AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
Exhibit 99.1
This Amendment No. 2 to Loan and Security Agreement (this “Amendment”) is entered into
this 14th day of February, 2007 but effective as of December 30, 2006 subject to the terms of
Section 5 hereof, 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
A. 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 (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.
B. PlanetOut desires to dispose of its membership interests in DSW (the “DSW Sale”).
C. Borrowers desire that Lender consent to the DSW Sale and amend the Loan Agreement upon the
terms and conditions more fully set forth herein.
D. 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 limited waiver and consent
contained herein and so amend the Loan Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound,
the parties hereto agree as follows:
1. Limited Waiver. Lender hereby agrees, subject to the terms of Section 5 hereof,
to waive any restrictions set forth in Section 7.1 that would otherwise prohibit PlanetOut from
consummating the DSW Sale.
2. Amendments to Loan Agreement.
2.1 Section 6.2 (Financial Statements, Reports, Certificates). Section 6.2(a) of the Loan
Agreement is hereby amended to renumber each of the existing subsections as (ii) through (vi) and
include the following new subsection (i):
“(i) as soon as available, but no later than twenty-five (25) days after the last day of each
calendar month, prepared under GAAP by Borrower, consistently applied, monthly consolidated and
consolidating balance sheets and income statements covering consolidated and consolidating
operations of PlanetOut and its Subsidiaries during the period certified by a Responsible Officer
and in a form acceptable to Lender;”
2.2 Section 6.7 (Financial Covenants). Section 6.7 of the Loan Agreement is hereby amended
and restated in its entirety as follows:
“(a) Minimum EBITDA. Maintain a minimum EBITDA as set forth on Schedule 6.7(a).
(b) Borrowers Liquidity. Maintain a minimum Liquidity as set forth on Schedule 6.7(b).”
2.3 Section 7.13 (PNO Liquidity). Section 7.13 of the Loan Agreement is hereby amended and
restated in its entirety as follows:
“Allow any of Borrowers’ Subsidiaries that are not a Borrower to have more than $150,000 in
unrestricted cash in the aggregate, at any given time.”
2.4 Section 14.1 (Definitions). Section 14.1 of the Loan Agreement is hereby amended as
follows:
(a) The definition of “Adjusted EBITDA” is hereby deleted.
(b) The definition of “Committed Revolving Line” is hereby amended and restated in its
entirety as follows:
““Committed Revolving Line” is an aggregate principal amount equal to $3,000,000;
provided, however, that the Committed Revolving Line shall be increased to an
aggregate principal amount equal to $5,000,000 on January 1, 2008 so long as no Event of Default
occurs in fiscal year 2007 following the effectiveness of this Amendment.”
(c) The new definition of “Liquidity” is hereby inserted in the appropriate alphabetical
order:
““Liquidity” means Borrowers’ and their respective Subsidiaries’ (i) unrestricted cash plus
(ii) the percentage of net Accounts receivable listed on Schedule 6.7(b) minus (iii) Indebtedness.”
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(d) Subsection (h) of the definition of “Permitted Investments” is hereby deleted in its
entirety.
2.5 Schedule 6.7 (Minimum EBITDA). Schedule 6.7 of the Loan Agreement is hereby amended and
restated in its entirety as set forth on Schedule 6.7 attached hereto.
2.6 Exhibit C (Description of Collateral). Exhibit C of the Loan Agreement is hereby amended
and restated in its entirety as set forth on Exhibit C attached hereto.
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) 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
(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.
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4. Limitation. The waiver and 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 waiver 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 amended hereby, the Loan Agreement shall continue in
full force and effect.
5. Effectiveness. This Amendment 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 Payment of Amendment Fee. Borrowers shall have paid Lender an amendment fee equal to
$25,000.
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.
6. 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.
7. 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.
8. 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/ Xxxxxxx Xxxxxx
|
|||||||
| Name: Xxxxx Xxxxx | Name: Xxxxxxx Xxxxxx | |||||||||
| Title: CEO | Title: CFO | |||||||||
| 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 Xxxxxxxx
|
By: | /s/ Xxxxxxx Xxxxxx
|
|||||||
| Name: Xxxxx Xxxxxxxx | Name: Xxxxxxx Xxxxxx | |||||||||
| Title: CEO | Title: CFO | |||||||||
| 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/ Xxxxxxx Xxxxxx
|
|||||||||
| Name: Xxxxxxx Xxxxxx | ||||||||||
| Title: CFO | ||||||||||
| Address and facsimile number for notices: | ||||||||||
| c/o PlanetOut Inc. | ||||||||||
| 0000 Xxxxxxx Xxxxxx | ||||||||||
| Xxx Xxxxxxxxx, XX 00000 | ||||||||||
| Attn: Xxxx Huge | ||||||||||
| fax: (000) 000-0000 | ||||||||||
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| 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 | ||||||||||
| With a copy to: | ||||||||||
| ORIX Venture Finance LLC, | ||||||||||
| 000 Xxxxxx Xxxxxx, Xxxx Xxxx, | ||||||||||
| XX 00000, | ||||||||||
| Attention: Xx. Xxxxxxx Xxxxx. | ||||||||||
| Fax: (000) 000-0000 | ||||||||||
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Schedule 6.7
6.7(a)- Minimum EBITDA. Borrowers shall not permit EBITDA for any Test Period described in the
table below to be less than the amount set forth opposite such period in such table:
| Test Date | Test Period | Minimum EBITDA | ||||
December 31, 2006 |
Quarterly EBITDA for trailing three months | $ | 600,000 | |||
March 31, 2007 |
Quarterly EBITDA for trailing six months | ($ | 500,000 | ) | ||
June 30, 2007 |
Quarterly EBITDA for trailing six months | ($ | 100,000 | ) | ||
September 30, 2007 |
Quarterly EBITDA for trailing six months | $ | 1,700,000 | |||
December 31, 2007 |
Quarterly EBITDA for trailing six months | $ | 500,000 | |||
March 31, 2008 |
Quarterly EBITDA for trailing six months | ($ | 500,000 | ) | ||
June 30, 2008 |
Quarterly EBITDA for trailing six months | $ | 500,000 | |||
September 30, 2008 |
Quarterly EBITDA for trailing six months | $ | 1,600,000 | |||
All remaining
fiscal quarter
ends through the
Term Loan Maturity
Date |
Quarterly EBITDA for trailing six months | $ | 1,600,000 | |||
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6.7(b)- Minimum Liquidity. Borrowers shall not permit Liquidity for any Test Period described
in the table below to be less than the amount set forth opposite such period in such table:
| Percentage of net | ||||||||||
| Accounts receivable | ||||||||||
| Test Date | Test Period | applied to Liquidity | Minimum Liquidity | |||||||
December 31, 2006 |
Fiscal quarter then ended | 90 | % | $ | (1,302,000 | ) | ||||
March 31, 2007 |
Calendar month then ended | 90 | % | $ | 1 | |||||
April 30, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
May 31, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
June 30, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
July 31, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
August 31, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
September 30, 2007 |
Calendar month then ended | 85 | % | $ | 1 | |||||
All remaining
calendar month
ends through the
Term Loan Maturity
Date |
Calendar month then ended | 80 | % | $ | 1 | |||||
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Exhibit C
Description of Collateral
Description of Collateral
“Collateral” means of all of each Borrower’s right, title and interest in and to the following
whether owned now or hereafter acquired or arising, and wherever located: all its Accounts; all
its Inventory; all its Equipment; all its Deposit Accounts; all its General Intangibles; all its
Investment Property; all its Other Property; and any and all claims, rights and interests in any of
the foregoing, and all guaranties and security for any of the foregoing, and all substitutions and
replacements for, additions, accessions, attachments, accessories, and improvements to, and
proceeds (including proceeds of any insurance policies, proceeds of proceeds and claims against
third parties) of, all of the foregoing, and such Borrower’s Books relating to any of the
foregoing; provided, however, the Collateral shall not include (i) cash subject to
a Lien described in subsection (g) of the definition of Permitted Liens; (ii) the “Pledged
Collateral” as defined in the SpecPub Pledge Agreement and “Collateral” as such term is defined in
that certain Security Agreement and Accommodation Security Agreement (the “SpecPub Security
Agreement”) dated as of November 8, 2005 made by SpecPub in favor of the Sellers (as defined below)
(collectively, the “Specified SpecPub Collateral”) so long as any of those certain Promissory Notes
dated November 8, 2005 (the “LPI Notes”) made by LPI Media, Inc. (f/k/a Vulcan Acquisition Corp.)
and SpecPub, Inc. (f/k/a SpecPub Acquisition Corp.) in favor of Lipo Liquidating Corp (f/k/a LPI
Media, Inc.) (“Lipo”) and Speco Liquidating Corp. (f/k/a SpecPub, Inc.) (“Speco”; together with
Lipo, the “Sellers”) remain outstanding; and (iii) any chattel paper and General Intangibles which
are now or hereafter held or any equipment heretofore or hereafter acquired by any of the Borrowers
as licensee, lessee or otherwise, to the extent that (x) such chattel paper, Equipment and General
Intangibles are not assignable or capable of being encumbered as a matter of law or under the terms
of the license, lease or other agreement applicable thereto (unless and solely to the extent that
any such restriction on assignment or encumbrance is ineffective under the Code or other applicable
law), without the consent of the licensor, lessor or financer thereof or other applicable party
thereto and (y) such consent has not been obtained; provided that the Collateral shall include (a)
any and all proceeds of such chattel paper, Equipment and General Intangibles to the extent that
any anti-assignment clause in any agreement relating thereto does not restrict the assignment or
encumbering of such proceeds, or if assignment or the granting of a lien in such proceeds is so
restricted, solely to the extent that such restriction is ineffective under the Code or other
applicable law and (b) upon the consent of any such licensor, lessor, financer or other applicable
party to the encumbrance of any such otherwise excluded chattel paper, Equipment or General
Intangibles being obtained, thereafter such chattel paper, Equipment or General Intangibles as well
as any and all proceeds thereof that theretofore might have been excluded from such grant of a
security interest.
Upon payment in full of the LPI Notes in accordance with Section 2.10 of the SpecPub Security
Agreement (the “LPI Payoff”), the exclusion in subsection (ii) immediately above for the Specified
SpecPub Collateral shall no longer apply.
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