UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
May
30, 2006
Date
of
Report (Date of earliest event reported)
Commission
File Number: 000-27743
PAC-WEST
TELECOMM, INC.
(Exact
name of registrant as specified in its charter)
|
California
(State
or other jurisdiction of
incorporation
or organization)
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68-0383568
(I.R.S.
Employer Identification No.)
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1776
W. March Lane, Suite 250
Stockton,
California
(Address
of principal executive offices)
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95207
(Zip
Code)
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(209)
926-3300
(Registrant’s
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry
into a Material Definitive Agreement
On
May
30, 2006, Pac-West Telecomm, Inc. (the “Company”),
Pac-West Telecom of Virginia, Inc., PWT Services, Inc., and PWT of New York,
Inc. (collectively, the “Borrowers”)
entered into a Third Amendment to Loan and Security Agreement (the “Amendment”)
with
Comerica Bank (the “Bank”),
which
amends that certain Loan and Security Agreement, dated as of November 9, 2005,
by an between the Borrowers and the Bank (as amended, the “Loan
and Security Agreement”).
The
Amendment provides in part that the Borrowers shall not be required to comply
with the financial covenants set forth in Sections 6.7(a) (Adjusted Quick
Ratio), 6.7(c) (Debt Service Coverage Ratio) and 6.7(d) (Total Liabilities
to
Effective Tangible Net Worth) of the Loan and Security Agreement during the
period commencing on May 1, 2006 through and including June 30, 2006. The
Amendment was entered into following receipt from the Bank by the Company on
May
11, 2006 of a waiver covering the Borrowers non-compliance with the financial
covenants set forth in Sections 6.7(a) and 6.7(d) of the Loan and Security
Agreement. In addition, the Amendment provides that Borrowers may request
additional credit extensions under the Loan and Security Agreement once the
Borrowers are in pro forma compliance with Sections 6.7(a), 6.7(c) and
6.7(d).
The
Company does not currently expect to regain compliance with the financial
covenants set forth in Sections 6.7(a) (Adjusted Quick Ratio) and 6.7(d) (Total
Liabilities to Effective Tangible Net Worth) of the Loan and Security Agreement
on or prior to June 30, 2006, the last day Borrower’s obligation to comply with
such covenants is waived under the Amendment. As such, the Company expects
that
it will be necessary to request from the Bank an additional waiver under, and/or
negotiate with the Bank an additional amendment to, the Loan and Security
Agreement to provide the Company additional time to comply, and/or reduce the
burden of complying, with these financial covenants for periods after June
30,
2006. There can be no assurances that the Bank will agree to such a
request.
If
the
Company is not in compliance with one or more of the financial
covenants after June 30, 2006 and the Bank is unwilling to grant a waiver
or enter into an amendment that relieves the Borrowers’ obligation to comply
with these financial covenants, the Bank will have available to it all of the
remedies provided for under the Loan and Security Agreement, including the
right
to accelerate, or declare due and payable, all outstanding amounts under the
Loan and Security Agreement, which is currently about $10.5 million. As of
March
31, 2006, the Company had $22.7 million in cash and cash equivalents.
Item 9.01
Financial
Statements and Exhibits
(d) Exhibits.
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10.1
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Third
Amendment to Loan and Security Agreement dated as of May 30, 2006,
by and
between Comerica Bank and Pac-West Telecomm, Inc., Pac-West Telecom
of
Virginia, Inc., PWT Services, Inc., and PWT of New York, Inc.
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2
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on is behalf by the
undersigned, herunto duly authorized.
PAC-WEST
TELECOMM, INC.
(Registrant)
Dated:
June 5, 2006
By:_____________________________
Michael
Sarina
Vice
President Finance
3
INDEX
TO EXHIBITS
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10.1
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Third
Amendment to Loan and Security Agreement dated as of May 30, 2006,
by and
between Comerica Bank and Pac-West Telecomm, Inc., Pac-West Telecom
of
Virginia, Inc., PWT Services, Inc., and PWT of New York, Inc.
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