Exhibit 10.1
 
AMENDMENT TO
MASTER CREDIT FACILITY AND CONSENT AND WAIVER AGREEMENT
 
This Amendment to Master Credit Facility and Consent and Waiver Agreement (this
“Amendment”) is made as of the 10th day of August, 2016, by and among
PROFESSIONAL DIVERSITY NETWORK, INC., a Delaware corporation (“PDN”), NAPW,
INC., a Delaware corporation and wholly-owned subsidiary of PDN (“NAPW”), NOBLE
VOICE LLC, a Delaware limited liability company and a wholly-owned subsidiary of
PDN (“Noble”), COMPLIANT LEAD LLC, a Delaware limited liability company and a
wholly-owned subsidiary of PDN (“Compliant”), and WHITE WINSTON SELECT ASSET
FUNDS, LLC, a Delaware limited liability company (“WWSAF” or the “Lender”). 
Capitalized terms used but not defined herein shall have the meaning ascribed to
them in the Loan Agreement (defined below).
 
PDN, NAPW, Noble and Compliant are collectively referred to herein as the
“Borrower,” and PDN, NAPW, Noble and Compliant shall be jointly and severally
liable for all obligations of the Borrower set forth herein.  All references
herein to the Borrower refer to PDN, NAPW, Noble and Compliant, unless otherwise
explicitly provided or required by the context.
 
Background
 

A The Lender made a loan to the Borrower in the original principal amount of
Five Million and 00/100 Dollars ($5,000,000.00) pursuant to a Master Credit
Facility, dated as of March 30, 2016, by and among the Borrower and the Lender
(the “Loan Agreement”).  The terms of the Loan are set forth in that certain
Promissory Note, dated June 30, 2016, made by the Borrower in favor of the
Lender (the “Note”).

 

B In partial consideration for WWSAF’s agreement to extend the loan to the
Borrower pursuant to the Loan Agreement (the “Credit Facility”), the Borrower
issued to WWSAF (a) a warrant (the “Fixed $0.25 Warrant”) to purchase up to
1,000,000 shares of the PDN’s common stock with an exercise price of $0.25 per
share, (b) a warrant (the “Pro Rata Warrant”) to purchase up to 1,750,000 shares
of PDN’s common stock with an exercise price of $0.25 per share and (c) a
warrant (the “Fixed $2.50 Warrant” and together with the Fixed $0.25 Warrant and
the Pro Rata Warrant, the “Warrants”), to purchase up to 1,000,000 shares of
PDN’s common stock with an exercise price of $2.50 per share.

 

C The Borrower is negotiating a financing transaction with Cosmic Forward
Limited, a Republic of Seychelles company (the “Investor”), pursuant to which
the Investor would acquire approximately fifty-one percent (51%) of PDN’s
outstanding shares of common stock on a fully-diluted basis, after giving effect
to the Tender Offer described below for an aggregate gross purchase price of
approximately $20.5 million, assuming no exercise by an existing shareholder of
his right of co-sale  (the “Financing”).

 

D In connection with the Financing, PDN intends to conduct a partial issuer
tender offer to purchase shares of its common stock at a purchase price (the
“Tender Price”) equal to the per share consideration paid by the Investor in the
Financing (the “Tender Offer”).

 

E Section 5.9 of the Loan Agreement provides that PDN may not repurchase or
agree to repurchase any shares of PDN common stock without the consent of
WWSAF.  In addition, under the Board Representation Agreement, WWSAF has the
right to participate in any offering of securities by PDN and the right to
nominate candidates to PDN’s Board of Directors under the circumstances set
forth in the Board Representation Agreement.

 
 

--------------------------------------------------------------------------------

 

F In furtherance of the Financing, the Borrower has requested that the Lender
consent to the Financing and the transactions contemplated thereby and agree to
waive, terminate or modify certain of the Lender’s rights under the Loan
Documents, and the Lender is willing to do so subject to the terms and
conditions below.

 
N O W ,  T H E R E F O R E ,
 
In consideration of the mutual covenants and agreements herein set forth, and in
reliance on the representations and warranties contained herein, the parties
hereby agree as follows:
 
Section 1.  Consent and Waiver.  Subject to the terms and conditions herein,
WWSAF hereby:
 

(a) consents to the Financing for all purposes under the Loan Agreement,
including PDN’s repurchase of PDN common stock in the Tender Offer contemplated
by the Financing;

 

(b) waives any rights it may have with respect to the Financing, including its
right to participate in the Financing pursuant to Section 4 of the Board
Representation Agreement, from the date hereof until the earliest of (a) the
termination and payoff of the Loan Agreement as set forth in Section 5 below,
(ii) the termination or consumation of the Financing or (c) January 5, 2017 (the
“Expiration Date”); and

 

(c) waives its rights to representation on PDN’s Board of Directors pursuant to
the Board Representation Agreement from the date hereof until the Expiration
Date.

 
Section 2.  Confirmation of Outstanding Obligations; Enforceability.  The Lender
and the Borrower agree and confirm that the amount due under the Loan Documents
as of the date of this Amendment is One Million Six Hundred Thirty-Two Thousand,
Two Hundred Forty-Two and 64/100 ($1,632,242.64) (the “Current Balance”),
inclusive of the outstanding principal balance and accrued but unpaid interest,
monitoring and consulting fees, and other costs, fees and expenses. The Borrower
acknowledges that the Loan Documents are enforceable in accordance with their
terms and that the Current Balance is an enforceable obligation of the Borrower.
 
Section 3.  No Defaults.  The Borrower represents and warrants to the Lender
that no default or Event of Default exists under any of the Loan Documents.
 
Section 4.  No Obligation to Make Further Advances.  The Borrower agrees that in
partial consideration of the waivers and consents granted herein, the Lender
shall have no obligation to make additional advances under the Note from and
after the date hereof.
 
Section 5.  Payoff; Termination of Credit Facility.  On or before the closing of
the Financing, the Borrower shall pay to the Lender all amounts due under the
Loan Documents on the date of such payment (the “Payoff Amount”). Upon receipt
of the Payoff Amount, the Note shall automatically be cancelled, all liens and
pledges securing the Borrower’s obligations under the Credit Facility shall be
released, and neither party shall have any further obligations under the Note or
the Loan Agreement.  In addition, each of the Board Representation Agreement and
Consulting Agreement shall terminate and be of no further effect.  Lender agrees
to cooperate with Borrower to provide a payoff letter and other documentation
reasonably requested by Borrower reflecting the payment in full of the Payoff
Amount, the termination release and discharge of the liens on the Borrower’s
assets, termination letters for any deposit account control agreement(s) for
Borrower’s bank accounts, and any further instruments or documents which are
reasonably required to consummate the foregoing actions in accordance with the
terms of this Section 5.
 
 

2

--------------------------------------------------------------------------------

 
Section 6.  Vesting of Warrants.  In partial consideration for the Lender’s
agreement to enter into this Amendment, the Borrower agrees that the Pro Rata
Warrant shall be fully exercisable on and after the date hereof with respect to
all 1,750,000 underlying shares, notwithstanding the pro rata formula set forth
in Section 2 thereof.
 
Section 7.  Option to Repurchase Warrants.
 

(a) WWSAF hereby agrees that, for a period of five (5) business days commencing
on the 11th (eleventh) business day following the consummation of the Tender
Offer, PDN shall have the right, but not the obligation, to repurchase the Fixed
$0.25 Warrant and the Pro Rata Warrant, in whole but not in part, for an amount
(the “Repurchase Price”) equal to: (i) the number of underlying shares then
exercisable with respect to each warrant (the “Available Shares”) multiplied by
the greater of the Tender Price or $1.20 (the “Gross Per Share Price”); minus
(ii) the aggregate exercise price for the Available Shares. Notwithstanding the
foregoing, if the Borrower delivers the Payoff Amount pursuant to Section 5
above within fifteen (15) days of the date of this Amendment, for purposes of
calculating the Repurchase Price the Gross Per Share Price shall be reduced by
eighteen and one-third percent (18 1/3%) (rounded to the nearest whole penny
($0.01), provided that in no event shall the net per share Repurchase Price be
less than $0.73. For the sake of clarity, PDN shall not have the right to
repurchase the Fixed $2.50 Warrant. PDN may exercise its repurchase right by
giving WWSAF not less than two (2) business days’ prior written notice. At the
closing of the repurchase, WWSAF shall deliver the Fixed $0.25 Warrant and the
Pro Rata Warrant, together with an instrument of transfer in form and substance
reasonably acceptable to PDN, against delivery by PDN of the Repurchase Price in
immediately available funds. At the time of such repurchase, WWSAF shall make
reasonable and customary representations and warranties to PDN regarding its
authority to consumate the transaction, its ownership of the Fixed $0.25 Warrant
and the Pro Rata Warrant, and the absence of any liens or encumbrances on the
Fixed $0.25 Warrant and the Pro Rata Warrant, but shall not be required to make
any other representations or warranties.

 

(b) The Borrower acknowledges and agrees that prior to the repurchase of the
Fixed $0.25 Warrant and the Pro Rata Warrant, WWSAF shall continue to have all
rights thereunder including, without limitation, the right to exercise such
Warrants and to tender the underlying shares in the Tender Offer.

 
Section 8.  Costs and Fees.  Upon execution of this Amendment, the Borrower
shall pay a financing fee of Fifteen Thousand Dollars ($15,000.00) for the cost
of all expenses or fees paid or incurred by the Lender in connection with this
Amendment.  All such fees shall be charged as a draw under the Note through the
date hereof.
 
Section 9.  Representations and Warranties.  The Borrower represents and
warrants to the Lender:
 

(a) that all representations and warranties made by the Borrower in the Loan
Documents are true and correct in all material respects as of the date hereof
(except to the extent that such representations and warranties expressly relate
to or are stated to have been made as of an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date).

 
 
3

--------------------------------------------------------------------------------

 

(b) that the Borrower is fully aware of the terms set forth in this Amendment
and has voluntarily, and without coercion or duress of any kind, entered into
this Amendment intending to be legally bound by its terms;

 

(c) that in executing this Amendment the Borrower is relying solely upon the
Borrower’s own judgment, belief and knowledge, and the advice or recommendations
of the Borrower’s own independently chosen counsel, taking into consideration
the nature, extent and duration of the Borrower’s rights and claims hereunder;
and

 

(d) that in executing this Amendment the Borrower has not relied to any extent
whatsoever on any representations, warranties or covenant made by the Lender or
any persons representing the Lender, other than those expressly set forth
herein.

 
Section 10.  Release.  In consideration of the Lender’s agreement to modify the
Credit Facility in the manner set forth herein, the Borrower, for the Borrower
and the Borrower’s subsidiaries, affiliates, agents, employees, representatives,
directors, officers, members, managers, successors and assigns (the “Releasing
Parties”), does hereby remise, release and forever discharge the Lender and its
subsidiaries, affiliates, agents, employees, representatives, directors,
officers, members, managers, successors and assigns (the “Released Parties”) of
and from any and all claims, counterclaims, demands, actions and causes of
action of any nature whatsoever, whether at law or in equity, including without
limitation any of the foregoing arising out of or relating to this Amendment,
the Loan Agreement, the Note or any of the other Loan Documents that the
Releasing Parties, or any of them, have or may have against the Released
Parties, whether or not known to them, from the beginning of the world to the
date of this Amendment (the “Claims”). The Releasing Parties further covenant
that they will not sue any of the foregoing Released Parties for any cause of
action relating to the Claims.
 
Section 11.  No Waiver.  Neither the failure of the Lender to exercise, nor the
delay of the Lender in exercising, any right, power or privilege under this
Amendment shall operate as a waiver thereof, nor of any other right, power or
privilege.
 
Section 12.  Notices.  Any notice to the Borrower or the Lender hereunder shall
be effective when delivered in accordance with the notice provisions set forth
in the Loan Agreement.
 
Section 13.  Construction; Governing Law.  Wherever the context shall so
require, the singular and plural shall mean each other and the masculine,
feminine and neutral genders shall mean each other.  This Amendment shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts, without giving effect to such jurisdiction’s principles of
conflict of laws.  Each party irrevocably agrees that any legal action, suit or
proceeding brought by it in any way arising out of this Amendment, any Loan
Document or any other dealings between the parties or their respective agents,
employees, representatives, directors, officers, members, managers, successors
and assigns must be brought solely and exclusively in the United States District
Court for the District of Massachusetts or in the state courts of the
Commonwealth of Massachusetts, and irrevocably accepts and submits to the sole
and exclusive jurisdiction of each of the aforesaid courts in personam,
generally and unconditionally with respect to any action, suit or proceeding
brought by it or against it by any other party.
 
Section 14.  Counterparts.  This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
 

4

--------------------------------------------------------------------------------

 
Section 15.  No Other Amendments  Other than as set forth herein, nothing in
this Amendment will be deemed or construed to amend, supplement or modify the
Loan Agreement, Board Representation Agreement, Consulting Agreement, Warrants
or other Loan Documents, all of which remain in full force and effect.  Except
as expressly set forth herein, this Amendment shall not constitute a waiver of
any Event of Default or a waiver or modification of any of WWSAF’s rights and
remedies under the Loan Agreement, ad WWSAF hereby reserves all of its rights
and remedies pursuant to the Loan Agreement and applicable law.
 
Section 16.  Neutral Construction; No Coercion or Duress.  This Amendment is the
product of arm’s-length negotiations between the parties, and each of the
parties has had the opportunity to obtain, and has obtained, the advice of
counsel with respect to the matters set forth herein. Each of the parties agrees
that no party will claim that any ambiguity in this Amendment shall be construed
against the other party or against the drafter of this Amendment.  Each party
hereby represents and warrants to the others that such party is fully aware of
the terms set forth in this Amendment and has voluntarily, and without coercion
or duress of any kind, entered into this Amendment intending to be legally bound
by its terms.  The Borrower represents and declares that in executing this
Amendment, it is relying solely upon its own judgment, belief and knowledge, and
the advice or recommendations of its own independently chosen counsel
considering the nature, extent, duration of their rights and claims hereunder
and that it has not been influenced to any extent whatsoever in executing this
Amendment by any representations, statements or omissions pertaining to any of
the foregoing matters by WWSAF or any persons representing WWSAF.
 
THE BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS AMENDMENT IS A PART
IS A COMMERCIAL TRANSACTION, AND THE LENDER RESERVES ALL RIGHTS TO PREJUDGMENT
REMEDIES TO WHICH IT MAY BE ENTITLED.  FURTHER, THE BORROWER HEREBY WAIVES, TO
THE EXTENT PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENT, STAY,
REDEMPTION AND MORATORIUM LAWS, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW. 
THE BORROWER HEREBY WAIVES, TO THE EXTENT PERMITTED BY LAW, THE BENEFITS OF
TRIAL BY JURY, NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAW.
 

[Signature Page Follows]
 
 

5

--------------------------------------------------------------------------------

 
 
IN WITNESS WHEREOF, the parties have executed this Amendment to Master Credit
Facility under seal as of the date first written above.
 
PROFESSIONAL DIVERSITY NETWORK, INC.
 
 
 
By:
/s/ Chris Wesser  
Witness:
 
/s/ Kerry Wesser
Name:
 
Chris Wesser
 
Name:
 
Kerry Wesser
Title:
 
Secretary
       

 

 
NAPW, INC.
 
 

By:
/s/ Chris Wesser  
Witness:
 
/s/ Kerry Wesser
Name:
 
Chris Wesser
 
Name:
 
Kerry Wesser1
Title:
 
Secretary
       

 

 
NOBLE VOICE LLC
 

By:
/s/ Chris Wesser  
Witness:
 
/s/ Kerry Wesser
Name:
 
Chris Wesser
 
Name:
 
Kerry Wesser
Title:
 
Secretary
       

 
 
 
COMPLIANT LEAD LLC
 

By:
/s/ Chris Wesser  
Witness:
 
/s/ Kerry Wesser
Name:
 
Chris Wesser
 
Name:
 
Kerry Wesser
Title:
 
Secretary
       

 
 
6

--------------------------------------------------------------------------------

 
WHITE WINSTON SELECT ASSET FUNDS, LLC
 

 
By:
/s/ Todd M. Enright
 
Witness:
 
/s/ Benjamin Hron
 
Todd M. Enright, Manager
 
Name:
 
Benjamin Hron

 
7

--------------------------------------------------------------------------------