Exhibit 10.1
 
EXECUTION VERSION

 

 
 
STOCK PURCHASE AGREEMENT
 
by and between
 
PROFESSIONAL DIVERSITY NETWORK, INC.
 
and
 
COSMIC FORWARD LIMITED
 
dated as of January 13, 2017
 

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Table of Contents
 

     
Page
       
1.
PURCHASE AND SALE OF COMMON SHARES.
1
       
(a)
Purchase and Sale of Common Shares
1
         
(b)
Closing
1
         
(c)
Purchase Price
2
         
(d)
Closing Deliveries
2
       
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
3
       
(a)
Organization; Authority
3
         
(b)
No Public Sale or Distribution
3
         
(c)
Accredited Investor Status
3
         
(d)
Reliance on Exemptions
3
         
(e)
No Governmental Review
4
         
(f)
Transfer or Resale
4
         
(g)
Validity; Enforcement
4
         
(h)
No Conflicts
4
         
(i)
Certain Trading Activities
5
         
(j)
Manipulation of Price
5
         
(k)
General Solicitation
5
         
(l)
Experience of the Buyer
5
         
(m)
Access to Information
6
         
(n)
Disclosure
6
         
(o)
No Disqualification Event
6
         
(p)
Ownership of the Buyer
6
         
(q)
Availability of Funds
6
         
(r)
No Additional Representations
7
       
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
7
       
(a)
Organization and Qualification
7
         
(b)
Subsidiaries
8
         
(c)
Authorization; Enforcement; Validity
8

 
(d)
Issuance of Common Shares
9

 

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(e)
No Conflicts
9
         
(f)
Consents
9
         
(g)
Principal Market
10
         
(h)
No General Solicitation; Placement Agent’s Fees
10
         
(i)
No Integrated Offering
10
         
(j)
SEC Documents; Financial Statements
10
         
(k)
Absence of Certain Changes
11
         
(l)
Conduct of Business; Regulatory Permits
11
         
(m)
Compliance with Laws; Foreign Corrupt Practices
11
         
(n)
Sarbanes-Oxley Act
12
         
(o)
Transactions With Affiliates
13
         
(p)
Equity Capitalization
13
         
(q)
Indebtedness
14
         
(r)
Absence of Litigation
14
         
(s)
Insurance
14
         
(t)
Employee Relations
15
         
(u)
Title
15
         
(v)
Intellectual Property Rights
16
         
(w)
Environmental Laws
16
         
(x)
Tax Status
17
         
(y)
Internal Accounting and Disclosure Controls
18
         
(z)
Off Balance Sheet Arrangements
18
         
(aa)
Investment Company Status
18
         
(bb)
U.S. Real Property Holding Corporation
19
         
(cc)
Employee Benefit Plans
19
         
(dd)
Employee Matters
21
         
(ee)
Privacy
22
         
(ff)
Information Technology
23
         
(gg)
No Disqualification Events
23
         
(hh)
Material Contracts
23
         
(ii)
Application of Takeover Protections
24

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(jj)
Disclosure
24
         
(kk)
PCI Standards
24
         
(ll)
Solvency
24
         
(mm)
No Additional Representations
25
       
4.
COVENANTS.
25
       
(a)
Form D and Blue Sky
25
         
(b)
Use of Proceeds
25
         
(c)
Listing
25
         
(d)
Fees and Expenses
25
         
(e)
Publicity
25
         
(f)
Integration
26
         
(g)
Notice of Disqualification Events
26
         
(h)
Survival; Indemnification
26
       
5.
LEGEND.
29
       
(a)
Legends
29
         
(b)
Removal of Legends
30
       
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
30
     
7.
CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.
31
     
8.
TERMINATION.
32
       
(a)
Termination
32
         
(b)
Notice of Termination
33
         
(c)
Effect of Termination
33
       
9.
MISCELLANEOUS.
34
       
(a)
Governing Law; Jurisdiction; Jury Trial
34
         
(b)
Counterparts
34
         
(c)
Headings; Gender
34
         
(d)
Severability
35
         
(e)
Entire Agreement; Amendments
35
         
(f)
Notices
35
         
(g)
Successors and Assigns
36

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(h)
No Third Party Beneficiaries
36
         
(i)
Further Assurances
36
         
(j)
Construction
37
         
(k)
Specific Performance
37
         
(l)
Agent for Service
37
               
Exhibit A
Wire Instructions
         
Exhibit B
Form of Amendment to Stockholders’ Agreement
         
Exhibit C
Knowledge of the Buyer
         
Exhibit D
Knowledge of the Company
 

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STOCK PURCHASE AGREEMENT
 
This STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of January 13, 2017,
is by and between Professional Diversity Network, Inc., a Delaware corporation
(the “Company”), and Cosmic Forward Limited, a Republic of Seychelles company
(the “Buyer”).
 
RECITALS
 
A.          The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”),
and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
 
B.          The Buyer wishes to purchase from the Company, and the Company
wishes to issue and sell to the Buyer, in each case upon the terms and subject
to the conditions set forth in this Agreement, 312,500 shares of common stock,
par value $0.01 per share, of the Company (the “Common Stock”).

C.          Contemporaneously with the execution and delivery of this Agreement,
the Buyer and the Company are entering into an amendment to that certain
Stockholders’ Agreement, dated as of November 7, 2016 (the “Stockholders’
Agreement”), by and among the Company, the Buyer, Maoji (Michael) Wang (“Wang”),
Jing Bo Song (“Song”), Yong Xiong Zheng (“Zheng”) and Nan Nan Kou (“Kou” and,
together with Wang, Song and Zheng, collectively, the “Buyer Principals” and
each a “Buyer Principal”).

AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Buyer hereby
agree as follows:
 
1.             PURCHASE AND SALE OF COMMON SHARES.
 
(a)          Purchase and Sale of Common Shares.  Upon the terms and subject to
the satisfaction or waiver of the conditions set forth herein, at the Closing
(as defined below), the Company shall issue and sell to the Buyer, and the Buyer
shall purchase from the Company, 312,500 shares of Common Stock (such purchased
shares, the “Common Shares” and, such issuance by the Company and sale to the
Buyer, the “Share Issuance”), free and clear of all Encumbrances (as defined
below).
 
(b)          Closing.  The closing (the “Closing”) of the Share Issuance shall
occur at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, NY
10166 or at such other place (including virtually, via the electronic exchange
of documents and signatures) as the Buyer and the Company may mutually agree. 
The date and time of the Closing shall be 10:00 a.m., New York City time, no
later than the third (3rd) Business Day on which the conditions to the Closing
set forth in Sections 6 and 7 have been satisfied or, to the extent permissible,
waived by the party or parties entitled to the benefit of such conditions, or at
such other time or on such other date as the Buyer and the Company may mutually
agree (the “Closing Date”).  As used herein, “Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks in New York, New
York are authorized or required by law to remain closed.
 
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(c)          Purchase Price.  The price for the Common Shares to be purchased by
the Buyer hereunder shall be an amount equal to $9.60 per Common Share (the “Per
Share Price”), without interest or adjustment.  As used herein, “Purchase Price”
means $3,000,000, representing the aggregate purchase price paid by the Buyer
hereunder for the Common Shares.
 
(d)          Closing Deliveries.
 
(i)         At the Closing, the Buyer shall deliver or cause to be delivered to
the Company:
 

(1)
the amendment to the Stockholders’ Agreement in the form of Exhibit B attached
hereto (the “Stockholders’ Agreement Amendment”), duly executed by the Buyer and
the Buyer Principals;

 

(2)
a certificate, executed by a duly authorized officer of the Buyer and dated as
of the Closing Date, certifying that the conditions specified in Section
6(a)(iii) and Section 6(a)(iv) have been satisfied; and

 

(3)
an amount in cash equal to the Purchase Price, by wire transfer of immediately
available funds to the account specified by the Company on Exhibit A to this
Agreement.

 
(ii)         At the Closing, the Company shall deliver or caused to be delivered
to the Buyer:
 

(1)
the Stockholders’ Agreement Amendment, duly executed by the Company;

 

(2)
a certificate, executed by a duly authorized officer of the Company and dated as
of the Closing Date, certifying that the conditions specified in Section
7(a)(iii) and Section 7(a)(iv) have been satisfied;

 

(3)
a certificate evidencing the formation and good standing of the Company and each
of its Subsidiaries (as defined below) in each such entity’s jurisdiction of
formation issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within ten (10) days prior to the Closing
Date; and

 
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(4)
a copy of the irrevocable instructions to the Company’s transfer agent
instructing the transfer agent to issue the Common Shares in the form of
book-entry restricted shares in the name of the Buyer and to deliver a statement
to the Buyer reflecting the share amount and the restrictions on the shares (the
“Irrevocable Transfer Agent Instructions”), together with any other documents
that, in the reasonable judgment of the Buyer, are necessary to transfer and
convey to, and vest in, the Buyer good and valid title to the Common Shares,
free and clear of all Encumbrances.

 
2.            BUYER’S REPRESENTATIONS AND WARRANTIES.
 
The Buyer represents and warrants to the Company that:
 
(a)          Organization; Authority.  The Buyer is an entity duly organized,
validly existing and in good standing under the laws of Seychelles with the
requisite power and authority to enter into and to consummate the transactions
contemplated by this Agreement and the other Transaction Documents (as defined
below) to which it is a party and otherwise to carry out its obligations
hereunder and thereunder.  As used in this Agreement, “Transaction Documents”
means, collectively, this Agreement, the Stockholders’ Agreement Amendment and
the Irrevocable Transfer Agent Instructions.
 
(b)          No Public Sale or Distribution.  The Buyer is acquiring the Common
Shares for its own account and not with a view towards, or for resale in
connection with, any public sale or distribution thereof in violation of
applicable securities laws.  The Buyer is acquiring the Common Shares hereunder
in the ordinary course of its business.  The Buyer does not presently have any
agreement or understanding, directly or indirectly, with any Person to
distribute any of the Common Shares in violation of applicable securities laws. 
As used in this Agreement, “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization or any other entity, or a government or any
department or agency thereof.
 
(c)          Accredited Investor Status.  The Buyer is an “accredited investor,”
as that term is defined in Rule 501(a) of Regulation D.   Any and all
information that has been furnished or that will be furnished by the Buyer to
evidence its status as an “accredited investor” is or will be when furnished
accurate and complete, and does not and will not contain any misrepresentation
or material omission.
 
(d)          Reliance on Exemptions.  The Buyer understands that the Common
Shares are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws
and that the Company is relying in part upon the truth and accuracy of, and the
Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of the Buyer
to acquire the Common Shares.
 
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(e)          No Governmental Review.  The Buyer understands that no United
States federal or state agency or any other Governmental Authority has passed on
or made any recommendation or endorsement of the Common Shares or the fairness
or suitability of the investment in the Common Shares nor have such authorities
passed upon or endorsed the merits of the offering of the Common Shares.
 
(f)          Transfer or Resale.  The Buyer understands that:  (i) the Common
Shares have not been and are not being registered under the 1933 Act or any
state securities laws and are “restricted securities,” as that term is defined
in Rule 144 under the 1933 Act (“Rule 144”); (ii) the Common Shares may not be
offered for sale, sold, assigned or transferred except (A) to the Company or one
of its Subsidiaries, (B) pursuant to a registration statement that has been
declared and remains effective under the 1933 Act, or (C) in a transaction that
is exempt from the requirements of the 1933 Act, which may require the delivery
of certificates, legal opinions and other information as may be requested by the
Company or its agents; and (iii) neither the Company nor any other Person is
under any obligation to register the Common Shares under the 1933 Act or any
state securities laws.  The Buyer further understands that the Common Shares
will also be subject to additional restrictions on transfer pursuant to the
Stockholders’ Agreement, as amended by the Stockholders’ Agreement Amendment
(the “Amended Stockholders’ Agreement”).  As used in this Agreement, the term
“Subsidiaries” means, with respect to the Company or the Buyer (as applicable)
any Person in which the Company or the Buyer (as applicable), directly or
indirectly, (1) owns at least fifty percent (50%) of the outstanding capital
stock or holds at least fifty percent (50%) of the equity or similar interest of
such Person or (2) Controls or operates all or any material part of the
business, operations or administration of such Person.
 
(g)          Validity; Enforcement.  Each of this Agreement and each other
Transaction Document to which the Buyer is a party has been duly and validly
authorized, executed and delivered on behalf of the Buyer and constitutes the
legal, valid and binding obligation of the Buyer enforceable against the Buyer
in accordance with its terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.
 
(h)          No Conflicts.  The execution, delivery and performance by the Buyer
of this Agreement and the other Transaction Documents to which the Buyer is a
party, and the consummation by the Buyer of the Share Issuance, will not (i)
result in a violation of the certificate of incorporation or bylaws, or similar
organizational documents, of the Buyer, (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Buyer is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws) applicable to the Buyer, except in the case of clauses (ii) and (iii)
above, for such conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Buyer to perform its obligations hereunder.
 
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(i)          Certain Trading Activities.  None of the Buyer or any of its
Affiliates has, directly or indirectly, and no Person acting on behalf of or
pursuant to any understanding with the Buyer or any of its Affiliates has,
engaged in any transactions in the securities of the Company (including, without
limitation, Short Sales involving the Company’s securities) since the time that
the Buyer, any of its Affiliates or any of their respective agents or
Representatives (as defined below) was first in contact with the Company
regarding the investment in the Company contemplated herein.  As used herein: 
(x) the term “Short Sales” means all “short sales,” as defined in Rule 200
promulgated under Regulation SHO under the Securities Exchange Act of 1934 (as
amended and, together with the rules and regulations promulgated thereunder, the
“1934 Act”), and all types of direct and indirect stock pledges, forward sales
contracts, options, puts, calls, swaps and similar arrangements (including on a
total return basis), and sales and other transactions through non-U.S. broker
dealers or foreign regulated brokers; (y) the term “Affiliate” means, with
respect to any Person, any other Person directly or indirectly Controlling,
Controlled by, or under common Control with such Person (it being acknowledged
and agreed that each of the individuals listed on Schedule 2(i) shall be deemed
to be an Affiliate of the Buyer for purposes of this Agreement); and (z) the
terms “Controlling,” “Controlled by,” and “under common Control with,” as
applied to any Person, mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of that person,
whether through the ownership or voting securities, by contract or otherwise. 
As used in this Agreement, “Representatives” means, with respect to any Person,
such Person’s directors, officers, employees and representatives.
 
(j)          Manipulation of Price.  Since the time that the Buyer, any of its
Affiliates or any of their respective agents or Representatives was first in
contact with the Company or its agent regarding the investment in the Company
contemplated herein, none of the Buyer or any of its Affiliates has, and, to the
knowledge of the Buyer, no Person acting on its or their behalf has, directly or
indirectly, (i) taken any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Common Shares, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any Common
Stock (other than the location and/or reservation of borrowable shares of Common
Stock by the Buyer), or (iii) paid or agreed to pay to any Person any
compensation for soliciting another to purchase any other securities of the
Company.  With respect to the Buyer, “knowledge” means the actual knowledge of
those individuals set forth on Exhibit C, after due inquiry of his or her direct
reports who have principal responsibility with respect to the subject matter of
the particular matter in question.
 
(k)          General Solicitation.  The Buyer is not purchasing the Common
Shares as a result of any advertisement, article, notice or other communication
regarding the Common Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar.
 
(l)          Experience of the Buyer.  The Buyer has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating the merits and risks of the prospective investment in the
Common Shares, and has so evaluated the merits and risks of such investment. 
The Buyer is able to bear the economic risk of an investment in the Common
Shares and, at the present time, is able to afford a complete loss of such
investment in the Common Shares.  The Buyer understands that its investment in
the Common Shares involves a high degree of risk.  The Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Common
Shares.
 
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(m)          Access to Information.  The Buyer acknowledges that it has had the
opportunity to review the Transaction Documents (including all exhibits and
schedules thereto) and has been afforded (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from,
representatives of the Company concerning the terms and conditions of the
offering of the Common Shares and the merits and risks of investing in the
Common Shares, (ii) access to information about the Company and its financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment in the Common Shares, and
(iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is
necessary to make an informed investment decision with respect to its investment
in the Common Shares.  The Buyer acknowledges and agrees that neither the
Placement Agent (as defined below) nor any Affiliate of the Placement Agent has
provided the Buyer with any information or advice with respect to the Common
Shares nor is such information or advice necessary or desired.
 
(n)          Disclosure.  Except for the representations and warranties
expressly set forth in this Agreement and the other Transaction Documents,
including the related disclosure schedules, the Buyer acknowledges and agrees
that the Company is not making any representation or warranty and has not made
any representation or warranty, express or implied, with respect to the Company
or its Subsidiaries or their respective businesses or operations, including with
respect to any information provided or made available to the Buyer or its
Representatives or to any other Person and the Buyer is not relying on any such
representation or warranty.
 
(o)          No Disqualification Event.  The Buyer is not subject to any of the
“Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the
1933 Act (a “Disqualification Event”), except for a Disqualification Event
covered by Rule 506(d)(2) or (d)(3).
 
(p)          Ownership of the Buyer.  The Buyer Principals collectively own,
directly, one hundred percent (100%) of the capital stock or other equity
interests of the Buyer, free and clear of any Encumbrances (as defined herein). 
There are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Buyer, or contracts, commitments, understandings or arrangements by which the
Buyer is or may become bound to issue additional capital stock of the Buyer or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any capital stock of the Buyer, which,
individually or in the aggregate, would result in the transfer of Control of the
Buyer to any Person other than the Buyer Principals.
 
(q)          Availability of Funds.  The Buyer will have as of the Closing Date,
unrestricted cash on hand and available to it that is at least sufficient to
enable the Buyer to pay the Purchase Price in full at the Closing.
 
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(r)          No Additional Representations.  Except for the representations and
warranties made by the Buyer in this Section 2, neither the Buyer nor any other
Person makes any express or implied representation or warranty with respect to
the Buyer or its respective businesses, operations, assets liabilities,
condition or prospects, and the Buyer hereby disclaims any such other
representations or warranties.  In particular, without limiting the foregoing
disclaimer, neither the Buyer nor any other Person makes or has made any
representation or warranty to the Company, or any of its Affiliates or
Representatives with respect to (i) any financial projection, forecast,
estimate, budget or prospect information relating to the Buyer or its respective
business, or (ii) except for the representations and warranties made by the
Company in this Section 2, any oral or written information presented to the
Company or any of its Affiliates or Representatives in the course of the
negotiation of this Agreement.
 
3.            REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company represents and warrants to the Buyer that, except as set forth in
(a) the disclosure schedules (it being agreed that any matter set forth in any
disclosure schedule to this Agreement shall be deemed to qualify only (i) the
section of this Agreement that corresponds to the applicable disclosure schedule
and (ii) any other section of this Agreement to which the applicability of such
disclosure is readily apparent, notwithstanding the omission of an appropriate
cross-reference to such other disclosure schedule) or (b) in the SEC Documents
filed by the Company since December 31, 2015 and publicly available at least two
(2) Business Days prior to the date of this Agreement (but excluding any
forward-looking disclosures set forth in any “risk factors” section, any
disclosures in any “forward-looking statements” section and any other
disclosures included therein to the extent they are predictive or
forward-looking in nature, it being understood that any factual information
contained within such sections shall not be excluded):
 
(a)          Organization and Qualification.  The Company is a corporation duly
organized and validly existing and in good standing under the laws of the state
of Delaware, and has the requisite power and authorization to own its properties
and to carry on its business as now being conducted and as presently proposed to
be conducted.  Each of the Company’s Subsidiaries (as defined below) is an
entity duly organized and validly existing and in good standing under the laws
of the jurisdiction in which it was formed, and has the requisite power and
authorization to own its properties and to carry on its business as now being
conducted and as presently proposed to be conducted.  Each of the Company and
each of its Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Company Material Adverse Effect.  As used in this
Agreement, the term “Company Material Adverse Effect” means, with respect to the
Company and its Subsidiaries, any change, effect, development or event that,
individually or in the aggregate, (i) has a material adverse effect on the
business, assets, properties, liabilities, results of operations or condition of
the Company and its Subsidiaries, taken as a whole, or (ii) prevents or
materially impairs the ability of the Company to perform any of its obligations
under this Agreement or any of the other Transaction Documents to which it is a
party; provided, however, that no change, effect, development or event
(individually or in the aggregate) to the extent resulting from, arising out of,
or attributable to, any of the following shall be deemed to constitute or be
taken into account when determining whether a Company Material Adverse Effect
has occurred: (1) any changes, effects, developments or events in the economy or
the financial, credit or securities markets in general (including changes in
interest or exchange rates), (2) any changes, effects, developments or events in
the industries in which the Company and its Subsidiaries operate, (3) any
changes, effects, developments or events resulting from the announcement or
pendency of the Share Issuance, the identity of Buyer or any action taken that
is required or expressly contemplated by this Agreement (provided that the
exception in this clause (3) shall not apply to references to “Company Material
Adverse Effect” in the representations and warranties set forth in Section 3(e),
and, to the extent related thereto, the condition in Section 7(a)(iii)), (4)
natural disasters, calamities, national or international political or social
conditions, including the engagement by any country in hostility (whether
commenced before, on or after the date hereof, and whether or not pursuant to
the declaration of a national emergency or war), or the occurrence of a military
or terrorist attack, or (5) any adoption, implementation, promulgation, repeal,
change or proposal in applicable law or United States generally accepted
accounting principles (“GAAP”), or any interpretation thereof, except to the
extent such changes, effects, developments or events resulting from or arising
out of the matters described in clauses (1), (2), (4) and (5) disproportionately
affect the Company and its Subsidiaries, taken as a whole, as compared to other
companies operating in the industries in which the Company and its Subsidiaries
operate.
 
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(b)          Subsidiaries.  All of the Company’s Subsidiaries are set forth on
Schedule 3(b).  The Company does not have any other Subsidiaries.  The Company
owns, directly or indirectly, one hundred percent (100%) of the capital stock or
other equity interests of each of its Subsidiaries, free and clear of any
Encumbrances.  All of the issued and outstanding shares of capital stock of each
Subsidiary owned by the Company are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities.  As used in this Agreement, “Encumbrance” means any
mortgage, deed of trust, lien, pledge, charge, defect in title, security
interest, title retention device, collateral assignment, indenture,
hypothecation, license to third parties, pledge, option, conditional or
installment sale agreement, easement, right of first refusal, right of first
offer, right of repurchase, claim, restriction or other encumbrance of any kind
(including any restriction on the voting of any security, any restriction on the
transfer of any security or other asset, any restriction on the receipt of any
income derived from any asset, any restriction on the use of any asset and any
restriction on the possession, exercise or transfer of any other attribute of
ownership of any security or other asset).
 
(c)          Authorization; Enforcement; Validity.  The Company has all
requisite power and authority to enter into this Agreement and the other
Transaction Documents to which it is a party and to perform its obligations
under this Agreement and the other Transaction Documents to which it is a party
and to issue the Common Shares in accordance with the terms hereof.  The
execution and delivery of this Agreement and the other Transaction Documents by
the Company, and the consummation by the Company of the Share Issuance, have
been duly and validly authorized by all necessary corporate action, including
having been duly and validly authorized by a special committee (the “Special
Committee”) of the Company’s board of directors (the “Board of Directors”) and,
with respect to the execution and delivery of the Stockholders’ Agreement
Amendment, duly and validly authorized by the Board of Directors, and no other
corporate proceedings on the part of the Company or its stockholders are
necessary to authorize the execution and delivery of this Agreement or to
consummate the Share Issuance.  This Agreement and the other Transaction
Documents will be prior to the Closing, duly executed and delivered by the
Company or its agent, and each constitutes or when so executed and delivered
will be the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and except as rights to indemnification and to contribution
may be limited by federal or state securities law.
 
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(d)          Issuance of Common Shares.  The Common Shares, when issued, will be
validly issued, fully paid and nonassessable and free from all Encumbrances with
respect to the issue thereof (except for Encumbrances set forth in this
Agreement and the Amended Stockholders’ Agreement and Encumbrances imposed by
the Buyer). Subject to the accuracy of the representations and warranties of the
Buyer in this Agreement, the offer and issuance by the Company of the Common
Shares is exempt from registration under the 1933 Act.
 
(e)          No Conflicts.  The execution and delivery of the Transaction
Documents by the Company have not, and performance of the Transaction Documents
by the Company and the consummation by the Company of the Share Issuance will
not, (i) result in a violation of the Certificate of Incorporation of the
Company, as amended (the “Certificate of Incorporation”), the Company’s bylaws,
as amended (the “Bylaws”), or the organizational documents of any of the
Company’s Subsidiaries, (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (iii) assuming the filing of a Form D
with the SEC under the 1933 Act and any filings required under the 1934 Act or
applicable “blue sky” laws, and the receipt of any and all approvals required
under the rules of the Nasdaq Capital Market (the “Principal Market”), result in
a violation of any law, rule, regulation, order, judgment or decree (including
foreign, federal and state securities laws and regulations and the rules and
regulations of the Principal Market) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected except, in the case of clause (ii) or (iii)
above, to the extent such violations that would not reasonably be expected to
have a Company Material Adverse Effect.
 
(f)          Consents.  Neither the Company nor any Subsidiary is required to
obtain any consent from, authorization or order of, or make any filing or
registration with, any Governmental Authority, any self-regulatory agency or any
other Person in order for it to execute, deliver or perform any of its
respective obligations under or contemplated by the Transaction Documents, in
each case, in accordance with the terms hereof or thereof, other than (i) the
filing of a Form D with the SEC under the 1933 Act, (ii) any filings required
under the 1934 Act or applicable “blue sky” laws, (iii) the receipt of any and
all approvals required under the rules of the Principal Market, and (iv) such
other consents which if not obtained or made would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.
 
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(g)          Principal Market.  The Company has not received any written
notification from the Principal Market that the Company is in violation of the
requirements of the Principal Market, and the Company has not taken any action
designed to, or which would reasonably be expected to lead to, the termination
or suspension of the listing of the Common Stock on the Principal Market.
 
(h)          No General Solicitation; Placement Agent’s Fees.  None of the
Company or any of its Subsidiaries, or any Person acting on its or their behalf,
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of the Common
Shares.  Other than Aegis Capital Corp. (the “Placement Agent”), neither the
Company nor any of its Subsidiaries has engaged any placement agent, financial
advisor or other agent in connection with the sale of the Common Shares.  The
Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or brokers’ commissions (other than for Persons engaged
by the Buyer or its investment advisor) relating to or arising out of the Share
Issuance (including, without limitation, the fees of the Placement Agent).
 
(i)          No Integrated Offering.  None of the Company, its Subsidiaries or
any of their Affiliates or, to its knowledge, any Person acting on their behalf,
has, directly or indirectly, made any offer or sale of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the issuance of any of the Common Shares under the 1933 Act,
whether through integration with prior offerings or otherwise.
 
(j)          SEC Documents; Financial Statements.  Since January 1, 2015, the
Company has timely filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed since January 1, 2014
and prior to the date hereof or the Closing Date and all exhibits included
therein and financial statements, notes and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC
Documents”), except where the failure to timely file would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.  As of its respective date, each SEC Document, as it may have been
amended by filings made by the Company at least two (2) Business Days prior to
the date hereof, complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to such SEC Document.  None of the SEC Documents, at the time they
were filed with the SEC and as they may have been amended by filings made by the
Company at least two (2) Business Days prior to the date hereof, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.  The
financial statements of the Company included in the SEC Documents (or as
updated, amended, restated or corrected by the subsequent SEC Document filed at
least two (2) Business Days prior to the date hereof) have been prepared in
accordance with GAAP, consistently applied during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements), and fairly
present in all material respects the financial condition of the Company as of
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments which will not be material, either individually or in
the aggregate).
 
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(k)          Absence of Certain Changes.  Since the date of the Company’s most
recent audited financial statements contained in a Form 10-K, there has been no
event, occurrence or development that has had or that could reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
 
(l)          Conduct of Business; Regulatory Permits.  Neither the Company nor
any of its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation, Bylaws, or other organizational documents, as
applicable.  Neither the Company nor any of its Subsidiaries is in violation, in
any material respect, of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct
its business in violation, in any material respect, of any of the foregoing. 
The Company and each of its Subsidiaries possesses all certificates,
authorizations and permits issued by the appropriate regulatory authorities
necessary to conduct its respective business, except where the failure to
possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Company Material Adverse Effect, and neither
the Company nor any such Subsidiary has received any written notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit.  None of the Company or any of its Subsidiaries has
taken any steps to seek protection pursuant to any law or statute relating to
bankruptcy, insolvency, reorganization, receivership, liquidation or winding up,
and the Company does not have knowledge or reason to believe that any of its or
any of its Subsidiaries’ respective creditors intends to initiate involuntary
bankruptcy proceedings.
 
(m)          Compliance with Laws; Foreign Corrupt Practices.
 
(i)          Each of the Company and its Subsidiaries is in compliance, and
since August 1, 2013 has been in compliance, in all material respects, with any
and all applicable laws, and to the knowledge of the Company, none of the
Company or any of its Subsidiaries is under investigation with respect to and
has not been charged with, or threatened to be charged with, or given written
notice of, any material violation of any applicable law by any Governmental
Authority.  With respect to the Company, “knowledge” means the actual knowledge
of those individuals set forth on Exhibit D, after due inquiry of his or her
direct reports who have principal responsibility with respect to the subject
matter of the particular matter in question.
 
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(ii)          Neither the Company nor any of its Subsidiaries nor any of their
respective directors, officers, employees, representatives, distributors,
consultants or agents acting directly for or on behalf of the Company or its
Subsidiaries has, in the course of his, her or its actions (1) made, offered,
promised, or authorized any illegal contributions, gifts, entertainment or
payments of other expenses, in each case from corporate funds, related to
political activity, (2) unlawfully made, offered, promised, or authorized the
giving of anything of value, or any direct or indirect unlawful payments to any
foreign or domestic Government Official for the purpose of (A) influencing any
act or decision of such person in their capacity as a Government Official, (B)
inducing a Government Official to do or omit to do any act in violation of his
or her lawful duties, (C) securing any improper advantage or (D) inducing a
Government Official to influence or affect any act or decision of any
Governmental Authority in a manner that would constitute or have the purpose or
effect of public or commercial bribery, acceptance of, or acquiescence in
extortion, kickbacks, or other unlawful or improper means of obtaining business
or any improper advantage, (3) made, offered, promised, or authorized any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment of any nature to any Government Official or (4) violated any provision
of the Foreign Corrupt Practices Act (the “FCPA”) the U.K. Bribery Act 2010 (the
“Bribery Act”) or any other applicable laws, regulations or conventions to which
the Company or any of its Subsidiaries is subject relating to corruption
(governmental or commercial), bribery, money laundering, political contributions
or gifts, entertainment, and gratuities, involving or to any Governmental
Authority or any Government Official or commercial entity, including all
national and international laws enacted to implement the OECD Convention on
Combating Bribery of Foreign Officials in International Business Transactions
(collectively, “Other Anticorruption Laws”).  Since January 1, 2013, none of the
Company nor any of its Subsidiaries has conducted or initiated any internal
investigation or made a voluntary, directed, or involuntary disclosure to any
Governmental Authority or similar agency with respect to any alleged act or
omission arising under or relating to any noncompliance with the FCPA, the
Bribery Act or any Other Anticorruption Law.  Neither the Company nor its
Subsidiaries have received any written notice, request, or citation for any
actual or potential noncompliance with any of the foregoing in this Section
3(m)(ii).  As used in this Agreement, “Governmental Authority” means any
transnational, domestic or foreign federal, state or local governmental,
regulatory or administrative authority, department, court, agency or official,
including any political subdivision thereof.  “Government Official” means (w)
any official, officer, employee, or representative of, or any person acting in
an official capacity for or on behalf of, any Governmental Authority, (x) any
political party or party official or candidate for political office, (y) a
Politically Exposed Person as defined by the Financial Action Task Force or
Groupe d’action Financière sur le Blanchiment de Capitaux or any (z) company,
business, enterprise or other entity controlled by any person described in the
foregoing clause (w), (x), or (y) of this definition.
 
(iii)          The Company has taken reasonable steps to ensure that its
accounting controls and procedures are sufficient to cause the Company to comply
in all material respects with the FCPA.  The operations of the Company and its
Subsidiaries have been conducted at all times in compliance in all material
respects with the applicable financial recordkeeping and reporting requirements
of the U.S. Currency and Foreign Transaction Reporting Act of 1970, as amended,
the U.S. Money Laundering Control Act of 1986, as amended, and all applicable
money laundering-related laws of other jurisdictions where the Company and its
Subsidiaries conduct business or own assets, and any related or similar law
issued, administered or enforced by any Governmental Authority (collectively,
the “Money Laundering Laws”).  No proceeding by or before any Governmental
Authority involving the Company or its Subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, is threatened.
 
(n)          Sarbanes-Oxley Act.  Each of the Company and each Subsidiary is in
compliance in all material respects with all applicable requirements of the
Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and all
applicable rules and regulations promulgated by the SEC thereunder that are
effective as of the date hereof.
 
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(o)          Transactions With Affiliates.  None of the officers, directors or
employees of the Company or any of its Subsidiaries is presently a party to any
transaction with the Company or any of its Subsidiaries (other than for ordinary
course services as employees, officers or directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such officer, director or employee or, to the
knowledge of the Company or any of its Subsidiaries, any corporation,
partnership, trust or other Person in which any such officer, director, or
employee has a substantial interest or is an employee, officer, director,
trustee or partner.
 
(p)          Equity Capitalization.  As of the date hereof, the authorized
capital stock of the Company consists of 45,000,000 shares of Common Stock and
1,000,000 shares of preferred stock, par value $0.01 per share.  As of December
31, 2016, (i)(A) 3,622,851 shares of Common Stock were issued and outstanding,
(B) 1,048 shares of Common Stock were held in treasury, (C) no shares of Common
Stock were held by Subsidiaries of the Company, (D) 225,000 shares of Common
Stock were reserved for issuance of equity incentives pursuant to the 2013
Equity Compensation Plan, (E) options to purchase 95,741 shares of Common Stock
granted under the 2013 Equity Compensation Plan were outstanding, with a
weighted average exercise price per share of $16.25, (F) warrants to purchase up
to 170,314 shares of Common Stock were outstanding, (G) no shares of restricted
stock granted under the 2013 Equity Compensation Plan were outstanding, and (ii)
no shares of preferred stock of the Company were outstanding. All of such
outstanding shares of Common Stock are duly authorized and have been, or upon
issuance will be, validly issued, fully paid and nonassessable.  All of such
outstanding shares of Common Stock have been have been issued in compliance in
all material respects with all applicable federal and state securities laws. 
None of the Company’s or any Subsidiary’s capital stock is subject to preemptive
rights or any other similar rights or Encumbrances.  There are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or
exercisable or exchangeable for, any capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional capital stock of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its
Subsidiaries.  There are no outstanding securities or instruments of the Company
or any of its Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to redeem a
security of the Company or any of its Subsidiaries.  Neither the Company nor any
Subsidiary has any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement.  There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the Share Issuance.
 
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(q)          Indebtedness.  Neither the Company nor any of its Subsidiaries (i)
has any outstanding Indebtedness (as defined below), or (ii) is in violation of
any term of, or in default under, any contract, agreement or instrument relating
to any Indebtedness, except where such violations and defaults would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.  For purposes of this Agreement:  (1) “Indebtedness” of
any Person means, without duplication (A) all indebtedness for borrowed money,
(B) all obligations issued, undertaken or assumed as the deferred purchase price
of property or services (other than trade payables entered into in the ordinary
course of business), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (F) all monetary obligations under any
leasing or similar arrangement which, in connection with generally accepted
accounting principles, consistently applied for the periods covered thereby, is
classified as a capital lease, (G) all indebtedness referred to in clauses (A)
through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any mortgage,
lien, pledge, charge, security interest or other encumbrance upon or in any
property or assets (including accounts and contract rights) owned by any Person,
even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; and (2) “Contingent Obligation”
means, as to any Person, any direct or indirect liability, contingent or
otherwise, of that Person with respect to any indebtedness, lease, dividend or
other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto.
 
(r)          Absence of Litigation.  There is no action, suit, proceeding,
inquiry or investigation before or by the Principal Market, any Governmental
Authority, self-regulatory organization or body pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of its
Subsidiaries, which (i) adversely affects or challenges the legality, validity
or enforceability of any of this Agreement or any of the other Transaction
Documents or (ii) would, if there were an unfavorable decision, ruling or
finding, have or reasonably be expected to result in a Company Material Adverse
Effect.  To the knowledge of the Company, there is not pending or contemplated,
any investigation by the SEC involving the Company, any of its Subsidiaries or
any current or former director or officer of the Company or any of its
Subsidiaries.  The SEC has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company under the
1933 Act or the 1934 Act.
 
(s)          Insurance.  The Company and its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged.  Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for, and neither the Company nor any such
Subsidiary has any reason to believe that it will be unable to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Company Material Adverse Effect.
 
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(t)          Employee Relations.  None of the Company or any of its Subsidiaries
is a party to any collective bargaining agreement or other agreement with a
labor union or other labor organization.  To the knowledge of the Company, no
employees of the Company or any of its Subsidiaries are represented by any labor
union or other labor organization.  To the knowledge of the Company there are no
activities or proceedings of any labor union or other labor organization to
organize any employees of the Company or any of its Subsidiaries and no demand
for recognition or certification as the exclusive bargaining representative of
any employees has been made by or on behalf of any labor union or other labor
organization.  The Company believes that its and its Subsidiaries’ relations
with their respective employees are good.  There are no pending or, to the
knowledge of the Company, threatened, and in the past three (3) years there have
been no strikes, lockouts, pickets, slowdowns claims (other than ordinary claims
under employee benefit plans), unfair labor charge, disputes, actions,
grievances or disciplinary actions pending or, to the knowledge of the Company,
threatened, by or between the Company or any of its Subsidiaries and any of
their respective employees.  The Company and its Subsidiaries are in material
compliance with all federal, state, local and foreign laws and regulations
respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours.
 
(u)          Title.  The Company and its Subsidiaries have good and marketable
title to all personal property (exclusive of Intellectual Property Rights, which
are addressed in Section 3(v)), owned by them which is material to the business
of the Company and its Subsidiaries, in each case, free and clear of all
Encumbrances, except for (i) Encumbrances that do not materially affect the
value of such property and do not materially interfere with the use made and
proposed to be made of such property by the Company and the Subsidiaries and
(ii) Encumbrances for the payment of federal, state or other taxes, for which
appropriate reserves have been made in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties.  Any real property and
facilities held under lease by the Company or any of its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company or any of its Subsidiaries.  There
is not, under any such real property lease, any material default or breach by
the Company or any of its Subsidiaries, nor, to the knowledge of the Company, by
any other party thereto.  The Company and its Subsidiaries lease four properties
as disclosed in the SEC Documents, and there are no other real property leases
to which the Company or any of its Subsidiaries is a party.  No portion of such
real property leased by the Company or any of its Subsidiaries is sublet or
licensed for use to any third party other than the sublease of Suite 210 of the
building located at 50 Jericho Quadrangle, Jericho, New York by NAPW, Inc. to
Intercontinental Capital Group, Inc.  There is not, under any such real property
lease or sublease, any material default or breach by the Company or any of its
Subsidiaries or, to the knowledge of the Company, by any other party thereto. 
None of the Company or any of its Subsidiaries owns any real property.
 
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(v)          Intellectual Property Rights.  Each of the Company and its
Subsidiaries (i) exclusively owns (free and clear of all Encumbrances) all
Intellectual Property Rights owned (or purported to be owned) by the Company or
its Subsidiaries (“Owned IP”); and (ii) possesses valid and continuing rights or
licenses to use any and all other rights in (1) trademarks, trade names, service
marks, service names, domain names, logos, slogans, and other indicia of origin,
and all goodwill associated with any of the foregoing, (2) issued patents and
patent applications (whether provisional or non-provisional) and patent rights,
(3) copyrights, works of authorship, original works, inventions, (4) software,
data, databases and compilations of data and other technology, (5) licenses,
approvals and governmental authorizations, (6) trade secrets and confidential or
other proprietary information, (7) social media, privacy and publicity, and (8)
all other intellectual property and proprietary rights and all applications and
registrations therefor, in each case, in any jurisdiction throughout the world
(collectively, “Intellectual Property Rights”) used in or necessary to conduct
their respective businesses as currently conducted (and such Intellectual
Property Rights will not be adversely affected by the consummation of the Share
Issuance).  All of the Owned IP is valid, enforceable and subsisting except as
would not reasonably be expected to have a Company Material Adverse Effect. 
None of the Company’s or its Subsidiaries’ Intellectual Property Rights used in
or necessary to conduct any of their respective businesses as now conducted or
as presently proposed to be conducted have expired, terminated or been
abandoned, or are expected to expire, terminate or be abandoned within five (5)
years from the date of this Agreement, except where such expiration, termination
or abandonment would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.  None of the Company or any
of its Subsidiaries has any knowledge of any infringement by the Company or any
of its Subsidiaries of any patents of any third parties.  The Company, its
Subsidiaries, their products and services, the conduct of their business and the
use of their Intellectual Property Rights do not infringe on, misappropriate or
otherwise violate the Intellectual Property Rights (other than patents) of any
third party.  There is no claim, action or proceeding pending, or to the
knowledge of the Company or any of its Subsidiaries, being threatened, by or
against the Company or any of its Subsidiaries regarding Intellectual Property
Rights.  Each of the Company and each of its Subsidiaries has taken reasonable
security measures to protect the secrecy, confidentiality and value of all of
its Intellectual Property Rights, except where failure to do so would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
 
(w)          Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with all applicable Environmental Laws (as defined below), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, (iii) are
in compliance with all terms and conditions of any such permit, license or
approval and (iv) are not subject to any claims, actions, suits, proceedings,
remedial action obligations or investigations pursuant to Environmental Laws
where, in each of the foregoing clauses (i), (ii), (iii) and (iv), the failure
to so comply, or the claim, action, suit, proceeding, remedial action obligation
or investigation, would reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.  The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.
 
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(x)           Tax Status.
 
(i)          The Company and each of its Subsidiaries:
 

(1)
has made or filed with the appropriate taxing authorities all material foreign,
federal and state income and all other tax returns, reports, forms and
declarations (including elections, disclosures, schedules, estimates and
informational tax returns) for taxes (“Returns”) required by any jurisdiction to
which it is subject, or obtained extensions of time for the filing thereof,
which Returns are true, correct and complete in all material respects, and
accurately reflect all liability for taxes of the Company for the periods
covered thereby.

 

(2)
has paid all material taxes and other governmental assessments and charges that
are due and payable, by or with respect to the income, assets or operations of
the Company, except those being contested in good faith; and

 

(3)
with respect to all material taxes incurred that are not yet due and payable,
(A) has adequately accrued and adequately disclosed such amounts on its
financial statements in accordance with GAAP, and (B) for periods not covered by
the financial statements, has accrued on its books provisions reasonably
adequate for the payment of such taxes.

 
(ii)          To the knowledge of the Company, there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction.
 
(iii)          Neither the Company nor any of its Subsidiaries (1) has entered
into an agreement or waiver (that has not expired) or has been requested to
enter into an agreement or waiver extending any statute of limitations relating
to the payment or collection of taxes of the Company or any of its Subsidiaries,
or (2) is presently contesting the tax liability of the Company or any of its
Subsidiaries before any court, tribunal or agency.
 
(iv)          Neither the Company nor any of its Subsidiaries has been included
in any “consolidated,” “unitary” or “combined” Return provided for under the law
of the United States, any non-U.S. jurisdiction or any state, province, prefect
or locality with respect to taxes for any taxable period for which the statute
of limitations has not expired.
 
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(v)          No written claim has been made by any taxing authority in a
jurisdiction where the Company or any of its Subsidiaries does not file Returns
that the Company or any of its Subsidiaries is or may by subject to taxation by
that jurisdiction and, to the knowledge of the Company, there is no basis in tax
law for such an assertion.
 
(vi)          Neither the Company nor any of its Subsidiaries has engaged in a
“reportable transaction” within the meaning of Treasury Regulations Section
1.6011-4(b).
 
(y)          Internal Accounting and Disclosure Controls.  The Company maintains
a system of “internal control over financial reporting” (as such term is defined
in Rule 13a-15(f) under the 1934 Act) that has been designed by, or under the
supervision of, the Company’s principal executive and principal financial
offices, or persons performing similar functions, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP, including
that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any differences.  The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) under the 1934 Act) to ensure that information required to be
disclosed by the Company in the reports that it files or submits under the 1934
Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC, including, controls and procedures
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the 1934 Act is accumulated and
communicated to the Company’s management, including its principal executive
officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure.  The
Company has not received any notice or correspondence from any accountant
relating to any potential material weakness in any part of the internal controls
over financial reporting of the Company or the Company’s disclosure controls and
procedures.
 
(z)          Off Balance Sheet Arrangements.  There is no transaction,
arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is
required to be disclosed by the Company in its 1934 Act filings and is not so
disclosed or that otherwise could be reasonably likely to have a Company
Material Adverse Effect.
 
(aa)          Investment Company Status.  The Company is not, and upon
consummation of Share Issuance will not be, an “investment company,” and
affiliate of an “investment company,” a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, and “investment company” within the meaning of such term under the
Investment Company Act of 1940, as amended, and the rules and regulations of the
SEC thereunder.
 
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(bb)          U.S. Real Property Holding Corporation.  Neither the Company nor
any of its Subsidiaries is, or has ever been, a U.S. real property holding
corporation within the meaning of Section 897 of the Internal Revenue Code of
1986, as amended (the “Code”).
 
(cc)          Employee Benefit Plans.
 
(i)           “Company Plan” means each benefit or compensation plan, program,
policy, practice, contract, agreement or other arrangement, covering current or
former employees, directors or consultants of the Company or any of its
Subsidiaries, including, but not limited to, “employee benefit plans” within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), employment, consulting, retirement, severance, termination
or change in control agreements, deferred compensation, vacation, sick,
equity-based, incentive, bonus, supplemental retirement, profit sharing,
insurance, medical, welfare, fringe or other benefits or remuneration of any
kind, whether or not in writing and whether or not funded, in each case, which
is sponsored, maintained or contributed to, or required to be maintained or
contributed to, or with respect to which any potential liability is borne by the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
For purposes of this Agreement, “ERISA Affiliate” means all employers (whether
or not incorporated) that would be treated together with the Company or any of
its Subsidiaries as a “single employer” within the meaning of Section 414 of the
Code.
 
(ii)          With respect to each Company Plan, the Company has made available
to Buyer, to the extent applicable, true, correct and complete copies of (1) all
documents embodying such Company Plan, (2) written descriptions of any material
Company Plans that are not set forth in a written document, (3) the most recent
summary plan description together with the summary or summaries of material
modifications thereto, (4) the three most recent annual actuarial valuations,
(5) the three most recent annual reports (Form 5500 or 990 series and all
schedules and financial statements attached thereto), and (6) all material
correspondence to or from the IRS, the United States Department of Labor, the
Pension Benefit Guaranty Corporation or any other Governmental Authority
received in the last three years.
 
(iii)          Each Company Plan has been established, operated and administered
in all material respects in compliance with its terms and all applicable laws
including ERISA and the Code.  The Company and each ERISA Affiliate have
performed in all material respects all obligations required to be performed by
them under each Company Plan.  With respect to the Company Plans, no event has
occurred and there exists no condition or set of circumstances in connection
with which the Company or any ERISA Affiliate would reasonably expect to be
subject to any material liabilities (other than for liabilities with respect to
routine benefit claims) under the terms of, or with respect to, such Company
Plans, ERISA, the Code or any other applicable law.
 
(iv)          Neither the Company, any Company Plan nor to the knowledge of the
Company, any trustee, administrator or other third-party fiduciary and/or
party-in-interest thereof, has engaged in any breach of fiduciary responsibility
or any “prohibited transaction” (as such term is defined in Section 406 of ERISA
or Section 4975 of the Code) to which Section 406 of ERISA or Section 4975 of
the Code applies and which could subject the Company or any ERISA Affiliate to
any material tax or penalty on prohibited transactions imposed by Section 4975
of the Code.
 
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(v)          No Company Plan is or has at any time been covered by Title IV of
ERISA or subject to Section 412 of the Code or Section 302 of ERISA, and neither
the Company nor any ERISA Affiliate has ever maintained, established,
participated in or contributed to, or is or has been obligated to contribute to,
or has otherwise incurred any obligation or liability under any Multiemployer
Plan (as defined in Section 3(37) of ERISA).
 
(vi)          Neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any other Person or entity, has made any binding
commitment to modify, change or terminate any Company Plan, other than with
respect to a modification, change or termination required by ERISA or the Code,
and there has been no amendment to, or written interpretation or announcement by
the Company or any of its Subsidiaries regarding any Company Plan that would
increase the expense of maintaining such Company Plan above the level or expense
incurred with respect to that plan for the most recently completed fiscal year.
 
(vii)          Neither the Company, any of its Subsidiaries nor any ERISA
Affiliate is subject to any material liability or penalty under Sections 4976
through 4980 of the Code or Title I of ERISA with respect to any Company Plan. 
All required contributions in respect of any Company Plan have been timely made
or properly accrued on the financial statements included in or incorporated by
reference into the SEC Documents, and all such contributions are deductible
under Section 162 or 404 of the Code.
 
(viii)          Each Company Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and, to the knowledge of the Company, nothing
has occurred, whether by action or failure to act, which would cause the loss of
such qualification.
 
(ix)          Except as required by applicable law, no Company Plan provides
retiree or post-employment medical, disability, life insurance or other welfare
benefits to any Person, and none of the Company or any of its Subsidiaries has
any obligation to provide such benefits.  To the extent that the Company and any
of its Subsidiaries sponsors any such plan, the Company or the applicable
Subsidiary has reserved the right to amend, terminate or modify at any time all
plans or arrangements providing for retiree health or medical or life insurance
coverage. Neither the execution and delivery of this Agreement, nor the
consummation of the Share Issuance could, either alone or in combination with
another event, (i) entitle any employee, director, officer or independent
contractor of the Company or any of its Subsidiaries to severance pay or any
material increase in severance pay, (ii) accelerate the time of payment or
vesting, or materially increase the amount of compensation due to any such
employee, director, officer or independent contractor, (iii) directly or
indirectly cause the Company to transfer or set aside any assets to fund any
material benefits under any Company Plan, (iv) otherwise give rise to any
material liability under any Company Plan, (v) limit or restrict the right to
merge, materially amend, terminate or transfer the assets of any Company Plan on
or following the Closing, (vi) require a “gross-up,” indemnification for, or
other payment to any “disqualified individual” within the meaning of Section
280G(c) of the Code due to the imposition of the excise tax under Section 4999
of the Code on any payment to such disqualified individual or due to the failure
of any payment to such disqualified individual to be deductible under of Section
280G of the Code or (vii) result in the payment of any amount that could,
individually or in combination with any other such payment, constitute an
“excess parachute payment” as defined in Section 280G(b)(1) of the Code.
 
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(x)          Each Company Plan that is a “nonqualified deferred compensation
plan” (as such term is defined in Section 409A(d)(1) of the Code) has been
administered in compliance with its terms and the operational and documentary
requirements of Section 409A of the Code and the regulations thereunder. 
Neither the Company nor any Subsidiary has any obligation to gross up, indemnify
or otherwise reimburse any individual for any excise taxes, interest or
penalties incurred pursuant to Section 409A of the Code or otherwise.
 
(dd)          Employee Matters.
 
(i)          The National Labor Relations Board has issued a preliminary order
requiring the Company to post certain workplace notices.  The Company and each
of its Subsidiaries is in compliance in all material respects with all
applicable laws relating to employment and employment practices (including equal
employment opportunity laws), terms and conditions of employment, immigration,
workers’ compensation, compensation and benefits, worker classification, exempt
and non-exempt status, affirmative action, plant closings, employee and data
privacy and wages and hours (“Employment Practices”).  Except as would not be
expected to result in a Company Material Adverse Effect, as of the date of this
Agreement, (1) there are no actions pending or scheduled by any Governmental
Authority or, to the knowledge of the Company, threatened, pertaining to the
Employment Practices of the Company or any of its Subsidiaries and (2) no
complaints relating to Employment Practices of the Company or any of its
Subsidiaries have been filed with any Governmental Authority or submitted in
writing to the Company or any of its Subsidiaries and to the knowledge of the
Company, no such complaints are threatened.
 
(ii)          All payments due from the Company and any of its Subsidiaries on
account of any wages, salaries, commissions, bonuses or other direct
compensation for any services performed for the Company or any of its
Subsidiaries, and employee health and welfare insurance and other benefits, have
been paid or properly accrued as a liability on the books of the Company or its
Subsidiaries.
 
(iii)          Neither the Company nor any of its Subsidiaries has incurred any
liability or obligation under the Worker Adjustment and Retraining Notification
Act or any similar state or local law that remains unsatisfied.
 
(iv)          No individual who has performed services for the Company or any of
its Subsidiaries has been improperly excluded from participation in any Company
Plan, and neither the Company nor any of its Subsidiaries has any direct or
indirect liability, whether actual or contingent, with respect to any
misclassification of any person as an independent contractor rather than as an
employee, with respect to any misclassification of any employee as exempt versus
non-exempt, or with respect to any employee leased from another employer.
 
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(v)          As of the date hereof, no senior executive or other key employee of
the Company or any of its Subsidiaries has stated his or her intention to
terminate his or her employment prior to or as a result of or following the
consummation of the transactions contemplated by this Agreement.
 
(ee)          Privacy.  The Company and its Subsidiaries have in place privacy
policies regarding the collection, use and disclosure of Personal Information
(as defined below) in their possession, custody or control, or otherwise held or
processed on their behalf.  The Company and its Subsidiaries are and have been
(and following the consummation of the Share Issuance will be) in compliance in
all material respects with all Information Privacy and Security Laws (as defined
below), agreements to which they are parties that contain, involve or deal with
Personal Information, and their own rules, policies and procedures relating to
privacy, data protection, and the collection and use of, Personal Information. 
None of the Company or any of its Subsidiaries has been notified of or is the
subject of any action, suit, inquiry, investigation or proceeding related to
data security or privacy or alleging a violation of any of its privacy policies
or any Information Privacy and Security Law, nor, to the knowledge of the
Company, is any such claim threatened.  The Company and its Subsidiaries have
taken all measures reasonably necessary or appropriate to protect and maintain
the confidentiality of all Personal Information collected by or on behalf of the
Company or any of its Subsidiaries and to maintain the security of their data
storage practices for Personal Information, in each case, in accordance with all
Information Privacy and Security Laws and consistent with commercially
reasonable industry practices applicable to such types of data gathered and
maintained in the industry in which the Company and its Subsidiaries conduct
their business.  To the knowledge of the Company, there has been no unauthorized
access, use, or disclosure of Personal Information in the possession or control
of the Company or any of its Subsidiaries.  For purposes of this Agreement:  (i)
“Personal Information” means, collectively, any information or data that can be
used, directly or indirectly, alone or in combination with other information
possessed or controlled by the Company, to identify an individual and any other
information or data pertaining to any individual (including name, address,
telephone number, email address, photograph, credit or payment card information,
bank account number, financial data or account information, password
combinations, customer account number, date of birth, government-issued
identifier, social security number, race, ethnic origin/nationality, and mental
or physical health or medical information) or that is otherwise governed,
regulated or protected by one or more Information Privacy and Security Laws; and
(ii) “Information Privacy and Security Laws” means all applicable laws relating
to privacy, data privacy, data protection, data security, anti-spam, and
consumer protection, and all regulations promulgated by any governmental
authority thereunder, including but not limited to, the Health Insurance
Portability and Accountability Act, the Gramm-Leach-Bliley Act, the Federal
Information Security Management Act, the Fair Credit Reporting Act, the Fair and
Accurate Credit Transaction Act, the Federal Trade Commission Act, the Privacy
Act of 1974, the CAN-SPAM Act, the Telephone Consumer Protection Act, the
Telemarketing and Consumer Fraud and Abuse Prevention Act, Children’s Online
Privacy Protection Act, state data security laws, state social security number
protection laws, state data breach notification laws, and laws concerning
requirements for website and mobile application privacy policies and practices,
call or electronic monitoring or recording or any outbound communications
(including outbound calling and text messaging, telemarketing, and e-mail
marketing) and all equivalent laws of any other jurisdiction.
 
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(ff)          Information Technology.  The Company and its Subsidiaries’ IT
Systems: (i) constitute all information technology assets necessary to conduct
the businesses of the Company and its Subsidiaries in the manner in which their
businesses are currently conducted, (ii) are adequate, sufficient and
satisfactory in all material respects (including with respect to working
condition, capacity, data storage and transmittal capability, functionality and
performance) for the operations of the businesses of the Company and its
Subsidiaries, (iii) are maintained and in good working condition, (iv) have
functioned consistently and accurately in all respects since being installed and
(v) have not suffered any material failure, security breach or unauthorized
intrusion within the past five (5) years.  There are no substantial alterations,
modifications or updates to the Company’s or its Subsidiaries’ IT Systems
intended or required currently or that will be required in the near future for
the operations of their businesses as currently conducted and as currently
contemplated to be conducted. “IT Systems” means all computers, software,
hardware, firmware, middleware, servers, systems, sites, circuits, networks,
source code, object code, development tools, workstations, routers, hubs,
switches, interfaces, platforms, data communications lines, websites, data, and
all other telecommunications and information technology assets and equipment,
and all associated documentation, in each case, (1) owned by the Company or any
of its Subsidiaries or (2) used or held for use by the Company or any of its
Subsidiaries, including pursuant to any and all outsourced or cloud computing
based arrangements.
 
(gg)          No Disqualification Events.  With respect to Common Shares to be
offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act
(“Regulation D Securities”), none of the Company, any of its predecessors, any
affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering contemplated hereby, any beneficial owner of
twenty percent (20%) or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in
any capacity at the time of sale (each, an “Issuer Covered Person” and,
together, “Issuer Covered Persons”) is subject to any Disqualification Event,
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).  The
Company has exercised reasonable care to determine whether any Issuer Covered
Person is subject to a Disqualification Event.
 
(hh)          Material Contracts.   There is no material contract or agreement
required by the 1934 Act to be described in or filed as an exhibit to the
Company’s SEC Documents (each, a “Material Contract”) which is not described or
filed in an SEC Document filed on or after December 31, 2015.   None of the
Company or any of its Subsidiaries is in violation or default in the performance
or observance of any material obligation under any Material Contract now in
effect, except as would not reasonably expected to have, individually or in the
aggregate, a Company Material Adverse Effect.  None of the Company or any of its
Subsidiaries knows of, or has received written notice of, any violation or
default under (nor does there exist any condition which upon the passage of time
or the giving of notice or both would cause such a violation of or default
under) any Material Contract, except as would not reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
 
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(ii)          Application of Takeover Protections.  The Company and the Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, interested stockholder, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Certificate of Incorporation,
Bylaws or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise that can be waived by approval of the board of
directors and which is or could become applicable to the Buyer as a result of
the Share Issuance, including, without limitation, the Company’s issuance of the
Common Shares and the Buyer’s ownership of the Common Shares.  The Company and
the Board of Directors have taken all necessary action, if any, in order to
render inapplicable any stockholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of shares of Common Stock or a change
in control of the Company or any of its Subsidiaries.
 
(jj)          Disclosure.  The Company understands and confirms that the Buyer
will rely on the foregoing representations in effecting transactions in
securities of the Company. To the Company’s knowledge, no material event or
circumstance has occurred or information exists with respect to the Company or
any of its subsidiaries or its or their business, properties, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed.
 
(kk)          PCI Standards.  The Company and its Subsidiaries are registered
with and in good standing in all material respects with the Card Associations
(as defined below) and the Company and the Subsidiaries and their business as
currently conducted and as currently contemplated to be conducted are in
material compliance with the Operating Rules (as defined below) and the PCI
Standards (as defined below). “Card Associations” means any and all card
networks whose payment cards are honored by the Company or any Subsidiary, and
any third party payment card processors that the Company or any Subsidiary may
use, including without limitation, MasterCard International, Visa USA Inc.,
American Express Company, Discover Bank, and any of their respective successors
and assigns. “Operating Rules” means the rules and regulations, procedures and
requirements, and interpretations thereof, issued by the Card Associations, as
amended from time to time, including any data security requirements. “PCI
Standards” means, collectively, (i) the Payment Card Industry Data Security
Standard and (ii) any additional standards that may be issued by the PCI
Security Standards Council or its successors, as the same may be supplemented,
revised or replaced from time to time.
 
(ll)          Solvency.  As of the Closing, after giving effect to the Share
Issuance, the Company will not:  (i) be insolvent (either because its financial
condition is such that the sum of its debts is greater than the fair market
value of its assets or because the fair saleable value of its assets is less
than the amount required to pay its probable liabilities on its existing debts
as they mature); (ii) have unreasonably small capital with which to engage in
its business; or (iii) have incurred debts beyond its ability to pay as they
become due.
 
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(mm)          No Additional Representations.  Except for the representations and
warranties made by the Company in this Section 3, neither the Company nor any
other Person makes any express or implied representation or warranty with
respect to the Company or any Subsidiary or their respective businesses,
operations, assets liabilities, condition or prospects, and the Company hereby
disclaims any such other representations or warranties.  In particular, without
limiting the foregoing disclaimer, neither the Company nor any other Person
makes or has made any representation or warranty to the Buyer, or any of its
Affiliates or Representatives with respect to (i) any financial projection,
forecast, estimate, budget or prospect information relating to the Company or
any of its Subsidiaries or their respective business, or (ii) except for the
representations and warranties made by the Company in this Section 3, any oral
or written information presented to the Buyer or any of its Affiliates or
Representatives in the course of their due diligence investigation of the
Company or the negotiation of this Agreement.
 
4.            COVENANTS.
 
(a)          Form D and Blue Sky.  The Company agrees to file with the SEC a
Form D with respect to the Common Shares as required under Regulation D and to
make any filings and reports relating to the offer and sale of the Common Shares
required under applicable securities or “Blue Sky” laws of the states of the
United States, and to provide copies thereof to the Buyer promptly after any
such filing.
 
(b)          Use of Proceeds.  The Company shall use the proceeds from the Share
Issuance to pay the fees and expenses incurred in connection with the
negotiation, execution, delivery and performance of this Agreement and the other
Transaction Documents and the consummation of the Share Issuance and for general
corporate and working capital purposes.
 
(c)          Listing.  The Company shall use its reasonable best efforts to
maintain the Common Stock’s listing or authorization for quotation (as the case
may be) on the Principal Market, the NYSE MKT, the New York Stock Exchange, the
Nasdaq Global Market, or the Nasdaq Global Select Market (each, an “Eligible
Market”).  Neither the Company nor any of its Subsidiaries shall take any action
which would be reasonably expected to result in the delisting or suspension of
the Common Stock on an Eligible Market.
 
(d)          Fees and Expenses.  Each party to this Agreement shall bear its own
fees and expenses in connection with the negotiation, execution, delivery and
performance of this Agreement and the other Transaction Documents.
 
(e)          Publicity.  On or before 5:00 p.m., New York City time, on the
fourth (4th) Business Day after the date of this Agreement, the Company will:
(i) issue a press release reasonably acceptable to the Buyer disclosing all the
material terms of the Share Issuance and (ii) file a Current Report on Form 8-K
describing all the material terms of the Share Issuance, in the form required by
the 1934 Act, and attaching all the material Transaction Documents (including,
without limitation, this Agreement and the Stockholders’ Agreement Amendment)
(including all attachments, the “8-K Filing”).  Subject to the foregoing, none
of the Company, any of its Subsidiaries, the Buyer, or any of the Buyer’s
Affiliates shall issue any press releases or any other public statements with
respect to the Share Issuance; provided, however, that the Company shall be
entitled, without the prior approval of the Buyer, to make any press release or
other public disclosure with respect to such transactions (1) in substantial
conformity with the 8-K Filing and (2) as is required by applicable law and
regulations.
 
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(f)          Integration.  None of the Company, any of its Affiliates, or any
person acting on behalf of the Company or any of its Affiliate will sell, offer
for sale, or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) which will be integrated with the Share
Issuance in a manner which would require the registration of the Common Shares
under the 1933 Act.
 
(g)          Notice of Disqualification Events.  The Company will notify the
Buyer in writing if prior to the Closing Date there occurs (i) any
Disqualification Event relating to any Issuer Covered Person or (ii) any event
that would, with the passage of time, reasonably be expected to become a
Disqualification Event relating to any Issuer Covered Person.  The Buyer will
notify the Company in writing if prior to the Closing Date there occurs (1) any
Disqualification Event relating with respect to the Buyer or (2) any event that
would, with the passage of time, reasonably be expected to become a
Disqualification Event with respect to the Buyer.
 
(h)          Survival; Indemnification.
 
(i)          Subject to the limitations and other provisions of this Agreement,
the representations and warranties contained herein shall survive the Closing
and shall remain in full force and effect until the date that is two (2) years
from the Closing Date.  None of the covenants or other agreements contained in
this Agreement shall survive the Closing Date other than those which by their
terms contemplate performance in whole or in part after the Closing Date, and
each such surviving covenant and agreement shall survive the Closing for the
period contemplated by its terms or, if earlier, until performed in full. 
Notwithstanding the foregoing, any claims asserted in good faith with reasonable
specificity (to the extent known at such time) and in writing by notice from the
non-breaching party to the breaching party prior to the expiration date of the
applicable survival period shall not thereafter be barred by the expiration of
such survival period and such claims shall survive until finally resolved.  For
the elimination of doubt, the parties hereby agree and acknowledge that the
survival period set forth in this Section 4(h) is a contractual statute of
limitations and any claim brought by any party pursuant to this Section 4(h)
must be brought or filed prior to the expiration of the survival period.
 
(ii)          Subject to the limitations and other provisions of this Agreement,
from and after the Closing, the Company will indemnify and hold the Buyer and
its directors, officers, stockholders, partners, employees, members and direct
or indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection
with the Share Issuance) (each, a “Buyer Indemnified Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs,
expenses, actions, causes of action, suits, penalties and fees, including all
judgments, amounts paid in settlements, court costs and reasonable out-of-pocket
attorneys’ fees and costs of investigation (collectively, “Losses”) that any
such Buyer Indemnified Party may suffer or incur as a result of, arising out of
or relating to (1) any breach of any representation or warranty made by the
Company in any of the Transaction Documents, or (2) any breach of any covenant,
agreement or obligation of the Company contained in any of the Transaction
Documents.  In addition to the indemnity contained herein, the Company will
reimburse each Buyer Indemnified Party for its expenses incurred in connection
therewith.
 
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(iii)          Subject to the limitations and other provisions of this
Agreement, from and after the Closing, the Buyer will indemnify and hold the
Company and its directors, officers, stockholders, partners, employees, members
and direct or indirect investors and any of the foregoing Persons’ agents or
other representatives (including, without limitation, those retained in
connection with the Share Issuance) (each, a “Company Indemnified Party” and,
together with the Buyer Indemnified Parties, the “Indemnified Parties”) harmless
from any and all Losses that any such Company Indemnified Party may suffer or
incur as a result of, arising out of or relating to (1) any breach of any
representation or warranty made by the Company in any of the Transaction
Documents or (2) any breach of any covenant, agreement or obligation of the
Company contained in any of the Transaction Documents.  In addition to the
indemnity contained herein, the Buyer will reimburse each Company Indemnified
Party for its expenses incurred in connection therewith.
 
(iv)          Promptly after receipt by any Indemnified Party under this Section
4(h) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving any Loss, such Indemnified Party
shall, if a claim in respect thereof is to be made against the Company or the
Buyer (as applicable, the “Indemnifying Party”) under this Section 4(h), deliver
to the Company a written notice of the commencement thereof, and the
Indemnifying Party shall have the right to participate in, and, to the extent
the Company so desires, to assume control of the defense thereof with counsel
mutually satisfactory to the Indemnifying Party and the Indemnified Party;
provided, however, that an Indemnified Party shall have the right to retain its
own counsel with the fees and expenses of such counsel to be paid by the
Indemnifying Party if:  (1) the Indemnifying Party has agreed in writing to pay
such fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Loss and to employ counsel reasonably satisfactory to
such Indemnified Party in any such Loss; or (3) the named parties to any such
Loss (including any impleaded parties) include both such Indemnified Party and
the Indemnifying Party, and such Indemnified Party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, then
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party), provided
further, that in the case of clause (3) above the Indemnifying Party shall not
be responsible for the reasonable fees and expenses of more than one (1)
separate legal counsel for such Indemnified Party.  The Indemnified Party shall
reasonably cooperate with the Indemnifying Party in connection with any
negotiation or defense of any such action or Loss by the Indemnifying Party and
shall furnish to the Indemnifying Party all information reasonably available to
the Indemnified Party which relates to such action or Loss.  The Indemnifying
Party shall keep the Indemnified Party reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto. 
The Indemnifying Party shall not be liable for any settlement of any action,
claim or proceeding effected without its prior written consent, provided,
however, that the Indemnifying Party shall not unreasonably withhold, delay or
condition its consent.  The Indemnifying Party shall not, without the prior
written consent of the Indemnified Party, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such Loss or
litigation, and such settlement shall not include any admission as to fault on
the part of the Indemnified Party.  Following indemnification as provided for
hereunder, the Indemnifying Party shall be subrogated to all rights of the
Indemnified Party with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made.  The failure to
deliver written notice to the Indemnifying Party within a reasonable time of the
commencement of any such action shall not relieve the Indemnifying Party of any
liability to the Indemnified Party under this Section 4(h), except to the extent
that the Indemnifying Party is materially and adversely prejudiced in its
ability to defend such action.
 
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(v)          The Indemnifying Party shall not be liable to the Indemnified Party
for indemnification under Section 4(h)(ii)(1) or Section 4(h)(iii)(1), as
applicable, until the aggregate amount of all Losses in respect of
indemnification under Section 4(h)(ii)(1) or Section 4(h)(iii)(1), as
applicable, exceeds $50,000 (the “Basket”), in which event the Indemnifying
Party shall be required to pay or be liable for all Losses from the first
dollar, including Losses incurred prior to exceeding the Basket, subject to the
immediately following sentence.  With respect to any single claim as to which
the Indemnified Party may be entitled to indemnification under Section
4(h)(ii)(1) or Section 4(h)(iii)(1), as applicable, the Indemnifying Party shall
not be liable for any individual or series of related Losses which do not exceed
$5,000 (which Losses shall not be counted toward the Basket). The aggregate
amount of all Losses for which an Indemnifying Party shall be liable pursuant to
Section 4(h)(ii)(1) or Section 4(h)(iii)(1), as applicable, shall not exceed
$500,000 (the “Indemnification Cap”); provided, however, that the
Indemnification Cap shall not apply with respect to Losses arising out of a
breach of any of the Company Excepted Representations or the Buyer Excepted
Representations, in each case for which the Indemnifying Party shall be liable
for all Losses up to the Purchase Price.
 
(vi)          Payments by an Indemnifying Party pursuant to Section 4(h) in
respect of any Loss shall be limited to the amount of any liability or damage
that remains after deducting therefrom any insurance proceeds and any indemnity,
contribution or other similar payment received or reasonably expected to be
received by the Indemnified Party in respect of any such claim.  The Indemnified
Party shall use its commercially reasonable efforts to recover under insurance
policies or indemnity, contribution or other similar agreements for any Losses
prior to seeking indemnification under this Agreement.
 
(vii)          For purposes of this Agreement, notwithstanding anything in this
Agreement to the contrary, the term “Losses” or “Loss” shall not include (1)
punitive or special damages or (2) consequential damages (including lost profits
or diminution in value), unless such damages are reasonably foreseeable or
contemplated by the parties as arising out of, based upon or resulting from a
breach of a representation, warranty or covenant contained in this Agreement (it
being understood, however, that in the event any Person is required to pay any
of such losses described in clauses (1) or (2) to a third party in respect of a
third-party claim, such payment shall be considered actual “Losses” with respect
to such Person and shall not be limited by the foregoing).
 
(viii)          The indemnity agreement contained herein shall be in addition to
(1) any cause of action or similar right of an Indemnified Party against the
Buyer or the Company, as applicable, and (2) any liabilities the parties to this
Agreement may be subject to pursuant to applicable law.
 
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(ix)          Once a Loss (including any associated expenses) is agreed to by
the Indemnifying Party or finally adjudicated to be payable pursuant to this
Section 4(h), the Indemnifying Party shall satisfy its obligations within twenty
(20) Business Days of such final, non-appealable adjudication by wire transfer
of immediately available funds.
 
(x)          The representations, warranties and covenants of each party hereto,
and the other party’s right to indemnification with respect thereto, shall not
be affected or deemed waived by reason of any investigation made by or on behalf
of the Indemnified Party (including by any of its Representatives) or by reason
of the fact that the Indemnified Party or any of its Representatives knew or
should have known that any such representation or warranty is, was or might be
inaccurate or by reason of the Indemnified Party's waiver of any condition set
forth in Section 6(a)(iii) or Section 6(a)(iv) or Section 7(a)(iii) or Section
7(a)(iv), as applicable.
 
5.            LEGEND.
 
(a)          Legends.  The Buyer understands that the Common Shares have been
issued pursuant to an exemption from registration or qualification under the
1933 Act and applicable state securities laws, are “restricted securities” as
that term is defined in Rule 144 and except as set forth below, the Common
Shares shall bear any legend as required by the “blue sky” laws of any state,
any legends required under the Amended Stockholders’ Agreement or any other
agreement between the Buyer and the Company, and a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of all the Common Shares):
 
THE SECURITIES REPRESENTED HEREBY NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER ANY APPLICABLE STATE SECURITIES LAW.  
THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR PLEDGED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (2) TO
PROFESSIONAL DIVERSITY NETWORK, INC. OR ANY OF ITS SUBSIDIARIES, (3) TO A PERSON
WHOM THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS
DEFINED IN RULE 144A UNDER THE ACT (A “QIB”) PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (4) OUTSIDE
THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER
THE  ACT, (5) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE ACT (IF AVAILABLE), (6) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT) OR (7)
PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE ACT, AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.  FOR PURPOSES OF
CLAUSES (3) THROUGH (7) ABOVE, PROFESSIONAL DIVERSITY NETWORK, INC. MAY REQUEST
AN OPINION OF COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. AS USED HEREIN,
THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S. PERSON” HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT.
 
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(b)          Removal of Legends.  Subject to applicable law and the terms of the
Amended Stockholders’ Agreement, certificates evidencing the Common Shares shall
not be required to contain the legend set forth in Section 5(a) above (i)
following any sale of such Common Shares pursuant an effective registration
statement under, and in compliance with the prospectus delivery requirements
under, the 1933 Act, (ii) following any sale of such Common Shares pursuant to
Rule 144, (iii) if such Common Shares are eligible to be sold, assigned or
transferred under Rule 144 without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to
such Common Shares and without volume or manner-of-sale restrictions (provided
that the Buyer provides the Company with reasonable assurances that such Common
Shares are eligible for sale, assignment or transfer under Rule 144), or (iv) if
such legend is not required under applicable requirements of the 1933 Act
(including, without limitation, controlling judicial interpretations and
pronouncements issued by the SEC).
 
6.            CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
 
(a)          The obligation of the Company hereunder to issue and sell the
Common Shares to the Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion (if permissible under applicable law)
by providing the Buyer with prior written notice thereof:
 
(i)          The Buyer shall have executed each of the other Transaction
Documents to which it is a party and delivered the same to the Company.
 
(ii)          The Buyer shall have delivered to the Company an amount in cash
equal to the Purchase Price for the Common Shares, by wire transfer of
immediately available funds pursuant to the wire instructions provided by the
Company on Exhibit A.
 
(iii)          The representations and warranties of Buyer contained in Section
2(a) (Organization; Authority), Section 2(b) (No Public Sale or Distribution),
Section 2(c) (Accredited Investor Status), Section 2(f) (Transfer or Resale),
Section 2(g) (Validity; Enforcement), Section 2(k) (General Solicitation),
Section 2(l) (Experience of the Buyer), Section 2(m) (Access to Information) and
Section 2(q) (Availability of Funds) (collectively, the “Buyer Excepted
Representations”) shall be true and correct in all respects as of the date
hereof and as of the Closing Date as though made on and as of the Closing Date,
except that those representations and warranties that address matters only as of
a particular date need only be true and correct as of such date.  All other
representations and warranties of Buyer contained in this Agreement, in each
case disregarding and without giving any effect to all qualifications and
exceptions contained therein relating to materiality or material adverse effect
or any similar standard or qualification, shall be true and correct as of the
date hereof and as of the Closing Date as though made on and as of the Closing
Date, except that those representations and warranties that address matters only
as of a particular date need only be true and correct as of such date and except
for such failures to be true and correct that have not had, and would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the Buyer or its ability to perform any of its obligations
under this Agreement or any of the other Transaction Documents to which it is a
party.
 
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(iv)          The Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer at or prior
to the Closing Date.
 
(v)          The Buyer shall have delivered to the Company all of the documents
and other items required to be delivered by the Buyer pursuant to Section
1(d)(i).
 
(vi)          The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the issuance and sale
of the Common Shares to the Buyer.
 
(vii)          No Governmental Authority of competent jurisdiction shall have
enacted, issued or entered any restraining order, injunction or similar order or
legal restraint or prohibition which remains in effect that enjoins or otherwise
prohibits the consummation of the Share Issuance, including, without limitation,
the Share Issuance, which order, injunction, legal restraint or prohibition
shall have become final and non-appealable.
 
7.            CONDITIONS TO THE BUYER’S OBLIGATION TO PURCHASE.
 
(a)          The obligation of the Buyer hereunder to purchase the Common Shares
at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Buyer’s sole benefit and may be waived by the Buyer at any time in its sole
discretion (if permissible under applicable law) by providing the Company with
prior written notice thereof:
 
(i)          The Company shall have duly executed and delivered to the Buyer
each of the Transaction Documents to which it is a party.
 
(ii)          The Company shall have delivered to the Buyer a copy of the
Irrevocable Transfer Agent Instructions, in the form reasonably acceptable to
the Buyer, which instructions shall have been delivered to and acknowledged in
writing by the Company’s transfer agent.
 
(iii)          The representations and warranties of the Company set forth in
Section 3(a) (Organization and Qualification), Section 3(b) (Subsidiaries),
Section 3(c) (Authorization; Enforcement; Validity), Section 3(d) (Issuance of
Common Shares), Section 3(gg) (No Disqualification Events), Section 3(p) (Equity
Capitalization) (except for any changes in capitalization that are, individually
or in the aggregate, de minimis in both amount and nature) and the second
sentence of Section 3(h) (No General Solicitation; Placement Agent’s Fees)
(collectively, the “Company Excepted Representations”) shall be true and correct
in all respects as of the date hereof and as of the Closing Date as though made
on and as of the Closing Date, except that those representations and warranties
that address matters only as of a particular date need only be true and correct
as of such date.  All of the other representations and warranties of the Company
contained in this Agreement, in each case disregarding and without giving any
effect to all qualifications and exceptions contained therein relating to
materiality or Company Material Adverse Effect or any similar standard or
qualification, shall be true and correct as of the date hereof and as of the
Closing Date as though made on and as of the Closing Date, except that those
representations and warranties that address matters only as of a particular date
need only be true and correct as of such date and except for such failures to be
true and correct that, individually and in the aggregate, have not had, and
would not be likely to have, a Company Material Adverse Effect.
 
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(iv)          The Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required to be
performed, satisfied or complied with by the Company at or prior to the Closing
Date.
 
(v)          The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the issuance and sale
of the Common Shares to the Buyer.
 
(vi)          The Company shall have delivered to the Buyer all of the documents
and other items required to be delivered by the Company pursuant to Section
1(d)(ii).
 
(vii)          No Governmental Authority of competent jurisdiction shall have
enacted, issued or entered any restraining order, injunction or similar order or
legal restraint or prohibition which remains in effect that enjoins or otherwise
prohibits the consummation of the Share Issuance, including, without limitation,
the Share Issuance, which order, injunction, legal restraint or prohibition
shall have become final and non-appealable.
 
(viii)          Since the date hereof, no change or event shall have occurred
and no circumstances shall exist which have had or would reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect.
 
8.            TERMINATION.
 
(a)          Termination.  This Agreement may be terminated and the Share
Issuance may be abandoned at any time before the Closing:
 
(i)          by mutual written consent of the Buyer and the Company, by action
of the Buyer’s board of directors (or similar governing body), and the Special
Committee, respectively;
 
(ii)          by either the Buyer or the Company:
 

(1)
if any Governmental Authority of competent jurisdiction shall have enacted,
issued or entered any restraining order, injunction or similar order or legal
restraint or prohibition which remains in effect that enjoins or otherwise
prohibits the consummation of the Share Issuance, and such order, injunction,
legal restraint or prohibition shall have become final and non-appealable; or

 
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(2)
if the Closing shall not have occurred by February 15, 2017 (the “Outside
Date”); provided that the party seeking to terminate this Agreement pursuant to
this Section 8(a)(ii)(2) shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have been the primary
cause of the failure of the Closing to occur on or before the Outside Date;

 
(iii)          by the Buyer:
 

(1)
if a breach of any representation or warranty or failure to perform any covenant
or agreement of the Company set forth in this Agreement shall have occurred and
such breach or failure to perform would cause any of the conditions set forth in
Section 7(a)(iii) or Section 7(a)(iv) not to be satisfied, and such breach or
failure to perform either cannot be cured or, if curable, has not been cured
prior to the earlier of (A) the fifth (5th) calendar day following receipt by
the Company of written notice of such breach or failure to perform from the
Buyer and (B) the calendar day immediately prior to the Outside Date;

 
(iv)          by the Company:
 

(1)
if a breach of any representation or warranty or failure to perform any covenant
or agreement of the Buyer set forth in this Agreement shall have occurred and
such breach or failure to perform would cause any of the conditions set forth in
Section 6(a)(iii) or Section 6(a)(iv) not to be satisfied, and such breach or
failure to perform either cannot be cured or has not been cured prior to the
earlier of (A) the fifth (5th) calendar day following receipt by the Buyer of
written notice of such breach or failure to perform from the Company and (B) the
calendar day immediately prior to the Outside Date;

 
(b)          Notice of Termination.  Any party terminating this Agreement
pursuant to this Section 8 shall give written notice of such termination to the
other parties in accordance with this Agreement, specifying the provision or
provisions hereof pursuant to which such termination is being effected.
 
(c)          Effect of Termination.  In the event of the termination and
abandonment of this Agreement pursuant to Section 8(a), this Agreement shall be
void and have no effect, with no liability on the part of any party hereto or
its Affiliates, directors, officers or stockholders to the other party, except
that no such termination shall relieve any party hereto from any liabilities or
damages resulting from any fraud or willful breach of this Agreement prior to or
in connection with such termination.  This Section 8(c) and Section 9 shall
survive any termination of this Agreement pursuant to Section 8.
 
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9.            MISCELLANEOUS.
 
(a)          Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.  Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 
(b)          Counterparts.  This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable
document format (.pdf) file of an executed signature page, such signature page
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
signature page were an original thereof.
 
(c)          Headings; Gender.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof.  The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if
followed by the words “without limitation.”  The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just
the provision in which they are found.
 
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(d)          Severability.  If any provision of this Agreement is prohibited by
law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. 
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).
 
(e)          Entire Agreement; Amendments.  This Agreement, the other
Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral
or written agreements between the Buyer, the Company, its Subsidiaries, their
Affiliates and Persons acting on their behalf solely with respect to the matters
contained herein and therein, and this Agreement, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein contain the entire understanding of
the parties solely with respect to the matters covered herein and therein.  For
clarification purposes, the Recitals are part of this Agreement. No provision of
this Agreement may be amended or waived other than by an instrument in writing
signed by the Company and the Buyer.
 
(f)          Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered:  (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by email; or
(iii) one (1) Business Day after deposit with an overnight courier service with
next day delivery specified, in each case, properly addressed to the party to
receive the same.  The addresses for such communications shall be:
 
If to the Company:
Professional Diversity Network, Inc.
801 W. Adams Street
Suite 600
Chicago, IL 60607
Attention:  James Kirsch
Email:        jkirsch@ProDivNet.com
 
with a copy (for informational
purposes only) to:
Greenberg Traurig, LLP
200 Park Avenue
New York, NY 10166
Attention:  Anthony J. Marsico
Email:   marsicoa@gtlaw.com
 
and
 
Greenberg Traurig, LLP
77 West Wacker Drive
Chicago, IL 60601
Attention:  Stacey T. Kern
Email:  kerns@gtlaw.com

 
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If to the Buyer:
Cosmic Forward Limited
P.O. Box 1239
Offshore Incorporations Centre
Victoria, Mahe
Republic of Seychelles
Attention:  Maoji (Michael) Wang
Email:          maoji.wang@gnetgroupplc.com
with a copy (for informational
purposes only) to:
 
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
Attention:    Francis Zou
                      Chang-Do Gong
                      F. Holt Goddard
Email: francis.zou@whitecase.com
           cgong@whitecase.com
           holt.goddard@whitecase.com

 
or to such other address and/or email and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, or (B) provided by an overnight courier service
shall be rebuttable evidence of personal service, receipt by email or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii)
above, respectively.
 
(g)          Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
assigns.  Neither party shall assign this Agreement, or any of its rights or
obligations hereunder, without the prior written consent of the other party.
 
(h)          No Third Party Beneficiaries.  Except as set forth in Section 4(h),
this Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.
 
(i)          Further Assurances.  Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the Share
Issuance.
 
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(j)          Construction.  The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
 
(k)          Specific Performance.  The parties hereto agree that irreparable
damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that, prior to the termination of this
Agreement, the parties shall be entitled, without posting a bond or similar
indemnity, to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any court as specified in Section 9(a).
 
(l)          Agent for Service.  By the execution and delivery of this
Agreement, the Buyer acknowledges that it has, by separate written instrument,
irrevocably designated and appointed CT Corporation (together with any
successor, the “Agent for Service”) as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents that may be instituted in
any state or federal court sitting in The City of New York, Borough of
Manhattan, or brought under federal or state securities laws, and acknowledges
that the Agent for Service has accepted such designation. The Buyer further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect
for so long as any of the representations, warranties, agreements and covenants
of the parties hereto shall survive the Closing pursuant to this Agreement. It
is hereby acknowledged and agreed by the Buyer that receipt by the Agent for
Service of any summons, notice or other similar item shall be deemed effective
receipt by the Buyer, whether or not forwarded to or received by the Buyer. If
such Agent for Service ceases to be able to act as such, resigns as such Agent
for Service or to have an address in New York, New York, the Buyer agrees to
irrevocably appoint a new agent acceptable to the Company to receive on behalf
of the Buyer service of any legal process and to deliver to the Company within
seven (7) days a copy of a written acceptance of appointment by such agent.
 
 
[signature pages follow]

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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.
 

 
COMPANY:
             
PROFESSIONAL DIVERSITY NETWORK,
INC.
                   
By:
/s/ Chris Wesser
   
Name: Chris Wesser
   
Title: Executive Vice President & Secretary
             
BUYER:
             
COSMIC FORWARD LIMITED
             
By:
/s/ Maoji (Michael) Wang
   
Name: Maoji (Michael) Wang
   
Title: Chief Executive Officer

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Exhibit A

Wire Instructions

 

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Exhibit B

Stockholders’ Agreement Amendment
 
FIRST AMENDMENT
TO THE
STOCKHOLDERS’ AGREEMENT

This First Amendment (“Amendment”) to the Stockholders’ Agreement (as defined
below) dated as of January 18, 2017 by and among Professional Diversity Network,
Inc., a Delaware corporation (the “Company”), Cosmic Forward Limited, a Republic
of Seychelles company (“CFL”), Maoji (Michael) Wang, Jimbo Song, Yong Xiong
Zheng and Nan Nan Kou (collectively, the “Buyer Parties”). In accordance with
Section 6.6 of the Stockholders’ Agreement, the parties to this Amendment hereby
consent, approve and adopt the following amendments. Capitalized terms not
otherwise defined herein shall have the meanings given to them in the
Stockholders’ Agreement.
 
RECITALS:

WHEREAS, the Company, CFL and the Buyer Parties entered into a Stockholders’
Agreement, dated November 7, 2016 (the “Stockholders’ Agreement”);

WHEREAS, immediately prior to the date of this Amendment, CFL Beneficially Owned
fifty-one percent (51%) of the Fully Diluted Common Stock;

WHEREAS, Section 2.1(a) of the Stockholders’ Agreement restricts CFL, the Buyer
Parties and their Controlled Affiliates from, among other things, Acquiring from
the Company, during the Effective Period, (i) any shares of Common Stock, if any
such shares so Acquired, when aggregated with all other shares of Common Stock
then Beneficially Owned by the Buyer Parties and their respective Affiliates,
would cause the Beneficial Ownership of Common Stock by the Buyer Parties and
their respective Affiliates to exceed the Percentage Ownership Cap, (ii) any
Capital Stock of the Company not constituting Common Stock or (iii) any Debt
Securities, subject to certain exceptions provided in Section 2.1 of the
Stockholders’ Agreement (such restrictions, collectively, the “Purchase
Restrictions”);

WHEREAS, Section 2.2(a)(ii) of the Stockholders’ Agreement restricts the Buyer
Parties and their Controlled Affiliates from, during the Effective Period (as
defined in the Stockholders’ Agreement and hereinafter referred to as the
“Effective Period”), and unless otherwise provided in the Stockholders’
Agreement, “induc[ing], facilitat[ing] or knowingly encourage[ing] the making or
submission by any Person to the Board of Directors…, Company management or any
of the Company’s security holders of any proposal or offer providing for or
contemplating any…issuance or sale or purchase of shares of any class or series
of capital stock (other than in connection with a capital raising transaction or
a compensation plan in the ordinary course of business)….or any similar
transaction, in each case, involving the securities, assets or business of the
Company or any of its subsidiaries (each a ‘Business Combination’)” (the
prohibition on a Business Combination contained in Section 2.2(a)(ii), the
“Business Combination Restrictions”);
 
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WHEREAS, notwithstanding the Purchase Restrictions and the Business Combination
Restrictions, CFL has proposed to the Board of Directors a capital raising
transaction pursuant to which it would purchase additional shares of Common
Stock for up to $3,000,000.00, and which capital raising transaction would
require the Company and the Buyer Parties to amend the Stockholders’ Agreement
in accordance with Section 6.6 of the Stockholders’ Agreement with the approval
of a majority of the members of the Board of Directors (the “Proposal”); and

WHEREAS, upon the recommendation of a special committee of the Board of
Directors composed entirely of Independent Directors of the Company who are not
Stockholder Nominees (the “Special Committee”), the Board of Directors, has
approved and adopted this Amendment in accordance with Section 6.6 of the
Stockholders’ Agreement and has authorized the appropriate officers of the
Company to execute and deliver this Amendment.

NOW, THEREFORE, to reflect the agreement of the parties hereto as to the
following amendments to the Stockholders’ Agreement, and in consideration of the
premises and the mutual covenants contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound the parties agree as follows:

1.          Definitions.

(a)          “Percentage Ownership Cap.”  The definition of “Percentage
Ownership Cap” as set forth in Exhibit A of the Stockholders Agreement is
deleted in its entirety and replaced with the following:

“Percentage Ownership Cap” means, on any date, with respect to the Buyer Parties
and their respective Affiliates, 54.64% of the outstanding Fully Diluted Common
Stock.”

2.          Acquisition of Additional Shares. Section 2.1(d) of the
Stockholders’ Agreement is deleted in its entirety and replaced with the
following:

“(d)          Without limiting the generality of Section 2.1(a) of this
Agreement, all Capital Stock of the Company and Debt Securities Beneficially
Owned by the Buyer Parties or any of their respective Controlled Affiliates
during the Effective Period (including, without limitation, (i) Capital Stock
issued after the Closing Date as a dividend or other distribution payable in
Capital Stock of the Company, (ii) pursuant to the Call Option (as defined in
the Stock Purchase Agreement), or (iii) shares of Common Stock issued by the
Company to the Buyer pursuant to that certain Stock Purchase Agreement, dated as
of January 13, 2017 (the “January 2017 Purchase Agreement”), by and between the
Company and the Buyer) shall be subject to all of the prohibitions and
restrictions contained in this Agreement as fully as if such Capital Stock or
Debt Securities were Acquired and Beneficially Owned by the Buyer Parties or
such Affiliates, as the case may be, on the Closing Date.”

3.          Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.  Receipt by facsimile or
electronic transmission (PDF) of any executed signature page shall constitute
the effective delivery of such signature page.
 
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4.          Miscellaneous. All other terms and conditions of the Stockholders’
Agreement shall remain in full force and effect and the parties hereby ratify
and affirm the Stockholders’ Agreement, as amended by this Amendment.

[Signature Page Follows]
 
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IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the
Stockholders’ Agreement as of the date first above written.

 
COMPANY:
       
PROFESSIONAL DIVERSITY NETWORK, INC.
       
By:
     
Name: Chris Wesser
   
Title: Executive Vice President & Secretary
             
CFL:
       
COSMIC FORWARD LIMITED
       
By:
     
Name: Maoji (Michael) Wang
   
Title: Chief Executive Officer
             
BUYER PARTIES:
 
 
 
 
MAOJI (MICHAEL) WANG
 
 
 
 
JING BO SONG
 
 
 
 
YON XIONG ZHENG
 
 
 
 
NAN NAN KOU

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Exhibit C

Knowledge of the Buyer

Maoji (Michael) Wang, Officer

 

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Exhibit D

Knowledge of the Company

James Kirsch, Co-Executive Chairman of the Board
Katherine Butkevich, CEO
Star Jones, President
Christopher Wesser, EVP, General Counsel & Secretary

 

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