Exhibit 10.7


 


Execution Version


 


HSW INTERNATIONAL, INC.


 


AFFILIATE REGISTRATION RIGHTS AGREEMENT


 


THIS AFFILIATE REGISTRATION
RIGHTS AGREEMENT (this “Agreement”) dated as of October 2, 2007 is
entered into by and among HSW International, Inc., a Delaware corporation (the “Company”),
and Kevin Jones, a resident of the State of                ;
Theodore P. Botts, a resident of the State of Connecticut; J. David Darnell, a
resident of the State of Texas; Dr. Heinz-Gerd Stein, a resident of the State
of                ;
and Larrie A. Weil, a resident of the State of                ;
(each an “Affiliate,” and collectively, the “Affiliates”).


 


R  E
C  I  T  A  L  S


 


WHEREAS, pursuant to the
terms of the Agreement and Plan of Merger dated as of April 20, 2006, as amended
on January 29, 2007 and further amended on August 23, 2007, (the “Merger
Agreement”), by and among the Company, HowStuffWorks, Inc., a Delaware
corporation (“HSW”), INTAC International, Inc., a Nevada corporation (“INTAC”),
and HSW International Merger Corporation, a Nevada corporation and wholly-owned
subsidiary of the Company (“Merger Sub”), (i) HSW will contribute a
license and sublicense of certain content to the Company in exchange for shares
of the common stock, par value $0.001 per share, of the Company (“Common
Stock”), and (ii) Merger Sub will merge with and into INTAC (the “Merger”)
and the shareholders of INTAC will receive shares of the Common Stock of the
Company.


 


WHEREAS, each Affiliate is a
Rule 145 Affiliate as such term is defined in the Merger Agreement;


 


WHEREAS, the Company has
agreed to grant each Affiliate certain registration rights with respect to the
shares of Common Stock issued to each Affiliate pursuant to the Merger on the
terms and conditions set forth herein; and


 


WHEREAS, the Company and
each Affiliate desire to define the registration rights of each Affiliate on
the terms and subject to the conditions herein set forth.


 


NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the parties hereby agree as follows:


 


SECTION 1.  DEFINITIONS


 


As used in this Agreement,
the following terms shall have the respective meanings set forth below:


 


“Closing” shall mean
the closing of the Merger pursuant to the Merger Agreement;


 


“Commission” shall
mean the Securities and Exchange Commission and any successor agency;


 

















 


“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder;


 


“Person” shall any
individual, firm, corporation, partnership, limited partnership, limited
liability company, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Exchange Act;


 


“Register”, “Registered”
and “Registration” shall refer to a registration effected by preparing
and filing a registration statement or similar document with the Commission in
compliance with the Securities Act and the declaration or ordering by the
Commission of effectiveness of such registration statement or document;


 


“Registrable Securities”
shall mean, as applicable: (a) the shares of Common Stock owned by each
Affiliate, whether owned or acquired by virtue of the Merger Agreement on the
date hereof or acquired hereafter by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, reorganization,
merger or consolidation of the Company; and (b) shares of Common Stock held by
Persons who, by virtue of agreements with the Company, are entitled to be
included in a Registration made by a Demanding Affiliate hereunder. For
purposes of this Agreement, (i) Registrable Securities shall cease to be
Registrable Securities when a registration statement covering such Registrable
Securities has been declared effective under the Securities Act by the
Commission and such Registrable Securities have been disposed of pursuant to
such effective registration statement, and (ii) Registrable Securities shall
cease to be Registrable Securities, if in the opinion of the Company, such
Registrable Securities may be distributed to the public pursuant to Rule 144(k)
(or any successor provision then in effect) under the Securities Act or any
such Registrable Securities have been sold in a sale made pursuant to Rule 144
of the Securities Act;


 


“Registration Expenses”
shall mean any and all expenses incurred by the Company incident to the
performance of or compliance with any registration or marketing of securities
pursuant to Section 2(a), (b) and (c) hereof, including
(a) the fees, disbursements and expenses of Company’s counsel and accountants
in connection with this Agreement and the performance of Company’s obligations
hereunder (including the expenses of any annual audit letters and “cold
comfort” letters required or incidental to the performance of such
obligations); (b) all expenses, including filing fees, in connection with the
preparation, printing and filing of any registration statement, any preliminary
prospectus or final prospectus, any other offering document and amendments and
supplements thereto and the mailing and delivering of copies thereof to any
underwriters and dealers; (c) the cost of printing and producing any agreements
among underwriters, underwriting agreements, selling group agreements and any
other customary documents in connection with the marketing of securities
pursuant to Section 2(a), (b) and (c) hereof; (d) all
expenses in connection with the qualification of the securities to be disposed
of for offering and sale under state securities laws, including the reasonable
fees and disbursements of counsel for the underwriters or an Affiliate in
connection with such qualification and in connection with any “blue sky”
and legal investment surveys, including the cost of printing and producing any
such “blue sky” or legal investment surveys; (e) the filing fees
incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the securities being registered
pursuant to Section 2(a), (b) and (c) hereof;


 


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(f) transfer agents’ and
registrars’ fees and expenses and the fees and expenses of any other agent or
trustee appointed in connection with such offering; (g) all security engraving
and security printing expenses; (h) all fees and expenses payable in connection
with the listing of the securities on any securities exchange or automated
interdealer quotation system; and (i) the costs and expenses of Company and its
officers relating to analyst or investor presentations, if any, or any “road
show” undertaken in connection with the registration and/or marketing of
any shares of Registrable Stock other than as provided in any underwriting
agreement entered into in connection with such offering. In no event shall
Registration Expenses be deemed to include Selling Expenses;


 


“Securities” shall
have the meaning set forth in Section 2(1) of the Securities Act;


 


“Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder; and


 


“Selling Expenses”
shall mean all underwriting discounts, selling commissions, brokerage fees and
transfer taxes applicable to the sale of Registrable Securities and all fees
and disbursements of counsel for each Affiliate.


 


SECTION 2.  REGISTRATION
RIGHTS


 


(a)                                  Requested Registration.


 


(i)                                     Request for Registration. After the receipt of a written request from
any Affiliate (such Affiliate, the “Demanding Affiliate”) at any time
after 180 days following the Closing requesting that the Company effect any
Registration under the Securities Act covering all or part of the Registrable
Securities held by such Affiliate, the Company shall, (i) as expeditiously as
is possible, but in any event no later than forty-five (45) days after receipt
of a written request from a Demanding Affiliate, file a registration statement
with the SEC for such Registration relating to all shares of Registrable
Securities which the Company has been so requested to register by such
Affiliate for sale, and (ii) use its commercially reasonable efforts to cause
such registration statement to be declared effective by the SEC as soon as is
practicable; provided that the Company shall not be obligated to effect,
or take any action to effect, any such Registration pursuant to this Section
2(a):


 


(1)                                  After the Company has effected three (3) such
Registrations requested by each Affiliate pursuant to this Section 2(a)
and the registration statements for such Registrations have been declared or
ordered effective;


 


(2)                                  If the Registrable Securities requested by
such Affiliate to be Registered pursuant to such request do not have an
anticipated aggregate public offering price (before any underwriting discounts
and commissions) of at least $5,000,000; or


 


(3)                                  During the period starting with the date
thirty (30) days prior to the Company’s good faith estimate of the date of
filing of, and ending on the date ninety (90) days immediately following the
effective date of, any registration


 


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statement
pertaining to securities of the Company (other than a Registration of
securities in a Rule 145 transaction or, with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
commercially reasonable efforts to cause such registration statement to become
effective; provided, further, however, that the Company
may only delay an offering pursuant to this Section 2(a)(i)(3) for a
period of not more than ninety (90) days, if a filing of any other registration
statement is not made within that period and the Company may only exercise this
right once in any twelve (12) month period.


 


(ii)                                  Other Stockholders. The registration statement filed pursuant
to any such request of any Demanding Affiliate may, subject to the provisions
of Section 2(a)(iv) below, include Registrable Securities of the other
Affiliate, and other securities of the Company which are held by Persons who,
by virtue of agreements with the Company, are entitled to include their Registrable
Securities in any such Registration (“Other Stockholders”).


 


(iii)                               Assignment. The registration rights set forth in this Section 2 may be
assigned, in whole or in part, to any transferee of Registrable Securities (who
shall be entitled to all rights and bound by all obligations of this
Agreement).


 


(iv)                              Underwriting.


 


(1)                                  If the Affiliate intends to distribute the
Registrable Securities covered by its request for Registration by means of an
underwriting, it shall so advise the Company in its request made pursuant to Section
2(a).


 


(2)                                  If the other Affiliate or Other Stockholders
request inclusion in any such Registration, the Demanding Affiliate shall offer
to include the Registrable Securities of the other Affiliate and such Other
Stockholders in the underwriting but may condition such offer on their
acceptance of the further applicable provisions of this Section 2(a)(iv).
The Demanding Affiliate and the Company shall (together with the other
Affiliate and all Other Stockholders proposing to distribute their Registrable
Securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Company and acceptable to the Demanding
Affiliate. Notwithstanding any other provision of this Section 2(a), if
the representative of such underwriter or underwriters advise the Company
and/or the Demanding Affiliate in writing that marketing factors require a
limitation on the number of shares to be underwritten, the Registrable
Securities held by the other Affiliate and Other Stockholders shall be excluded
from such Registration to the extent so required by such limitation pro rata in
accordance with the number of shares of Registrable Securities requested by
such parties to be included in such Registration, by such minimum number of
shares as is necessary to comply with such limitation. No Registrable
Securities excluded from the underwriting by reason of the underwriter’s
marketing limitation shall be included in such Registration. If the other
Affiliate or any Other Stockholder who has requested inclusion in such
Registration as provided above disapproves of the


 


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terms
of the underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Demanding Affiliate. If the
Demanding Affiliate elects to withdraw from such Registration, the initiation
of such Registration shall not count as a demand by such Affiliate for purposes
hereof (including without limitation, Section 2(a)(i)(1)). The
Registrable Securities so withdrawn shall also be withdrawn from Registration. If
the underwriter has not limited the number of Registrable Securities to be
underwritten, the Company and officers and directors of the Company may include
its or their securities for its or their own account in such Registration if
the representative of such underwriter or underwriters so agrees and if the
number of Registrable Securities which would otherwise have been included in
such Registration and underwriting will not thereby be limited.


 


(b)                                 Company Registration.


 


(i)                                     If the Company determines to Register any of
its equity securities either for its own account or for the account of Other
Stockholders, other than a Registration relating solely to employee benefit
plans, or a Registration relating solely to a Commission Rule 145 transaction,
or a Registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
required to be included in a registration statement covering the sale of
Registrable Securities, the Company shall:


 


(1)                                  promptly give to each Affiliate a written
notice thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable blue
sky or other state securities laws); and


 


(2)                                  include in such Registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting
involved therein, all the Registrable Securities held by an Affiliate specified
in a written request made by such Affiliate within fifteen (15) days after
receipt of the written notice from the Company described in clause (1) above,
except as set forth in Section 2(b)(ii) below. Such written request may
cover Registration of all or a part of such Affiliate’s Registrable Securities.


 


(ii)                                  Underwriting. If the Registration of which the Company
gives notice is for a Registered public offering involving an underwriting, the
Company shall so advise each Affiliate in the written notice given pursuant to Section
2(b)(i)(1). In such event, the right of an Affiliate to Registration
pursuant to this Section 2(b) shall be conditioned upon such Affiliate’s
participation in such underwriting and the inclusion of such Affiliate’s
Registrable Securities in the underwriting to the extent provided herein. In
such case, each such Affiliate shall (together with the Company and the Other
Stockholders distributing their Registrable Securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected for underwriting by
the Company. Notwithstanding any other provision of this Section 2(b),
if such representative determines that marketing


 


5

















 


factors
require a limitation on the number of shares to be underwritten, such
representative may (subject to the allocation priority set forth below) limit
the number of Registrable Securities to be included in the Registration and
underwriting. The Company shall so advise each such Affiliate and any other
holder of Registrable Securities requesting Registration, and the number of
shares of Registrable Securities that are entitled to be included in the
Registration and underwriting shall be allocated in the following manner:  the Registrable Securities held by such
Affiliate and by Other Stockholders (other than Registrable Securities held by
any such persons who by contractual right demanded such Registration) shall be
excluded from such Registration and underwriting to the extent required by such
limitation pro rata in accordance with the number of shares of Registrable
Securities requested by such parties to be included in such Registration, by
such minimum number of shares as is necessary to comply with such limitation. If
any such holder of Registrable Securities disapproves of the terms of any such
underwriting, such holder may elect to withdraw therefrom by written notice to
the Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
Registration.


 


(c)                                  Form S-3. Following the Closing, the Company shall use all commercially
reasonable efforts to qualify for Registration on Form S-3 for secondary sales.
After the Company has qualified for the use of Form S-3, each Affiliate shall
have the right to request three (3) Registrations on Form S-3 with respect to
all or a part of the Registrable Securities held by such Affiliate (all such
requests shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended method of disposition
of shares by the Affiliate), provided that the Company shall not be
obligated to effect, or take any action to effect, any such Registration
pursuant to this Section 2(c):


 


(i)                                     Unless such Affiliate proposes to dispose of
shares of Registrable Securities having an aggregate price to the public
(before deduction of underwriting discounts and expenses of sale) of more than
$5,000,000;


 


(ii)                                  Within 180 days of the effective date of the
registration statement for the most recent Registration pursuant to this Section
2(c) in which securities held by the Affiliate could have been included for
sale or distribution; or


 


(iii)                               During the period starting with the date thirty (30) days prior to the
Company’s good faith estimate of the date of filing of, and ending on the date
ninety (90) days immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a Registration of
securities in a Rule 145 transaction or with respect to an employee benefit
plan), provided that the Company is actively employing in good faith all
commercially reasonable efforts to cause such registration statement to become
effective; provided, however, that the Company may only delay an
offering pursuant to this Section 2(c)(iii) for a period of not more
than sixty (60) days, if a filing of any other registration statement is not
made within that period and the Company may only exercise this right once in
any twelve (12) month period.


 


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The Company shall give
written notice to the other Affiliate and all Other Stockholders of the receipt
of a request for Registration pursuant to this Section 2(c) and shall
provide a reasonable opportunity for the other Affiliate and such Other
Stockholders to participate in the Registration, provided that if the
Registration is for an underwritten offering, the terms of Section 2(a)(ii)
shall apply to all participants in such offering. Subject to the foregoing, the
Company will use all commercially reasonable efforts to effect promptly the
Registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the holders thereof for purposes of disposition.


 


(d)                                 Expenses of Registration. All Registration Expenses shall be borne by
the Company, and all Selling Expenses shall be borne by the holders of the
Registrable Securities so Registered pro rata on the basis of the number of
their shares of Registrable Securities so Registered.


 


(e)                                  Registration Procedures. If and when the Company effects a Registration
of Registrable Securities under the Securities Act pursuant to this Section
2, the Company shall keep each Affiliate advised in writing as to the
initiation of each Registration and as to the completion thereof. At its
expense, the Company shall:


 


(i)                                     prepare and file with the Commission a
registration statement on any appropriate form under the Securities Act with
respect to such Registrable Securities and thereafter use its commercially
reasonable efforts to cause such registration statement promptly to become and
remain effective for a period of one hundred twenty (120) days or until each
Affiliate has completed the distribution described in the registration
statement relating thereto, whichever first occurs; provided, however,
that (A) such one hundred twenty (120) day period shall be extended for a
period of time equal to the period during which an Affiliate refrains from
selling any Registrable Securities included in such Registration in accordance
with provisions in Section 2(k) or 2(l) hereof; and (B) in the case of
any Registration of Registrable Securities on Form S-3 which are intended to be
offered on a continuous or delayed basis, such one hundred twenty (120) day
period shall be extended until all such Registrable Securities are sold, provided
that Rule 415, or any successor rule under the Securities Act, permits an
offering on a continuous or delayed basis, and provided  further
that applicable rules under the Securities Act governing the obligation to file
a post-effective amendment permit, in lieu of filing a post-effective amendment
which (y) includes any prospectus required by Section 10(a) of the Securities
Act or (z) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (y) and
(z) above to be contained in periodic reports filed pursuant to Section 12 or
15(d) of the Exchange Act in the registration statement;


 


(ii)                                  prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Securities covered by such registration
statement until the earlier of such time as all of such Securities have been
disposed of in a public offering or the expiration of 30 days;


 


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(iii)                               furnish to each Demanding Affiliate and to the other Affiliate, if the
other Affiliate has shares of Registrable Securities covered by such
Registration (a “Selling  Affiliate”) such number of copies of
such registration statement, each amendment and supplement thereto, the
prospectus included in such registration statement (including each preliminary
prospectus), any documents incorporated by reference therein and such other
documents as such Affiliate may reasonably request in order to facilitate the
disposition of the shares of Registrable Securities owned by such Affiliate (it
being understood that, subject to the requirements of the Securities Act and
applicable state securities laws, Company consents to the use of the prospectus
and any amendment or supplement thereto by each Demanding Affiliate and Selling
Affiliate in connection with the offering and sale of the shares of Registrable
Securities covered by the registration statement of which such prospectus,
amendment or supplement is a part);


 


(iv)                              furnish, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through
underwriters or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities
becomes effective, (1) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such Registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and reasonably satisfactory to each Demanding Affiliate and Selling
Affiliate, addressed to the underwriters, if any, and to the holders of
Registrable Securities participating in such Registration and (2) a letter,
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to each Demanding Affiliate and Selling Affiliate,
addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the holders of Registrable Securities participating in
such Registration.


 


(v)                                 use its commercially reasonable efforts to register
or qualify such Registrable Securities under such other securities or blue sky
laws of such jurisdictions within the United States of America as each
Demanding Affiliate and Selling Affiliate may reasonably request; use its
commercially reasonable efforts to keep each such registration or qualification
(or exemption therefrom) effective during the period in which such registration
statement is required to be kept effective and take any other action which may
be reasonably necessary or advisable to enable each Demanding Affiliate and
Selling Affiliate to consummate the disposition in such jurisdictions of the
Registrable Securities being disposed of by such Demanding Affiliate and
Selling Affiliate, provided, however, that Company will not be required
to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph or (B) subject
itself to taxation in or consent to general service of process in any such
jurisdiction, and provided, further, that Company shall not be required
to qualify such Registrable Securities in any jurisdiction in which the
securities regulatory authority requires that any Affiliate submits any shares
of its Registrable Securities to the terms, provisions and restrictions of any
escrow, lockup or similar agreement(s) for consent to sell Registrable
Securities in such jurisdiction;


 


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(vi)                              promptly notify each Demanding Affiliate and
Selling Affiliate (A) when the registration statement, any prospectus or any
prospectus supplement or post-effective amendment has been filed and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (B) of the issuance by any state securities or other
regulatory authority of any order suspending the qualification or exemption
from qualification of any of the Registrable Securities under state securities
or “blue sky” laws or the initiation of any proceedings for that purpose
and (C) of the happening of any event which makes any statement made in a
registration statement or related prospectus untrue or which requires the
making of any changes in such registration statement, prospectus or documents
so that they will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading (or with respect to the prospectus, in
light of the circumstance under which such statements were made), and, subject
to Section 2(l), as promptly as reasonably practicable thereafter,
prepare and file with the Commission and furnish a supplement or amendment to
such prospectus so that, as thereafter deliverable to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue statement
of a material fact or omit a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;


 


(vii)                           if requested by any Demanding Affiliate or
Selling Affiliate, promptly incorporate in a prospectus supplement or
post-effective amendment such information as such Demanding Affiliate or
Selling Affiliate reasonably requests to be included therein and promptly make
all required filings of such prospectus supplement or post-effective amendment;


 


(viii)                        as promptly as reasonably practicable after
the filing with the Commission of any document which is incorporated by
reference into a registration statement (in the form in which it was
incorporated), deliver copies of each such document to each Demanding Affiliate
and Selling Affiliate;


 


(ix)                                cooperate with each Demanding Affiliate and
Selling Affiliate to facilitate the timely preparation and delivery of
certificates (which shall not bear any restrictive legends unless required
under applicable law) representing securities sold under any registration
statement, and enable such securities to be in such denominations and
registered in such names as such Demanding Affiliate or Selling Affiliate may
request and keep available and make available to Company’s transfer agent prior
to the effectiveness of such registration statement a supply of such
certificates;


 


(x)                                   cause the Registrable Securities included in
any registration statement to be listed on each United States securities
exchange, if any, on which the Company Common Stock is then listed;


 


(xi)                                provide a transfer agent and registrar for
all shares of Registrable Securities registered hereunder and provide a CUSIP
number for the shares of Registrable Securities included in any registration
statement not later than the effective date of such registration statement;


 


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(xii)                             cooperate with each Demanding Affiliate,
Selling Affiliate and their counsel in connection    with any
filings required to be made with the NASD;


 


(xiii)                          during the period when the prospectus is
required to be delivered under the Securities Act, promptly file all documents
required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act;


 


(xiv)                         notify each Demanding Affiliate and Selling
Affiliate promptly of any request by the Commission for the amending or
supplementing of such registration statement or prospectus or for additional
information;


 


(xv)                            prepare and file with the Commission as
promptly as reasonably practicable any amendments or supplements to such
registration statement or prospectus which, in the opinion of counsel for
Company, is required in connection with the distribution of the Registrable
Securities;


 


(xvi)                         advise each Demanding Affiliate and Selling
Affiliate, promptly after it shall receive notice or obtain knowledge thereof,
of the issuance of any stop order by the Commission suspending the
effectiveness of such registration statement or the initiation or threatening
of any proceeding for such purpose and promptly use its commercially reasonable
efforts to prevent the issuance of any stop order or to obtain its withdrawal
at the earliest possible moment if such stop order should be issued; and


 


(xvii)                      in the event of an underwritten public
offering, enter into and perform its obligations under an underwriting
agreement, in usual and customary form, with the managing underwriter(s) of
such offering.


 


(f)                                    Indemnification.


 


(i)                                     The Company shall indemnify and hold harmless
each Demanding Affiliate, Selling Affiliate, each of their officers, directors,
partners and members, and each person controlling such Affiliate, with respect
to each Registration which has been effected pursuant to this Section 2,
and each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof), to which they may become subject under the Securities Act or
otherwise, insofar as such claims, losses, damages and liabilities (or actions
in respect thereof) arise out of or are based on any untrue (or alleged untrue)
statement of any material fact contained in any registration statement on the
effective date thereof (including any prospectus, offering circular or other
documents) incident to any such Registration, qualification or compliance, or
arise out of or are based on any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the Company
in connection with any such Registration, qualification or compliance, and
shall reimburse each Demanding Affiliate, Selling Affiliate, each of their
officers, directors, partners and members, and each person controlling such
Affiliate, each such underwriter and each person who controls any such


 


10

















 


underwriter,
for any legal and any other expenses reasonably incurred by them in connection
with investigating and defending any such claims, losses, damages, liabilities
or actions; provided, that the Company shall not be liable to such
Affiliate, its officers, directors, partners and members, each person
controlling such Affiliate, each such underwriter and each person who controls
any such underwriter in any such case to the extent that any such claims,
losses, damages, liabilities or expenses arise out of or are based on any
untrue statement or omission made in connection with such registration
statement, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished to the Company by such Affiliate
or underwriter expressly for use in connection with such registration statement
by such Affiliate, its officers, directors, partners and members, each person
controlling such Affiliate, each such underwriter and each person who controls
any such underwriter.


 


(ii)                                  Each Demanding Affiliate and Selling
Affiliate shall, if Registrable Securities held by it are included in the
securities as to which such Registration, qualification or compliance is being
effected, severally and not jointly, indemnify and hold harmless the Company,
each of its directors and officers and each underwriter for the Company within
the meaning of the Securities Act (if any), and each person who controls the
Company or such underwriter against all claims, losses, damages and
liabilities, joint or several (or actions in respect thereof), to which the
Company or any such director, officer, controlling person, or underwriter may
become subject, under the Securities Act or otherwise, insofar as such claims,
losses, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue (or alleged untrue) statement of any material fact
contained in any registration statement on the effective date thereof
(including any prospectus, offering circular or other documents) made by such
Affiliate, or arise out of or are based upon any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements by such Affiliate therein not misleading, shall reimburse
any legal or any other expenses reasonably incurred by the Company or any such
directors, officers, controlling persons or underwriters in connection with
investigating or defending any such claims, losses, damages, liabilities or
actions, 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
made in such registration statement or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished to the
Company by such Affiliate expressly for use in connection with such
registration statement; provided, however, that the obligations
of such Affiliate hereunder shall be limited to an amount equal to the net
proceeds to such Affiliate of the Registrable Securities sold as contemplated
herein.


 


(iii)                               Each party entitled to indemnification under this Section 2(f)
(the “Indemnified Party”) shall give written notice to the party
required to provide indemnification (the “Indemnifying Party”) and to
the other parties hereto promptly after the receipt by such Indemnified Party
of any written notice of the commencement of any claim, action, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification pursuant to this Agreement, and shall permit
the Indemnifying Party to assume the defense of any such claim, action,
proceeding or investigation; provided that counsel for the Indemnifying
Party, who shall


 


11
















 


conduct
the defense of such claim, action, proceeding or investigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld) and the Indemnified Party may participate in such defense at such
party’s expense (unless the Indemnified Party shall have reasonably concluded
that there may be a conflict of interest between the Indemnifying Party and the
Indemnified Party in such claim, action, proceeding or investigation, in which
case the fees and expenses of counsel shall be at the expense of the
Indemnifying Party), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim, action, proceeding or investigation shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement 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 claim,
action, proceeding or investigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim, action, proceeding or investigation.


 


(iv)                              If the indemnification provided for in this Section 2(f) is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any losses, liabilities, claims, damages or expenses referred
to herein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, liabilities, claims, damages
or expenses in such proportion as is appropriate to reflect the relative fault
of the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.


 


(v)                                 Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public
offering contemplated by this Agreement are in conflict with the foregoing
provisions, the provisions in such underwriting agreement shall be controlling.


 


(vi)                              The foregoing indemnity agreement of the Company and each Affiliate is
subject to the condition that, insofar as they relate to any losses, claims,
liabilities or damages arising out of a statement made in or omitted from a
preliminary prospectus but eliminated or remedied in the amended prospectus on
file with the Commission at the time the registration statement in question
becomes effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the “Final Prospectus”),


 


12

















 


such
indemnity or contribution agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was furnished to the underwriter
and was not furnished to the person asserting the losses, liabilities, claims
or damages at or prior to the time such action is required by the Securities
Act.


 


(g)                                 Information by the Affiliates. To the extent the Registrable Securities
held by an Affiliate are included in any Registration, such Affiliate shall
furnish to the Company such information regarding such Affiliate and the
distribution proposed by such Affiliate as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
Registration, qualification or compliance referred to in this Section 2.


 


(h)                                 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of Registrable Securities to the public without
Registration, at all times from and after ninety (90) days following the
effective date of the registration statement for the first Registration
demanded by any Affiliate under the Securities Act filed by the Company for an
offering of securities of the Company to the general public, the Company agrees
to:


 


(i)                                     make and keep public information available as
those terms are understood and defined in Rule 144 under the Securities Act (“Rule
144”);


 


(ii)                                  use all commercially reasonable efforts to
file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act at any
time after it has become subject to such reporting requirements; and


 


(iii)                               so long as any Affiliate owns any Registrable Securities, furnish to
such Affiliate, upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the Securities
Act and the Exchange Act (at any time after it has become subject to such
reporting requirements), a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed as such Affiliate
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Affiliate to sell any such securities without
Registration.


 


(i)                                     Reserved.


 


(j)                                     Limitation on Subsequent Registration Rights. The Company shall not, without the prior
written consent of each Affiliate, enter into any agreement with any other
holder or prospective holder of any securities of the Company that would allow
such other holder or prospective holder to include securities of the Company in
any registration statement on terms more favorable than the terms on which the
Affiliate may include shares of Registrable Securities in such Registration.


 


(k)                                  Holdback Agreements.


 


(i)                                     If and whenever the Company effects a
Registration pursuant to Section 2, each Affiliate that holds Registrable
Securities included in such Registration agrees not to


 


13

















 


effect
any public sale or distribution, including any sale pursuant to Rule 144 under
the Securities Act, of any Registrable Securities within seven days prior to
and 90 days (unless advised in writing by the managing underwriter that a
longer period, not to exceed 180 days, is required) after the effective date of
the registration statement relating to such Registration, except as part of such
Registration; provided, however, that each such Affiliate only agrees to
such restriction if and to the extent that all other holders of Registrable
Securities included in such Registration (including without limitation,
officers and directors of the Company) similarly agree not to effect any such
sales or distributions during such periods.


 


(ii)                                  The Company agrees not to effect any public
sale or distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities within seven days prior
to and 90 days (unless advised in writing by the managing underwriter that a
longer period, not to exceed 180 days, is required) after the effective date of
any such registration statement as described in Section 2(k)(i) (except
as part of such Registration or pursuant to a Registration on Form S-4 or
S-8 or any successor form). In addition, if requested by the managing
underwriter, the Company shall use its commercially reasonable best efforts to
cause each holder of Registrable Securities, to agree not to effect any such
public sale or distribution of such Registrable Securities during such period,
except as part of any such Registration if permitted, and to use its
commercially reasonable efforts to cause each such holder to enter into a
similar agreement to such effect with the Company.


 


(l)                                     Blockage Period. If (i) there has been or there is pending a
development or change in the business, affairs or prospects of Company or any
of its subsidiaries; (ii) Company’s counsel advised Company in writing that
such development or change should be disclosed in the registration statement,
the prospectus included therein, or an amendment or supplement thereto in order
to ensure that the registration statement and such prospectus, as amended or
supplemented, will not contain any misstatement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading (or with respect to the prospectus, in light of
the circumstance under which such statements were made); and (iii) in the good
faith judgment of the officers or directors of Company, disclosure of such
development or change would either (x) have an adverse effect on the business
or operations of Company or (y) if the disclosure otherwise relates to a
material financing or acquisition of assets which has not yet been disclosed
and such disclosure would have an adverse effect on the likelihood of
consummating such transaction, then Company may deliver written notification to
the Affiliates that Registrable Securities may not be sold pursuant to the
registration statement (a “Blockage Notice”). Company shall have no
obligation to include in any such notice any reference to or description of the
facts based upon which the Company is delivering such notice. Company shall
delay during such Blockage Period the filing or effectiveness of any
registration statement required pursuant this Agreement. No Affiliate shall
sell any Registrable Securities pursuant to the registration statement for the
period (the “Blockage Period”) beginning on the date such Blockage
Notice was received by such Affiliate and ending on the date on which Company
notifies the Affiliates that the Blockage Period has ended, which Blockage Period
shall not exceed an aggregate of ninety (90) days in any calendar year, provided,
that such Blockage Period shall be extended for any period, not to exceed
forty-five (45) days in any calendar year, during which the Commission is
reviewing any proposed amendment to the registration (and


 


14

















 


Company agrees promptly to
notify the Affiliates if the circumstances giving rise to such Blockage Period
no longer apply). Company shall promptly prepare and file any amendment or
supplement to the registration statement or the prospectus included therein
necessary so that at the conclusion of the Blockage Period, the registration
statement and the prospectus included therein do not contain any misstatements
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading (or with
respect to the prospectus, in light of the circumstance under which such
statements were made) and notify the Affiliates of such amendment or supplement
and of the conclusion of the Blockage Period.


 


SECTION 3.  TERMINATION


 


(a)                                  Termination.
The provisions of this Agreement shall terminate as to a particular Affiliate
at such time as such Affiliate has sold all of his or its Registrable
Securities in a Registration pursuant to the Securities Act or pursuant to Rule
144. Section 2(f) shall survive any termination of this Agreement.


 


SECTION 4.  MISCELLANEOUS


 


(a)                                  Governing Law. This Agreement and all actions arising out
of or in connection with this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts
executed in and to be performed entirely within that State, without regard to
the conflicts of law provisions of the State of New York.


 


(b)                                 Submission to Jurisdiction. All actions and proceedings arising out of
or relating to this agreement shall be heard and determined exclusively in any
New York state or federal court sitting in the Borough of Manhattan of the City
of New York. The parties hereto hereby (a) submit to the exclusive jurisdiction
of any state or federal court sitting in the Borough of Manhattan of the City
of New York for the purpose of any action arising out of or relating to this
agreement brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such action, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution,
that the action is brought in an inconvenient forum, that the venue of the
action is improper, or that this agreement or the transaction may not be
enforced in or by any of the above-named courts. Each of the parties hereto
hereby waives to the fullest extent permitted by applicable law any right it
may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this agreement. Each of
the parties hereto (a) certifies that no representative, agent or attorney of
any other party has represented, expressly or otherwise, that such other party
would not, in the event of litigation, seek to enforce that foregoing waiver
and (b) acknowledges that it and the others hereto have been induced to enter
into this agreement, as applicable, by, among other things, the mutual waivers
and certifications in this Section 3(c)


 


(c)                                  Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given (i) when delivered personally by hand (with
written confirmation of receipt), (ii) when sent by facsimile (with written
confirmation of transmission) or (iii) one Business Day following the day sent
by overnight courier (with written confirmation of receipt), in each case at
the following addresses and facsimile numbers (or to such other address or
facsimile number as a party may have specified by notice given to the other
party pursuant to this provision):


 


15

















 


	
   

  	
  (i)

  	
  If to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSW International, Inc.

  
	
   

  	
   

  	
  One Capital City Plaza,
  Suite 1500

  
	
   

  	
   

  	
  3350 Peachtree Road

  
	
   

  	
   

  	
  Atlanta, GA   30326

  
	
   

  	
   

  	
  Attention: Chief
  Executive Officer

  
	
   

  	
   

  	
  Facsimile: (404)
  760-3458

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy (which shall
  not constitute notice) to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Greenberg Traurig, LLP

  
	
   

  	
   

  	
  3290 Northside Parkway, N.W., Suite 400

  
	
   

  	
   

  	
  Atlanta, GA  30327

  
	
   

  	
   

  	
  Attention:  James S. Altenbach, Esq.

  
	
   

  	
   

  	
  Facsimile:  (678) 553-2188

  



 


(ii)                                  If to an Affiliate, to the address and
facsimile number listed on the signature page attached hereto:


 


(d)                                 Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the Affiliates by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and the Affiliates may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction shall
be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Affiliates in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.


 


(e)                                  Successors and Assigns. Subject to the restrictions on transfer
described in clauses (i) and (ii) below, the rights and obligations of the
Company and each Affiliate hereunder shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of such parties.


 


(i)                                     The rights, interests or obligations
hereunder may not be assigned, by operation of law or otherwise, in whole or in
part, by an Affiliate without the prior written consent of the Company; provided,
however, an Affiliate may assign its interest to its partners, limited
partners, affiliates or heirs without the consent of the Company.


 


(ii)                                  The rights, interests or obligations
hereunder may not be assigned, by operation of law or otherwise, in whole or in
part, by the Company without the prior written consent of each Affiliate.


 


(f)                                    Amendment and Waivers. No failure or delay on the part of Company
or any Affiliate in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right, power or remedy preclude any other or


 


16

















 


further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to Company or an Affiliate at law or in
equity or otherwise. Any provision of this Agreement may be amended,
supplemented, modified or waived if, but only if, such amendment, supplement,
modification or waiver is in writing and is signed by all the parties hereto.


 


(g)                                 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any law or
public policy, all other terms or provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.


 


(h)                                 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement. This Agreement may be executed by facsimile or other
electronic means.


 


(i)                                     Entire
Agreement. This Agreement constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof and thereof
and, except as provided in Section 2(f) hereof, is not intended to and shall
not confer upon any Person other than the parties any rights or remedies
hereunder. The parties agree that time is of the essence with respect to the
performance of all obligations provided in this Agreement and effectuation of
the transactions contemplated thereby.


 


(j)                                     Specific Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any New York State Court sitting
in the borough of Manhattan in the city of New York or any Federal Court
sitting in the borough of Manhattan in the city of New York, this being in
addition to any other remedy to which they are entitled at law or in equity.


 


(k)                                  Rules of Construction. Unless the context otherwise requires, the
singular shall include the plural and vice-versa, each pronoun in any gender
shall include all other genders, and provisions apply to successive events and
transactions. The words “hereof,” “hereby,” “herein” and “hereunder” and words
of similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement. The word “including”
or any variation thereof means “including, without limitation” and shall not be
construed to limit any general statement that it follows to the specific or
similar items or matters immediately following it. The titles and headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.


 


17

















 


Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by such
Person.


 


 


[Remainder of page intentionally left blank]


 


18

















 


IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first set forth above.


 


	
   

  	
  HSW INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
        /s/ Bradley T.
  Zimmer

  	
   

  
	
   

  	
  Name: Bradley Zimmer

  
	
   

  	
  Title: Secretary

  



 


 


	
   

  	
  AFFILIATES

  
	
  MAILING ADDRESS:

  	
   

  
	
   

  	
   

  	
   

  	
  DEUTSCHE BANK AKTIENGESELLSCHAFT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ASHFORD CAPITAL
  MANAGEMENT, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     /s/
  Kevin Jones

  	
   

  
	
   

  	
   

  	
   

  	
  Kevin Jones

  
	
   

  	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     /s/
  Theodore P. Botts

  	
   

  
	
   

  	
   

  	
   

  	
  Theodore P. Botts

  
	
   

  	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  	
   

  
												



 


 


~ Affiliate signatures continue on the next page ~


 


19

















 


~ continuation of Affiliate signatures ~


 


 


	
   

  	
   

  	
     /s/ J.
  David Darnell

  
	
   

  	
   

  	
  J. David Darnell

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     /s/
  Heinz-Gerd Stein

  
	
   

  	
   

  	
  Dr. Heinz-Gerd Stein

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/ Larrie A. Weil

  
	
   

  	
   

  	
  Larrie A. Weil

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
					



 


20