Exhibit 10.4


 


REGISTRATION
RIGHTS AGREEMENT


 


REGISTRATION
RIGHTS AGREEMENT (this “Agreement”),
dated as of January 15, 2008, by and among Answers Corporation, a Delaware
corporation, with headquarters located at 237 W. 35th Street, Suite 1101, New York, NY 10001 (the “Company”), and the undersigned buyers
(each, a “Buyer”, and
collectively, the “Buyers”).


 


WHEREAS:


 


A.            In connection with the
Securities Purchase Agreement by and among the parties hereto of even date
herewith (the “Securities Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to each Buyer, either
upon a Follow-On Issuance (as defined in the Securities Purchase Agreement) or
upon a Notes Termination Event (as defined in the Securities Purchase
Agreement), senior convertible notes which shall be either the Follow-On Notes
or Termination Notes (the Follow-On Notes and Termination Notes each as defined
in the Securities Purchase Agreement and, collectively, the “Notes”) which will, among other things, be convertible into
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock,” as converted, collectively, the “Conversion Shares”).


 


B.            In accordance with the terms
of the Securities Purchase Agreement and subject to issuance of the Notes
pursuant to the Securities Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933
Act”), and applicable state securities laws.


 


NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and each of the
Buyers hereby agree as follows:


 


1.     Definitions.


 


Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Securities Purchase Agreement.  As used
in this Agreement, the following terms shall have the following meanings:


 


a.             “Business Day” means any day other than Saturday, Sunday or any
other day on which commercial banks in the City of New York are authorized or
required by law to remain closed.


 


b.             “Closing Date” shall have the meaning set forth in the
Securities Purchase Agreement.


 


c.             “Effective Date” means the date that the Registration Statement
has been declared effective by the SEC.


 

















 


d.             “Effectiveness Deadline” means the date that is ninety (90)
days after the Filing Deadline.


 


e.             “Filing Date”
means the date on which the Registration Statement is filed with the SEC.


 


f.              “Filing Deadline” means (A) in the event that the Company
does not have sufficient authorized but unissued shares of Common Stock to
register the Required Registration Amount as of the Closing Date, the date which
is the earlier of (i) ten (10) business days after the Stockholder
Approval Date (as defined in the Securities Purchase Agreement) and (ii) ten (10) business
days after the Stockholder Approval Deadline (as defined in the Securities
Purchase Agreement) or (B) otherwise, thirty (30) calendar days
after the Closing Date.


 


g.             “Investor” means a Buyer or any transferee or assignee thereof
to whom a Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the
provisions of this Agreement in accordance with Section 9.


 


h.             “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.


 


i.              “register,” “registered,”
and “registration” refer to a
registration effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 and
the declaration or ordering of effectiveness of such Registration Statement(s) by
the SEC.


 


j.              “Registrable Securities” for the Registration Statement means (i) the
Notes, (ii) the Conversion Shares issued or issuable upon conversion of
the Notes, and (iii)  any capital stock of the Company issued or issuable,
with respect to the Notes or the Conversion Shares as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or
otherwise, without regard to any limitations on conversion and/or redemption of
the Notes.


 


k.             “Registration Statement” means a registration statement or registration
statements of the Company filed under the 1933 Act covering the Registrable
Securities.


 


l.              “Required Holders” means the holders of at least a majority of
the Registrable Securities.


 


m.            “Required Registration Amount” means 130% of the sum of the
number of Conversion Shares issued and issuable pursuant to the Notes as of the
Trading Day (as defined in the Securities Purchase Agreement) immediately
preceding the applicable date of determination.


 


n.             “Rule 415” means Rule 415 promulgated under the 1933
Act or any successor rule providing for offering securities on a
continuous or delayed basis.


 

















 


o.             “SEC” means the United States Securities and Exchange
Commission.


 


2.     Registration.


 


a.         Mandatory Registration.  The Company shall prepare, and, as soon as
practicable, but in no event later than the Filing Deadline, file with the SEC
the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities.  In the event
that Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration on another
appropriate form reasonably acceptable to the Required Holders, subject to the
provisions of Section 2(d).  The
Registration Statement prepared pursuant hereto shall register for resale the
Notes and at least the number of shares of Common Stock equal to the Required
Registration Amount determined as of the date the Registration Statement is
initially filed with the SEC.  The
Registration Statement shall contain (except if otherwise directed by the
Required Holders) the “Selling Stockholders” and “Plan of
Distribution” sections in substantially the form attached hereto as Exhibit B.  The Company shall use its commercially
reasonable best efforts to have the Registration Statement declared effective
by the SEC as soon as practicable, but in no event later than the Effectiveness
Deadline.  By 9:30 a.m. New York
time on the Business Day following the Effective Date, the Company shall file
with the SEC in accordance with Rule 424 under the 1933 Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement.


 


b.         Allocation of Registrable
Securities.  The initial
number of Registrable Securities included in any Registration Statement and any
increase in the number of Registrable Securities included therein shall be
allocated pro rata among the Investors based on the number of Registrable
Securities held by each Investor at the time the Registration Statement
covering such initial number of Registrable Securities or increase thereof is
declared effective by the SEC.  In the
event that an Investor sells or otherwise transfers any of such Investor’s Registrable
Securities, each transferee shall be allocated a pro rata portion of the then
remaining number of Registrable Securities included in such Registration Statement
for such transferor.  Any shares of
Common Stock included in a Registration Statement and which remain allocated to
any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata
based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement. 
In no event shall the Company include any securities other than
Registrable Securities on any Registration Statement without the prior written
consent of the Required Holders.


 


c.         Legal Counsel.  Subject to Section 5 hereof, the
Required Holders shall have the right to select one legal counsel to review and
oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Schulte
Roth & Zabel LLP or such other counsel as thereafter designated by the
Required Holders.  The Company and Legal
Counsel shall reasonably cooperate with each other in performing the Company’s
obligations under this Agreement.


 


d.         Ineligibility for Form S-3.  In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the 


 

















 


Required Holders and (ii) undertake
to register the Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.


 


e.         Sufficient Number of Shares
Registered.  In the
event the number of shares available under a Registration Statement filed
pursuant to Section 2(a) is insufficient to cover all of the
Registrable Securities required to be covered by such Registration Statement or
an Investor’s allocated portion of the Registrable Securities pursuant to Section 2(b),
the Company shall amend the applicable Registration Statement, or file a new
Registration Statement (on the short form available therefor, if applicable),
or both, so as to cover at least the Required Registration Amount as of the Trading
Day immediately preceding the date of the filing of such amendment or new
Registration Statement, in each case, as soon as practicable, but in any event
not later than fifteen (15) days after the necessity therefor arises.  The Company shall use its commercially
reasonable best efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.  For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale under the
Registration Statement is less than the product determined by multiplying (i) the
Required Registration Amount as of such time by (ii) 0.90.  The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on the conversion
and/or redemption of the Notes and such calculation shall assume that the Notes
are then convertible into shares of Common Stock at the then prevailing
Conversion Rate (as defined in the Notes).


 


f.          Effect of Failure to File
and Obtain and Maintain Effectiveness of Registration Statement.  If (i) a Registration Statement covering
all of the Registrable Securities required to be covered thereby and required
to be filed by the Company pursuant to this Agreement is (A) not filed
with the SEC on or before the respective Filing Deadline (a “Filing Failure”) or (B) not declared
effective by the SEC on or before the respective Effectiveness Deadline (an “Effectiveness Failure”) or (ii) on any
day after the Effective Date sales of all of the Registrable Securities
required to be included on such Registration Statement cannot be made (other
than during an Allowable Grace Period (as defined in Section 3(r))
pursuant to such Registration Statement or otherwise (including, without
limitation, because of a failure to keep such Registration Statement effective,
to disclose such information as is necessary for sales to be made pursuant to
such Registration Statement, to register a sufficient number of shares of
Common Stock or to maintain the listing of the Common Stock) (a “Maintenance Failure”) then, as partial
relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to each holder of Registrable Securities
relating to such Registration Statement an amount in cash equal to one percent
(1.0%) of the aggregate Purchase Price (as such term is defined in the
Securities Purchase Agreement) of such Investor’s Registrable Securities
whether or not included in such Registration Statement, on each of the
following dates:  (i) on every
thirtieth day after the day of a Filing Failure and thereafter (pro rated for
periods totaling less than thirty days) until such Filing Failure is cured; (ii) on
every thirtieth day after the day of an Effectiveness Failure and thereafter
(pro rated for periods totaling less 


 

















 


than thirty days) until such
Effectiveness Failure is cured; and (iii) on every thirtieth day after the
initial day of a Maintenance Failure and thereafter (pro rated for periods
totaling less than thirty days) until such Maintenance Failure is cured.  The payments to which a holder shall be entitled
pursuant to this Section 2(f) are referred to herein as “Registration Delay Payments.”  Registration Delay Payments shall be paid on
the earlier of (I) the dates set forth above and (II) the third
Business Day after the event or failure giving rise to the Registration Delay
Payments is cured.  In the event the
Company fails to make Registration Delay Payments in a timely manner, such Registration
Delay Payments shall bear interest at the rate of one and one-half percent (1.5%)
per month (prorated for partial months) until paid in full.


 


3.     Related Obligations.


 


At such time as the Company
is obligated to file a Registration Statement with the SEC pursuant to Section 2(a),
2(d), or 2(e), the Company will use its commercially reasonable best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:


 


a.         The Company shall promptly
prepare and file with the SEC a Registration Statement with respect to the
Registrable Securities and use its commercially reasonable best efforts to
cause such Registration Statement relating to the Registrable Securities to
become effective as soon as practicable after such filing (but in no event
later than the Effectiveness Deadline). 
The Company shall keep each Registration Statement effective pursuant to
Rule 415 at all times until the earlier of (i) the date as of which the
Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or
any successor thereto) promulgated under the 1933 Act or (ii) the date on
which the Investors shall have sold all of the Registrable Securities covered
by such Registration Statement (the “Registration
Period”).  The Company shall
ensure that each Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case
of prospectuses, in the light of the circumstances in which they were made) not
misleading.  The term commercially
reasonable “best efforts” shall mean, among other things, that the Company
shall submit to the SEC, within two (2) Business Days after the later of
the date that (i) the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on a particular Registration Statement, as the case may
be, and (ii) the approval of Legal Counsel pursuant to Section 3(c) (which
approval is immediately sought), a request for acceleration of effectiveness of
such Registration Statement to a time and date not later than two (2) Business
Days after the submission of such request.  The Company shall respond in writing to
comments made by the SEC in respect of a Registration Statement as soon as
practicable.


 


b.         The Company shall prepare
and file with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such 


 

















 


period, comply with the
provisions of the 1933 Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement until such
time as all of such Registrable Securities shall have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in such Registration Statement.  In the case of amendments and supplements to
a Registration Statement which are required to be filed pursuant to this
Agreement (including pursuant to this Section 3(b)) by reason of the
Company filing a report on Form 10-Q, Form 10-QSB, Form 10-K, Form 10-KSB
or any analogous report under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), the Company
shall have incorporated such report by reference into such Registration
Statement, if applicable, or shall file such amendments or supplements with the
SEC on the same day on which the 1934 Act report is filed which created the
requirement for the Company to amend or supplement such Registration Statement.


 


c.         The Company shall (A) permit
Legal Counsel to review and comment upon (i) a Registration Statement at
least five (5) Business Days prior to its filing with the SEC and (ii) all
amendments and supplements to all Registration Statements (except for Annual
Reports on Form 10-K or Form 10-KSB, Quarterly Reports on Form 10-Q
or Form 10-QSB, Current Reports on Form 8-K, and any similar or
successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or amendment or
supplement thereto in a form to which Legal Counsel reasonably objects.  The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which
consent shall not be unreasonably withheld. 
The Company shall furnish to Legal Counsel, without charge, (i) copies
of any correspondence from the SEC or the staff of the SEC to the Company or
its representatives relating to any Registration Statement, (ii) promptly
after the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, if requested by an
Investor, and all exhibits and (iii) upon the effectiveness of any
Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto.  The Company shall reasonably cooperate with
Legal Counsel in performing the Company’s obligations pursuant to this Section 3.


 


d.         The Company shall furnish to
each Investor whose Registrable Securities are included in any Registration
Statement, without charge, if requested by the Investor (i) promptly after
the same is prepared and filed with the SEC, at least one copy of such
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of
any Registration Statement, ten (10) copies of the prospectus included in
such Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such
other documents, including copies of any preliminary or final prospectus, as
such Investor may reasonably request from time to time in order to facilitate
the disposition of the Registrable Securities owned by such Investor.


 


e.         The Company shall use its commercially
reasonable best efforts to (i) register and qualify, unless an exemption
from registration and qualification applies, the resale 


 

















 


by Investors of the
Registrable Securities covered by a Registration Statement under such other
securities or “blue sky” laws of all applicable jurisdictions in the United
States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(e), (y) subject itself to general
taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. 
The Company shall promptly notify Legal Counsel and each Investor who
holds Registrable Securities of the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of any of
the Registrable Securities for sale under the securities or “blue sky” laws of
any jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.


 


f.          The Company shall notify
Legal Counsel and each Investor in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of
which the prospectus included in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and, subject to Section 3(r), promptly prepare a supplement
or amendment to such Registration Statement to correct such untrue statement or
omission and deliver ten (10) copies of such supplement or amendment to
Legal Counsel and each Investor upon request (or such other number of copies as
Legal Counsel or such Investor may reasonably request).  The Company shall also promptly notify Legal
Counsel and each Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to Legal Counsel and
each Investor by facsimile or e-mail on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.


 


g.         The Company shall use its commercially
reasonable best efforts to prevent the issuance of any stop order or other
suspension of effectiveness of a Registration Statement, or the suspension of
the qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify Legal Counsel
and each Investor who holds Registrable Securities being sold of the issuance
of such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.


 

















 


h.         If any Investor is required
under applicable securities laws to be described in the Registration Statement
as an underwriter or an Investor believes that it could reasonably be deemed to
be an underwriter of Registrable Securities, at the reasonable request of such
Investor, the Company shall furnish to such Investor, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as an Investor may reasonably request (i) a letter, dated such
date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants
to underwriters in an underwritten public offering, addressed to the Investors,
and (ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.


 


i.          If any Investor is required
under applicable securities laws to be described in the Registration Statement
as an underwriter or an Investor believes that it could reasonably be deemed to
be an underwriter of Registrable Securities, the Company shall make available
for inspection by (i) such Investor, (ii) Legal Counsel and (iii) one
firm of accountants or other agents retained by the Investors (collectively,
the “Inspectors”), all pertinent
financial and other records, and pertinent corporate documents and properties
of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree to hold in strict confidence and shall not make any disclosure (except to
an Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this Agreement.  Each Investor agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential.  Nothing
herein (or in any other confidentiality agreement between the Company and any
Investor) shall be deemed to limit the Investors’ ability to sell Registrable
Securities in a manner which is otherwise consistent with applicable laws and
regulations.


 


j.          The Company shall hold in
confidence and not make any disclosure of information concerning an Investor
provided to the Company unless (i) disclosure of such information is
necessary to comply with federal or state securities laws, (ii) the
disclosure of such information is necessary to avoid or correct a misstatement
or omission in any Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement.  The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investor is sought
in or by a court or governmental body of competent jurisdiction or through
other means, give 


 

















 


prompt written notice to
such Investor and allow such Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.


 


k.         The Company shall use its commercially
reasonable best efforts either to (i) cause all of the Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange or (ii) secure the
inclusion for quotation of all of the Registrable Securities on The NASDAQ
Global Select Market or (iii) if, despite the Company’s commercially
reasonable best efforts, the Company is unsuccessful in satisfying the
preceding clauses (i) and (ii), to secure the inclusion for quotation on
The New York Stock Exchange, The NASDAQ Capital Market or the American Stock
Exchange for such Registrable Securities and, without limiting the generality
of the foregoing, to use its commercially reasonable best efforts to arrange
for at least two market makers to register with the Financial Industry
Regulatory Authority (“FINRA”) as such with respect to such Registrable
Securities.  The Company shall pay all
fees and expenses in connection with satisfying its obligation under this Section 3(k).


 


l.          The Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the
extent applicable, facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and registered in such names as the Investors
may request.


 


m.        If requested by an Investor,
the Company shall as soon as practicable (i) incorporate in a prospectus
supplement or post-effective amendment such information as an Investor
reasonably requests to be included therein relating to the sale and
distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; (ii) make
all required filings of such prospectus supplement or post-effective amendment
after being notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if reasonably requested by an Investor
holding any Registrable Securities.


 


n.         The Company shall use its commercially
reasonable best efforts to cause the Registrable Securities covered by a
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.


 


o.         The Company shall make
generally available to its security holders as soon as practical, but not later
than ninety (90) days after the close of the period covered thereby, an
earnings statement (in form complying with, and in the manner provided by, the
provisions of Rule 158 under the 1933 Act) covering a twelve-month period
beginning not later than the first day of the Company’s fiscal quarter next
following the applicable Effective Date of a Registration Statement.


 

















 


p.         The Company shall otherwise
use its commercially reasonable best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.


 


q.         Within two (2) Business
Days after a Registration Statement which covers Registrable Securities is ordered
effective by the SEC, the Company shall deliver, and shall cause legal counsel
for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as
Exhibit A.


 


r.          Notwithstanding anything to
the contrary herein, at any time after the Effective Date, the Company may
delay the disclosure of material, non-public information concerning the Company
the disclosure of which at the time is not, in the good faith opinion of the Board
of Directors of the Company and its counsel, in the best interest of the
Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company
shall promptly (i) notify the Investors in writing of the existence of material,
non-public information giving rise to a Grace Period (provided that in each
notice the Company will not disclose the content of such material, non-public
information to the Investors) and the date on which the Grace Period will
begin, and (ii) notify the Investors in writing of the date on which the
Grace Period ends; and, provided further, that no Grace Period shall exceed fifteen
(15) consecutive days and during any three hundred sixty five (365) day period
such Grace Periods shall not exceed an aggregate of sixty (60) days and the
first day of any Grace Period must be at least five (5) Trading Days after
the last day of any prior Grace Period (each, an “Allowable Grace Period”). 
For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) and shall end on and include the later of
the date the Investors receive the notice referred to in clause (ii) and
the date referred to in such notice.  The
provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. 
Upon expiration of the Grace Period, the Company shall again be bound by
the first sentence of Section 3(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer
applicable.  Notwithstanding anything to
the contrary, the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the
terms of the Securities Purchase Agreement in connection with any sale of
Registrable Securities with respect to which an Investor has entered into a
contract for sale, prior to the Investor’s receipt of the notice of a Grace
Period and for which the Investor has not yet settled.


 


s.         Neither the Company nor any
Subsidiary or affiliate thereof shall identify any Buyer as an underwriter in
any public disclosure or filing with the SEC or any Principal Market (as defined in the Securities Purchase Agreement) or
Eligible Market and any Buyer being deemed an underwriter by the SEC shall not
relieve the Company of any obligations it has under this Agreement or any other
Transaction Document (as defined in the
Securities Purchase Agreement); provided, however, that the
foregoing shall not prohibit the Company from including the disclosure found in
the “Plan of Distribution” section attached hereto as Exhibit B in
the Registration Statement.


 

















 


4.     Obligations of the Investors.


 


a.         At least five (5) Business
Days prior to the first anticipated filing date of a Registration Statement,
the Company shall notify each Investor in writing of the information the
Company requires from each such Investor if such Investor elects to have any of
such Investor’s Registrable Securities included in such Registration
Statement.  It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect and maintain the effectiveness of the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.


 


b.         Each Investor, by such
Investor’s acceptance of the Registrable Securities, agrees to cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder, unless such
Investor has notified the Company in writing of such Investor’s election to
exclude all of such Investor’s Registrable Securities from such Registration
Statement.


 


c.         Each Investor agrees that,
upon receipt of any notice from the Company of the happening of any event of
the kind described in Section 3(g) or the first sentence of 3(f),
such Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Investor’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or
the first sentence of 3(f) or receipt of notice that no supplement or
amendment is required.  Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or
the first sentence of 3(f) and for which the Investor has not yet settled.


 


d.         Each Investor covenants and
agrees that it will comply with the prospectus delivery requirements of the
1933 Act as applicable to it or an exemption therefrom in connection with sales
of Registrable Securities pursuant to the Registration Statement.


 


5.     Expenses of Registration.


 


All reasonable expenses,
other than underwriting discounts and commissions, incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees, and fees and disbursements of counsel for
the Company shall be paid by the Company. 
The Company shall also reimburse the Investors for the fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 


 

















 


of
this Agreement which amount shall be limited to $10,000 for each such
registration, filing or qualification.


 


6.     Indemnification.


 


In the event any Registrable
Securities are included in a Registration Statement under this Agreement:


 


a.         To the fullest extent
permitted by law, the Company will, and hereby does, indemnify, hold harmless
and defend each Investor, the directors, officers, members, partners,
employees, agents, representatives of, and each Person, if any, who controls
any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or
several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: 
(i) any untrue statement or alleged untrue statement of a material
fact in a Registration Statement or any post-effective amendment thereto or in
any filing made in connection with the qualification of the offering under the
securities or other “blue sky” laws of any jurisdiction in which Registrable
Securities are offered (“Blue Sky Filing”),
or the omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, (iii) any
violation or alleged violation by the Company of the 1933 Act, the 1934 Act,
any other law, including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of
this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, “Violations”).  Subject to Section 6(c), the Company
shall reimburse the Indemnified Persons, promptly as such expenses are incurred
and are due and payable, for any legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such
Claim.  Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this Section 6(a):  (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company by
such Indemnified Person for such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was timely made
available by the Company pursuant to Section 3(d); and (ii) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall 


 

















 


not be unreasonably withheld or delayed.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.


 


b.         In connection with any
Registration Statement in which an Investor is participating, each such
Investor agrees to severally and not jointly indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section 6(a),
the Company, each of its directors, each of its officers who signs the
Registration Statement and each Person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or
Indemnified Damages to which any of them may become subject, under the 1933
Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
arise out of or are based upon any Violation, in each case to the extent, and
only to the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 6(c), such Investor shall reimburse the Indemnified Party,
promptly as such expenses are incurred and are due and payable, for any legal
or other expenses reasonably incurred by an Indemnified Party in connection
with investigating or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement
with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a
Claim or Indemnified Damages as does not exceed the net proceeds to such
Investor as a result of the sale of Registrable Securities pursuant to such
Registration Statement.  Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.


 


c.         Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 6 of notice of
the commencement of any action or proceeding (including any governmental action
or proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses of not more than
one counsel for all such Indemnified Person or Indemnified Party to be paid by
the indemnifying party, if, in the reasonable opinion of counsel retained by
the indemnifying party, the representation by such counsel of the Indemnified
Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person
or Indemnified Party and any other party represented by such counsel in such proceeding.  In the case of an Indemnified Person, legal
counsel referred to in the immediately preceding sentence shall be selected by
the Investors holding at least a majority  in
interest of the Registrable Securities included in the Registration Statement to
which the Claim relates.  The Indemnified



 

















 


Party or Indemnified Person shall cooperate
reasonably with the indemnifying party in connection with any negotiation or
defense of any such action or Claim by the indemnifying party and shall furnish
to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or
Claim.  The indemnifying party shall keep
the Indemnified Party or Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior
written consent, provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without the
prior written consent of the Indemnified Party or Indemnified Person, consent
to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party or Indemnified Person of a release from all
liability in respect to such Claim or litigation, and such settlement shall not
include any admission as to fault on the part of the Indemnified Party.  Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made.  The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability
to defend such action.


 


d.         The indemnification required
by this Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Indemnified Damages are incurred.


 


e.         The indemnity agreements
contained herein shall be in addition to (i) any cause of action or
similar right of the Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.


 


7.     Contribution.


 


To the extent any
indemnification by an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that:  (i) no Person involved in the sale of
Registrable Securities which Person is guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) in connection
with such sale shall be entitled to contribution from any Person involved in
such sale of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the amount of net proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.


 

















 


8.     Reports Under the 1934 Act.


 


With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
1933 Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without registration (“Rule 144”),
the Company agrees to:


 


a.         make and keep public
information available, as those terms are understood and defined in Rule 144;


 


b.         file with the SEC in a
timely manner all reports and other documents required of the Company under the
1933 Act and the 1934 Act so long as the Company remains subject to such
requirements and the filing of such reports and other documents is required for
the applicable provisions of Rule 144; and


 


c.         furnish to each Investor so
long as such Investor owns Registrable Securities, promptly upon request, (i) a
written statement by the Company, if true, that it has complied with the
reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a
copy of the most recent annual or quarterly report of the Company and such
other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.


 


9.             Assignment of Registration Rights.


 


The rights under this
Agreement shall be automatically assignable by the Investors to any transferee
of all or any portion of such Investor’s Registrable Securities if:  (i) the Investor agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such assignment; (ii) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned; (iii) immediately
following such transfer or assignment the further disposition of such
securities by the transferee or assignee is restricted under the 1933 Act or
applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by
all of the provisions contained herein; and (v) such transfer shall have
been made in accordance with the applicable requirements of the Securities
Purchase Agreement.


 


10.           Amendment of Registration Rights.


 


Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Required Holders.  Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investor and
the Company.  No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Registrable Securities.  No consideration
shall be offered or paid to any Person 


 

















 


to
amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration also is offered to all of the parties to this
Agreement.


 


11.           Miscellaneous.


 


a.         A Person is deemed to be a
holder of Registrable Securities whenever such Person owns or is deemed to own
of record such Registrable Securities.  If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from such
record owner of such Registrable Securities.


 


b.         Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement must be in writing and will be deemed to have been
delivered:  (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same.  The addresses and facsimile numbers for such
communications shall be:


 


If to the Company:


 


	
   

  	
  Answers Corporation

  
	
   

  	
  237
  W. 35th Street, Suite 1101

  
	
   

  	
  New
  York, NY 10001

  
	
   

  	
  Telephone:

  	
  (646)
  502-4777

  
	
   

  	
  Facsimile:

  	
  (646) (304-1826)

  
	
   

  	
  Attention:

  	
  Caleb A Chill, General
  Counsel

  
	
   

  	
   

  
	
   

  	
  With a copy (for
  informational purposes only) to:

  
	
   

  	
   

  
	
   

  	
  Sichenzia Ross Friedman Ference LLP

  
	
   

  	
  61 Broadway, 32nd Floor

  
	
   

  	
  New York, New York 10006

  
	
   

  	
  Telephone:

  	
  (212) 930-9700

  
	
   

  	
  Facsimile:

  	
  (212) 930-9725

  
	
   

  	
  Attention:

  	
  Jeffrey J. Fessler, Esq.

  
	
   

  
	
   

  	
  If to the Transfer Agent:

  
	
   

  
	
   

  	
  American Stock Transfer & Trust company

  
								



 

















 


	
   

  	
  6201 15th Avenue

  
	
   

  	
  Brooklyn, NY 11219

  
	
   

  	
  Telephone:

  	
  (718) 921-8261

  
	
   

  	
  Facsimile:

  	
  (718) 921-8337

  
	
   

  	
  Attention:

  	
  Donna Ansbro

  
	
   

  
	
   

  	
  If
  to Legal Counsel:

  
	
   

  
	
   

  	
  Schulte
  Roth & Zabel LLP

  
	
   

  	
  919
  Third Avenue

  
	
   

  	
  New
  York, New York 10022

  
	
   

  	
  Telephone:
   (212) 756-2000

  
	
   

  	
  Facsimile:
   (212) 593-5955

  
	
   

  	
  Attention:
   Eleazer N. Klein, Esq.

  
					



 


If to a Buyer, to its address and facsimile
number set forth on the Schedule of Buyers attached hereto, with copies to such
Buyer’s representatives as set forth on the Schedule of Buyers, or to such
other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change.  Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine containing the
time, date, recipient facsimile number and an image of the first page of
such transmission or (C) provided by a courier or overnight courier
service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.


 


c.         Failure of any party to
exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver
thereof.


 


d.         All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner 


 

















 


permitted by law.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.


 


e.         This Agreement, the other
Transaction Documents (as defined in the Securities Purchase Agreement) and the
instruments referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
and therein.  This Agreement, the other
Transaction Documents and the instruments referenced herein and therein
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.


 


f.          Subject to the requirements
of Section 9, this Agreement shall inure to the benefit of and be binding
upon the permitted successors and assigns of each of the parties hereto.


 


g.         The headings in this
Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.


 


h.         This Agreement may be
executed in identical counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may
be delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.


 


i.          Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.


 


j.          All consents and other
determinations required to be made by the Investors pursuant to this Agreement
shall be made, unless otherwise specified in this Agreement, by the Required
Holders.


 


k.         The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent and no rules of strict construction will be applied
against any party.


 


l.          This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.


 

















 


m.        The obligations of each
Investor hereunder are several and not joint with the obligations of any other
Investor, and no provision of this Agreement is intended to confer any
obligations on any Investor vis-à-vis any other Investor.  Nothing contained herein, and no action taken
by any Investor pursuant hereto, shall be deemed to constitute the Investors as
a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investors are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated
herein.


 


* * * * * *


 


[Signature Page Follows]


 

















 


IN WITNESS
WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first
written above.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANSWERS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert S. Rosenschein

  
	
   

  	
   

  	
  Name:
  Robert S. Rosenschein

  
	
   

  	
   

  	
  Title:
  CEO

  



 


 


[Signature Page to Registration Rights Agreement]


 

















 


IN WITNESS
WHEREOF, each Buyer and the Company have caused their respective signature page to
this Registration Rights Agreement to be duly executed as of the date first
written above.


 


	
   

  	
  BUYERS:

  
	
   

  	
   

  
	
   

  	
  INTERLACHEN
  CONVERTIBLE INVESTMENTS

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Gregg T. Colburn

  	
   

  
	
   

  	
   

  	
  Name:
  Gregg T. Colburn

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  



 


 


[Signature Page to Registration Rights Agreement]


 

















 


SCHEDULE OF BUYERS


 


	
  Buyer

  	
   

  	
  Buyer
  Address 

  and Facsimile Number

  	
   

  	
  Buyer’s
  Representative’s Address 

  and Facsimile Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interlachen Convertible
  Investments Limited

  	
   

  	
  c/o
  Interlachen Capital Group LP 

  800 Nicollet Mall, Suite 2500 

  Minneapolis, MN 55402-2034  

  Attention: Gregg T. Colburn and the Legal Department  

  Facsimile: (612) 659-4457  

  Telephone: (612) 659-4407  

  Residency: Cayman Islands

  	
   

  	
  Schulte
  Roth & Zabel LLP  

  919 Third Avenue  

  New York, NY 10022  

  Attn: Eleazer Klein, Esq.  

  Facsimile: (212) 593-5955  

  Telephone: (212) 756-2000

  	
   

  



 

















 


EXHIBIT A


 


FORM OF
NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT


 


[              ]


 


[              ]


 


[              ]


 


Re:          Answers Corporation


 


Ladies
and Gentlemen:


 


[We
are][I am] counsel to Answers Corporation, a Delaware corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement (the “Securities Purchase
Agreement”) entered into by and among the Company and the buyers
named therein (collectively, the “Holders”)
pursuant to which the Company issued to the Holders senior convertible notes (the
“Notes”) which shall be convertible into
the Company’s common stock, par value $0.001 per share (the “Common Stock”). 
Pursuant to the Securities Purchase Agreement, the Company also has
entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”) pursuant to
which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the
shares of Common Stock issuable upon conversion of the Notes, under the
Securities Act of 1933, as amended (the “1933
Act”).  In connection with the
Company’s obligations under the Registration Rights Agreement, on                         
      , 200_, the Company filed a Registration
Statement on Form S-3 (File No. 333-                          )
(the “Registration Statement”)
with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each
of the Holders as a selling stockholder thereunder.


 


In connection with the
foregoing, [we][I] advise you that a member of the SEC’s staff has advised
[us][me] by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER
DATE OF EFFECTIVENESS] and [we][I]
have no knowledge, after telephonic inquiry of a member of the SEC’s staff,
that any stop order suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by, the SEC and
the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.


 

















 


This
letter shall serve as our standing instruction to you that the shares of Common
Stock are freely transferable by the Holders pursuant to the Registration
Statement.  You need not require further
letters from us to effect any future legend-free issuance or reissuance of
shares of Common Stock to the Holders as contemplated by the Company’s
Irrevocable Transfer Agent Instructions dated [•], 2008.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [ISSUER’S COUNSEL]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



CC:          [LIST NAMES OF HOLDERS]


 

















 


EXHIBIT B


 


SELLING
STOCKHOLDERS


 


The
shares of common stock being offered by the selling stockholders are issuable
upon conversion of the convertible notes. 
For additional information regarding the issuance of those convertible
notes, see “Private Placement of Convertible Notes “ above.  We are registering the shares of common stock
and convertible Notes in order to permit the selling stockholders to offer the
shares for resale from time to time. 
Except for the ownership of the convertible notes issued pursuant to the
Securities Purchase Agreement, the selling stockholders have not had any
material relationship with us within the past three years.


 


The
table below lists the selling stockholders and other information regarding the
beneficial ownership of the shares of common stock by each of the selling
stockholders.  The second column lists
the number of shares of common stock beneficially owned by each selling
stockholder, based on its ownership of the convertible notes, as of                 ,
2008, assuming conversion of all convertible notes held by the selling
stockholders on that date, without regard to any limitations on conversions.


 


The
third column lists the maximum aggregate principal amount of Notes to be sold
pursuant to the prospectus.


 


The
fourth column lists the shares of common stock being offered by this prospectus
by the selling stockholders.


 


In
accordance with the terms of a registration rights agreement with the selling
stockholders, this prospectus generally covers the resale of the Notes and at
least 130% of the number of shares of common stock issuable upon conversion of
the convertible notes as of the Trading Day immediately preceding the date the
registration statement is initially filed with the SEC.  Because
the conversion price of the convertible notes may be adjusted, the number of
shares that will actually be issued may be more or less than the number of
shares being offered by this prospectus. 
The fifth column assumes the sale of all of the shares offered by the
selling stockholders pursuant to this prospectus.


 


Under
the terms of the convertible notes, a selling stockholder may not convert the
convertible notes to the extent such conversion would cause such selling
stockholder, together with its affiliates, to beneficially own a number of
shares of common stock which would exceed 9.99% of our then outstanding shares
of common stock following such conversion, excluding for purposes of such
determination shares of common stock issuable upon conversion of the
convertible notes which have not been converted.  The number of shares in the second column
does not reflect this limitation.  The
selling stockholders may sell all, some or none of their shares in this
offering.  See “Plan of Distribution.”


 

















 


	
  Name of
  Selling Stockholder

  	
   

  	
  Number
  of Shares of 

  Common Stock Owned

  Prior to Offering

  	
   

  	
  Maximum
  

  Aggregate Principal 

  Amount of Notes to 

  be Sold Pursuant o 

  the Prospectus

  	
   

  	
  Maximum
  Number of 

  Shares of Common 

  Stock to be Sold 

  Pursuant to this 

  Prospectus

  	
   

  	
  Number
  of Shares of 

  Common Stock 

  Owned After 

  Offering

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interlachen Convertible
  Investments Limited

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  



 






(1)           Interlachen Capital Group LP
is the trading manager of Interlachen Convertible Investments Limited and has
voting and investment discretion over securities held by Interlachen
Convertible Investments Limited.  Andrew
Fraley, in his role as Chief Investment Officer of Interlachen Capital Group
LP, has voting control and investment discretion over securities held by Interlachen
Convertible Investments Limited.  Andrew
Fraley disclaims beneficial ownership of the securities held by Interlachen
Convertible Investments Limited.


 

















 


PLAN OF DISTRIBUTION


 


We
are registering the shares of common stock and convertible Notes issuable upon
conversion of the convertible notes to permit the resale of these shares of
common stock by the holders of the convertible notes from time to time after
the date of this prospectus.  We will not
receive any of the proceeds from the sale by the selling stockholders of the
shares of common stock.  We will bear all
fees and expenses incident to our obligation to register the shares of common
stock.


 


The
selling stockholders may sell all or a portion of the shares of common stock
beneficially owned by them and offered hereby from time to time directly or
through one or more underwriters, broker-dealers or agents.  If the shares of common stock are sold through
underwriters or broker-dealers, the selling stockholders will be responsible
for underwriting discounts or commissions or agent’s commissions.  The shares of common stock may be sold in one
or more transactions at fixed prices, at prevailing market prices at the time
of the sale, at varying prices determined at the time of sale, or at negotiated
prices.  These sales may be effected in
transactions, which may involve crosses or block transactions,


 


·      on any national securities exchange or quotation
service on which the securities may be listed or quoted at the time of sale;


 


·      in the over-the-counter market;


 


·      in transactions otherwise than on these exchanges or
systems or in the over-the-counter market;


 


·      through the writing of
options, whether such options are listed on an options exchange or otherwise;


 


·      ordinary brokerage transactions and transactions in
which the broker-dealer solicits purchasers;


 


·      block trades in which the broker-dealer will attempt
to sell the shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;


 


·      purchases by a broker-dealer as principal and resale
by the broker-dealer for its account;


 


·      an exchange distribution in accordance with the rules of
the applicable exchange;


 


·      privately negotiated transactions;


 


·      short sales;


 


·      sales pursuant to Rule 144;


 

















 


·      broker-dealers may agree with the selling
securityholders to sell a specified number of such shares at a stipulated price
per share;


 


·      a combination of any such methods of sale; and


 


·      any other method permitted pursuant to applicable
law.


 


If
the selling stockholders effect such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved).  In connection with sales of the shares of
common stock or otherwise, the selling stockholders may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of
the shares of common stock in the course of hedging in positions they
assume.  The selling stockholders may
also sell shares of common stock short and deliver shares of common stock
covered by this prospectus to close out short positions and to return borrowed
shares in connection with such short sales. 
The selling stockholders may also loan or pledge shares of common stock
to broker-dealers that in turn may sell such shares.


 


The
selling stockholders may pledge or grant a security interest in some or all of
the convertible notes, or shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933, as amended, amending,
if necessary, the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.  The selling stockholders
also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.


 


The
selling stockholders and any broker-dealer participating in the distribution of
the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act.  At the time a particular offering of the
shares of common stock is made, a prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of shares of common stock
being offered and the terms of the offering, including the name or names of any
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to broker-dealers.


 


Under
the securities laws of some states, the shares of common stock may be sold in
such states only through registered or licensed brokers or dealers.  In addition, in some states the shares of
common stock may not be sold unless such shares have been registered or
qualified for 


 

















 


sale
in such state or an exemption from registration or qualification is available
and is complied with.


 


There
can be no assurance that any selling stockholder will sell any or all of the
shares of common stock registered pursuant to the registration statement, of
which this prospectus forms a part.


 


The
selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the
timing of purchases and sales of any of the shares of common stock by the
selling stockholders and any other participating person.  Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of common stock to engage
in market-making activities with respect to the shares of common stock.  All of the foregoing may affect the
marketability of the shares of common stock and the ability of any person or
entity to engage in market-making activities with respect to the shares of
common stock.


 


We
will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be
$[     ] in total, including, without limitation,
Securities and Exchange Commission filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that a selling
stockholder will pay all underwriting discounts and selling commissions, if
any.  We will indemnify the selling
stockholders against liabilities, including some liabilities under the
Securities Act, in accordance with the registration rights agreements, or the
selling stockholders will be entitled to contribution.  We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by
the selling stockholder specifically for use in this prospectus, in accordance
with the related registration rights agreement, or we may be entitled to
contribution.


 


Once
sold under the registration statement, of which this prospectus forms a part,
the shares of common stock will be freely tradable in the hands of persons
other than our affiliates.