Exhibit 4.7
Execution Version
FOURTH AMENDMENT
CONSENT, WAIVER AND FORBEARANCE
AGREEMENT
This Fourth Amendment, Consent,
Waiver and Forbearance Agreement (“Amendment”) is
effective as of January 8, 2004 and relates to (i) the Note
Agreement dated as of May 12, 2003, as amended (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”), ACT Teleconferencing,
Inc. (“Holdings”), ACT Teleconferencing Services, Inc.
(the “Services”) and certain Co-Borrowers listed on the
signature page of this Amendment (the “Co-Borrowers), as
amended, and (ii) the Warrant Agreement dated as of May 12, 2003
(the Warrant Agreement”) among NewWest, KCEP, Convergent, the
Trust and Holdings, as amended. Capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in
the Note Agreement.
Recitals
Holdings and Services have requested
that the Purchaser forbear in connection with certain current
events of default under the Note Agreement and to agree to certain
amendments and waivers, subject to the terms and conditions set
forth in this Amendment, and the Purchaser has agreed to such
forbearance, amendments and waivers under the Note Agreement, 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 Note Agreement
Amendment .
(a) Subject to the conditions set
forth in this Amendment, the Purchaser hereby waives (i) the
requirement set forth in section 6 of the Warrant Agreement that
Holdings shall not, without shareholder approval, issue (A)
2,100,000 shares of Holdings’ common stock, no par value, at
a price of $1.05 per share, to certain investors pursuant to the
Stock Purchase Agreement dated as of January 8, 2004 among Holdings
and certain investors (together with the other transactions
contemplated by such agreement, the “Barron
Transaction”) and (B) warrants to acquire 250,000 shares of
Holdings common stock, no par value, at a price of $1.10 per share,
to Robert C. Kaphan and Richard Parlato pursuant to the Warrant
Agreement dated as of January 2, 2004 among Holdings and such
individuals (together with the amendment to the promissory notes
held by such individuals and the other transactions contemplated by
such agreement and amendment, the “Proximity
Transaction”), 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 Note Agreement is hereby
amended to add, as a Permitted Lien, the security interest granted
by Services in favor of Robert C. Kaphan and Richard Parlato
pursuant to the Security Agreement dated as of January 2, 2004
among Services and such individuals.
(c) If Borrower is in full
compliance with all provisions of the Note Agreement and this
Amendment as of March 31, 2004 (and provided that no Event of
Default, other than the Specified Defaults, shall have occurred and
all Specified Defaults shall have been cured, to the extent
curable), then all Specified Defaults shall be deemed to be waived
by Purchaser.
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 March 31, 2004, from (i) accelerating or demanding
immediate payment of the Obligations, and (ii) exercising remedies
under the Note Agreement. For purposes of this Amendment, the
Specified Defaults shall mean the defaults identified by Purchaser
in writing as of the date of this Amendment. 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 (i) to provide evidence
reasonably satisfactory to the Purchaser no later than January 20,
2004 that Holdings has a current directors and officers insurance
policy of at least $2,000,000, (ii) provide evidence reasonably
satisfactory to the Purchaser no later than January 20, 2004 that
all defaults or events of default under the Bank Agreement have
been waived, (iii) to provide Purchaser, no later than January 20,
2004, with copies of all borrowing base and covenant compliance
certificates provided to the Bank since May 12, 2003, any
amendments to the Bank Indebtedness, and any other documents
required to be provided to Purchaser pursuant to section 6.6(m) of
the Note Agreement, (iv) to provide evidence reasonably
satisfactory to the Purchaser no later than January 20, 2004 that
Holdings has filed any required additional listing application with
Nasdaq for the Underlying Shares, (v) provide Purchaser, no later
than January 20, 2004, with copies of all correspondence since May
12, 2003 with Compunetix regarding Services’ lease with
Compunetix, (vi) provide Purchaser, no later than January 20, 2004,
a certificate of Holdings’ Chief Financial Officer that
Holdings and Services have complied with the provisions clauses (i)
– (v) above, and (vii) in accordance with Section 8.3 of the
Note Agreement, Borrower will reimburse the Purchaser for all
reasonable expenses within 10 days of receiving notice from the
Purchaser of such expenses. Any failure by Holdings and Services to
comply with the provisions of this Amendment shall constitute an
Event of Default under the Note Agreement.
4. Conditions to
Effectiveness . The effectiveness of this Amendment is
expressly conditioned upon Holdings and Borrower delivering to the
Purchaser all of the following, all in form and substance
acceptable to the Purchaser: (a) this Amendment duly executed by
Holdings, Services, the Co-Borrowers and the Principals; (b)
evidence satisfactory to the Purchaser that all events of default
under any other promissory notes or loan agreements have been
waived and such waivers are in full force and effect; and (c)
consummation of the Barron Transaction and the Proximity
Transaction, including the execution by Robert C. Kaphan and
Richard Parlato of a subordinat
