Form of Warrant replacing Stock Option in favor of Pharmacy Management Strategies LLC, dated June 28, 2011

THIS WARRANT (the “Warrant”) certifies that, for value received, Pharmacy Management Strategies LLC (the “Holder”) is entitled, upon the terms and conditions hereinafter set forth, at any time on or after the Grant Date and on or before the close of business on the third anniversary of the Grant Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Single Touch Systems Inc., a Delaware corporation (the “Company”), up to 1,000,000 shares (the “Warrant Shares”) of common stock (the “Common Stock”) of the Company, subject to adjustment hereunder. 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.          Acknowledgements.  The Holder, by acceptance of this Warrant, acknowledges that this Warrant is not granted under any Company Warrant plan and that this Warrant (and the Warrant Shares) does not have any registration rights. The Holder, by acceptance of this Warrant, acknowledges that this Warrant represents a full accord and satisfaction of any and all rights of the Holder against the Company and any of its affiliates under that certain agreement dated May 13, 2011 as subsequently revised and replaced in the entirety by that certain agreement dated March 14, 2012 and under any other written or oral agreement between the Company (or any of its affiliates) and the Holder.

 

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 Grant Date and on or before the Termination Date by (1) delivery to the Company of a duly executed facsimile copy of the Notice of Exercise Form annexed hereto, accompanied by (2) payment of the aggregate Exercise Price of the shares thereby purchased by wire transfer or cashier’s check drawn on a United States bank.  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.

 

b)        Exercise Price.  The exercise price per share of the Common Stock under this Warrant shall be $0.40, subject to adjustment hereunder (the “Exercise Price”).

 

c)        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 of the Exercise 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.

 

ii.           Delivery of Certificates upon Exercise.  Certificates representing Warrant Shares shall be transmitted by the transfer agent of the Company to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise promptly after each exercise.

 

iii.          Closing of Books.  The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

reclassification, reorganization or recapitalization of the Common Stock, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (vi) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Securities Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock (each a “Fundamental Transaction”), then, the Company shall make appropriate provision to ensure that the Holder will thereafter receive upon an exercise of this Warrant at any time after the consummation of a Fundamental Transaction but before the Termination Date, in lieu of the Warrant Shares (or other stock, securities, cash, assets or other property whatsoever) issuable upon the exercise of this Warrant before such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant been exercised immediately before such Fundamental Transaction. If any holder of Common Stock is given any choice as to the stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to what receives it upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) before such Fundamental Transaction. The provisions of this paragraph shall apply similarly and equally to successive Fundamental Transactions.