Exhibit 10.2
THIRTEENTH WAIVER, AMENDMENT AND
FORBEARANCE AGREEMENT
This Thirteenth Waiver, Amendment
and Forbearance Agreement dated as of June 22, 2005
(“Amendment”) relates to the Note Agreement dated as of
May 12, 2003 (the “Note Agreement”), among NewWest
Mezzanine Fund, LP (“NewWest”), KCEP Ventures II, L.P.
(“KCEP”), Convergent Capital Partners I, L.P.
(“Convergent”), James F. Seifert Management Trust dated
October 8, 1992 (the “Trust”) (collectively, the
“Purchaser”), and ACT Teleconferencing, Inc.
(“Holdings”) and certain subsidiaries of Holdings, as
amended, and the Warrant Agreement dated as of May 12, 2003 (the
“Warrant Agreement”) among Purchaser and Holdings, as
amended. Other capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Note
Agreement.
Recital
Holdings has received a proposal
from Dolphin Direct Equity Partners, LP (“Dolphin”) for
up to $16,000,000 in financing through the sale of preferred stock
to Dolphin and others (the “Dolphin Investment”), a
condition to the execution of the definitive documents relating to
which is to obtain consent to certain terms of the investment from
Holdings’ principal creditors, including the Purchaser; this
Amendment sets forth the terms of such consent.
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants set forth herein,
the parties agree as follows:
1. Dolphin Investment . The
Dolphin Investment is contingent upon shareholder approval.
Holdings agrees to use its best efforts to obtain such approval and
to arrange a special shareholders meeting at the earliest feasible
date for such purpose. Subject to Section 4(d) below, the Company
is to receive at least $8,000,000 in gross proceeds, before fees,
expenses and other costs from the initial sale of preferred stock
to Dolphin and/or its affiliates upon receipt of shareholder
approval (the “First Closing”). Upon receipt of
proceeds from the first $8,000,000 of gross proceeds received at
the First Closing, Holdings shall promptly disburse $5,000,000 of
said proceeds to creditors, to be allocated among the Purchaser,
David Holden (“Holden”), Robert Kaphan
(“Kaphan”), Richard Parlato (“Parlato”),
and Equitas, L.P. (“Equitas”), proratably according to
(a) Purchaser’s principal balance of $7,308,000
(“Purchaser’s Principal Balance”) and (b) the
Adjusted Principal Balance of each of the other creditors, as
defined in Section 2 below. Upon receipt in excess of $8,000,000 of
gross proceeds at the First Closing, Holdings shall promptly pay
the net proceeds from such excess to the creditors, proratably in
the proportions provided above. Upon completion of a registered
rights offering to be conducted immediately following the First
Closing (the “Second Closing”), Holdings shall promptly
pay the net proceeds from the Second Closing, pro rata in the
proportions provided above with respect to the First Closing until
the remaining balance then due Purchaser and the remainder of the
Adjusted Principal Balance due each of the other creditors have
been paid in full. All payments pursuant to this Section 1 shall by
applied by Purchaser in accordance with the provisions of the Note
Agreement. Interest shall continue to accrue and be paid by
Holdings on Purchaser’s Principal Balance (reflecting any
reductions in such balance) until fully paid.
2. Royalty Amendment and
Waiver . In addition to Holdings’ obligations to pay the
Purchaser’s Principal Balance, a royalty of $939,500 has
accrued to Purchaser under the Note Agreement. Subject to and
conditioned upon the receipt of the repayment at the First Closing
described above and upon Holdings obtaining the discounts described
below, Purchaser (i) agrees to waive $470,000 of such royalty
amounts in consideration of the allocation of proceeds from the
First Closing, as described in Section 1 above and (ii) waives any
claim to royalties in addition to the $939,500 previously accrued
that may accrue under the Note Agreement. The amount to be waived,
$470,000, is 5.7% of the total amount due Purchaser. Holdings has
agreed to obtain a discount of 5.7% of the principal balance due
(the “Adjusted Principal Balance”) from each of Holden,
Kaphan, Parlato, and Equitas. At the First Closing, Holdings will
execute and deliver promissory notes payable to each of NewWest,
KCEP, Convergent, and the Trust for their respective prorated
portion of said $470,000 in accordance with each of said
party’s percentage of the total due under the Note Agreement.
Each promissory note, in the form attached as Exhibit A, will be
payable in a lump sum on the due date of December 31, 2006, and
will be non-interest bearing and unsecured.
3. Warrants Cancelled .
Subject to and conditioned upon the receipt of the repayment at the
First Closing described above and upon Holdings obtaining the
discounts described below, NewWest, KCEP, Convergent, and the Trust
each waive and agree, without the payment of any additional
consideration, to the cancellation of the Warrant Agreement and all
outstanding Warrants to purchase common stock of Holdings granted
to each of said parties prior to June 20, 2005, which Warrants
shall be null and void ab initio .
4. Twelfth Waiver Reaffirmed
. The Twelfth Waiver, Amendment and Forbearance Agreement, dated
March 4, 2005, among Purchaser and Holdings (the “Twelfth
Waiver”), is reaffirmed subject to the following:
(a) Upon execution of definitive
documents for the Dolphin Investment, which is contemplated to
occur on or about June 24, 2005, the Forbearance Date set forth in
the Twelfth Waiver shall be extended from June 30, 2005 through
August 31, 2005;
(b) Upon the occurrence of the First
Closing, the Forbearance Date set forth in the Twelfth Waiver shall
be extended through October 31, 2005;
(c) In the event shareholder
approval is not obtained, or in the event the First Closing does
not occur, in each case on or prior to August 31, 2005, the
Forbearance Date set forth in the Twelfth Waiver shall expire on
August 31, 2005;
(d) Purchaser consents to a loan by
Dolphin to Holdings in the amount of $1,000,000 at an annual
interest rate not to exceed 15%, which may be made prior to the
First Closing, and which would be collateralized by a security
interest in Holdings’ receivables, personal property, and
intangibles. In connection with such loan, pursuant to and subject
to the terms and conditio
