1.01. Entry into a Material Definitive Agreement.
November 26, 2008, HSW International, Inc., or HSWI, entered into a merger
agreement pursuant to which HSWI agreed to acquire all of the capital securities
of Daily Strength, Inc. in exchange for cash. The transaction was
structured as a reverse triangular merger in which Daily Strength became the
wholly owned subsidiary of HSWI. The transaction closed
simultaneously on November 26, 2008.
paid $3.125 million at closing. HSWI is contingently obligated to pay
an earnout of up to an additional $3.525 million. The earnout is
payable by HSWI if in any two months before November 26, 2010, the total page
social media webpages or section of an HSWI health-focused website
a designated number of page views. The earnout will be paid in five
equal installments, provided that the level of page views is achieved for each
installment. The level of page views increases for each
Strength agreed in the merger agreement to indemnify HSWI for breach of any
representation, warranty or covenant contained in the merger agreement and other
losses and expenses arising out of the merger agreement, if any. An
amount equal to 45% of the earnout is available to cover indemnity claims. In
addition, $150,000 of the purchase price will be held in escrow for two years
after the closing to pay indemnity and other claims.
is no material relationship between HSWI or Daily Strength or any of their
affiliates, other than the merger agreement.
copy of the merger agreement is filed as an exhibit to this
Current Report on Form 8-K, including Exhibit 99.1, contains
forward-looking statements, including those regarding expected benefits of the
transaction described above. Actual results could differ
* The registrant has requested confidential treatment with respect to
certain portions of this exhibit. Such portions have been omitted from
this exhibit and filed seperately with the U.S. Securities and Exchange