Document:

Exhibit 10.2

 

Execution Copy

 

CONTRIBUTION
AGREEMENT

(PRC
Territories)

 

THIS 
CONTRIBUTION AGREEMENT (the “Agreement”) is entered into as of
October 2, 2007 (the “Effective Date”) by and between HowStuffWorks, Inc., with its principal office located at
3350 Peachtree Road, Suite 1500, Atlanta, Georgia 30326 (“Contributor”),
and HSW International, Inc., with its
principal office located at 3350 Peachtree Road, Suite 1150, Atlanta, Georgia
30326 (“Company”) (Contributor and Company are collectively referred to
herein as the “Parties” and individually a “Party”).

 

WHEREAS, Contributor is engaged in the publication and
distribution of certain reference information in digital form via the website
www.howstuffworks.com (the “Site”); and

 

WHEREAS, Company is a newly formed corporation to which
Contributor is licensing and/or otherwise contributing certain intangible and
intellectual properties (collectively, the “Properties”) pursuant to
this Agreement and substantially similar agreements with respect to different territories
and a certain Merger Agreement (the “Merger Agreement”) dated as of
April 20, 2006, as amended on January 29, 2007 and further amended on
August 23, 2007, by and among Contributor, Company, HSW International Merger
Corporation and INTAC International, Inc., in a series of transactions that
collectively are intended to qualify for non-recognition treatment under
Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”).

 

NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as
follows:

 

1.                                      DEFINITIONS

 

For purposes of this Agreement, the following terms
shall have the meanings ascribed to them below.

 

“Agreement” shall have the meaning set forth
above in the preamble.

 

“Code” shall have the meaning set forth above
in the recitals.

 

“Company” shall have the meaning set forth
above in the preamble.

 

“Content” means collectively the Licensed
Content and the Sublicensed Content, but, for the avoidance of doubt, excluding
the Chinese translations of the Licensed Content and Sublicensed Content.

 

“Contributed Content” means the right to render
Chinese translations of, the right to publish and otherwise use any and all
actual renderings in the Chinese language (including both Simplified and
Traditional) and all such actual renderings, of any and all of the Licensed
Content and Sublicensed Content (and further providing that Contributed Content
shall include, with respect to limited excerpts thereof that are either not
translatable into Chinese or for which the common, universal understanding of
the term is in English, the right to render and include as part of the Chinese
language rights such limited excerpts of the Licensed Content and Sublicensed
Content in the English language) solely in digital and/or electronic medium.

 

“Contributor” shall have the meaning set forth
above in the recitals.

 

“Effective Date” shall have the meaning set
forth above in the preamble.

 

 

“Intellectual Property Rights” means (i) any
works of authorship or expression, whether or not copyrightable, including
moral rights (as defined below) and copyrights recognized by domestic or
foreign law, together with any renewal or extension thereof and all rights
deriving there from; (ii) any logos, trademarks, service marks, trade names and
trade dress, and all goodwill relating thereto; (iii) any idea, design,
concept, technique, methodology, process, invention or discovery, whether
patentable or not, all United States and foreign patents, patent applications,
utility models, certificates of invention and all continuations,
continuations-in-part, extensions, renewals, divisions, re-issues and
re-examinations relating thereto; and (iv) any trade secrets, know-how,
technology licenses, confidential information, shop rights and other
intellectual property rights owned or claimed and embodied therein, or
associated therewith, or similar rights protectable under any laws or
international conventions throughout the world, and in each case including any
improvements, enhancements or modifications to or derivatives from any of the
foregoing, and the right to apply for registrations, certificates, or renewals
with respect thereto and the right to prosecute, enforce, obtain damages
relating to, settle or release any past, present, or future infringement
thereof.

 

“Licensed Content” means the text, images,
designs, graphics, artwork and any and all other forms of content, that are
owned by Contributor and that are posted on the Site on or before the Effective
Date, excluding Contributor’s trademarks and design marks.

 

“Merger Agreement” shall have the meaning set
forth above in the recitals.

 

“Party” and “Parties” shall have the
meaning set forth above in the preamble.

 

“Properties” shall have the meaning set forth
above in the recitals.

 

“Proprietary Notices” shall have the meaning
set forth in Section 3.5.

 

“Site” shall have the meaning set forth above
in the recitals.

 

“Sublicensed Content” means the text, images,
designs, graphics, artwork and any and all other forms of content, that are or
have been licensed to Contributor by third parties pursuant to Third Party
Licenses and that are or have been posted on the Site on or before the
Effective Date, as specified on Schedule A hereto.

 

“Territory” means the People’s Republic of
China, the Hong Kong Special Administrative Region, the Macao Special
Administrative Region and Taiwan, and any and all current and future ULR
addresses and domain names for such geographic territories, including .CN, .TW,
..HK and .MO.

 

“Third Party Content” shall have the meaning
set forth in Section 2.4.

 

“Third Party Licenses” means, collectively, the
licenses from third parties granting Contributor the right to use the
Sublicensed Content, as set forth on Schedule A hereto. A “Third
Party License” means an individual reference to each of the Third Party
Licenses.

 

“Third Party Licensors” means the licensors
under the Third Party Licenses.

 

2.                                      LICENSE GRANT

 

2.1                                 Contributed Content.   Contributor hereby contributes the Contributed
Content to Company by granting to Company a perpetual, fully paid up,
royalty-free, sublicensable, exclusive (even as to Contributor) license in the
Territory to the Contributed Content. For the avoidance of doubt, the

 

2

 

foregoing license
includes, but is not limited to, the right to display, publish, transmit, copy,
publicly perform, distribute and modify/create derivative works of the
Contributed Content in the digital and/or electronic medium in the Territory.

 

2.2                                 Content.   Subject to
the terms and conditions of this Agreement, Contributor hereby grants to
Company a limited, perpetual, fully paid up, royalty-free, non-sublicensable,
non-transferable (except as set forth in Section 10.1), exclusive
(even as to Contributor) license in the Territory to:  (i) use the Content solely for purposes of
translating it into the Chinese language for the purposes thereby of creating
Contributed Content; and (ii) use limited excerpts of the Licensed Content translated
into the Chinese language in print format with limited distribution to
businesses solely for purposes of marketing, business development, financings
and other similar legitimate business purposes, provided that any such limited
print excerpts are not distributed publicly. With respect to the foregoing
grant in (ii), Company shall provide copies of relevant portions of such
printed materials to Contributor, for Contributor’s prior written approval
which shall not be unreasonably withheld and provided further that in the event
that Contributor does not notify Company of its disapproval within ten (10)
business days after receipt thereof from Company, then Contributor shall be
deemed to have approved such materials. Company’s inadvertent failure to submit
any such materials to Contributor for approval hereunder shall not be deemed to
be a material breach under this Agreement.

 

2.3                                 Limitation with Respect to Contribution
of Sublicensed Content.   The license granted in Section 2.1
above with respect to the Chinese language digital publishing rights in the
Territory to Sublicensed Content, is limited by and subject to the terms,
conditions and restrictions set forth in the applicable Third Party Licenses,
and Company agrees to comply with all applicable terms, conditions and
restrictions set forth or imposed on it under or pursuant to its sublicense of
rights under each such Third Party License, which are provided to Company in
writing. The expressed intent of this Section 2.3 is to clarify
that the Contributor is transferring and contributing to Company all Chinese
language digital publishing rights with respect to the Territory held by
Contributor on the Effective Date, but that, which respect to the Sublicensed
Content, Contributor can and is transferring and contributing to Company all
rights, but only those rights, which belong to and are held by Contributor
pursuant to the Third Party Licenses.

 

2.4                                 Third Party Content.   The Content may contain text, images,
designs, graphics, artwork, links and other content owned by and/or proprietary
to third parties, including, without limitation, Sublicensed Content under the
Third Party Licenses (“Third Party Content”). With respect to all Third
Party Content, the representations and warranties made by Contributor under Section 6.1
below and Contributor’s indemnification obligations as set forth in Section 7.1,
shall be limited in accordance with the rights that Contributor has from the
Third Party Content providers. Company agrees to be bound by the terms and
restrictions applicable to and/or governing any Third Party Content, as
communicated in writing by Contributor to Company.

 

2.5                                 Use of Subcontractors.  
Company may use subcontractors to exercise any of the rights granted to
it in Section 2.2, provided that (i) each subcontractor agrees in
writing to protect Contributor’s and Third Party Licensors’ proprietary rights
in the Content in a manner and to an extent consistent with Section 2.3
and Article 3 of this Agreement; and (ii) Company remains solely
liable to Contributor for the acts and omissions of any subcontractor.

 

2.6                                 Update Agreement.   With respect to future changes made by Contributor to the Content on the
Site or new content added by Contributor to the Site after the Effective Date
hereof, Contributor contributes to and grants to Company the right to enter
into an Update Agreement in substantially the form attached as Exhibit G to the
Merger Agreement, which Update Agreement shall be executed contemporaneously
herewith.

 

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3.                                      PROPRIETARY
RIGHTS

 

3.1                                 Licensed Content Ownership.   Contributor shall be the sole and exclusive
owner throughout the world of, and retain all right, title and interest in and
to, the Licensed Content and all Intellectual Property Rights therein and
thereto, provided, however, that Company shall hold in perpetuity the rights
granted to it under Section 2.1, including the right to transfer
and assign such rights as provided in Section 10.1.

 

3.2                                 Sublicensed Content Ownership.   Third Party Licensors shall be the sole and
exclusive owners throughout the world of, and retain all right, title and
interest in and to, the Sublicensed Content and all Intellectual Property
Rights therein and thereto, provided, however, that subject to Company’s
performance of its obligations as a sublicensee under the Third Party Licenses,
Company shall hold the rights to which it is entitled pursuant to Section 2.3.

 

3.3                                 Contributed Content Ownership.   Company shall be the sole and exclusive owner
throughout the world of, and retain all right, title and interest in and to,
the Contributed Content and all Intellectual Property Rights therein and
thereto, subject to Contributor’s (and its Third Party Licensors’) rights in
the underlying Licensed Content and Sublicensed Content.

 

3.4                                 Reserved Rights in the Content.   All rights in and to the Content not
expressly granted herein to Company are reserved by Contributor and the Third
Party Licensors. Company shall neither acquire nor claim any right, title or
interest in or to the Content, except its rights in the Contributed Content as
defined in this Agreement. Company shall not, directly or indirectly, challenge
Contributor’s retained rights hereunder or take any other action which Company
reasonably knows will impair or diminish Contributor’s rights in the Content.

 

3.5                                 Proprietary Notices.   The Contributed Content shall bear
appropriate copyright and/or credit notices as designated by Contributor and
set forth on Schedule B, which may be amended from time to time in
writing by Contributor (the “Proprietary Notices”) or as designated in
writing by Third Party Content providers. The Proprietary Notices shall not be
removed or obscured, and shall be reproduced on all copies of the Contributed
Content.

 

3.6                                 Removal of Content.   Company acknowledges and agrees that
Contributor may, with respect to any Content, or a portion thereof, request
Company to remove or cease using and/or distributing the translated version
thereof in the event that Contributor reasonably believes that such Content may
be in violation of law or the proprietary or contractual rights of a third
party, and Company will cooperate with Contributor in that regard.

 

4.                                      PARTIES’
OBLIGATIONS

 

4.1                                 Obligations of Contributor.   Contributor will make the Content available
to Company in the English language in a digital format promptly upon the
Effective Date. Contributor shall not, directly or indirectly, amend or
otherwise modify any existing agreements relating to Content or enter into any
new agreements relating to Content, to the extent that such amendment,
modification or new agreement would adversely affect Company’s rights hereunder.
Contributor shall, at Company’s reasonable request and cost, use commercially
reasonable efforts to assist Company in any claims or actions brought by
Company against third parties pursuant to Section 4.2.

 

4.2                                 Obligations of Company.   Company shall be responsible for (i)
translating the Content into the Chinese language, and (ii) ensuring that all
uses of the Contributed Content are at all times in compliance with all
applicable laws, rules, regulations and ordinances. Company shall be solely

 

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responsible for, at its
sole discretion, instituting and pursuing any and all claims and actions
against third parties in respect of infringement of the Contributed Content by
such third party or unfair competition by such third party with respect to the
Contributed Content, in each case within the Territory.

 

5.                                      CONSIDERATION.   This Contribution of the Contributed Content
to Company, and the related rights and privileges granted to Company pursuant
to this Contribution Agreement are expressly intended to be performance by
Contributor of its property contribution obligations pursuant to the Merger
Agreement, and the transfer of property and the intangible and intellectual
rights hereunder shall be construed at all times so as to conform with the
requirements of the Merger Agreement and Code Section 351 .

 

6.                                      WARRANTIES

 

6.1                                 By Contributor.   Contributor represents and warrants to
Company that (i) it has the full power and authority to enter into this
Agreement; (ii) it has all rights necessary rights to transfer the Contributed
Content and grant the licenses set forth herein; and (iii) Company’s use of the
Licensed Content and Sublicensed Content as authorized herein does not and will
not infringe or misappropriate any third party Intellectual Property Rights.

 

6.2                                 By Company.   Company
represents and warrants to Contributor that (i) it has the full power and
authority to enter into this Agreement; (ii) it has all rights necessary to
fulfill its obligations hereunder; (iii) it will not use the Content or any
portion thereof in violation of any applicable law, rule, statute, regulation,
or ordinance; (iv) it will not use or modify the Content or any portion thereof
in any way that infringes or misappropriates any third party Intellectual
Property Rights, provided, however that the foregoing warranty shall not (a)
limit Contributor’s warranty under Section 6.1(iii), (b) apply with
respect to modified Content  provided by
Contributor to Company under the Services Agreement, and (c) apply with respect
to modifications to the Content made by or at Contributor’s explicit written
request, with the exception of any translations to such modified Content or any
derivative works to such modified Content made by or on behalf of Company; and
(v) it will ensure that the Contributed Content is at all times in compliance
with all applicable laws, rules, statutes, regulations and ordinances.

 

6.3                                 Disclaimer.   Except for
the express warranties and representations set forth in this Agreement, neither
Party makes any warranties, whether express, implied or otherwise. Each Party
expressly disclaims all other warranties and representations, whether express,
implied or statutory, including, without limitation, the implied warranties of
merchantability, fitness for a particular purpose, non-infringement and
accuracy.

 

7.                                      INDEMNITY

 

7.1                                 By Contributor.   Contributor hereby agrees to defend,
indemnify and hold harmless Company, its officers, directors, employees and
agents against any and all claims, demands, causes of action, judgments,
damages, penalties, losses, liabilities, costs and expenses (including
reasonable attorney fees’ and court costs) arising out of or resulting from (i)
Contributor’s breach of any representation or warranty under this Agreement; or
(ii) third party claims that Company’s use of the Licensed Content, Sublicensed
Content, or any portion thereof, as authorized herein infringes or
misappropriates any third party Intellectual Property Rights. For the avoidance
of doubt, the Parties acknowledge and agree that any amounts paid by Company in
indemnifying a sublicensee for any claims, demands or causes of actions arising
out of or resulting from Contributor’s breach of any representation or warranty
under this Agreement shall be deemed losses for which Company is entitled to
indemnification hereunder. Company agrees to provide Contributor with prompt
written notice of any third party claim subject to indemnification, allow
Contributor to have sole control of the defense of such

 

5

 

claim and any resulting
disposition or settlement of such claim; provided, however, that Company may
participate in the defense of a claim at its own expense. Notwithstanding the
foregoing, any delay by Company in providing notice as required hereunder shall
not relieve Contributor of its indemnification obligations except and only to
the extent that Contributor was prejudiced by such delay.

 

7.2                                 Contributor Rights.   If Contributor determines that the Content or
any portion thereof, becomes, or is likely to become, the subject of an
infringement claim or action, Contributor may at its sole option:  (i) procure, at no cost to Company the right
to continue using such Content, or portion thereof, as applicable; (ii) replace
or modify the Content, or portion thereof, as applicable to render it
non-infringing; or (iii) if, in Contributor’s reasonable opinion, neither (i)
nor (ii) above are commercially feasible, Contributor may remove such Content
from the scope of this Agreement.

 

7.3                                 Exceptions.   Contributor
will have no liability under Section 7.1 for any claim or action
where:  (i) such claim or action would
have been avoided but for modifications (other than Chinese translation) of the
Content, or any portion thereof, made by Company or a third party on Company’s
behalf; (ii) such claim or action would have been avoided but for Company’s or
a third party on Company’s behalf combining or using the Content, or any
portion thereof, with other content or materials; (iii) such claim or action
would have been avoided but for Company’s failure to implement the infringement
remedy of removal as requested, if at all, by Contributor under Section 3.6
or Section 7.2; or (iv) Company’s use of the Content, or any
portion thereof, is not in compliance with the terms of this Agreement and such
claim would have been avoided but for such non-compliance.

 

7.4                                 By Company.   Company
hereby agrees to defend, indemnify and hold harmless Contributor, its
licensors, and its and their officers, directors, employees and agents against
any and all claims, demands, causes of action, damages, judgments, penalties,
losses, liabilities, costs and expenses 
(including reasonable attorneys’ fees and court costs) arising out of or
resulting from (i) Company’s breach of any representation or warranty under
this Agreement; (ii) Company’s use of the Content in a manner in breach of the
terms and conditions of this Agreement; or (iii) third party claims that the
Contributed Content, or any portion thereof, infringes or misappropriates any
third party Intellectual Property Rights. Contributor agrees to provide Company
with prompt written notice of any third party claim subject to indemnification,
allow Company to have sole control of the defense of such claim and any
resulting disposition or settlement of such claim; provided, however, that
Contributor may participate in the defense of a claim at its own expense. Notwithstanding
the foregoing, any delay by Contributor in providing notice as required
hereunder shall not relieve Company of its indemnification obligations except
and only to the extent that Company was prejudiced by such delay.

 

8.                                      LIMITATION OF
LIABILITY

 

Except for (i) the Parties’ respective indemnification
obligations set forth in this Agreement; and (ii) damages arising out of either
Party’s gross negligence or willful misconduct, neither Party shall be liable
to the other under any legal theory or cause of action for any special,
incidental, consequential or other indirect damages, including, without
limitation, damages for lost profits, even if the Party has been advised of the
possibility of such damages.

 

9.                                      TERMINATION

 

9.1                                 Termination by Contributor.   Contributor may terminate the licenses
granted in Section 2.2 and all rights granted to Company thereunder
upon written notice to Company if: (i) Company files a petition for bankruptcy
or is adjudicated bankrupt; (ii) a petition in bankruptcy is filed against
Company and such petition is not dismissed within ninety (90) calendar days;
(iii) Company becomes insolvent or makes an assignment for the benefit of its
creditors or an arrangement for its

 

6

 

creditors pursuant to any
bankruptcy law; (iv) Company discontinues the business that is covered by this
Agreement; (v) a receiver is appointed for Company or its business; or (vi)
Company is in material breach of any of the terms or conditions set forth
herein, which breach remains uncured thirty (30) days after written notice
thereof from Contributor; provided, however, that (i) such material breach was not caused by any
action or inaction of Contributor, and (ii) Contributor did not prevent or
limit Company’s attempts to cure such breach. Notwithstanding the foregoing,
unless such extension period would create a risk of a breach by Contributor
under any Third Party License, if Company is using commercially reasonable
efforts to cure a material breach but is unable to do so within thirty (30)
days, then the cure period will be extended for an additional sixty (60) days
so long as Company continues to use commercially reasonable efforts to cure the
breach.

 

9.2                                 Effect of Termination.   Upon any termination of the licenses granted
in Section 2.2, (i) all rights granted to Company thereunder shall
automatically and immediately terminate, (ii) Company shall cease all use of
the Licensed Content and Sublicensed Content; and (iii) Company shall return or
destroy all copies of the Licensed Content and Sublicensed Content in its
possession or control, regardless of the form or media. Subject to Section 2.3,
any termination of the licenses set forth in Section 2.2 shall not
affect Company’s rights under Section 2.1 in respect of the
Contributed Content.

 

10.                               MISCELLANEOUS

 

10.1                           Assignment.   Company
shall have the right to assign its license rights under Section 2.1
with respect to the Contributed Content (except as limited and restricted by Section 2.3).
Except as otherwise expressly set forth herein, Company shall not assign the
licenses granted in Section 2.2, including any of its rights or
obligations in connection therewith, in whole or in part, by operation or law
or otherwise, without the prior written consent of Contributor. Company agrees
that any sublicenses or assignments of its rights hereunder granted by Company
will be subject to the terms and conditions set forth herein.

 

10.2                           Injunctive Relief.   Company acknowledges that Company’s material
breach of Articles 2, 3 or 6 would result in irreparable injury
to Contributor, and therefore in the event of an actual or threatened breach,
Contributor shall be entitled, in addition to all other available remedies, to
seek an injunction or other equitable relief.

 

10.3                           Taxes.   Company is
liable for any and all sales, use, excise, value added, customs fees, or other
similar taxes Contributor must pay relating to the Content and the Contributed
Content, provided, however that Contributor shall give Company written and
prior notice of any such taxes. If Company is exempt from the payment of any
such taxes, Company must provide Contributor with a valid tax exemption
certificate; otherwise, absent proof of Company’s direct payment of such taxes
to the applicable taxing authority, Contributor will invoice Company for and
Company will pay to Contributor all such taxes. Notwithstanding anything to the
contrary in this section, Contributor shall be solely responsible for all taxes
based on its income.

 

10.4                           Notices.   All notices,
consents and other communications hereunder must be in writing and delivered to
the other Party at the address set below by personal delivery, certified mail
(postage pre-paid), overnight delivery service or by facsimile with verified
receipt of transmission, and shall be effective upon receipt (or when delivery
is refused). Each Party may change its address for receipt of notice by giving
notice of the new address to the other Party.

 

If to Contributor:                                                     HowStuffWorks, Inc.

One Capital City Plaza

3350 Peachtree Road, Suite 1500

 

7

 

                                                                                                                                                Atlanta, Georgia 30326

Phone:  404-760-4729

Fax:  404-760-3458

Attention:  Legal Department

 

If to Company:                                                                HSW International, Inc.

3350 Peachtree Road, Suite 1150

Atlanta, Georgia  30326

Phone: 

Fax: 

Attention: Chief Financial Officer

 

10.5                           Waiver.   Neither
Party shall be deemed, by any act or omission, to have waived any of its rights
or remedies hereunder unless such waiver is in writing and signed by the
waiving Party, and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event.

 

10.6                           Severability.   If, at any time, any provision hereof is or
becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions hereof nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby. The invalid provision shall be replaced by a valid one
that achieves to the extent possible the original purpose and commercial goal
of the invalid provision.

 

10.7                           Governing Law; Jurisdiction.   This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding its
choice of laws provisions. The Parties agree that the exclusive venue and
jurisdiction for any actions or disputes arising from this Agreement shall be a
federal or state court in New York.

 

10.8                           Survival.   Any terms
and conditions that by their nature should survive termination of this
Agreement shall be deemed to survive. Such terms and conditions include, but
are not limited to, Sections 2.1 and 9.2 and Articles 3, 6,
7, 8 and 10.

 

10.9                           Relationship of the Parties.   Nothing in this Agreement shall establish any
relationship of partnership, joint venture, employment, franchise, or agency
between the Parties. Nothing in this Agreement shall give either Party the
power to bind the other Party or incur obligations on the other Party’s behalf
without the other Party’s prior written consent.

 

10.10                     Headings.   Headings are
used for purposes of reference only and shall not affect the interpretation of
this Agreement.

 

10.11                     Construction.   This
Agreement shall be construed and interpreted fairly, in accordance with the
plain meaning of its terms, and there shall be no presumption or inference
against the Party drafting this Agreement in construing or interpreting the
provisions hereof.

 

10.12                     Counterparts.   This
Agreement may be executed in counterparts all of which taken together shall
constitute one single agreement between the Parties.

 

10.13                     Bankruptcy Law.   The Parties
intend that the licenses of Intellectual Property herein are licenses to “intellectual
property” as defined in the Section 101 of the U.S. Bankruptcy Code,
11 U.S.C. § 101(35A)

 

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and is subject in all
respects to each party’s rights under Section 365(n) of the Bankruptcy
Code, 11 U.S.C. § 365(n).

 

10.14                     Entire Agreement.   This
Agreement and the Schedules attached hereto constitute the entire agreement
between the Parties relating to the subject matter hereof and supersede all
prior communications, whether written or oral. The Schedules are incorporated
into this Agreement by this reference and are hereby made part of this
Agreement. This Agreement may be amended only in a written document signed by
both Parties.

 

[Signatures on following page]

 

9

 

[Signature page to Contribution Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the Effective Date.

 

	
  Contributor:

  	
  Company:

  
	
   

  
	
  HowStuffWorks, Inc.

  	
  HSW International, Inc.

  
	
   

  
	
  By:

  	
  /s/ Jeffrey Arnold

  	
   

  	
  By:

  	
  /s/ Bradley Zimmer

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Jeffrey Arnold

  	
   

  	
  Name:

  	
  Bradley Zimmer

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  Secretary

  	
   

  
											

 

10Exhibit 10.3

 

EXECUTION COPY

 

SERVICES AGREEMENT

 

THIS SERVICES AGREEMENT (the “Agreement”)
is entered into as of October 2, 2007 (the “Effective Date”) by and
between HowStuffWorks, Inc., with its principal
office located at 3350 Peachtree Road, Suite 1500, Atlanta, Georgia 30326 (“HSW”),
and HSW International, Inc.,
with its principal office located at 3350 Peachtree Road, Suite 1150, Atlanta,
Georgia 30326 (“Client”). HSW and Client are collectively referred to
herein as the “Parties” and individually a “Party”.

 

WHEREAS, HSW is engaged in the
publication and distribution of certain reference information in digital form
via the website www.howstuffworks.com (the “Site”);

 

WHEREAS, HSW and Client have
entered into one or more Content Contribution Agreements pursuant to which HSW
licensed the Contributed Content  to
Client (collectively, the “Contribution Agreements”) for digital
distribution in the Territory; and

 

WHEREAS, Client desires to
engage HSW for the purposes of developing, supporting, translating, updating
and facilitating the digital transmission of the Contributed Content on a
transitional basis until Client is able to perform such services on its own
behalf.

 

NOW THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto hereby agree as follows:

 

1.                                      DEFINITIONS

 

Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Contribution Agreements. For
purposes of this Agreement, the following terms shall have the meanings
ascribed to them below:

 

“Client Sites” means the applicable domain
names for the Territory as set forth in the Contribution Agreements on which
the Contributed Content is posted, as specified by Client in writing.

 

“Technology” means all computer code,
documentation and functions and any other computer software (including all
computer programming code and documentation) and other technology utilized by
HSW or its third party providers in providing the Services.

 

“Terms of Use” means the terms and conditions
governing access to and use of the Client Sites by the Parties and Users, which
shall be posted on the Client Sites.

 

“User” means anyone that accesses a Client
Site.

 

2.                                      SERVICES

 

2.1                                 Provision
of Services.   Upon Client’s written
request, HSW shall provide the following services to Client or Intac
International Management Consultancy (Beijing) Co., Ltd., as reasonably
designated by Client: (i) translating the Content into the language designated
in the Contribution Agreements; (ii) designing and developing the Client Sites;
(iii) providing the

 

 

Technology for establishing, operation and use of the Client Sites;
(iv) providing support and consulting concerning the hosting, operation, and
display of the Client Sites; (v) securing the registration and maintaining the
domain names for the Client Sites; and (vi) providing other services reasonably
agreed to by the Parties as necessary to develop, operate and maintain the
Client Sites (collectively, the “Services”). HSW shall provide the Services in
accordance with the mutually agreed upon statements of work (“SOW”) agreed to
by the Parties in writing. Each SOW shall incorporate, without modification,
the terms and conditions set forth herein and shall set forth the details and
terms with respect to the Services, including timing, scope details and fee
estimates. In the event of a conflict between the terms and conditions set
forth in this Agreement and those set forth in any SOW, the terms and
conditions set forth in this Agreement shall control. The Parties shall use
commercially reasonable efforts to launch the first Client Site by June 1,
2006.

 

2.2                                 Correction
of Errors.   Notwithstanding Section
6.3, in the event that the Client Sites have technical errors or the Client
Sites or Services do not meet the specifications set forth in an applicable
SOW, HSW shall use commercially reasonable efforts to remedy such deficiencies
in a timely manner in accordance with a new SOW agreed to by the Parties.

 

3.                                                                                      CONSIDERATION

 

3.1                                 Fees.
  In
consideration of the Services provided by HSW hereunder, Client shall pay HSW a
fee equal to HSW’s fully allocated costs in providing the Services, which shall
include reasonable direct, indirect and overhead costs (the “Fee”). HSW
shall provide a reasonably detailed invoice on a monthly basis specifying each
type of Service rendered to Client. Client shall pay all such invoices, in U.S.
dollars to HSW within thirty (30) days of Client’s receipt of the invoice.

 

3.2                                 Right
to Audit.   For a period of six (6) months after Client
receives an invoice from HSW for the provision of Services, Client shall be
provided, upon advance written notice, reasonable access to and the right to
audit, at Client’s cost and expense, by a mutually acceptable nationally recognized
accounting firm (provided that such firm has not previously provided services
to either Party and provided further that such firm enter into a
confidentiality agreement) all of HSW’s books and records that pertain to the
provision of the Services under such invoice; provided, however,
neither Client nor any agent of Client shall have access to the Technology or
any other proprietary technology of HSW by virtue of this Section 3.2. Any overpayments or underpayments shall be
credited or charged, as applicable, to Client in the next invoice from HSW to
Client. If the audit identifies that the Client was overcharged by more
than ten percent (10%) in respect of the audited invoices, HSW shall bear the
costs and expense of such audit.

 

3.3                                 Taxes.
  The fees and expenses shall not include
any applicable foreign, federal, state or local sales, use, excise, value
added, customs fees or other taxes, duties, surcharges or assessments, and HSW
shall provide Client written notification of such taxes and Client shall be
responsible for the payment of all such taxes. Notwithstanding anything to the
contrary in this section, HSW shall be solely responsible for all taxes based
on its income.

 

3.4                                 Late
Payments.   Any amount not paid when
due hereunder shall be subject to an interest charge at the lesser of 1.5% per
month or the maximum rate permitted by law.

 

2

 

4.                                      PROPRIETARY
RIGHTS

 

4.1                                 Content.   Ownership
of the Content and the Contributed Content and Client’s right to use the same
are governed by the terms and conditions set forth in the Contribution
Agreements.

 

4.2                                 Technology.   All
right, title and interest in and to the Technology and all Intellectual
Property Rights therein and all derivatives thereof, shall remain exclusively
vested in HSW. This Agreement does not convey, confer, grant, assign or
otherwise provide Client with any ownership interest in or to the Technology.

 

5.                                      TERM/TERMINATION

 

5.1                                 Term.
  This Agreement shall commence upon the
Effective Date and continue for a period of eighteen (18) months or until
earlier terminated in accordance with the terms set forth herein (the “Term”).

 

5.2                                 Termination.   This
Agreement shall terminate when the Parties mutually agree in writing that
Client is able to perform the Services on its own behalf. Client may terminate
any or all Services, either in whole or in part, or this Agreement upon thirty
(30) days’ written notice to HSW. HSW may suspend any Service in the event that
Client fails to pay the Fee for such Service when due and such failure
continues un-remedied for ninety (90) days after receipt of written notice
thereof from HSW.

 

5.3                                 Termination
of Contribution Agreements.   This
Agreement shall automatically and immediately terminate upon termination of all
the licenses granted in Section 2.2 of the Contribution Agreements.

 

5.4                                 Effect
of Termination.   Any termination of this Agreement shall not
(i) waive or otherwise adversely effect any other rights or remedies the
terminating Party may have at law or in equity, or (ii) affect any terms and
conditions which by their nature should survive termination, including (a)
Client’s obligations to pay all accrued but unpaid Fees, and (b) the rights and
obligations of the Parties under Sections 3.2, 3.3 and 3.4; and Articles
4, 6, 7, and 8.

 

6.                                      WARRANTIES
AND COVENANTS

 

6.1                                 By
HSW.   HSW represents, warrants and
covenants to Client that (i) it has the full power and authority to enter into
this Agreement; (ii) it shall provide and perform the Services with the level
of care and in a professional and workmanlike manner in accordance with
commercially reasonable industry standards; (iii) it shall observe and comply
with any and all applicable U.S. laws and regulations bearing on the
performance of the Services; and (iv) the Technology and Services do not and
will not infringe or misappropriate any third party Intellectual Property
rights.

 

6.2                                 By
Client.   Client represents and
warrants to HSW that (i) it has the full power and authority to enter into this
Agreement; (ii) the Client Sites are in compliance with all applicable laws,
rules, regulations, statutes and ordinances; (iii) the Client Sites do not and
will not infringe any third party Intellectual Property Rights; provided,
however, that this

 

3

 

representation and warranty shall not apply in respect of Contributed
Content or Updates and instead, the applicable representation and warranty
shall be as set forth in the Contribution Agreements and Update Agreements;
(iv) it will not use the Technology or any portion thereof in any way that
infringes or misappropriates any Intellectual Property Rights; and (v) will
ensure that Terms of Use are at all times in compliance with all
applicable  laws, rules, statutes,
regulations and ordinances.

 

6.3                                 Disclaimer.
  Except for the express warranties and
representations set forth in this Agreement and the Contribution Agreements,
neither Party makes any warranties, whether express, implied or otherwise with
respect to the Services and the materials provided by HSW under this Agreement
and Licensee’s use of the Client Sites and Contributed Content. Each Party
expressly disclaims all other warranties and representations, whether express,
implied or statutory, including, without limitation, the implied warranties of
merchantability, fitness for a particular purpose, non-infringement and
accuracy. HSW does not warrant that the Client Sites or the Services will be
uninterrupted, secure, virus free, error free, or prevent unauthorized access
by third parties, that all errors will be corrected, or that the Services will
meet Client’s requirements.

 

7.                                      INDEMNITY

 

7.1                                 By
HSW.   HSW agrees to defend,
indemnify and hold harmless Client, its officers, directors, employees, agents
and contractors against any and all claims, demands, causes of action,
judgments, damages, penalties, losses, liabilities, costs and expenses
(including reasonable attorney fees’ and court costs) arising out of, resulting
from or related to (i) HSW’s breach of the covenants, representations and
warranties set forth in Article 6; or (ii) any breach of or default
under the Terms of Use by HSW or its subcontractors, except where such
liabilities, losses, damages, costs and expenses arise out of the gross
negligence, willful misconduct or bad faith of, or the violation of any
applicable law by, or willful breach by Client of any of Client’s obligations
under this Agreement. Client agrees to provide HSW with prompt written notice
of any third party claim subject to indemnification hereunder, allowing HSW to
have sole control of the defense of such claim and any resulting disposition or
settlement thereof; provided, however, that Client may participate in the
defense of a claim at its own expense. Notwithstanding the foregoing, any delay
by Client in providing notice as required hereunder shall not relieve HSW of
its indemnification obligations except and only to the extent that HSW was
prejudiced by such delay.

 

7.2                                 By
Client.   Client agrees to defend,
indemnify and hold harmless HSW, its officers, directors, employees, agents and
contractors against any and all claims, demands, causes of action, judgments,
damages, penalties, losses, liabilities, costs and expenses (including
reasonable attorney fees’ and court costs) arising out of, resulting from or
related to (i) Client’s breach of the covenants, representations and warranties
set forth in Article 6; or (ii) any breach of or default under the Terms
of Use by Client or its subcontractors or licensees, except where such
liabilities, losses, damages, costs and expenses arise out of the gross
negligence, willful misconduct or bad faith of, or the violation of any
applicable law by, or willful breach by HSW, its affiliates, its consultants or
its subcontractors of any of HSW’s obligations under this Agreement. HSW agrees
to provide Client with prompt written notice of any third party claim subject
to indemnification hereunder, allowing Client to have sole control of the
defense of such

 

4

 

claim and any resulting disposition or settlement thereof; provided,
however, that HSW may participate in the defense of a claim at its own expense.
Notwithstanding the foregoing, any delay by HSW in providing notice as required
hereunder shall not relieve Client of its indemnification obligations except
and only to the extent that Client was prejudiced by such delay.

 

8.                                      LIMITATION
OF LIABILITY

 

8.1                                 Exclusion
of Damages.   Except for (i) the Parties’ respective
indemnification obligations set forth in this Agreement; and (ii) damages
arising out of either Party’s gross negligence or willful misconduct, neither
Party shall be liable to the other under any legal theory or cause of action
for any special, incidental, consequential or other indirect damages, including,
without limitation, damages for lost profits, even if the Party has been
advised of the possibility of such damages.

 

8.2                                 Limitation
of Damages.   Except with respect to
HSW’s (or its subcontractors’) gross negligence or willful or intentional misconduct,
HSW’s total aggregate liability arising from or related to the Services or this
Agreement shall be limited to the proven direct damages not to exceed the Fees
actually paid to HSW by Client hereunder for Services rendered during the first
twelve (12) months of the Term.

 

9.                                      MISCELLANEOUS

 

9.1                                 Assignment.
  Neither Party shall assign this
Agreement, in whole or in part, by operation or law or otherwise, without the
prior written consent of the other Party; provided, however, HSW may, without
Client’s consent, assign this Agreement or any of its rights or obligations
hereunder upon a change of control. Any purported assignment in violation
hereof shall be void.

 

9.2                                 Force
Majeure.   The obligations of either
Party shall be suspended during the period and to the extent that either Party,
is prevented or hindered from complying therewith by any of the following
causes beyond its reasonable control: 
(i) acts of God, (ii) weather, fire or explosion, (iii) war, invasion,
riot or other civil unrest, (iv) governmental laws, orders or restrictions, (v)
actions, embargoes or blockades in effect on or after the date of this
Agreement, (vi) action by any regulatory authority, (vii) national or regional
emergency, (viii) strikes, labor stoppages or slowdowns or other industrial
disturbances, (ix) power failures, fiber cuts, network disturbances, shortage
of adequate power or transportation facilities, or (x) any other event which is
beyond the reasonable control of such party. In such event, the Party whose
performance is affected thereby shall give notice of suspension as soon as
reasonably practicable to the other stating the date and extent of such
suspension and the cause thereof, and such Party shall resume the performance
of such obligations as soon as reasonably practicable after the removal of the
cause.

 

9.3                                 Subcontractors.
  HSW shall be entitled to perform any or
all of the Services through one or more subcontractors, provided that HSW
remains solely responsible to Client for the performance of the Services and
solely liable to Client for the acts and omissions of any subcontractor.

 

5

 

9.4                                 Notices.
  All notices, consents and other
communications hereunder must be in writing and delivered to the other Party at
the address set below by personal delivery, certified mail (postage pre-paid),
overnight delivery service or by facsimile with verified receipt of
transmission, and shall be effective upon receipt (or when delivery is refused).
Each Party may change its address for receipt of notice by giving notice of the
new address to the other Party.

 

If to HSW:                                      HowStuffWorks,
Inc.

One Capital City Plaza

3350 Peachtree Road, Suite 1500

Atlanta, Georgia 30326
 Phone: 
404-760-4729

Fax:  404-760-3458

Attention:  Legal Department

 

If to Client:                                   HSW International, Inc.

3350 Peachtree Road, Suite 1150

Atlanta, Georgia 30326

Phone:

Fax:

Attention: Chief Executive Officer

 

9.5                                 Confidentiality.
  In connection with this Agreement, the
Parties may receive or have access to nonpublic information of the other Party
(“Confidential Information”). The Parties agree (i) to keep in
confidence and trust all of the other Party’s Confidential Information; (ii)
not to use the other Party’s Confidential Information other than as expressly permitted
under the terms of this Agreement or any other Agreement between the Parties;
(iii) to take all reasonable steps to prevent unauthorized disclosure or use of
the other Party’s Confidential Information, and to prevent it from falling into
the public domain or the possession of unauthorized persons; and (iv) to
disclose the other Party’s Confidential Information only to its employees or
agents who need access to such Confidential Information for purposes of meeting
and carrying out the  obligations hereunder
and who have executed a confidentiality agreement which protects the
confidentiality of the other Party’s Confidential Information. As used herein,
Confidential Information shall not include information that is: (i) available
to the public other than by a breach of this Agreement; (ii) rightfully
received from a third party not in breach of an obligation of confidentiality;
(iii) independently developed by the receiving Party without access to the
other Party’s Confidential Information; (iv) rightfully known to the receiving
Party prior to the time of disclosure; or (v) produced in compliance with
applicable law or a court order, provided the disclosing Party is given
reasonable notice of such law or order and an opportunity to attempt to
preclude or limit such production.

 

9.6                                 Waiver.
  Neither Party shall be deemed, by any
act or omission, to have waived any of its rights or remedies hereunder unless
such waiver is in writing and signed by the waiving Party, and then only to the
extent specifically set forth in such writing. A waiver with reference to one
event shall not be construed as continuing or as a bar to or waiver of any
right or remedy as to a subsequent event.

 

6

 

9.7                                 Severability.   If, at
any time, any provision hereof is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions hereof nor the legality,
validity or enforceability of such provision under the law of any other
jurisdiction shall in any way be affected or impaired thereby. The invalid
provision shall be replaced by a valid one that achieves to the extent possible
the original purpose and commercial goal of the invalid provision.

 

9.8                                 Governing
Law; Jurisdiction.   This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, excluding its choice of laws provisions. The Parties agree that the
exclusive venue and jurisdiction for any actions or disputes arising from this
Agreement shall be a federal or state court in New York.

 

9.9                                 Relationship
of the Parties.   Nothing in this Agreement shall establish any
relationship of partnership, joint venture, employment, franchise, or agency
between the Parties. Nothing in this Agreement shall give either Party the
power to bind the other Party or incur obligations on the other Party’s behalf
without the other Party’s prior written consent. The Parties shall act as
independent contractors and not as an agent of the other in performing the
Services and in connection with this Agreement, maintaining control over its
employees, its subcontractors and their employees and complying with all
withholding of income at source requirements, whether federal, state, local or
foreign. No employee of either Party shall be considered an employee of the
other Party.

 

9.10                           Headings.   Headings
are used for purposes of reference only and shall not affect the interpretation
of this Agreement.

 

9.11                           Construction.
  This Agreement shall be construed and
interpreted fairly, in accordance with the plain meaning of its terms, and
there shall be no presumption or inference against the Party drafting this
Agreement in construing or interpreting the provisions hereof.

 

9.12                           Counterparts.
  This Agreement may be executed in
counterparts all of which taken together shall constitute one single agreement
between the Parties.

 

9.13                           Entire
Agreement.   This Agreement constitutes the entire
agreement between the Parties relating to the subject matter hereof and
supersede all prior communications, whether written or oral. This Agreement may
be amended only in a written document signed by both Parties.

 

[Signatures on following page]

 

7

 

[Signature page to Services Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement as of the Effective Date.

 

	
  HSW:

  	
  Client:

  
	
   

  
	
  HowStuffWorks, Inc.

  	
  HSW International, Inc.

  
	
   

  
	
  By:

  	
  /s/ Jeffrey Arnold

  	
   

  	
  By:

  	
  /s/ Bradley Zimmer

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Jeffrey Arnold

  	
   

  	
  Name:

  	
  Bradley Zimmer

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Chief Executive Officer

  	
   

  	
  Title:

  	
  Secretary

  	
   

  
											

 

8

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