Document:

Pac-West Telecomm, Inc. Exhibit 10.60

    

      SECOND
        AMENDMENT TO LOAN AND SECURITY AGREEMENT 

       

      This
        Second Amendment to Loan and Security Agreement (the “Amendment" ) is entered
        into as of February 17, 2006, by and between COMERICA BANK ("Bank") and PAC-WEST
        TELECOMM, INC., PAC- WEST TELECOM OF VIRGINIA, INC., PWT SERVICES, INC.,
        and PWT
        OF NEW YORK, INC. (each a "Borrower" and collectively, "Borrowers").

       

      RECITALS
        

       

      Borrowers
        and Bank are parties to that certain Loan and Security Agreement dated as
        of
        November 9, 2005 (as amended from time to time, including without limitation
        by
        that certain First Amendment to Loan and Security Agreement dated as of November
        30, 2005, together with any related agreements, the " Agreement"). Hereinafter,
        all indebtedness owing by Borrowers to Bank shall be referred to as the "
        Indebtedness." The parties desire to amend the Agreement in accordance with
        the
        terms of this Amendment. 

       

      NOW,
        THEREFORE, for good and valuable consideration, the receipt and sufficiency
        of
        which are hereby acknowledged, the parties agree as follows: 

       

      AGREEMENT
        

       

      I.
        Incorporation
        bv Reference. The
        Recitals and the documents referred to therein are incorporated herein by
        this
        reference. Except as otherwise noted, the terms not defined herein shall
        have
        the meaning set forth in the Agreement. 

       

      II.
        Amendment
        to the Agreement. Subject
        to the satisfaction of the conditions precedent as set forth in Article IV
        hereof, the Agreement is hereby amended as set forth below. 

       

      A.
        Section 2.I(c)(ii) of the Agreement is hereby amended and restated in its
        entirety to read as follows: 

       

      "
        (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 outstanding under Tranche A on the Tranche
        A
        Availability End Date shall be payable in thirty (30) 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-three (23) equal monthly installments of
        principal, plus all accrued interest, beginning 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.I(c)
        and any
        other amounts due under this Agreement 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." 

       

      B.
        Section 7.12 of the Agreement is hereby amended and restated in its entirety
        to
        read as follows: 

       

      "7
        .12
Capital
        Expenditures. Notwithstanding
        any other provision in this Agreement, incur Capital Expenditures in excess
        of
        (i) Twelve Million Five Hundred Thousand Dollars ($12,500,000) for fiscal
        year
        2005; (ii) Nineteen Million Five Hundred Thousand Dollars ($19,500,000) 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." 

       

      AMENDMENT
        PAGE 1OF3 

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      

       

      

       

      

       

      

      C.
        Section II of the Agreement is hereby amended and restated in its entirety
        to
        read as follows: 

      “II.
        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. Jurisdiction shall lie in the State of California. THE UNDERSIGNED
        ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT
        THAT IT
        MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW,
        EACH
        PARTY , AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
        COUNSEL
        OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL
        BENEFIT
        OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
        ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT
        OR
        AGREEMENT BETWEEN THE UNDERSIGNED PARTIES." 

       

      III.
        Legal
        Effect. 

       

      A.
        The
        Agreement is hereby amended wherever necessary to reflect the changes described
        above. Each Borrower agrees that it has no defenses against the obligations
        to
        pay any amounts under the Indebtedness. 

       

      B.
        Each
        Borrower understands and agrees that in modifying the existing Indebtedness,
        Bank is relying upon each Borrower's representations, warranties, and
        agreements, as set forth in the Agreement. Except as expressly modified pursuant
        to this Amendment, the terms of the Agreement remain unchanged, and in full
        force and effect. Bank's agreement to modifications to the existing Indebtedness
        pursuant to this Amendment in no way shall obligate Bank to make any future
        modifications to the Indebtedness. Nothing in this Amendment shall constitute
        a
        satisfaction of the Indebtedness. It is the intention of Bank and each Borrower
        to retain as liable parties, all makers and endorsers of Agreement, unless
        the
        party is expressly released by Bank in writing. No maker, endorser, or guarantor
        will be released by virtue of this Amendment. The terms of this paragraph
        apply
        not only to this Amendment, but also to all subsequent loan modification
        requests. 

       

      C.
        This
        Amendment may be executed in two or more counterparts, each of which shall
        be
        deemed an original, but all ofwhich together shall constitute one instrument.
        This is an integrated Amendment and supersedes all prior negotiations and
        agreements regarding the subject matter hereof. All modifications hereto
        must be
        in writing and signed by the parties. 

       

      IV
        .Conditions
        Precedent. Except
        as
        specifically set forth in this Amendment, all of the terms and conditions
        of the
        Agreement remain in full force and effect. The effectiveness of this Agreement
        is conditioned upon receipt by Bank of this Amendment, and any other documents
        which Bank may require to carry out the terms hereof, including but not limited
        to the following: 

       

      A.
        This
        Amendment, duly executed by Borrowers; 

       

      B.
        A
        legal fee from the Borrowers in the amount of $250; and 

       

      C.
        Such
        other documents, and completion of such other matters, as Bank may reasonably
        deem 

      necessary
        or appropriate. 

       

      AMENDMENT
        PAGE 2 0F 3 

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      

       

      

       

      

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

      PAC-WEST
        TELECOMM, INC.         PWT
        OF
        NEW YORK, INC. 

       

      By:    /s/
        Ravi
        Brar                                        
By: 
/s/
        Ravi
        Brar

      Title:        
        CFO                                       Title:
        

      
 

      
         

        PAC-
          WEST
          TELECOM OF VIRGINIA, INC.       COMERICA
          BANK 

         

        By:  /s/
          Ravi Brar                  
          By: /s/ Jerry Iwata

        Title:                Title:
          SVP

         

        PWT
          SERVICES, INC. By: 

         

        By: 
          /s/ Ravi Brar

        Title:
          

      

      

        AMENDMENT
          PAGE 30F 3Pac-West Telecomm, Inc. Exhibit 10.61

    Comerica
      Bank 

     

    Five
      Palo
      Alto Square. Ste. 800 

    3000
      El
      Camino Real 

    Palo
      Alto, CA 94306 

    Technology
      & Life Sciences 

     

    May
      11,
      2006 

     

    Ravi
      Brar

    Chief
      Financial Officer 

    Pac-West
      Telecomm, Inc. 

    1776
      W.
      March Lane, Suite 250 

    Stockton,
      Ca 95207 

     

    Re:
      Pac-West Telecomm, Inc. 

     

    Dear
      Ravi: 

     

    Reference
      is made to that certain Loan and Security Agreement between Pac-West Telecomm,
      Inc. ("Borrower")
      and Comerica Bank ("Bank") dated as of November 9, 2005, as amended by that
      certain First Amendment to the Loan and Security Agreement, dated as of November
      30,2005, as further amended by that certain Second Amendment to the Loan and
      Security Agreement, dated as of February 17, 2006 (collectively, and together
      with any agreements referred to therein, the "Agreement"). All initially
capitalized
      terms used but not defined in this letter shall have the meanings assigned
      to
      such terms in the Agreement. 

     

    Borrower
      has been notified that on or after April 1, 2006 certain Defaults or Events
      of
      Default have occurred
      and continue to exist as a result ofa violation of the following provision(s)
      of
      the Agreement: 

     

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

     

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

     

    Borrower
      has requested and Bank hereby agrees to waive the above referenced default
      for
      the periods from April 1, 2006 through and including May 31, 2006. 

     

    This
      waiver is limited to the violations and the periods described above. This waiver
      does not constitute a waiver, amendment, or forbearance of any other Default
      or
      Event of Default that may now exist or may occur
      after the period stated herein with respect to these violations or any other
      term, condition, or covenant contained in the Agreement. Except as specifically
      set forth herein, all of the terms and conditions of the Agreement remain
      unchanged and in full force and effect. 

     

    Sincerely,
      Comerica 

     

    By:
      /s/
      John Benetti

     

    John
      Benetti 

    Corporate
      Banking Officer 

     

    ~

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