MANUFACTURING CO.

                          2001 LONG-TERM INCENTIVE PLAN

The Lindsay Manufacturing Co. 2001 Long-Term Incentive Plan, as previously
amended, is hereby amended as follows:

1. Section 6.02 of the Plan is hereby amended to provide that no automatic
Nonqualified Stock Option grants will be made to Director Participants on
September 3, 2005.

2. Section 8.10 is hereby added to the Plan to read in its entirety as follows:

     "SECTION 8.10 RESTRICTED STOCK UNITS. The Committee may, in its discretion,
     grant to any Employee Participant restricted stock units (RSUs) which will
     be payable in shares of Common Stock and/or in cash on such terms as the
     Committee may determine in its sole discretion, but subject to the same
     restrictions contained in the Plan which apply to grants of Restricted
     Stock. Such Awards may be made as additional compensation for services or
     may be in lieu of other compensation which the Employee Participant is
     entitled to receive from the Corporation. All such RSUs shall constitute
     Awards for all purposes of the Plan, and shall be subject to the limits on
     Awards which are payable in Shares and in cash which are contained in the
     Plan. The Committee may also grant dividend equivalents in connection with
     any such Award which is made under the Plan, on such terms as the Committee
     may determine in its sole discretion pursuant to Section 11.03 of the
     Plan."

This Amendment is adopted, upon recommendation of the Compensation Committee, by
action of the Board of Directors pursuant to Article XIII of the Plan.

                                       51

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