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.
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Number of Warrants:
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Warrant Certificate
No. Class A-
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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
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.
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
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
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.
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 l
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