Exhibit 10.2

 

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

 

Void after 5:00 p.m. (New York time) on the 16th day of June, 2014.

 

Number of Warrants:

Warrant Certificate No. Class A-   

 

ANSWERS CORPORATION

 

(A corporation existing under the laws of the State of Delaware)

 

THIS  COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received,                (the “Holder”), is entitled, upon the terms and subject
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the date hereof and on or prior to 5:00 p.m. (New York time) on
June 16, 2014 (the “Expiry Time”) but not thereafter, to subscribe for and
purchase from Answers Corporation, a Delaware corporation (the “Company”), up to
           shares (the “Warrant Shares”) of Common Stock, par value $.001 per
share, of the Company (the “Common Stock”), subject to adjustment as provided
herein.  The purchase price of one share of Common Stock under this Warrant
shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1.                                            Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement (the “Securities Purchase
Agreement”), dated June 16, 2008, among the Company and the purchasers signatory
thereto.

 

Section 2.                                            Exercise.

 

a)                                           Exercise of Warrant.  Exercise of
the purchase rights represented by this Warrant may be made, in whole or in
part, at any time or times on or after the date of issuance of this Warrant and
on or before the Expiry Time by delivery to the principal office of the Company
of a duly executed copy of the Notice of Exercise Form annexed hereto (or to
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of

 

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the Company); provided, however, within five (5) trading days of the date said
Notice of Exercise is delivered to the Company, if this Warrant is exercised in
full, the Holder shall have surrendered this Warrant to the Company and the
Company shall have received  payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank.  Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full.  Partial exercises of this Warrant resulting
in purchases of a portion of the total number of Warrant Shares available
hereunder shall have the effect of lowering the outstanding number of Warrant
Shares purchasable hereunder in an amount equal to the applicable number of
Warrant Shares purchased.  The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. 
The Company shall deliver any objection to any Notice of Exercise Form within
two (2) Business Days of receipt of such notice.  The Holder and any assignee,
by acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.

 

Immediately prior to the expiration of the Expiry Period, the portion of this
Warrant not exercised prior thereto shall automatically be deemed to be
exercised in full in the manner set forth in Section 2(c), without any further
action on behalf of the Holder; provided, however, that in the event that the
cashless exercise formula set forth in Section 2(c) yields a result that is less
than or equal to zero, then the unexercised portion of this Warrant shall
automatically terminate and become void.  The Company may not call or redeem any
portion of this Warrant without the prior written consent of the affected
Holder.

 

b)            Exercise Price. The exercise price of the Common Stock under this
Warrant shall be $4.95 per share, subject to adjustment hereunder.

 

c)             Cashless Exercise. This Warrant may also be exercised by means of
a “cashless exercise” in which the Holder shall be entitled to receive a
certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B)*(X)] by (A), where:

 

(A) =      the VWAP on the trading day immediately preceding the date of such
election;

 

(B) =      the Exercise Price of this Warrant, as adjusted; and

 

(X) =      the number of Warrant Shares issuable upon exercise of this Warrant
in accordance with the terms of this Warrant by means of a cash exercise rather
than a cashless exercise.

 

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THE “VWAP” MEANS, FOR ANY DATE, THE PRICE DETERMINED BY THE FIRST OF THE
FOLLOWING CLAUSES THAT APPLIES:  (A) IF THE COMMON STOCK IS THEN LISTED OR
QUOTED ON A TRADING MARKET, THE DAILY VOLUME WEIGHTED AVERAGE PRICE OF THE
COMMON STOCK FOR SUCH DATE (OR THE NEAREST PRECEDING DATE) ON THE TRADING MARKET
ON WHICH THE COMMON STOCK IS THEN LISTED OR QUOTED AS REPORTED BY BLOOMBERG
FINANCIAL L.P. (BASED ON A TRADING DAY FROM 9:30 A.M. EASTERN TIME TO 4:02 P.M.
EASTERN TIME);  (B) THE VOLUME WEIGHTED AVERAGE PRICE OF THE COMMON STOCK FOR
SUCH DATE (OR THE NEAREST PRECEDING DATE) ON THE OTC BULLETIN BOARD OR (C) IF
THE COMMON STOCK IS NOT THEN LISTED OR QUOTED ON THE OTC BULLETIN BOARD AND IF
PRICES FOR THE COMMON STOCK ARE THEN REPORTED IN THE “PINK SHEETS” PUBLISHED BY
THE PINK SHEETS, LLC (OR A SIMILAR ORGANIZATION OR AGENCY SUCCEEDING TO ITS
FUNCTIONS OF REPORTING PRICES), THE MOST RECENT BID PRICE PER SHARE OF THE
COMMON STOCK SO REPORTED; OR (D) IN ALL OTHER CASES, THE FAIR MARKET VALUE OF A
SHARE OF COMMON STOCK AS DETERMINED BY AN INDEPENDENT APPRAISER SELECTED IN GOOD
FAITH BY THE  HOLDER AND REASONABLY ACCEPTABLE TO THE COMPANY.

 

d)                                     Trading Market Restrictions. 
Notwithstanding anything herein to the contrary, the Company shall not issue to
any Holder any shares of Common Stock, including pursuant to any rights herein,
including, without limitation, any exercise rights, to the extent such shares,
when added to the number of shares of Common Stock issued (A) upon conversion of
any shares of Series A Preferred Stock and (B) upon exercise of any Common Stock
Purchase Warrants issued pursuant to the Securities Purchase Agreement would
cause the total number of shares of Common Stock then beneficially owned by such
Holder and any Persons whose beneficial ownership of Common Stock would be
aggregated with such Holder for purposes of Section 13(d) of the Securities
Exchange Act to exceed 19.999% of the total number of outstanding shares of
Common Stock of the Company at the time of such issuance, or such greater number
of shares of Common Stock permitted pursuant to the corporate governance
rules of the Trading Market that is at the time the principal trading exchange
or market for the Common Stock, based upon share volume, as confirmed in writing
by counsel to the Company (the “Maximum Aggregate Share Amount”), unless and
until the Company obtains stockholder approval permitting such issuances in
accordance with the applicable Trading Market rules (“Stockholder Approval”). 
For purposes of this Section 2(d), beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder.    If on any attempted exercise of this Warrant, the
issuance of Warrant Shares would exceed the Maximum Aggregate Share Amount and
the Company shall not have previously obtained Stockholder Approval at the time
of exercise, then the Company shall issue to the Holder requesting a Warrant
exercise such number of Warrant Shares as may be issued below the Maximum
Aggregate Share Amount and, with respect to the remainder of the aggregate
number of Warrant Shares, this Warrant shall not be exercisable until and unless
Stockholder Approval has been obtained.

 

e)                                      Mechanics of Exercise.

 

i.                  Authorization of Warrant Shares.  The Company covenants that
all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon exercise of the

 

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purchase rights represented by this Warrant and payment to the Company of the
purchase price therefor, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

 

ii.               Delivery of Certificates Upon Exercise.  Certificates for
shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder’s prime broker with
the Depository Trust Company through its Deposit Withdrawal Agent Commission
(“DWAC”) system if the Company is a participant in such system, and otherwise by
physical delivery to the address specified by the Holder in the Notice of
Exercise within three (3) Trading Days from the delivery to the Company of the
Notice of Exercise Form, surrender of this Warrant (if required) and payment of
the aggregate  Exercise Price (unless exercised by means of a cashless exercise
pursuant to Section 2(c)) (“Warrant Share Delivery Date”).  This Warrant shall
be deemed to have been exercised on the date the Exercise Price is received by
the Company (or in the case of a cashless exercise pursuant to Section 2(c), the
date this Warrant is surrendered).  If all or any part of a Warrant is exercised
at a time when there is an effective registration statement to cover the
issuance or resale of the Warrant Shares or if the legend is not required under
applicable securities laws, such Warrant Shares shall be issued free of all
legends on or before the Warrant Share Delivery Date.  The Warrant Shares shall
be deemed to have been issued, and Holder or any other Person so designated to
be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised by
payment to the Company of the Exercise Price, or the cancellation of shares
pursuant to Section 2(c) hereof, and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(d)(vi) prior to the issuance of such
shares, have been paid irrespective of the date such Warrant Shares are credited
to the Holder’s DWAC account, or the date of delivery of certificates evidencing
the Warrant Shares, as the case may be.

 

iii.            Delivery of New Warrants Upon Exercise.  If this Warrant shall
have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the
certificate or certificates representing Warrant Shares, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased Warrant
Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.

 

iv.           Rescission Rights.  If the Company fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the

 

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Warrant Shares pursuant to this Section 2(e) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.

 

v.              Buy-In.   In addition to any other rights available to the
Holder, if by the Warrant Share Delivery Date the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to
Section 2(e)(ii), and if after such date and prior to the receipt of such
Warrant Shares, the Holder is required by its broker to purchase (in an open
market transaction or otherwise), or the Holder’s broker purchases,  shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant
Shares which the Holder was entitled to receive upon such exercise relating to
such Warrant Share Delivery Date (a “Buy-In”), then the Company shall (1) pay in
cash to the Holder (in addition to any other remedies available to or elected by
such Holder) the amount by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the product of (A) the aggregate number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the
exercise at issue and (B) the actual sale price at which the sell order giving
rise to such purchase obligation was executed (including any brokerage
commissions) and (2) at the option of the Holder, either reinstate the portion
of the Warrant and equivalent number of Warrant Shares for which such exercise
was not honored or deliver to the Holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its exercise
and delivery obligations hereunder.  The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In.

 

vi.           No Fractional Shares or Scrip.  No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.  As to any fraction of a share that Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

 

vii.        Charges, Taxes and Expenses.  Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.

 

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f)                                             The Company’s obligations to
issue and deliver Warrant Shares in accordance with the terms hereof are
absolute and unconditional, irrespective of any action or inaction by the Holder
to enforce the same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to enforce the
same, or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver the
Warrant Shares upon exercise of the Warrant as required pursuant to the terms
hereof.

 

Section 3.                                            Certain Adjustments.

 

a)                                           Stock Dividends and Splits. If the
Company, at any time while this Warrant is outstanding: (A) pays a stock
dividend or otherwise makes a distribution or distributions on shares of its
Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company pursuant to this Warrant),
(B) subdivides outstanding shares of Common Stock into a larger number of
shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted.  Any adjustment made
pursuant to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.

 

b)                                          Subsequent Equity Sales.  If the
Company shall sell or grant any option to purchase or otherwise dispose of or
issue any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock, at an effective price per share less than the
then Exercise Price (such lower price, the “Base Share Price” and such issuances
collectively, a “Dilutive Issuance”), as adjusted hereunder (if the holder of
the Common Stock or Common Stock Equivalents so issued shall at any time,
whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which is issued in connection with such issuance, be
entitled to receive shares of Common Stock at an effective price per share which
is less than the Exercise Price, such issuance shall be deemed to have occurred
for less than the Exercise Price), then, the Exercise Price shall be reduced by
multiplying the Exercise Price by a fraction, the numerator of which is the

 

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number of shares of Common Stock issued and outstanding immediately prior to the
Dilutive Issuance plus the number of shares of Common Stock and Common Stock
Equivalents which the aggregate consideration received or receivable by the
Company in connection with such Dilutive Issuance would purchase at the then
effective Exercise Price, and the denominator of which shall be the sum of the
number of shares of Common Stock issued and outstanding immediately prior to the
Dilutive Issuance plus the number of shares of Common Stock and Common Stock
Equivalents so issued or issuable in connection with the Dilutive Issuance. Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued.  The Company shall notify the Holder in writing, no later than the
Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable issuance
price, or of applicable reset price, exchange price, conversion price and other
pricing terms (such notice the “Dilutive Issuance Notice”).  For purposes of
clarification, whether or not the Company provides a Dilutive Issuance Notice
pursuant to this Section 3(b), upon the occurrence of any Dilutive Issuance,
after the date of such Dilutive Issuance the Holder is entitled to receive a
number of Warrant Shares calculated based upon the Base Share Price regardless
of whether the Holder accurately refers to the Base Share Price in the Notice of
Exercise.

 

c)                                      Pro Rata Distributions.  If the Company,
at any time prior to the Expiry Time, shall declare, or distribute any dividend
or other distribution to all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock, then in each such case the Exercise Price shall be
adjusted by multiplying the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution by a fraction of which the denominator shall be the VWAP determined
as of the record date mentioned above, and of which the numerator shall be such
VWAP on such record date less the then per share fair market value at such
record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of the Common Stock as
determined by the Board of Directors of the Company in good faith.  The
adjustment shall be described in a statement provided to the Holder.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

 

d)                                     Fundamental Transaction. If, at any time
while this Warrant is outstanding, (A) the Company effects any merger or
consolidation of the Company with or into another Person, (B) the Company
effects any sale of all or substantially all of its assets in one or a series of
related transactions, (C) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their shares for other securities,
cash or property, or (D) the Company effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise immediately prior
to the occurrence of such Fundamental

 

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Transaction, at the option of the Holder, (a) the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula.  For purposes of any such
exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or surviving
entity in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
exercise such warrant into Alternate Consideration. The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this Section 3(d) and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction.

 

e)                                      Calculations. All calculations under
this Section 3 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be. For purposes of this Section 3, the number of shares
of Common Stock deemed to be issued and outstanding as of a given date shall be
the sum of the number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.

 

f)                                        Voluntary Adjustment By Company.
Subject to the Exercise Floor Price, the Company may at any time during the term
of this Warrant reduce the then current Exercise Price to any amount and for any
period of time deemed appropriate by the Board of Directors of the Company
(including the Preferred Director, as such term is defined in the Certificate of
Designation) and with the approval of the Holder.

 

g)                                     Notice to Holders.

 

i.                  Adjustment to Exercise Price. Whenever the Exercise Price is
adjusted pursuant to this Section 3, the Company shall promptly mail to each
Holder a notice setting forth the Exercise Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.

 

ii.               Notice to Allow Exercise by Holder. If (A) the Company shall
declare a dividend (or any other distribution) on the Common Stock;

 

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(B) the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock; (C) the Company shall authorize the granting to
all holders of the Common Stock rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights; (D) the approval of
any stockholders of the Company shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property; (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 10 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, in each case that such information
shall be made known to the public through a press release, filing with the
Commission, or other public announcement prior to or in conjunction with such
notice being provided to the Holder, and provided further that the failure to
mail such notice or any defect therein or in the mailing thereof shall not
affect the validity of the corporate action required to be specified in such
notice.  The Holder is entitled to exercise this Warrant during the 10-day
period commencing on the date of such notice to the effective date of the event
triggering such notice.

 

h)                                           Floor Price.  Until such time as
the Company obtains Stockholder Approval in order to allow the Exercise Price to
be less than the Exercise Floor Price (as defined below), no adjustment pursuant
to Sections 3(a) or 3(b) shall cause the Exercise Price to be less than $3.82,
as adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction (the “Exercise Floor Price”).

 

Section 4.                                            Transfer of Warrant.

 

a)                                            Transferability.  This Warrant and
all rights hereunder are transferable, in whole or in part and without the
Company’s consent, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or

 

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attorney and funds sufficient to pay any transfer taxes payable upon the making
of such transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  A Warrant, if properly assigned, may be exercised by a
new holder for the purchase of Warrant Shares without having a new Warrant
issued.

 

b)                                          New Warrants. This Warrant may be
divided or combined with other Warrants upon presentation hereof at the
aforesaid office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney.  Subject to compliance with Section 4(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice.

 

c)                                           Warrant Register. The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Register”), in the name of the record Holder hereof.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5.                                            Miscellaneous.

 

a)                                           Title to Warrant.  Prior to the
Expiry Time and subject to compliance with applicable laws and Section 4 of this
Warrant, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed.

 

b)                                          No Rights as Stockholder Until
Exercise.  This Warrant does not entitle the Holder to any voting rights or
other rights as a stockholder of the Company prior to the exercise hereof.  Upon
the surrender of this Warrant and the payment of the aggregate Exercise Price
(or by means of a cashless exercise), the Warrant Shares so purchased shall be
and be deemed to be issued to such Holder as the record owner of such shares as
of the close of business on the later of the date of such surrender or payment.

 

c)                                           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and cancellation of such
Warrant or stock certificate, if mutilated, the Company will make and deliver a
new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

 

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d)                                     Saturdays, Sundays, Holidays, etc.  If
the last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday,
then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday.

 

e)                                      Authorized Shares.  The Company
covenants that during the period the Warrant is outstanding, it will maintain a
reserve, free from preemption rights, from its duly authorized shares of Common
Stock for issuance pursuant to the Transaction Documents in such amount as may
be required to fulfill its obligations in full under the Transaction Documents. 
The Company further covenants that its issuance of this Warrant shall constitute
full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Trading Market upon
which the Common Stock may be listed.  If at any time during the Expiry Period
the number of authorized but unissued shares of Common Stock shall not be
sufficient to permit exercise of this Warrant, the Company will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock (or other securities as
provided herein) to such number of shares as shall be sufficient for such
purposes.

 

Except and to the extent as waived or consented to by the Holder, the Company
hereby covenants to not by any action, including, without limitation, amending
its certificate of incorporation, bylaws or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, and will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such actions as
may be necessary or appropriate to protect the rights of Holder as set forth in
this Warrant against impairment.  Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the Exercise Price then in effect and (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares upon the exercise of this Warrant.

 

f)                                        Jurisdiction. All questions concerning
the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Securities Purchase
Agreement.

 

g)                                     Restrictions.  The Holder acknowledges
that the Warrant Shares acquired upon the exercise of this Warrant, if not
registered, will have restrictions upon resale imposed by state and federal
securities laws.

 

h)                                     Nonwaiver and Expenses.  No course of
dealing or any delay or failure to exercise any right hereunder on the part of
Holder shall operate as a waiver of such right or otherwise prejudice Holder’s
rights, powers or remedies, notwithstanding the fact that all rights hereunder
terminate on the Expiry Time.  If the Company willfully and

 

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knowingly fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to Holder such amounts
as shall be sufficient to cover any costs and expenses incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.

 

i)                                         Notices.  Any notice, request or
other document required or permitted to be given or delivered to the Holder by
the Company shall be delivered in accordance with the notice provisions of the
Securities Purchase Agreement.

 

j)                                         Limitation of Liability.  No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
or privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.

 

k)                                      Remedies.  The remedies provided in this
Warrant shall be cumulative and in addition to all other remedies available or
granted by law, including recovery of damages. Each of the parties hereto will
be entitled to specific performance of its rights under this Warrant.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach or threatened
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate including making a showing of economic loss and the posting of a bond
or other security.

 

l)                                         Successors and Assigns.  Subject to
applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder. 
The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.

 

m)                                   Amendment.  This Warrant may be modified or
amended or the provisions hereof waived only with the written consent of the
Company and the Holder.

 

n)                                     Severability.  Wherever possible, each
provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

 

o)                                     Headings.  The headings used in this
Warrant are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Warrant.

 

********************

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

 

 

Dated:  June 16, 2008

 

 

 

ANSWERS CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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NOTICE OF EXERCISE

 

TO:     ANSWERS CORPORATION

 

(1)          The undersigned hereby elects to purchase                  Warrant
Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the Exercise Price in full,
together with all applicable transfer taxes, if any.

 

(2)          Payment shall take the form of (check applicable box):

 

o in lawful money of the United States; or (if available)

 

o the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)          Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

 

 

 

 

 

The Warrant Shares shall be delivered to the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4)          Accredited Investor.  The undersigned is an “accredited investor”
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:

 

Signature of Authorized Signatory of Investing Entity:

 

Name of Authorized Signatory:

 

Title of Authorized Signatory:

 

Date:

 

 

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ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are
hereby assigned to

 

 

 whose address is

 

 

 

.

 

 

 

 

 

 

 

 

 

Dated:

 

,

 

 

 

 

 

Holder’s Signature:

 

 

 

 

 

 

 

Holder’s Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Guaranteed:

 

 

 

NOTE:  The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

 

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