Exhibit 10.20.4
CONSENT
UNDER
LOAN AND SECURITY
AGREEMENT
This CONSENT under Loan and
Security Agreement (this “Consent” ) is
entered into as of the 31 st day of October, 2005, by and among
Silicon Valley Bank ( “Bank” or
“Silicon” ) and each of the following named
corporations: ACT Teleconferencing, Inc., ACT Teleconferencing
Services, Inc., ACT Videoconferencing, Inc., ACT Proximity, Inc.,
and ACT Research, Inc. (collectively and jointly and severally, the
“Borrowers” and separately, a
“Borrower” ), with ACT Teleconferencing, Inc.,
whose chief executive office is located at 1526 Cole Boulevard,
Suite 300, Golden, CO 80401, acting as the Borrowers’
agent.
R ECITALS
A. Bank and Borrowers have entered into that
certain Loan and Security Agreement dated as of November 12,
2004 (as the same has been amended and as the same may from time to
time be further amended, modified, supplemented or restated, the
“Loan Agreement” ). Bank has extended credit to
Borrowers for the purposes permitted in the Loan
Agreement.
B. Borrowers entered into certain agreements with
Dolphin Direct Equity Partners, LP, a Delaware limited partnership
(“Dolphin”), providing for the sales of up to
$16,000,000 of preferred stock of ACT Teleconferencing, Inc. in two
tranches, with the first in the amount of $8,000,000 which has been
completed and the second in the remaining amount to be completed
through a public rights offering to existing shareholders of ACT
Teleconferencing, Inc., with Dolphin funding any shortfall. Pending
completion of the second tranche, Dolphin is prepared to lend
Borrowers up to $7,200,000 (the “Bridge Loan”) secured
by a junior lien on Borrowers’ assets and subordinated to
Bank (collectively, the “Transaction”). In connection
with this Transaction, Borrowers plan to use of the proceeds of
this Bridge Loan to repay the remaining existing Subordinated Debt
and the proceeds of the second tranche to repay the Bridge Loan.
Borrowers have requested that Bank consent to the Transaction and
the payments or prepayments of Subordinated Debt and the borrowing
of the Bridge Loan on a secured, subordinated basis before the
closing of the second tranche.
C. Borrowers again acknowledge that events of
default occurred under the Loan Agreement (collectively, the
“Existing Defaults” ) and that Borrowers
continue to be in default of the Loan Agreement as a result of
Borrowers’ previous failure to comply with Section 5.3
(Schedule Section 6, subsections 5, 6 and 8) and
Section 5.1 (Schedule Section 5) of the Loan
Agreement.
D. Bank has agreed to so consent to the Bridge
Loan, but only to the extent, in accordance with the terms, subject
to the conditions and in reliance upon the representations and
warranties set forth below.
A GREEMENT
Now, T HEREFORE , in
consideration of the foregoing recitals and other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto
agree as follows:
1. Definitions.
Capitalized terms used b
