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Exhibit 2.3
Execution Copy
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
among
HSW INTERNATIONAL, INC.
HOWSTUFFWORKS, INC.
and
WEI ZHOU
Dated January 29, 2007
Table of
Contents
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Page
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ARTICLE 1
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CERTAIN
DEFINITIONS
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SECTION 1.01 Certain Definitions
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2
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ARTICLE 2
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RESTRICTIONS ON
TRANSFERABILITY
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SECTION 2.01 Restrictions on HSW
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SECTION 2.02 Restrictions on WEI ZHOU
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SECTION 2.03 Improper Sale or
Encumbrance
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SECTION 2.04 Restrictive Legends
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ARTICLE 3
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CORPORATE
GOVERNANCE
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SECTION 3.01 Composition of the Board, Committees
and Management
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SECTION 3.02 Agreement with Respect to Voting of
Common Stock
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ARTICLE 4
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CONFIDENTIALITY
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SECTION 4.01 Confidentiality
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SECTION 4.02 Furnishing of Information
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ARTICLE 5
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OTHER MARKETS,
ETC.
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SECTION 5.01 Other Markets. (a)
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SECTION 5.02 Additional Content
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SECTION 5.03 Non-Competition
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ARTICLE 6
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MISCELLANEOUS
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SECTION 6.01 Termination
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SECTION 6.02 Notices
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SECTION 6.03 Amendments and Waivers
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SECTION 6.04 Binding Effect
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SECTION 6.05 Expenses
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SECTION 6.06 Governing Law;
Jurisdiction
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SECTION 6.07 Specific Performance
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SECTION 6.08 Counterparts
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SECTION 6.09 Entire Agreement
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SECTION 6.10 Headings
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SECTION 6.11 Severability
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SECTION 6.12 Public Announcements
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SECTION 6.13 Cumulative Remedies
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SECTION 6.14 Interpretation
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SECTION 6.15 No Third Party
Beneficiaries
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SECTION 6.16 Construction
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ii
AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
This Amended and Restated Stockholders Agreement (this "
Agreement ") is entered into as of this 29th day of January,
2007 to be effective as of the Effective Time, by and among HSW
INTERNATIONAL, INC., a Delaware corporation (the " Company
"), HOWSTUFFWORKS, INC., a Delaware corporation (" HSW "),
and WEI ZHOU, a citizen of Germany ("WEI ZHOU").
W I T N E S S E T H :
WHEREAS, the Company, HSW and WEI ZHOU entered into that certain
Stockholders Agreement dated as of April 20, 2006, to be effective
as of the Effective Date (the "Original Stockholders
Agreement");
WHEREAS, the Company, HSW and WEI ZHOU now desire to amend and
restate the provisions of the Original Stockholders Agreement as
set forth herein.
WHEREAS, the Company, HSW, INTAC International, Inc., a Nevada
corporation (" INTAC "), and HSW International Merger
Corporation, a Nevada corporation (" Merger Sub "), have
entered into an Agreement and Plan of Merger dated as of April 20,
2006, as amended by that certain First Amendment to Agreement and
Plan of Merger dated as of the date hereof (the " Merger
Agreement "), pursuant to which (i) HSW will contribute certain
assets, properties and rights to the Company in exchange for shares
of the common stock, par value $0.001 per share, of the Company
(the " Common Stock "), (ii) the Merger Sub will merge into
and with INTAC with INTAC surviving the merger, and (iii) all
shareholders of INTAC will receive shares of Common Stock upon the
Closing;
WHEREAS, upon consummation of the transactions contemplated by
the Merger Agreement, each of HSW and WEI ZHOU will become a
significant stockholder of the Company, and will Beneficially Own
shares of Common Stock (each of HSW and WEI ZHOU, a "
Stockholder ");
WHEREAS, at the Closing, the Company and HSW will be entering
into two Contribution Agreements (the " Contribution
Agreements "), pursuant to which HSW will contribute to the
Company, among other things, certain Contributed Content (as
defined therein); and
WHEREAS, the Company, HSW and WEI ZHOU wish to enter into this
Agreement to set forth their agreement as to the matters set forth
herein with respect to, among other things, representation on the
Company’s Board, the Sale of, or creation, incurrence or
assumption of an Encumbrance on, the shares of Common Stock and
acquisition by HSW and WEI ZHOU of additional shares of Common
Stock.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company, HSW and WEI ZHOU hereby agree as
follows:
ARTICLE 1
CERTAIN DEFINITIONS
SECTION 1.01 Certain Definitions . (a)
As used in this Agreement, the following terms shall have the
following respective meanings:
" Affiliate " means, with respect to any specified
Person, any Person that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common
Control with, such specified Person.
" Applicable Restricted Period " means (a) with respect
to HSW, the period ending (i) twelve (12) months after the Closing
with respect to the first one-third ( 1
/ 3 ) of
the shares of the HSW Stock, (ii) eighteen (18) months after the
Closing with respect to the next one-third ( 1 / 3
) of the shares of the HSW Stock, (iii) twenty-four
(24) months after the Closing with respect to the remaining
one-third ( 1 /
3 ) of the shares of the HSW
Stock, and (b) with respect to WEI ZHOU, the period ending twelve
(12) months after the Closing.
" Beneficially Own " has the meaning given such term in
Rule 13d-3 under the Exchange Act; provided that
Beneficial Ownership under Rule 13d-3(d)(1)(i) shall be determined
based on whether a Person has a right to acquire Beneficial
Ownership irrespective of whether such right is exercisable within
60 days of the time of determination.
" Board " means the board of directors of the
Company.
" Closing " has the meaning given to such term in the
Merger Agreement.
" Commission " means the Securities and Exchange
Commission.
" Control " (including the terms " Controlled by "
and " under common Control with ") means, the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, as trustee or executor,
by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power
to elect a majority of the board of directors or similar body
governing the affairs of such Person.
" Effective Time " has the meaning given to such term in
the Merger Agreement.
" Encumbrance " means any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use, or other
encumbrance of any kind.
" Exchange Act " means the United States Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
" Fully Diluted Basis " means, in respect of the Common
Stock, the method of calculating the number of shares of Common
Stock outstanding on an applicable measurement date, pursuant to
which the following shares shall be deemed to be outstanding: (i)
all shares of Common Stock outstanding on such measurement date,
(ii) all shares of Common Stock issuable upon conversion of
outstanding shares of any convertible or exchangeable securities of
the
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Company and (iii) all shares of Common Stock
issuable pursuant to any outstanding stock options or warrants of
the Company.
" Law " means any statute, law, ordinance, regulation,
rule, code, executive order, injunction, judgment, decree or other
order issued or promulgated by any national, supranational, state,
federal, provincial, local or municipal government or any
administrative or regulatory body with authority therefrom with
jurisdiction over the Company, HSW or WEI ZHOU, as the case may
be.
" Permitted Transferee " means, with respect to a
specified Person, any Affiliate of such Person, provided
that such Person is not a competitor of the Company, as reasonably
determined by the Board.
" Person " means, any individual, partnership, firm,
corporation, 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.
The terms " register ," " registered " and "
registration " refer to a registration effected by preparing
and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
" Representative " means, as to any person, such
person’s Affiliates and its and their directors, officers,
employees, agents, advisors (including, without limitation,
financial advisors, counsel and accountants).
" Sale " means, in respect of any Common Stock, property
or other asset, any sale, assignment, transfer, distribution or
other disposition thereof or of a participation therein, or other
conveyance of legal or beneficial interest therein.
" Securities Act " means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
" Subsidiary " or " Subsidiaries " of any Person
means any corporation, partnership, limited liability company,
joint venture, association or other legal entity of which such
Person (either alone or together with any other Subsidiary), owns,
directly or indirectly, more than 50% of the stock or other equity
interests, the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of
such corporation or other legal entity.
" Territories " means, collectively, each "Territory" as
defined in the Contribution Agreements.
(b)
Each of the following terms is defined in the
Section set forth opposite such term:
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Term
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Section
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Agreement
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Company
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Common Stock
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Confidential Information
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Contribution Agreements
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HSW
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HSW Designees
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HSW Stock
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INTAC
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Merger Agreement
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Merger Sub
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Other Market Transaction
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Stockholder
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WEI ZHOU Designees
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ARTICLE 2
RESTRICTIONS ON TRANSFERABILITY
SECTION 2.01 Restrictions on HSW . (a)
HSW understands and agrees that the shares of
Common Stock issued to HSW pursuant to the Merger Agreement (the
"HSW Stock") will not have been registered for resale under the
Securities Act. During the Applicable Restricted Period, HSW
may not make or solicit any Sale of, or create, incur or assume any
Encumbrance with respect to, the HSW Stock; provided that,
during the Applicable Restricted Period, HSW may make or solicit a
Sale to a Permitted Transferee and may pledge an interest in the
HSW Stock to High River Limited Partnership and/or StuffWorks, LLC
pursuant to a Stock Pledge Agreement dated as of April 20, 2006 or
to one or more other lenders pursuant to a Stock Pledge Agreement
entered into by HSW in connection with any transaction in which the
debt currently owed by HSW to High River Limited Partnership and/or
StuffWorks, LLC is refinanced (pursuant to which the applicable
pledgee shall succeed to all of the rights and obligations of HSW
under this Agreement with respect to any shares of HSW Stock
foreclosed upon thereunder); provided , further ,
that the restrictions contained in this Section 2.01 shall
terminate and be of no further force and effect (i) with respect to
one-third ( 1 /
3 ) of the shares of the HSW
Stock, on the date that is twelve (12) months after the Closing ,
(ii) with respect to the next one-third ( 1 / 3
) of the shares of the HSW Stock, on the date that
is eighteen (18) months after the Closing, and (iii) with respect
to the remaining one-third ( 1
/ 3 ) of
the shares of the HSW Stock, on the date that is twenty-four (24)
months after the Closing.
(b)
No Sale of HSW Stock to a Permitted Transferee shall
be effective if a purpose or effect of such transfer shall have
been to circumvent the provisions of this Section 2.01.
HSW shall remain responsible for the performance of this Agreement
by each Permitted Transferee of HSW to which HSW Stock is
transferred. If any Permitted Transferee to which HSW Stock
is transferred pursuant to Section 2.01(a) ceases to be a
Permitted Transferee of HSW, such Person shall reconvey such Stock
to HSW immediately before such Person ceases
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to be a Permitted Transferee of HSW so long as
such Person knows of its upcoming change of status immediately
prior thereto. If such change of status is not known until
after its occurrence, the former Permitted Transferee shall make
such transfer to HSW as soon as is practicable after the former
Permitted Transferee receives notice thereof.
(c)
HSW agrees that it will not make or solicit any Sale
of, or create, incur or assume any Encumbrance with respect to, its
interest in any Permitted Transferee to which it has transferred
HSW Stock unless prior thereto HSW Stock held by such entity is
transferred to HSW or to one or more Permitted
Transferees.
SECTION 2.02 Restrictions on WEI ZHOU . WEI
ZHOU understands and agrees that the shares of Common Stock issued
to him pursuant to the Merger Agreement will not have been
registered for resale under the Securities Act. During the
Applicable Restricted Period, WEI ZHOU may not make or solicit any
Sale of, or create, incur or assume any Encumbrance with respect
to, at least four million (4,000,000) shares of the Common Stock
issued to WEI ZHOU pursuant to the Merger Agreement (the
"Restricted Zhou Stock"); provided that the restrictions
contained in this Section 2.02 shall terminate and be of no further
force and effect on the date that is twelve (12) months after the
Closing.
SECTION 2.03 Improper Sale or Encumbrance .
Any attempt not in compliance with this Agreement to make any Sale
of, or create, incur or assume any Encumbrance with respect to, any
shares of Common Stock shall be null and void and of no force and
effect, the purported transferee shall have no rights or privileges
in or with respect to the Company, and the Company shall not give
any effect in the Company’s stock records to such attempted
Sale or Encumbrance. Furthermore, HSW or WEI ZHOU, as
applicable, and the other parties engaging or attempting to engage
in such Sale or Encumbrance shall indemnify and hold harmless the
Company and the other Stockholder from all losses that the Company
and the other Stockholder may incur (including, without limitation,
incremental tax liability and lawyers’ fees and expenses) in
enforcing the provisions of this Agreement.
SECTION 2.04 Restrictive Legends . (a)
Each certificate representing the shares of HSW Stock, each
certificate representing any shares of Common Stock acquired by HSW
following its acquisition of Common Stock pursuant to the Merger
Agreement and each certificate representing the Restricted Zhou
Stock shall be stamped or otherwise imprinted with legends in
substantially the following form (in addition to any legends
required by agreement or by applicable state securities laws):
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(i)
THE SHARES REPRESENTED BY THIS CERTIFICATE GENERALLY
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
APPLICABLE EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SAID ACT.
(ii)
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS UNDER THE TERMS OF AN AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT DATED
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JANUARY , 2007,
AS AMENDED FROM TIME TO TIME, BETWEEN THE ISSUER AND THE HOLDER
HEREOF AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF THAT
AGREEMENT.
(b)
Each Stockholder consents to the Company making a
notation on its records and giving instructions to any transfer
agent of its capital stock in order to implement the restrictions
on transfer established in this Agreement.
(c)
If any HSW Stock or any Restricted Zhou Stock ceases
to be subject to any and all restrictions on Sale or Encumbrance
set forth in Section 2.01 or 2.02 of this Agreement, as
applicable, or the other provisions set forth in this Agreement,
the Company, upon the written request of the holder thereof, shall
issue to such holder a new certificate evidencing such HSW Stock or
such Restricted Zhou Stock, as applicable, without the first
paragraph or without the second paragraph, as applicable, of the
legends required by Section 2.04 endorsed thereon.
ARTICLE 3
CORPORATE GOVERNANCE
SECTION 3.01 Composition of the Board, Committees and
Management . (a) From and after the Closing, the
number of directors comprising the Board shall be seven (7), or
such number of directors as may be determined by the Board in
accordance with the Amended and Restated Certificate of
Incorporation and the Amended and Restated Bylaws of the Company,
effective as of the Closing. At all times, a majority of the
directors on the Board shall be independent directors and the
independent directors (including those designated by any
Stockholder) shall meet all requirements regarding the independence
of directors as may be applicable to the Company pursuant to
applicable Law or the rules of the stock exchange on which the
shares of Common Stock are listed.
As of the Closing, HSW, WEI ZHOU and the Company, through the
Board, shall take all such action as may be necessary (i) to cause
the persons designated by each Stockholder as set forth in
Exhibit 3.01(a) to be duly appointed to the Board, each to
serve until the next annual election of directors of the Company
(unless any such person originally designated by a Stockholder is
unable to serve in such capacity, in which event such Stockholder
shall designate a substitute individual), and (ii) to cause the
Special Committee, the Compensation Committee and the Audit
Committee of the Board to be duly established, each composed of the
persons set forth in Exhibit 3.01(a) and to serve for such
term during which such person remains a director of the
Company. HSW shall have the right to designate five (5)
directors (three (3) of whom shall be independent directors) and
such directors designated by HSW shall be referred to herein as the
" HSW Designees ". WEI ZHOU shall have the right to
designate two (2)
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