Installment Note

AMENDED AND RESTATED

COLLATERAL INSTALLMENT NOTE






$5,405,330.86 & #160; February 27, 2007



FOR VALUE RECEIVED , PAC-WEST TELECOMM, INC., a corporation organized and existing under the laws of the State of California ("Customer") hereby promises to pay to the order of MERRILL LYNCH CAPITAL, a division of MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC. , a corporation organized and existing under the laws of the State of Delaware ("MLC"), in lawful money of the United States, the principal sum of Five Million Four Hundred Five Thousand Three Hundred Thirty and 86/100 Dollars ($5,405,330.86), or if more or less, the aggregate amount advanced by MLC to Customer pursuant to the Loan Agreement (the "Loan Amount ?); together with interest on the unpaid balance of the Loan Amount, from the Closing Date until payment, at the Interest Rate, as follows:



1. DEFINITIONS.



(a) In addition to terms defined elsewhere in this Note, as used herein, the following terms shall have the following meanings:



(i) "Closing Date" shall mean the date the funds are advanced or deemed advanced hereunder.




(ii) "Excess Interest" shall mean any amount or rate of interest (including the Default Rate and, to the extent that they may be deemed to constitute interest, any prepayment fees, late charges and other fees and charges) payable, charged or received in connection with any of the Loan Documents which exceeds the maximum amount or rate of interest permitted under applicable law.




(iii) "Interest Rate" shall mean a rate equal to 9.11% per annum.




(iv) "Loan Agreement" shall mean that certain AMENDED AND RESTATED TERM LOAN AND SECURITY AGREEMENT dated as of the date hereof between Customer and MLC, as the same may have been or may hereafter be amended or supplemented.




(v) "Note" shall mean this AMENDED AND RESTATED COLLATERAL INSTALLMENT NOTE .




(b) Capitalized terms used herein and not defined herein shall have the meaning set forth in the Loan Agreement. Without limiting the foregoing, the terms ?Loan Documents", "Bankruptcy Event" and "Event of Default" shall have the respective meanings set forth in the Loan Agreement.



2. PAYMENT AND OTHER TERMS. Customer shall pay the indebtedness under this Note in 30 consecutive monthly installments commencing on the Closing Date and continuing on the first day of each calendar month thereafter until this Note shall be paid in full. Each such installment shall be in the amounts listed below which will fully amortize the Loan Amount with accrued interest in equal monthly installments over a term of 30 months:



(i) $75,000 on March 1, 2007;



(ii) $75,000 on the first day of each of the next 14 calendar months following the Closing Date; and



(iii) thereafter, $125,000 on the first day of each of the next 14 calendar months (through and including July 1, 2009), with the final balance, including (i) all accrued and unpaid interest thereon and (iii) all of MLC costs and expenses (including reasonable fees and expenses of MLC's attorneys and accountants, other than such fees and expenses paid on or prior to ...