AMENDMENT No. 1 TO LIMITED WAIVER TO LOAN AND SECURITY AGREEMENT AND CONSENT
Exhibit 10.32
EXECUTION VERSION
AMENDMENT No. 1
TO
LIMITED WAIVER TO
LOAN AND SECURITY AGREEMENT
AND CONSENT
TO
LIMITED WAIVER TO
LOAN AND SECURITY AGREEMENT
AND CONSENT
This Amendment No. 1 to Limited Waiver to Loan and Security Agreement and Consent
(this “Amendment”) is entered into this 29th day of June, 2007, by and among PlanetOut
Inc., a Delaware corporation (“PlanetOut”), PlanetOut USA Inc. , a Delaware
corporation (“PlanetOut USA”), LPI Media Inc., a Delaware corporation (“LPI”),
SpecPub, Inc., a Delaware corporation (“SpecPub”), RSVP Productions, Inc., a
Delaware corporation (“RSVP”), (PlanetOut, PlanetOut USA, LPI, SpecPub, and RSVP are collectively
referred to herein as the “Borrowers” and individually as a “Borrower”), and ORIX Venture
Finance LLC (“Lender”). Capitalized terms used herein without definition shall have the same
meanings given them in the Loan Agreement (as defined below).
Recitals
Borrowers and Lender have entered into that certain Loan and Security Agreement dated as of
September 28, 2006, as amended by Amendment No. 1 to Loan and Security Agreement and Pledge
Agreements dated as of November 8, 2006, Amendment No. 2 to Loan and Security Agreement (“Amendment
No. 2”) dated as of February 14, 2007, and the May Waiver (as defined below) (as may be amended,
restated, or otherwise modified, the “Loan Agreement”), pursuant to which the Lender has agreed to
extend and make available to Borrower certain advances of money.
Borrowers and Lender have entered into that certain Limited Waiver to Loan and Security Agreement
and Amendment No. 3 as of May 9, 2007 (the “May Waiver”).
Borrowers desire that Lender amend the terms of the May Waiver and consent to certain asset
dispositions upon the terms and conditions more fully set forth herein.
Subject to the representations and warranties of Borrowers herein and upon the terms and
conditions set forth in this Amendment, Lender is willing to provide the amendments and consent
contained herein.
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound,
the parties hereto agree as follows:
1. Amendment.
1.1 Term Sheet for Capital Event. Section 3.3 of the May Waiver is amended to delete such
Section in its entirety, and replace the title thereof with “Intentionally Omitted.”.
1.2 Capital Event Closings. Section 3.4 of the May Waiver is restated in its entirety to read
as follows: “Not later than September 30, 2007, Borrowers shall have closed the issuance of new
equity or subordinated debt resulting in gross proceeds of at least an amount equal to $25,000,000
(the “Financing”) which issuance may be completed on a single date, or in (i) an initial closing of
the issuance of at least 3,500,000 shares of common stock (on an as-converted basis in the case of
convertible subordinated debt) or subordinated debt for gross proceeds of not less than $4,200,000
(the “Initial Capital Raise”) the proceeds of which are received by Borrowers not later than July
10, 2007, and (ii) a second closing resulted in gross proceeds to Borrowers of not less than
$25,000,000 less the amount of gross proceeds from the Initial Capital Raise (the “Second
Closing”). Upon the completion of the Initial Capital Raise or the full Financing, but in no event
later than July 10, 2007, Borrowers shall pay to Lender $1,000,000 for application to amounts due
under the Term Loan, in inverse order of maturity.”
1.3 Prepayments of Indebtedness. Section 3.5 of the May Waiver is restated in its entirety to
read as follows: “Other than Indebtedness incurred pursuant to the Loan Agreement, Borrowers shall
not pay any Indebtedness prior to its due date; provided, however, that Borrowers are permitted to
(i) prepay the quarterly interest installment due under each of the LPI Notes on June 30, 2007;
(ii) prepay up to $1,000,000 in principal to holders of the LPI Notes in respect thereof concurrent
with the Initial Capital Raise, and (iii) prepay in full the LPI Notes (including all
then-outstanding principal and all then-accrued and unpaid interest) upon a sale of all of the
stock or assets of SpecPub for a gross sales price of at least $3,000,000 that closes at any time
after the Initial Capital Raise; and provided further, that other than the payments referred to in
clauses (i) through (iii) hereof, Borrower shall not pay any additional principal to holders of the
LPI Notes in respect thereof prior to consummation of the Financing in full. Lender hereby
acknowledges that Borrowers have prepaid the quarterly interest installment due June 30, 2007 under
each of the LPI Notes (such prepayment having been made on or about June 27, 2007), and consents to
such prepayment.”
1.4 Payment of Success Fee. Section 3.6 of the May Waiver is amended to delete such Section
in its entirety, and replace the title thereof with “Intentionally Omitted.”
1.5 Repayment of Obligations. A new Section 3.7 (Repayment of Obligations) is added to the
May Waiver to read in its entirety as follows: “Borrower’s obligation to pay installments of
principal on the Term Loan due on each of July 1, August 1 and September 1, 2007, shall be waived,
provided, however, that payments of interest due on each such date shall be made in accordance with
the Loan Agreement. Notwithstanding anything to the contrary contained in the Loan Agreement or
the previous sentence, upon the consummation of the Financing in full, all Obligations of Borrowers
to Lender shall be immediately due and payable in full, including without limitation, a prepayment
fee in respect of the Term Loan as specified in Section 2.1.2(b) of the Loan Agreement.”
1.6 Payment of Deferral Fee. A new Section 3.8 (Payment of Deferral Fee) is added to the May
Waiver to read in its entirety as follows: “In consideration of Lender’s
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deferral of certain payments due to Lender under the Loan Agreement as set forth herein,
Borrowers shall pay to Lender immediately upon consummation of the Financing in full a fee in the
amount of $150,000.”
2. Consent. Lender hereby consents to the following, upon the terms and subject to
the conditions set forth herein:
2.1 Closure of International Business. Borrowers may suspend operation of the international
portion of the business and take all necessary and desirable action to discontinue and shut such
business.
2.2 Sale of SpecPub. At any time after the Initial Capital Raise, Borrowers may sell all of
the stock or assets of SpecPub, provided that (i) the gross sales price for such stock or assets is
not less than $3,000,000, and (ii) the LPI Notes (including all then-outstanding principal and all
then-accrued and unpaid interest) are paid in full within two Business Days after the closing of
such sale.
3. Borrowers’ Representations And Warranties. Each Borrower represents and warrants
that:
(a) immediately upon giving effect to this Amendment (i) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (ii) no Event of Default has occurred
and is continuing;
(b) such Borrower has the corporate power and authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this Amendment;
(c) except for the amendment to the certificate of incorporation of PlanetOut in January 2007
(a copy of which has been delivered to Lender), the certificate of incorporation, bylaws and other
organizational documents of such Borrower delivered to Lender on the Closing Date remain true,
accurate and complete and have not been amended, supplemented or restated and are and continue to
be in full force and effect;
(d) the execution and delivery by such Borrower of this Amendment and the performance by such
Borrower of its obligations under the Loan Agreement as amended by this Amendment have been duly
authorized by all necessary corporate action on the part of such Borrower;
(e) this Amendment has been duly executed and delivered by the Borrowers and is the binding
obligation of each Borrower, enforceable against it in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights; and
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(f) as of the date hereof, it has no defenses against the obligations to pay any amounts under
the Obligations. Each Borrower acknowledges that Lender has acted in good faith and has conducted
in a commercially reasonable manner its relationships with Borrowers in connection with this
Amendment and in connection with the Loan Documents.
Each Borrower understands and acknowledges that Lender is entering into this Amendment in
reliance upon, and in partial consideration for, the above representations and warranties, and
agrees that such reliance is reasonable and appropriate.
4. Limitation. The amendments set forth in this Amendment shall be limited precisely
as written and shall not be deemed (a) to be a waiver or modification of any other term or
condition of the Loan Agreement or of any other instrument or agreement referred to therein or to
prejudice any right or remedy which Lender may now have or may have in the future under or in
connection with the Loan Agreement or any instrument or agreement referred to therein; or (b) to be
a consent to any future amendment or modification or Amendment to any instrument or agreement the
execution and delivery of which is consented to hereby, or to any waiver of any of the provisions
thereof. Except as expressly waived and amended hereby, the Loan Agreement and each of its terms
and conditions shall continue in full force and effect.
5. Effectiveness. This Amendment (with the exception of the consent contained in
Section 2.2 hereof) shall become effective upon the satisfaction of all the following conditions
precedent:
5.1 Amendment. Borrowers and Lender shall have duly executed and delivered this Amendment to
Lender.
5.2 Review of Financing Documents. Borrowers shall have provided to Lender copies of current
drafts of the proposed documents evidencing the Financing, and such agreements shall be reasonably
satisfactory to Lender.
5.3 Payment of Lender Expenses. Borrowers shall have paid all Lender Expenses (including all
reasonable attorneys’ fees and reasonable expenses) incurred through the date of this Amendment.
The consent contained in Section 2.2 hereof is further conditioned upon the closing of the
Initial Capital Raise.
6. Release. In further consideration of Lender’s execution of this Amendment, each
Borrower for itself and on behalf of its successors (including, without limitation, any trustees
acting on behalf of Borrower and any debtor-in-possession with respect to Borrower), assigns,
subsidiaries and affiliates, hereby forever releases Lender and its successors, assigns, parents,
subsidiaries, affiliates, officers, employees directors, agents and attorneys (collectively, the
“Releasees”) from any and all debts, claims, demands, liabilities, responsibilities, disputes,
causes, damages, actions and causes of action (whether at law or in equity) and obligations of
every nature whatsoever, whether liquidated or unliquidated, known or unknown, matured or
unmatured, fixed or contingent (collectively, “Claims”), that Borrower may have against the
Releasees that arise from or relate to any actions which the Releasees may have taken or omitted to
take prior to the date this Amendment was executed, including without limitation with respect
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to the Obligations, any Collateral, the Loan Agreement, any other Loan Document and any third
parties liable in whole or in part for the Obligations, other than arising out of Lender’s gross
negligence or willful misconduct. This provision shall survive and continue in full force and
effect whether or not Borrower shall satisfy all other provisions of this Amendment, the Loan
Agreement or the other Loan Documents, including payment in full of all Obligations.
7. Indemnities. Each Borrower hereby agrees that its obligation to indemnify and hold
the Releasees harmless as set forth in the Loan Agreement shall include an obligation to indemnify
and hold the Releasees harmless with respect to any and all liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as
a result of or arising from or relating to any proceeding by, or on behalf of, any Person,
including, without limitation, officers, directors, agents, trustees, creditors, partners or
shareholders of any Borrower, whether threatened or initiated, asserting any claim for legal or
equitable remedy under any statute, regulation or common law principle arising from or in
connection with the negotiation, preparation, execution, delivery, performance, administration and
enforcement of this Amendment or any other document executed in connection herewith, other than
arising out of such Releasees’ gross negligence or willful misconduct. The foregoing indemnity
shall survive the payment in full of the Obligations and the termination of this Amendment, the
Loan Agreement and the other Loan Documents.
8. Counterparts. This Amendment may be signed in any number of counterparts, and by
different parties hereto in separate counterparts, with the same effect as if the signatures to
each such counterpart were upon a single instrument. All counterparts shall be deemed an original
of this Amendment.
9. Integration. This Amendment and any documents executed in connection herewith or
pursuant hereto contain the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, offers and negotiations, oral or
written, with respect thereto and no extrinsic evidence whatsoever may be introduced in any
judicial or arbitration proceeding, if any, involving this Amendment; except that any financing
statements or other agreements or instruments filed by Lender with respect to Borrowers shall
remain in full force and effect.
10. Governing Law; Venue. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrowers and Lender each
submit to the exclusive jurisdiction of the State and Federal courts in San Francisco County,
California.
[signature page follows]
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In Witness Whereof, the parties have duly authorized and caused this Amendment to be
executed as of the date first written above.
BORROWERS:
| PlanetOut Inc. | LPI Media Inc. | |||||||
By:
|
/s/ Xxxxx Xxxxx | By: | /s/ Xxxxx Xxxxx | |||||
| Name: Xxxxx Xxxxx | Name: Xxxxx Xxxxx | |||||||
| Title: CEO | Title: CEO | |||||||
| Address and facsimile number for notices: | Address and facsimile number for notices: | |||||||
| c/o PlanetOut Inc. | c/o PlanetOut Inc. | |||||||
| 0000 Xxxxxxx Xxxxxx | 0000 Xxxxxxx Xxxxxx | |||||||
| Xxx Xxxxxxxxx, XX 00000 | Xxx Xxxxxxxxx, XX 00000 | |||||||
| Attn: Xxxx Huge | Attn: Xxxx Huge | |||||||
| fax: (000) 000-0000 | fax: (000) 000-0000 | |||||||
| SpecPub, Inc. | RSVP Productions, Inc. | |||||||
By:
|
/s/ Xxxxx Xxxxx | By: | /s/ Xxxxx Xxxxx | |||||
| Name: Xxxxx Xxxxx | Name: Xxxxx Xxxxx | |||||||
| Title: CEO | Title: CEO | |||||||
| Address and facsimile number for notices: | Address and facsimile number for notices: | |||||||
| c/o PlanetOut Inc. | c/o PlanetOut Inc. | |||||||
| 0000 Xxxxxxx Xxxxxx | 0000 Xxxxxxx Xxxxxx | |||||||
| Xxx Xxxxxxxxx, XX 00000 | Xxx Xxxxxxxxx, XX 00000 | |||||||
| Attn: Xxxx Huge | Attn: Xxxx Huge | |||||||
| fax: (000) 000-0000 | fax: (000) 000-0000 | |||||||
| PlanetOut USA Inc. | ||||||||
By:
|
/s/ Xxxxx Xxxxx . | |||||||
| Name: Xxxxx Xxxxx . | ||||||||
| Title: CEO . | ||||||||
| Address and facsimile number for notices: | ||||||||
| c/o PlanetOut Inc. | ||||||||
| 0000 Xxxxxxx Xxxxxx | ||||||||
| Xxx Xxxxxxxxx, XX 00000 | ||||||||
| Attn: Xxxx Huge | ||||||||
| fax: (000) 000-0000 | ||||||||
LENDER:
ORIX Venture Finance LLC
By:
|
/s/ Xxxxx X. Xxxxxxx | |||
| Name: Xxxxx X. Xxxxxxx | ||||
| Title: President & CEO | ||||
Address and facsimile number for notices:
ORIX Venture Finance LLC,
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Fax: (000) 000-0000
With a copy to:
ORIX Venture Finance LLC,
000 Xxxxxx Xxxxxx, Xxxx Xxxx,
XX 00000,
Attention: Xx. Xxxxxxx Xxxxx.
Fax: (000) 000-0000
000 Xxxxxx Xxxxxx, Xxxx Xxxx,
XX 00000,
Attention: Xx. Xxxxxxx Xxxxx.
Fax: (000) 000-0000
