Exhibit 10.10.2
EIGHTH WAIVER, AMENDMENT AND
FORBEARANCE AGREEMENT
This Eighth Waiver, Amendment and
Forbearance Agreement (“Waiver”) is effective as of
August 16, 2004 and relates to the Warrant Agreement dated as
of May 12, 2003 (the Warrant 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”), as amended and the Note Agreement dated
as of May 12, 2003 among NewWest, KCEP, Convergent, the Trust,
Holdings and certain subsidiaries of Holdings (the “Note
Agreement”). Other capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the
Note Agreement.
Recitals
Holdings has requested that the
Purchaser forbear in connection with certain current Events of
Default under the Note Agreement and agree to certain amendments
and waivers under the Warrant Agreement, subject to the terms and
conditions set forth in this Waiver, and the Purchaser has agreed
to such forbearance, amendments and waivers, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the foregoing premises and the mutual covenants hereinafter stated,
the parties hereby agree as follows:
1. Waivers and Amendments
.
(a) Subject to the conditions set
forth in this Waiver, the Purchaser hereby waives (i) the
requirement set forth in section 6 of the Warrant Agreement that
Holdings shall not, without shareholder approval, issue shares of
Holdings’ common stock, no par value, for maximum proceeds of
$3,500,000 and warrants to acquire shares of Holdings common stock,
no par value, to certain investors pursuant to the resolution of
the Board of Directors of Holdings dated August 10, 2004; and
(ii) the right under section 15 of the Warrant Agreement to
purchase a portion of the securities referred to in clause
(i) above.
(b) The Purchaser and Holdings agree
that Gavin Thomson shall no longer be considered a
“Principal” as defined in the Warrant
Agreement.
(c) Item 2 of the Financial
Covenants Schedule (Debt Service Coverage Ratio) is amended to add
the following sentence:
“Notwithstanding the
foregoing, for the calendar quarter ending September 30, 2004,
Holdings shall not permit its Debt Service Coverage Ratio, as
determined on a rolling four (4) calendar quarter basis, to be
less than 0.90:1.”
(d) Section 6.3(a) of the Note
Agreement is hereby amended to add the following
sentence:
“Notwithstanding the
foregoing, during the period from August 16, 2004 until
December 31, 2004, Holdings, Borrower and their Subsidiaries
shall not be required to promptly pay and discharge (i) all
trade accounts payable in accordance with customary business terms
(so
long as accounts payable do not age
significantly beyond aging as of August 16, 2004),
(ii) Belgian VAT taxes for 2000 through 2004, and
(iv) Texas sales and use taxes for 1998 through
2002.”
(e) Section 6.10 of the Note
Agreement, relating to Capital Expenditures, is amended to add the
following:
“Notwithstanding the
foregoing, during the period from January 1, 2004 to
December 31, 2004, Holdings and Borrower may incur Capital
Expenditures of up to $1,650,000, provided that any such Capital
Expenditures after August 16, 2004 are (i) set forth in a
business plan provided to Purchaser and Holdings’ Board of
Directors and (ii) approved by Holdings’ Board of
Directors.”
(f) Section 7.1 of the Note
Agreement (Events of Default) is amended to add the
following:
“Notwithstanding the
foregoing, if the Bank does not extend the October 30, 2004
maturity date of the Bank Indebtedness, then Holdings’
failure to repay all outstanding Bank Indebtedness on
October 30, 2004 (and any default under any other Indebtedness
caused by such failure to repay all outstanding Bank Indebtedness
on October 30, 2004) shall not be deemed to be an Event of
Default until the earlier of (i) the date the Bank or any
other person commences any enforcement action under the Bank
Agreement or otherwise, or (ii) December 31,
2004.”
(g) The Pledged Shares schedule
attached to the Pledge Agreement is hereby amended to reduce the
percentage of shares of ACT Business Solutions Ltd. pledged by
Holdings (the Pledgor) from 65% to 60%.
(h) Section 14.2 of the Warrant
Agreement is amended to add the following:
“Notwithstanding the
foregoing, if, on or after August 16,2004, the addition of one
or more representatives of the Institutional Holders pursuant to
this Section 14.2 causes the Boards of Directors of the
Company or Services to include more than seven members, then solely
in order to add such representatives of the Institutional Holders,
the Boards of Directors of the Company or Services may temporarily
be expanded to include up to nine members.”
(i) If Borrower is in full
compliance with all provisions of the Note Agreement and this
Amendment as of December 31, 2004 (and provided that no Event
of Default, other than the Specified Defaults as defined below,
shall have occurred and all such Specified Defaults shall have been
cured, to the extent curable), then all Specified Defaults shall be
deemed to be waived by Purchaser as of
December 31,2004.
2. Forbearance . So long as
Holdings and Services comply with all terms and conditions of the
Note Agreement, as amended by this Amendment (other than the
Specified Defaults as defined below), the Purchaser agrees to
forbear, until December 31, 2004, from (i) accelerating
or demanding immediate payment of the Obligations, and
(ii) exercising remedies against Borrower under the Note
Agreement. For purposes of this Amendment, the Specified Defaults
shall mean the Events of Default set forth on Exhibit A.
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Such agreement to forbear is effective only for
the Specified Defaults and not for any other defaults of covenants
or obligations so listed by Purchaser or for any time periods not
so listed by Purchaser.
3. Covenants of Holdings and
Services . Holdings and Services agree as follows:
(a) Holdings agrees to retain an
investment banker no later than September 30, 2004 to advise
Holdings in connection with refinancing the Bank Indebtedness and
the Note.
(b) Notwithstanding anything to the
contrary in the Note Agreement, neither Holdings nor Services will
make any principal payments on any Indebtedness on or after
August 16, 2004 other than (i) the Bank Indebtedness and,
(ii) payments of up to $40,000 per month to Compunetix in
connection with th
