EXHIBIT 10.2
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THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE (THE "WARRANT
SHARES") HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED
UNDER THE ACT. THE WARRANT SHARES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT, (II) IN COMPLIANCE WITH THE LIMITATIONS
OF RULE 144 UNDER THE ACT, OR (III) PURSUANT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR COMPLIANCE IS NOT
REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS EXERCISE ARE ALSO
SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 4 OF THIS WARRANT.
Warrant No. SB-CBS-#1 Number of Shares: 1,066,174
(subject to adjustment)
Date of Issuance: June 30, 1999
SWITCHBOARD INCORPORATED
Common Stock Purchase Warrant
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Switchboard Incorporated, a Delaware corporation (the "Company"), for value
received, hereby certifies that CBS Corporation, a Pennsylvania corporation, or
its permitted transferees (the "Registered Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company, at any time or from time to
time on or after the earlier of (i) June 30, 2001 and (ii) the closing of the
Company's initial underwritten public offering of Common Stock registered under
the Securities Act of 1933, as amended (the "Securities Act"), and on or before
the earlier of (a) the second anniversary of the closing of the Company's
initial underwritten public offering of Common Stock registered under the
Securities Act and (b) June 30, 2004, at not later than 5:00 p.m. (Boston,
Massachusetts time), 1,066,174 shares of Common Stock, $.01 par value per share,
of the Company, at a purchase price of $1.00 per share. The shares purchasable
upon exercise of this Warrant, and the purchase price per share, each as
adjusted from time to time pursuant to the provisions of this Warrant, are
hereinafter referred to as the "Warrant Shares" and the "Purchase Price,"
respectively.
1. Exercise.
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(a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by the Registered Holder or by the Registered
Holder's duly authorized attorney, at the principal office of the Company, or at
such other office or agency as the Company may designate, accompanied by payment
(by wire transfer) in full, in lawful money of the United States, of the
Purchase Price payable in respect of the number of Warrant Shares purchased upon
such exercise.
(b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day (the "Exercise
Date") on which this Warrant shall have been surrendered to the Company as
provided in Section 1(a) above. At such time, the Registered Holder shall be
deemed to have become the holder of record of the Warrant Shares.
(c) As soon as practicable after the exercise of this Warrant in full
or in part, and in any event within 15 days thereafter, the Company, at its
expense, will cause to be issued in the name of, and delivered to, the
Registered Holder (upon payment by the Registered Holder of any applicable
transfer taxes):
(i) a certificate or certificates for the whole number of duly
authorized, validly issued, fully paid and non-assessable Warrant Shares to
which the Registered Holder shall be entitled upon such exercise plus, in lieu
of any fractional share to which the Registered Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 3 hereof; and
(ii) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant minus the number of such shares purchased by the Registered
Holder upon such exercise.
2. Adjustments.
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(a) General. The Purchase Price shall be subject to adjustment from
time to time pursuant to the terms of this Section 2.
(b) Diluting Issuances.
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(i) Definitions. For purposes of this Section 2, the following
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definitions shall apply:
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(A) "Option" shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire Common Stock or Convertible Securities, excluding
options described in Section 2(b)(i)(D) below.
(B) "Original Issue Date" shall mean the date on which this Warrant
was first issued.
(C) "Convertible Securities" shall mean any evidences of indebtedness,
shares or other securities directly or indirectly convertible into or
exchangeable for Common Stock, but excluding Options.
(D) "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued (or, pursuant to Section 2(b)(iii) below, deemed to be
issued) by the Company after the Original Issue Date, other than shares of
Common Stock issued or issuable:
(I) upon conversion or exchange of any Convertible Securities
or exercise of any Options outstanding on the Original
Issue Date, each of which is listed on Schedule A attached
hereto;
(II) by reason of a dividend, stock split, split-up or other
distribution on shares of Common Stock that are covered by
Sections 2(c) or 2(d) below;
(III) up to 4,000,000 shares of Common Stock (or options with
respect thereto) to employees or directors of, or
consultants or advisors to, the Company pursuant to a plan,
agreement or arrangement adopted by the Board of Directors
of the Company;
(IV) in the Company's initial public offering pursuant to a
registration statement under the Securities Act;
(V) pursuant to the Stock Warrant Agreement by and among the
Company, Ameritech Interactive Media, Inc., Intelligent
Media Ventures, Inc., SBC Interactive and U.S. West Dex,
Inc., dated March 31, 1999, as it may be amended from time
to time;
(VI) pursuant to any past and present lending or line of credit
arrangement between the Company and Banyan Systems
Incorporated;
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(VII) pursuant to the Technology Development and Marketing
Agreement between the Company and Continuum Software,
Inc., dated November 7, 1997, as it may be amended from
time to time; or
(VIII) pursuant to any future borrowing, loan, line of credit,
leasing or similar financing arrangement with a bank,
commercial lender, leasing company or other person or for
any other purpose (provided that the shares issuable under
this clause (VIII) shall be limited to a maximum of
100,000).
The share number references in (III) and (VIII) are subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar event affecting such shares.
(ii) No Adjustment of Purchase Price. No adjustments to the
Purchase Price shall be made unless the consideration per share (determined
pursuant to Section 2(b)(v)) for an Additional Share of Common Stock issued or
deemed to be issued by the Company is less than $16.00 (subject to adjustment in
the same manner as the Purchase Price pursuant to Sections 2(c) and 2(d) below)
(the "Adjustment Price").
(iii) Issue of Securities Deemed Issue of Additional Shares of Common
Stock. If the Company at any time or from time to time after the Original Issue
Date shall issue (whether by sale or grant) any Options or Convertible
Securities or shall fix a record date for the determination of holders of any
class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares of Common Stock (as set forth in
the instrument relating thereto without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to be
Additional Shares of Common Stock issued as of the time of such issue or, in
case such a record date shall have been fixed, as of the close of business on
such record date, provided that Additional Shares of Common Stock shall not be
deemed to have been issued unless the consideration per share (determined
pursuant to Section 2(b)(v) hereof) of such Additional Shares of Common Stock
would be less than the Adjustment Price in effect on the date of and immediately
prior to such issue, or such record date, as the case may be, and provided
further that in any such case in which Additional Shares of Common Stock are
deemed to be issued:
(A) No further adjustment in the Purchase Price shall be made upon the
subsequent issue of Convertible Securities or shares of Common Stock upon the
exercise of such Options or conversion or exchange of such Convertible
Securities;
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(B) If such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any increase or decrease in the
consideration payable to the Company, then upon the exercise, conversion or
exchange thereof, the Purchase Price computed upon the original issue thereof
(or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) Upon the expiration or termination of any such unexercised Option,
the Purchase Price shall not be readjusted, but the Additional Shares of Common
Stock deemed issued as the result of the original issue of such Option shall not
be deemed issued for the purposes of any subsequent adjustment of the Purchase
Price;
(D) In the event of any change in the number of shares of Common Stock
issuable upon the exercise, conversion or exchange of any such Option or
Convertible Security, including, but not limited to, a change resulting from the
anti-dilution provisions thereof, the Purchase Price then in effect shall
forthwith be readjusted to such Purchase Price as would have obtained had the
adjustment which was made upon the issuance of such Option or Convertible
Security not exercised, converted or exchanged prior to such change been made
upon the basis of such change; and
(E) No readjustment pursuant to clause (B) or (D) above shall have the
effect of increasing the Purchase Price to an amount which exceeds the lower of
(i) the Purchase Price on the original adjustment date, or (ii) the Purchase
Price that would have resulted from any issuances of Additional Shares of Common
Stock between the original adjustment date and such readjustment date.
(iv) Adjustment of Purchase Price Upon Issuance of Additional
Shares of Common Stock. In the event the Company shall at any time after the
Original Issue Date issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section
2(b)(iii), but excluding shares issued as a dividend or distribution or upon a
stock split or combination as provided in Section 2(c)), without consideration
or for a consideration per share less than the Adjustment Price in effect on the
date of and immediately prior to such issue, then and in such event, the
Purchase Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Purchase Price
by a fraction, (A) the numerator of which shall be (1) the number of shares of
Common
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Stock outstanding immediately prior to such issue plus (2) the number of
shares of Common Stock which the aggregate consideration received or to be
received by the Company for the total number of Additional Shares of Common
Stock so issued would purchase at the Adjustment Price; and (B) the denominator
of which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of such Additional Shares of Common Stock so
issued; provided that, (i) for the purpose of this Section 2(b)(iv), all shares
of Common Stock issuable upon exercise, conversion or exchange of Options or
Convertible Securities outstanding immediately prior to such issue shall be
deemed to be outstanding, and (ii) the number of shares of Common Stock deemed
issuable upon exercise, conversion or exchange of such outstanding Options and
Convertible Securities shall not give effect to any adjustments to the exercise
or conversion price or rate of such Options or Convertible Securities resulting
from the issuance of Additional Shares of Common Stock that is the subject of
this calculation. For the avoidance of doubt, any shares of Common Stock held
by the Company as treasury shares shall not be deemed to be outstanding.
Notwithstanding the foregoing, the applicable Purchase Price shall not
be so reduced at such time if the amount of such reduction would be an amount
less than $.05, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.05 or more.
(v) Determination of Consideration. For purposes of this Section
2(b), the consideration received by the Company for the issue of any Additional
Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
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(I) insofar as it consists of cash, be computed at the
aggregate of cash received by the Company, excluding amounts paid or payable for
accrued interest or accrued dividends;
(II) insofar as it consists of property other than cash, be
computed at the fair market value thereof, as determined in good faith by the
Board of Directors; and
(III) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the Company
for consideration which covers both, be the proportion of such consideration so
received, computed as provided in clauses (I) and (II) above, as determined in
good faith by the Board of Directors.
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(B) Options and Convertible Securities. The consideration per share
received by the Company for Additional Shares of Common Stock deemed to have
been issued pursuant to Section 2(b)(iii), relating to Options and Convertible
Securities, shall be determined by dividing
(x) the total amount, if any, received or receivable by the
Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Company upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock (as set
forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(vi) Multiple Closing Dates. In the event the Company shall
issue on more than one date Additional Shares of Common Stock which are
comprised of shares of the same series or class of Preferred Stock, and such
issuance dates occur within a period of no more than 120 days, then the Purchase
Price shall be adjusted only once on account of such issuances, with such
adjustment to occur upon the final such issuance and to give effect to all such
issuances as if they occurred on the date of the final such issuance.
(vii) Limitation. Notwithstanding anything in this Warrant
to the contrary, in no event shall the Purchase Price be adjusted pursuant to
Section 2(b) to below $0.01 per share.
(c) Recapitalizations. If outstanding shares of the Company's Common
Stock shall be subdivided into a greater number of shares or a dividend in
Common Stock shall be paid in respect of Common Stock, the Purchase Price in
effect immediately prior to such subdivision or at the record date of such
dividend shall simultaneously with the effectiveness of such subdivision or
immediately after the record date of such dividend be proportionately reduced.
If outstanding shares of Common Stock shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination
shall, simultaneously with the effectiveness of such combination, be
proportionately increased.
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(d) Mergers, etc. If there shall occur any capital reorganization or
reclassification of the Company's Common Stock (other than a change in par value
or a subdivision or combination as provided for in Section 2(c) above), or any
consolidation or merger of the Company with or into another corporation, or a
transfer of all or substantially all of the assets of the Company, then, as part
of any such reorganization, reclassification, consolidation, merger or sale, as
the case may be, lawful provision shall be made so that the Registered Holder
shall have the right thereafter to receive upon the exercise hereof the kind and
amount of shares of stock or other securities or property which such Registered
Holder would have been entitled to receive if, immediately prior to any such
reorganization, reclassification, consolidation, merger or sale, as the case may
be, such Registered Holder had held the number of shares of Common Stock which
were then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined in good faith by the Board of
Directors of the Company) shall be made in the application of the provisions set
forth herein with respect to the rights and interests thereafter of the
Registered Holder, such that the provisions set forth in this Section 2
(including provisions with respect to adjustment of the Purchase Price) shall
thereafter be applicable, as nearly as is reasonably practicable, in relation to
any shares of stock or other securities or property thereafter deliverable upon
the exercise of this Warrant.
(e) Adjustment in Number of Warrant Shares. When any adjustment is
required to be made in the Purchase Price pursuant to Section 2(c), the number
of Warrant Shares purchasable upon the exercise of this Warrant shall be changed
to the number determined by dividing (i) an amount equal to the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Purchase Price in effect immediately prior to such adjustment,
by (ii) the Purchase Price in effect immediately after such adjustment.
(f) Certificate of Adjustment. When any adjustment is required to be
made pursuant to this Section 2, the Company shall promptly mail to the
Registered Holder a certificate setting forth the Purchase Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment. Such certificate shall also set forth the kind and amount of stock
or other securities or property into which this Warrant shall be exercisable
following such adjustment.
3. Fractional Shares. The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the fair market value per share of
Common Stock, as determined in good faith by the Board of Directors of the
Company.
4. Requirements for Transfer. Neither this Warrant nor any interest
herein is transferrable in any respect (other than to the Company or Banyan
Systems Incorporated); provided, however, that notwithstanding the foregoing,
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the Registered
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Holder may transfer the entire Warrant (but not less than the entire Warrant) to
any entity controlling, controlled by or under common control of the Registered
Holder if (1) written notice of such action is provided to the Company, (2) the
transferee agrees in writing as part of such notice to be bound by this
Agreement and (3) CBS Corporation remains primarily responsible for the
performance of all of the obligations of the Registered Holder hereunder. The
Warrant and the Warrant Shares are also subject to the restrictions on transfer
set forth in the Common Stock and Warrant Purchase Agreement dated as of June 1,
1999 between the Company and the Registered Holder, which terms are incorporated
herein.
5. No Impairment. The Company will not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Warrant, but will at all times in good faith assist
in the carrying out of all such terms and in the taking of all such action as
may be necessary or appropriate, including such action as may be necessary or
appropriate in order that the Company may validly and legally issue or sell
fully paid and non-assessable Warrant Shares upon exercise of this Warrant, in
order to protect the rights of the holder of this Warrant against impairment.
6. Notices of Record Date, etc. In case:
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(a) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to receive any other
right; or
(b) of any capital reorganization of the Company, any reclassification
of the Common Stock of the Company, any consolidation or merger of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the surviving entity), or any transfer of all or substantially
all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of
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Common Stock (or such other stock or securities at the time deliverable upon the
exercise of this Warrant) shall be entitled to exchange their shares of Common
Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the record date or effective date for the event
specified in such notice.
7. Reservation of Stock. The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant. All Warrant
Shares shall be duly authorized and, when issued upon such exercise, shall be
validly issued, fully paid and non-assessable and free and clear of all
preemptive rights, and free from all taxes, liens and other charges with respect
to the issue thereof by the Company. The Company will take all actions as may
be necessary to assure that the Warrant Shares issued upon a valid exercise
hereof may be issued by the Company without violation of any law or regulation,
or of any requirement of any domestic securities exchange upon which any capital
stock of the Company may be listed.
8. Replacement of Warrants. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.
9. Mailing of Notices, etc. All notices and other communications from
the Company to the Registered Holder shall be mailed by first-class certified or
registered mail, postage prepaid, to the address last furnished to the Company
in writing by the Registered Holder. All notices and other communications from
the Registered Holder or in connection herewith to the Company shall be mailed
by first-class certified or registered mail, postage prepaid, to the Company at
000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, Attn: Chief Financial Officer, with
copies to the Company at the foregoing address, Attn: General Counsel, and to
Banyan Systems Incorporated, 000 Xxxxxxxx Xxxx, Xxxxxxxx, XX 00000, Attn:
Chief Financial Officer and Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX
00000, Attn: Xxxx X. Xxxxxx, Esq. If the Company should at any time change the
location of its principal office to a place other than as set forth below, it
shall give prompt written notice to the Registered Holder and thereafter all
references in this Warrant to the location of its principal office at the
particular time shall be as so specified in such notice.
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10. No Rights as Stockholder. Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.
11. Change or Waiver. Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against which enforcement
of the change or waiver is sought.
12. Remedies. In case any one or more of the covenants and agreements
contained in this Warrant shall have been breached, the Registered Holder (in
the case of a breach by the Company), or the Company (in the case of a breach by
the Registered Holder), may proceed to protect and enforce its rights either by
suit in equity and/or by action at law, including, but not limited to, an action
for damages as a result of any such breach and/or an action for specific
performance of any such covenant or agreement contained in this Warrant.
13. Headings. The headings in this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.
14. Governing Law. This Warrant will be governed by and construed in
accordance with the laws of the State of Delaware (without reference to the
conflicts of law provisions thereof).
15. Waiver of Jury Trial. THE COMPANY AND THE REGISTERED HOLDER WAIVE THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON.
[signatures on following page]
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SWITCHBOARD INCORPORATED
By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: President
ATTEST:
/s/ Xxxxxxx X. Xxxxxxxxx
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(signature page to Switchboard warrant)
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EXHIBIT I
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PURCHASE FORM
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To: Switchboard Incorporated Date:
000 Xxxxxxxx Xxxx ------------
Xxxxxxxx, XX 00000
Attn: Chief Financial Officer
The undersigned, pursuant to the provisions set forth in the attached
Warrant (No. ___), hereby irrevocably elects to purchase _____ shares of the
Common Stock covered by such Warrant. The undersigned herewith makes payment of
$____________, representing the full purchase price for such shares at the price
per share provided for in such Warrant. Such payment takes the form of $______
in lawful money of the United States.
Signature:
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Address:
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