EXHIBIT 10.29
LIMITED WAIVER
TO
LOAN AND SECURITY AGREEMENT
AND AMENDMENT NO. 3
 
     This Limited Waiver to Loan and Security Agreement and Amendment No. 3
(this “Waiver”) is entered into this 9th day of May, 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
     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, and Amendment No. 2 to Loan and Security Agreement (“Amendment No. 2”)
dated as of February 14, 2007 (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.     Borrowers have failed to achieve the Minimum EBITDA and Liquidity
covenants set forth in Section 6.7 of the Loan Agreement as of March 31, 2007
and the Liquidity covenant as of April 30, 2007 (together, the “Existing
Defaults”), and have notified Lender that they expect to fail to achieve the
Liquidity covenant as of May 31, 2007 (the “May Liquidity Test”).
     C.     Borrowers desire that Lender waive the Existing Defaults and the May
Liquidity Test 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 Waiver, Lender is willing to
provide the limited waiver and amendment contained herein.
Agreement
      NOW, THEREFORE, in consideration of the foregoing Recitals and intending
to be legally bound, the parties hereto agree as follows:
     1.     Financial Covenants.   Borrowers acknowledge their failure to
achieve Minimum EBITDA for the period tested as of March 31, 2007 as provided
for in Section 6.7(a) of the Loan Agreement (the “EBITDA Event”) and Minimum
Liquidity as provided for in Section 6.7(b) of the Loan Agreement for the
periods tested as of the end of each of the months of March and April 2007 (the
“Liquidity Events”). Borrowers further request that Lender waive compliance by
Borrowers with the May Liquidity Test.

 

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     2.     Limited Waiver.   Lender hereby agrees, subject to the terms of
Section 3 hereof, to waive (i) the EBITDA Event, (ii) the Liquidity Events and
(iii) the May Liquidity Test. Lender further agrees, subject to the terms of
Section 3 hereof, to waive any misrepresentation in Section 3(c) of Amendment
No. 2 in connection with Borrowers’ failure to disclose the amendment to
PlanetOut’s certificate of incorporation filed January 8, 2007.
     3.      Conditions to Limited Waiver.
          3.1      Engagement of Investment Bankers.   Not later than May 15,
2007, Borrowers shall have engaged an investment banking firm for the purpose of
raising capital for PlanetOut, and shall have provided evidence of the same to
Lender.
          3.2      Establishment of Lockbox.   Not later than May 18, 2007,
Borrowers shall have established a lockbox account with a bank to which Account
debtors shall be directed to make payment and into which the proceeds of all
Accounts shall be deposited, pursuant to a blocked account agreement in such
form as Lender may reasonably specify.
          3.3      Term Sheet for Capital Event.   Not later than June 8, 2007,
Borrowers shall have received a signed term sheet, reasonably satisfactory to
Lender, from one or more investors for the issuance of new equity or
subordinated debt in an aggregate gross amount of not less than $15,000,000 (the
“Capital Event”).
          3.4      Capital Event Closings.   Not later than June 30, 2007,
Borrowers shall have (i) obtained a written commitment from one or more
investors in the form of one or more subscription or purchase agreements to
purchase new equity or subordinated debt issued by PlanetOut in at least the
gross amount of $15,000,000, subject only to customary closing conditions,
including shareholder approval as may be required, and (ii) closed the issuance
of new equity 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 $7,000,000 (the “Initial Capital Raise”) and
received the proceeds thereof, of which $1,500,000 shall be immediately remitted
to Lender for application to amounts due under the Term Loan, in inverse order
of maturity. Not later than August 31, 2007, Borrowers shall have closed the
issuance of new equity or subordinated debt resulting in gross proceeds of at
least an amount equal to $15,000,000 less the amount of gross proceeds from the
Initial Capital Raise, and shall have received the proceeds thereof, of which an
additional $1,500,000 (for a total of $3,000,000) shall be immediately remitted
to Lender for application to amounts due under the Term Loan, in inverse order
of maturity.
          3.5      No Prepayments of Indebtedness.   Other than Indebtedness
incurred pursuant to the Loan Agreement, Borrowers shall not pay any
Indebtedness, including without limitation, the LPI Notes, prior to its due
date.
          3.6      Payment of Success Fee.  In the event a Change in Control of
PlanetOut occurs, and Lender consents to such Change in Control in accordance
with the Loan Agreement, Borrowers shall pay to Lender immediately upon the
closing of such Change in Control a fee in the amount of $250,000.

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     4.      Amendments.
          4.1      Term Loan Interest.   The first sentence of Section 2.2.1 to
the Loan Agreement (Interest Rates) is deleted and replaced in its entirety by
the following: “Borrowers shall pay interest to Lender in arrears on each
applicable Interest Payment Date, at the following rates: (a) with respect to
the Advances, each Advance shall bear interest on the outstanding principal
amount thereof from the date when made until paid in full at a rate per annum
equal to the Base Rate plus one percent (1.0%), and (b) with respect to the Term
Loan, the Term Loan shall bear interest on the outstanding principal amount
thereof from the date when made until paid in full at a rate per annum equal to
the Base Rate plus five percent (5.00%).”
          4.2      Minimum Cash.   A new Section 6.7(c) is added to the Loan
Agreement as follows: “Minimum Cash. Borrowers shall maintain at all times cash
and cash equivalents in an amount not less than $4,500,000 through June 30,
2007, $7,000,000 from July 1 through July 31, 2007, and $3,000,000 commencing
August 1, 2007.”
     5.      Borrowers’ Representations And Warranties.   Each Borrower
represents and warrants that:
               (a)      immediately upon giving effect to this Waiver (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 Waiver and to perform its obligations under the Loan
Agreement, as amended by this Waiver;
               (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
Waiver and the performance by such Borrower of its obligations under the Loan
Agreement as amended by this Waiver have been duly authorized by all necessary
corporate action on the part of such Borrower;
               (e)      this Waiver 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
Waiver and in connection with the Loan Documents.
          Each Borrower understands and acknowledges that Lender is entering
into this Waiver in reliance upon, and in partial consideration for, the above
representations and warranties, and agrees that such reliance is reasonable and
appropriate.
     6.      Limitation.   The waiver and amendments set forth in this Waiver
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 waived and amended hereby, the Loan Agreement and each of its terms
and conditions shall continue in full force and effect.
     7.      Effectiveness.   This Waiver shall become effective upon the
satisfaction of all the following conditions precedent:
          7.1      Waiver.  Borrowers and Lender shall have duly executed and
delivered this Waiver to Lender.
          7.2      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 Waiver.
     8.      Release.  In further consideration of Lender’s execution of this
Waiver, 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 Waiver was executed, including
without limitation with respect 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
Waiver, the Loan Agreement or the other Loan Documents, including payment in
full of all Obligations.

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     9.      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 Waiver 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 Waiver, the Loan
Agreement and the other Loan Documents.
     10.      Counterparts.   This Waiver 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 Waiver.
     11.      Integration.   This Waiver 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 Waiver; except that
any financing statements or other agreements or instruments filed by Lender with
respect to Borrowers shall remain in full force and effect.
     12.      Governing Law; Venue.   THIS WAIVER 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 Waiver
to be executed as of the date first written above.
BORROWERS:

      PlanetOut Inc.   LPI Media Inc.
 
   
 
   
 
   
By: /s/ Daniel J. Miller                              
  By:/s/ Daniel J. Miller                              
 
   
Name: Daniel J. Miller
  Name: Daniel J. Miller
 
   
Title: Senior Vice President, Chief Financial
Officer and Treasurer
  Title: Chief Financial Officer
 
  Address and facsimile number for notices:
 
   
Address and facsimile number for notices:
   
 
   
 c/o PlanetOut Inc.
  c/o PlanetOut Inc. 1355 Sansome Street
1355 Sansome Street
  San Francisco, CA 94111
San Francisco, CA 94111
  Attn: Todd Huge
Attn: Todd Huge
  fax: (415) 834-6378
fax: (415) 834-6378
   
 
   
 
   
SpecPub, Inc.
  RSVP Productions, Inc.
 
   
 
   
By:/s/ Daniel J. Miller                              
  By:/s/ Daniel J. Miller                              
 
   
 
   
Name: Daniel J. Miller
  Name: Daniel J. Miller
 
   
Title: Chief Financial Officer
  Title: Chief Financial Officer
 
   
Address and facsimile number for notices:
  Address and facsimile number for notices:
 
   
c/o PlanetOut Inc.
  c/o PlanetOut Inc.
1355 Sansome Street
  1355 Sansome Street
San Francisco, CA 94111
  San Francisco, CA 94111
Attn: Todd Huge
  Attn: Todd Huge
fax: (415) 834-6378
  fax: (415) 834-6378

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  PlanetOut USA Inc.
 
 
By:/s/ Daniel J. Miller                              
 
Name: Daniel J. Miller
 
Title: Chief Financial Officer
 
Address and facsimile number for notices:
 
c/o PlanetOut Inc.
1355 Sansome Street
San Francisco, CA 94111
Attn: Todd Huge
fax: (415) 834-6378

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LENDER:
ORIX Venture Finance LLC

 
By:/s/ Kevin P. Sheehan                              
 
Name: Kevin P. Sheehan
 
Title: President & CEO
 
Address and facsimile number for notices:
 
ORIX Venture Finance LLC,
245 Park Avenue, 19th Floor
New York, NY 10167-0001
Attn: Kevin Sheehan
Fax: (212) 497-7917

With a copy to:
ORIX Venture Finance LLC,
151 Lytton Avenue, Palo Alto,
CA 94301,
Attention: Mr. Michael David.
Fax: (650) 617-0706

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