Exhibit 10.1
 
PROFESSIONAL DIVERSITY NETWORK, INC.
801 West Adams Street, Suite 600
Chicago, Illinois  60607
 

 
September 24, 2014                                
 

 
Mr. Matthew B. Proman
Ms. Star Jones
Mr. Christopher Wesser
c/o NAPW, Inc.
1325 Franklin Avenue, Suite 160
Garden City, New York  11530
 
Re:           Registration Rights and Lock-Up Agreement
 
Ladies and Gentlemen:
 
Reference is made to the Agreement and Plan of Merger, dated as of July 11, 2014
(the “Merger Agreement”), among Professional Diversity Network, Inc., a Delaware
corporation (“PDN”), NAPW Merger Sub Inc., a Delaware corporation (“Merger
Sub”), and NAPW, Inc., a New York corporation (“NAPW”), pursuant to which all
outstanding NAPW Common Shares will be acquired by PDN by means of the merger of
NAPW with and into Merger Sub, with the result that NAPW will become a
wholly-owned subsidiary of PDN, and NAPW Common Shares will be converted into
the right of the undersigned shareholders (the “Shareholders”) to receive an
aggregate of 6,318,227 newly-issued shares of PDN Common Stock, subject to
adjustment for changes in the number of shares of PDN Common Stock outstanding
prior to the Closing Date.  All capitalized terms not defined herein shall have
the meaning ascribed to them in the Merger Agreement.
 
(a)           Not later than nine (9) months following the Closing Date, PDN
shall cause a shelf registration statement on Form S-3 (the “Registration
Statement”) to be filed with the U.S. Securities and Exchange Commission (the
“Commission”) under the Securities Act of 1933, as amended (the “Securities
Act”), with respect to the shares of PDN Common Stock to be issued by PDN to or
on behalf of the Shareholders at the Closing pursuant to Section 2.1 of the
Merger Agreement, and shall thereafter use its best efforts to have the
Registration Statement declared effective not later than twelve (12) months
following the Closing Date and to keep it effective until the earlier of (i)
three (3) years thereafter or (ii) when each of the Shareholders can sell all of
his or her shares without the need for current public information or other
restriction pursuant to Rule 144 under the Securities Act of 1933, as amended.
 
(b)           Each of the Shareholders hereby represents to PDN that such
Shareholder will not, without the prior written consent of the PDN Board of
Directors, offer to sell, sell or otherwise dispose of, or encumber, any shares
of PDN Common Stock received by such Shareholder pursuant to Section 2.1 of the
Merger Agreement before the expiration of twelve (12) months following the
Closing Date.  Notwithstanding anything to the contrary in the preceding
sentence, nothing herein shall restrict the Shareholders from disposing of
shares of PDN Common Stock by gift or otherwise than for value.  In any such
event, the shares transferred to a donee or other transferee will bear the
restrictive legend contained in Section 3 below.
 
 
 

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(c)           Until the Registration Statement has become effective under the
Securities Act, each certificate representing the shares of PDN Common Stock
issued at the Closing and all certificates and instruments issued in transfer
thereof shall be endorsed with the following restrictive legend:
 
“THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT
WITH A VIEW TO THE DISTRIBUTION THEREOF, AND NEITHER SUCH SHARES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED OR PLEDGED EXCEPT IF
REGISTERED UNDER APPLICABLE STATE BLUE SKY OR SECURITIES LAWS OR ANY EXEMPTIONS
FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE, ALL IN
ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF
AND THE ISSUER OF SUCH SHARES.”
 
Upon the effectiveness of the Registration Statement, PDN shall, upon the
request of any Shareholder (together with an appropriate legal opinion), issue
to such Shareholder a replacement certificate without such legend in exchange
for any such legended certificate.
 
(d)           PDN shall furnish to all Shareholders, at PDN’s expense, such
number of copies of the Registration Statement and each amendment and supplement
thereto, preliminary prospectus, final prospectus and such other documents as
such Shareholder may reasonably request in order to facilitate the public
offering of their shares of PDN Common Stock.
 
(e)           PDN shall promptly, at the Shareholders’ expense, use its
reasonable best efforts to register or qualify any shares of PDN Common Stock
covered by the Registration Statement under such state securities or blue sky
laws of such jurisdictions as such Shareholders participating in such
registration may reasonably request, except that PDN shall not for any purpose
be required to execute a general consent to service of process or to qualify to
do business as a foreign corporation in any jurisdiction where it is not so
qualified.
 
(f)           PDN shall notify the Shareholders, promptly after it shall receive
notice thereof, of the date and time when the Registration Statement and each
post-effective amendment thereto has become effective or a supplement to any
prospectus forming a part of the Registration Statement has been filed.
 
 
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(g)           PDN shall advise the Shareholders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for the purpose and promptly use its
best efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued.
 
(h)           (a)  PDN agrees to bear all Commission registration and filing
fees, printing and mailing expenses, fees and disbursements of counsel and
accountants for PDN and all expenses and fees incident to an application for
listing the shares of PDN Common Stock on the Nasdaq Capital Market and (b) the
Shareholders agree to bear all fees and disbursements of counsel for all
underwriters, brokers and dealers engaged in connection with the distribution of
such shares of PDN Common Stock and any discounts, commissions and fees of any
such underwriters, brokers and dealers, FINRA filing fees and expenses incurred
by any Person in connection therewith, legal fees and disbursements and other
expenses of complying with state securities or blue sky laws of any
jurisdictions in which such shares of PDN Common Stock are to be registered or
qualified and the fees and disbursements of legal counsel for the Shareholders.
 
(i)            (i)  PDN hereby agrees to indemnify and hold harmless each
Shareholder from and against, and agrees to reimburse such Shareholder with
respect to, any and all claims, actions (actual or threatened), demands, losses,
damages, liabilities, costs and expenses to which such Shareholder may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are caused by any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, any prospectus contained therein or any amendment or
supplement thereto, or are caused by the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading; provided, however, that PDN shall not be liable in any such case
to the extent that any such claim, action, demand, loss, damage, liability, cost
or expense is caused by an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information furnished in
writing by such Shareholder for use in the preparation thereof.
 
(ii)           Each Shareholder hereby agrees to indemnify and hold harmless
PDN, its officers, directors, legal counsel and accountants and each Person who
controls PDN within the meaning of the Securities Act, from and against, and
agrees to reimburse PDN, its officers, directors, legal counsel, accountants and
controlling Persons with respect to, any and all claims, actions, demands,
losses, damages, liabilities, costs or expenses to which PDN, its officers,
directors, legal counsel, accountants or such controlling Persons may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are caused by any
untrue or alleged untrue statement of any material fact contained in the
Registration Statement, any prospectus contained therein or any amendment or
supplement thereto, or are caused by the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
so made in reliance upon and in conformity with information furnished in writing
by such Shareholder for use in the preparation thereof.
 
 
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(iii)           If any claim shall be asserted against any Person (an
“Indemnified Person”) for which such Person intends to seek indemnification
pursuant to Section 9(a) or (b), as the case may be, such Indemnified Person
shall give prompt written notice to PDN or such Shareholders, as the case may
be, of the nature of such claim, but the failure to give such notice shall not
relieve PDN or such Shareholders, as the case may be, of their obligations under
this Section (h) unless it or they have been prejudiced substantially
thereby.  PDN or such Shareholders shall have the exclusive right to conduct, at
their expense, through counsel of its or their own choosing, which counsel is
approved by the Indemnified Person (which approval may not be unreasonably
withheld), the defense of any such claim, and may compromise or settle such
claims with the prior consent of PDN or such Shareholders (which consent shall
not be unreasonably withheld).
 
(j)           PDN hereby confirms that this letter agreement has been duly
authorized by its Board of Directors.
 
If the foregoing is acceptable to you, please sign below where indicated and
return a copy of this letter to PDN, whereupon this letter shall become a
binding agreement between PDN and the Shareholders.
 

 

 
PROFESSIONAL DIVERSITY NETWORK, INC.
                   
By:
 /s/ James Kirsch     Name: James Kirsch     Title: Chief Executive Officer

 
 
Agreed to and accepted:
 
SHAREHOLDERS:
 

    /s/ Matthew B. Proman
Matthew B. Proman
    /s/ Star Jones
Star Jones
    /s/ Christopher Wesser
Christopher Wesser

 
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