EXECUTION COPY
Exhibit 99.4
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WARRANT AGREEMENT
Dated as of January 20, 2004
between
PRIVATE BUSINESS, INC.
and
LIGHTYEAR PBI HOLDINGS, LLC
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WARRANT AGREEMENT (this "Agreement"), dated as of January
20, 2004 between PRIVATE BUSINESS, INC., a Tennessee corporation (the
"Company"), and LIGHTYEAR PBI HOLDINGS, LLC, a Delaware limited partnership
(the "Initial Holder").
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Grant. The Company hereby grants to the Initial Holder
warrants ("Warrants") which shall entitle the registered holder thereof to
purchase from the Company, at any time or from time to time hereafter until
5:00 P.M., New York time, on January 20, 2014 (the "Expiration Date"), up to
16,000,000 shares (the "Warrant Shares") of Common Stock, no par value, of the
Company ("Common Stock"), subject to adjustment as provided in Section 6, at
the exercise price of $1.25 per share, subject to adjustment as provided in
Section 6 (the "Exercise Price"), all subject to the terms and upon the
conditions set forth herein. Each Warrant not exercised or deemed exercised on
or prior to the Expiration Date shall become invalid and all rights
thereunder, and all rights in respect thereof under this Agreement, shall
cease as of that time.
2. Warrant Certificates. The Warrants shall be evidenced by
certificates issued pursuant to this Agreement (the "Warrant Certificates") in
the form set forth in Exhibit A hereto, with such appropriate insertions,
omissions, substitutions, and other variations as are required or permitted by
this Agreement.
3. Exercise of Warrant.
(a) General. Subject to the provisions of this Agreement,
upon surrender to the Company at its principal office of a Warrant Certificate
with the annexed Form of Election to Purchase duly executed, together with
payment in accordance with Section 3(b) of the Exercise Price then in effect,
the Company shall issue and deliver promptly to the registered holder of such
Warrant Certificate, a certificate or certificates for the Warrant Shares or
other securities or property to which the registered holder is entitled,
registered in the name of such registered holder or, upon the written order of
such registered holder, in such name or names as such registered holder may
designate; provided, however, that if such exercise would result in the
Initial Holder acquiring beneficial ownership of Common Stock (together with
all other Common Stock owned by the Initial Holder at such time) with a value
in excess of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), notification threshold (the "HSR Threshold"), then
only the exercise of those Warrants which when exercised do not exceed the HSR
Threshold shall be exercised and the Form of Election to Purchase shall be
deemed to relate only to such Warrants. The exercise of additional Warrants in
excess of the HSR Threshold shall not occur until the Initial Holder has
received approval of such exercise under the HSR Act or the time for such
approval has passed. In the case of an exercise of Warrants, any certificate
or certificates representing Warrant Shares shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to
have become the holder of record of the Warrant Shares as of the date of the
surrender of such Warrant Certificate (together with such duly executed Form
of Election to Purchase) and payment of the Exercise Price.
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(b) Payment. Payment of the Exercise Price shall be made, at
the option of the registered holder of the Warrants, (i) in cash, (ii) by wire
transfer payable to the order of the Company, (iii) on a net basis, such that
without the exchange of any funds, such holder receives that number of Warrant
Shares that would otherwise be issuable upon a cash exercise of such Warrants
less that number of Warrant Shares having a current market price equal to the
aggregate Exercise Price that would otherwise have been paid by such holder
for the number of Warrant Shares with respect to which such Warrant is being
exercised or (iv) in shares of Series A Preferred Stock of the Company (the
"Series A Preferred Stock"), such that without the exchange of any funds, such
holder receives that number of Warrant Shares issuable upon a cash exercise of
such Warrants upon surrender to the Company of that number of shares of Series
A Preferred Stock having an aggregate Series A Liquidation Payment (as defined
in the Designation of Preferences of the Series A Preferred Stock) equal to
the aggregate Exercise Price that would otherwise have been paid by such
holder for the number of Warrant Shares with respect to which such Warrant is
being exercised. In the case of clauses (iii) and (iv) of the preceding
sentence, such exchange shall be treated by the parties as a recapitalization
under Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), to the extent permitted by applicable law. For the purpose of any
computation under this paragraph 3(b), the current market price per share of
Common Stock on any day shall be deemed to be the average of the Closing
Prices of the Common Stock for the ten (10) consecutive trading days ending on
the day before the day the Warrant Certificate (together with a duly executed
Form of Election to Purchase) is delivered to the Company. The term "Closing
Price" shall mean, for each trading day, the last reported sale price regular
way on the principal national securities exchange on which the Common Stock is
then listed or admitted for trading or, if the Common Stock is not listed on a
national securities exchange, the average of the closing bid and asked prices
in the over-the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Company for that purpose. If for
any reason the current market price per share cannot be determined pursuant to
the foregoing provisions of this paragraph, the current market price per share
shall be the fair market value thereof as determined by an independent (i.e.
not having any significant relationship with the Company or Investor or its
affiliates) appraiser or investment bank chosen by the members of the
Company's Board of Directors (the "Board") that are not affiliated with the
Initial Holder.
(c) Exercise in Whole or in Part. The purchase rights
evidenced by a Warrant Certificate shall be exercisable, at the election of
the registered holder thereof, in whole or in part, but only for lots of
10,000 Warrant Shares or integral multiples thereof if less than all the
Warrants then held by such registered holder are being exercised. If less than
all of the Warrant Shares purchasable under any Warrant Certificate are
purchased, the Company shall cancel such Warrant Certificate upon the
surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the remaining number of Warrant Shares purchasable thereunder.
(d) Fractional Shares. No fractional shares of Common Stock
shall be issued upon exercise of any Warrants. Instead the Company shall round
the results of an exercise up to the nearest full share of Common Stock.
(e) Reservation of Shares. The Company will at all times
reserve and keep available out of its authorized Common Stock solely for the
purpose of issuance upon exercise of the Warrants as herein provided, such
number of shares of Common Stock as shall from time to
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time be issuable upon the exercise of all outstanding Warrants. All shares of
Common Stock that may be issued upon exercise of the Warrants will, upon
issuance, be validly issued, fully paid and nonassessable and not subject to
preemptive rights of any stockholder.
(f) Legend on Warrant and Stock Certificates. The Warrant
Certificates and any other instruments which evidence the shares issued upon
exercise of the Warrants shall, unless no longer required in the reasonable
judgment of the Company or as set forth in an opinion of counsel reasonably
acceptable to the Company, bear a legend substantially to the following effect
in conspicuous print:
THIS WARRANT HAS OR AS APPLICABLE, THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED,
NOR WILL ANY ASSIGNEE OR ENDORSEE HEREOF BE RECOGNIZED AS AN OWNER OR
HOLDER HEREOF BY THE COMPANY FOR ANY PURPOSE, UNLESS AND UNTIL THIS
WARRANT IS REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
(g) Acknowledgment of Continuing Obligation. The Company
will, at the time of any exercise of the Warrants in whole or in part, upon
request of the registered holder, acknowledge in writing its continuing
obligation to such registered holder in respect of any rights to which the
registered holder shall continue to be entitled after exercise in accordance
with the Warrants; provided, however, that the failure of the registered
holder to make any such request shall not affect the continuing obligation of
the Company to the registered holder in respect of such rights.
4. Restrictions on Transfer.
(a) Warrant Register. The Company shall maintain at its
principal office a Warrant Register for registration of Warrant Certificates
and transfers thereof. The Company shall initially register the outstanding
Warrants in the name of the Initial Holder. The Company may deem and treat the
registered holder(s) of the Warrant Certificates as the absolute owner(s)
thereof and of the Warrants represented thereby (notwithstanding any notation
of ownership or other writing on the Warrant Certificates made by any person)
for the purpose of any exercise thereof or any distribution to the holder(s)
thereof, and for all other purposes, and the Company shall not be affected by
any notice to the contrary. For the purpose of this Agreement, all references
to a holder herein shall refer to a registered holder of Warrants.
(b) Warrants and Warrant Shares Not Registered. Each
registered holder of the Warrants, by acceptance thereof, represents and
acknowledges that the Warrants and the Warrant Shares which may be purchased
upon exercise of a Warrant are not registered under the Securities Act of
1933, as amended (the "Securities Act"), that the issuance of the Warrants and
the offering and sale of such Warrant Shares are being made in reliance on the
exemption from registration afforded by Rule 506 of Regulation D as
promulgated under the Securities Act and
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Section 4(2) thereunder as not involving any public offering and that the
Company's reliance on such exemption is predicated in part on the
representations made by the Initial Holder of the Warrants to and with the
Company that such holder (1) is acquiring the Warrants in good faith solely
for its own account, for investment and not with a view toward resale or other
distribution within the meaning of the Securities Act, (2) is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act, and (3)
has such knowledge and experience in financial and business matters such that
it is capable of evaluating the merits and risks of its investment in the
Warrants. Neither the Warrants nor the related Warrant Shares may be
transferred except (i) pursuant to an effective registration statement under
the Securities Act, (ii) pursuant to Rule 144 under the Securities Act if the
transferor delivers a certificate, in form and substance reasonably
satisfactory to the Company, that such transfer complies with the requirements
of Rule 144, or (iii) pursuant to any other available exemption from
registration if such transferee makes the representations set forth in the
preceding sentence in writing to the Company and provides to the Company an
opinion of counsel in a form reasonably satisfactory to the Company.
(c) Notice and Registration of Transfer. Each registered
holder of the Warrants, by acceptance thereof, agrees that prior to any
disposition by such holder of the Warrants or of any Warrant Shares, such
holder will give written notice to the Company expressing such holder's
intention to effect such disposition and describing briefly such holder's
intention as to the manner in which the Warrants or the Warrant Shares
theretofore issued or thereafter issuable upon exercise hereof, are to be
disposed of, whereupon, but only if such transfer is permitted pursuant to
paragraph 4(b) above, such transferring holder shall be entitled to dispose of
the Warrants and/or the Warrant Shares theretofore issued upon the exercise
thereof, all in accordance with the terms of the notice delivered by such
holder to the Company. In the event of such transfer, the Company shall
register the transfer of any outstanding Warrants in the Warrant Register upon
surrender of the Warrant Certificate(s) evidencing such Warrants to the
Company at its principal office, accompanied by a written instrument of
transfer in form reasonably satisfactory to it, duly executed by the
registered holder thereof. Upon any such registration or transfer, new Warrant
Certificate(s) evidencing such transferred Warrants shall be issued to the
transferee(s) and, if less than all of the Warrants are to be transferred, the
transferor, and the surrendered Warrant Certificate(s) shall be canceled.
5. Special Agreements of the Company. The Company covenants
and agrees as follows:
(a) Listing on Securities Exchanges. If the Common Stock is
listed on a stock exchange or quoted on the Nasdaq National Market or the
Nasdaq Small Cap Market, the Company will use its reasonable best efforts to
procure at its sole expense the listing of all Warrant Shares (subject to
issuance or notice of issuance) on all stock exchanges on which the Common
Stock is then listed, or the quotation of the Warrant Shares on the Nasdaq
National Market or the Nasdaq Small Cap Market, as the case may be, and
maintain the listing or quotation of such shares and other securities after
issuance.
(b) Actions in Avoidance; Non-Dilution. The Company will
not, by amendment of its Amended and Restated Charter, as amended, or through
any reorganization, transfer of assets, consolidation, merger, issue or sale
of securities or otherwise, avoid or take any action which would have the
effect of avoiding the observance or performance of any of the
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terms to be observed or performed hereunder by the Company but will at all
times in good faith assist in carrying out all of the provisions of the
Warrants and in taking all of such action as may be necessary or appropriate
in order to protect the rights of the registered holders of the Warrants
against impairment. Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (b) use
its best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
If any shares of Common Stock required to be reserved for
purposes of exercise of Warrants would require, under any federal law (other
than the Securities Act), registration with or approval of any governmental
authority, before such shares may be issued upon exercise, the Company will
use its reasonable best efforts to cause such shares to be duly registered or
approved by such governmental authority, at its expense.
6. Adjustment of Exercise Price and Number of Warrant
Shares Issuable. The number and kind of shares purchasable upon the exercise
of Warrants and the Exercise Price shall be subject to adjustment from time to
time as follows:
(a) In case the Company shall pay or make a dividend or
other distribution on any class of capital stock of the Company in Common
Stock other than the payment of regularly scheduled dividends on any series of
preferred stock, the Exercise Price in effect at the opening of business on
the day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be reduced by
multiplying such Exercise Price by a fraction the numerator of which shall be
the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination and the denominator of which shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination of the holders entitled to such dividends and
distributions. For the purposes of this paragraph 6(a), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(b) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Exercise Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be reduced, and, conversely, in case
the outstanding shares of Common Stock shall each be combined into a smaller
number of shares of Common Stock, the Exercise Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be increased to equal the product of the Exercise Price in
effect on such date and a fraction the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such subdivision or
combination, as the case may be, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
subdivision or combination, as the case may be. Such reduction or increase, as
the case may be,
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shall become effective immediately after the opening of business on the day
following the day upon which such subdivision or combination becomes
effective.
(c) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock (A) evidences of its
indebtedness or (B) shares of any class of capital stock, cash or other
property or assets (including securities, but excluding any dividend or
distribution referred to in paragraph 6(a) or 6(b) above), then in each case,
the Exercise Price in effect at the opening of business on the day following
the date fixed for the determination of holders of Common Stock entitled to
receive such distribution shall be adjusted by multiplying such Exercise Price
by a fraction of which the numerator shall be the current market price per
share (determined as provided in paragraph 6(e) below) of the Common Stock on
such date of determination less the then fair market value as determined by
the Board (whose determination shall be conclusive) of the portion of the
capital stock, cash or other assets or evidences of indebtedness so
distributed (and for which an adjustment to the Exercise Price has not
previously been made pursuant to the terms of this paragraph 6) applicable to
one share of Common Stock, and the denominator shall be such current market
price per share of the Common Stock, such adjustment to become effective
immediately after the opening of business on the day following such date of
determination of the holders entitled to such distribution.
(d) The reclassification or change of Common Stock into
securities, including securities other than Common Stock, (other than any
reclassification upon a consolidation or merger to which paragraph 6(l) below
shall apply) shall be deemed to involve (A) a distribution of such securities
other than Common Stock to all holders of Common Stock (and the effective date
of such reclassification shall be deemed to be "the date fixed for the
determination of holders of Common Stock entitled to receive such
distribution" within the meaning of paragraph 6(c) above), and (B) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision or combination becomes effective" within the meaning of
paragraph 6(b) above).
(e) If the Common Stock is listed or admitted to trading on
a principal national securities exchange in the United States, the Nasdaq
National Market or the Nasdaq Small Cap Market or in the over-the-counter
market, for the purpose of any computation under this Section 6, the current
market price per share of Common Stock on any day shall be deemed to be the
average of the Closing Prices of the Common Stock for the 10 consecutive
trading days immediately preceding the trading day before the day in question;
provided that, in the case of paragraph 6(c), if the period between the date
of the public announcement of the dividend or distribution and the date for
the determination of holders of Common Stock entitled to receive such dividend
or distribution shall be less than 10 trading days, the period shall be such
lesser number of trading days but, in any event, not less than five trading
days;
(f) If the Common Stock is not quoted or listed by any such
organization, exchange or market, the current market price per share shall be
the fair market value thereof as determined by an independent (i.e. not having
any significant relationship with the Company or Investor or its affiliates)
appraiser or investment bank chosen by the members of the Company's Board that
are not affiliated with the Initial Holder.
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(g) No adjustment in the Exercise Price need be made until
all cumulative adjustments amount to 1% or more of the Exercise Price as last
adjusted. Any adjustments that are not made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
paragraph 6 shall be made to the nearest 1/1,000th of a cent or to the nearest
1/1,000th of a share, as the case may be.
(h) For purposes of this paragraph 6, "Common Stock"
includes any stock of any class of the Company which has no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which is
not subject to redemption by the Company. However, subject to the provisions
of paragraph 6(k) below, shares issuable on exercise of the Warrants shall
include only shares of the class designated as Common Stock of the Company on
the date hereof or shares of any class or classes resulting from any
reclassification thereof and which have no preferences in respect of dividends
or amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to
redemption by the Company; provided that, if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
(i) No adjustment in the Exercise Price shall reduce the
Exercise Price below the then par value of the Common Stock. The Company
hereby agrees with each holder of Warrants that it shall not increase the par
value of the Common Stock. No adjustment in the Exercise Price need be made
under paragraphs 6(a) and 6(c) above if the Company issues or distributes to
each registered holder of Warrants the shares of Common Stock, evidences of
indebtedness, assets or other property, rights, options or warrants referred
to in those paragraphs which each registered holder would have been entitled
to receive had the Warrants been exercised prior to the happening of such
event or the record date with respect thereto.
(j) Whenever the Exercise Price is adjusted pursuant to
paragraphs 6(a), 6(b) or 6(c) above, (A) the number of Warrant Shares
purchasable upon exercise of any Warrant shall be adjusted by multiplying such
number of Warrant Shares by a fraction the numerator of which is the Exercise
Price immediately prior to such adjustment and the denominator of which is the
Exercise Price immediately after such adjustment and (B) the Company shall
promptly mail to registered holders of Warrants, first class, postage prepaid,
a notice of the adjustment together with a certificate from the Company's
independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct.
(k) If:
(A) the Company plans to take any action which
would require an adjustment in the Exercise Price
pursuant to this paragraph 6;
(B) the Company plans to consolidate or merge
with, or transfers all or substantially all of its
assets to, another corporation, and stockholders of the
Company must approve the transaction; or
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(C) there is to be a dissolution or liquidation of
the Company;
the Company shall mail to registered holders of the Warrants, first class,
postage prepaid, a notice stating the proposed record or effective date, as
the case may be. The Company shall mail the notice at least 15 days before
such proposed record or effective date. However, failure to mail the notice or
any defect in it shall not affect the validity of any transaction referred to
in clause (A), (B) or (C) of this paragraph 6(k).
(l) In the case of any consolidation of the Company or the
merger of the Company with or into any other entity or the sale or transfer of
all or substantially all the assets of the Company pursuant to which the
Company's Common Stock is converted into other securities, cash or assets or
other property, upon consummation of such transaction, each Warrant shall
automatically thereafter become exercisable for the kind and amount of
securities, cash or other assets or other property receivable upon the
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock into which such Warrant might have been converted immediately
prior to such consolidation, merger, transfer or sale (assuming such holder of
Common Stock failed to exercise any rights of election and received per share
the kind and amount of consideration receivable per share by a plurality of
non-electing shares). Appropriate adjustment (as determined by the Board)
shall be made in the application of the provisions herein set forth with
respect to the rights and interests thereafter of the holders of Warrants, to
the end that the provisions set forth herein (including provisions with
respect to changes in and other adjustment of the Exercise Price and the
number of shares of Common Stock issuable upon the exercise of the Warrants)
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any shares of stock or other securities or assets or property thereafter
deliverable upon the exercise of Warrants. If this paragraph 6(l) applies to
any transaction, paragraphs 6(a), 6(b) and 6(d) do not apply to such
transaction.
(m) In any case in which this paragraph 6 shall require that
an adjustment as a result of any event become effective from and after a
record date, the Company may elect to defer until after the occurrence of such
event the issuance to the holder of any Warrants exercised after such record
date and before the occurrence of such event of the additional shares of
Common Stock issuable upon such conversion over and above the shares issuable
on the basis of the Exercise Price and number of Warrant Shares in effect
immediately prior to adjustment; provided, however, that if such event shall
not have occurred and authorization of such event shall be rescinded by the
Company, the Exercise Price and number of Warrant Shares shall be recomputed
immediately upon such recission to the price that would have been in effect
had such event not been authorized, provided that such recission is permitted
by and effective under applicable laws.
(n) If any event occurs as to which the foregoing provisions
of this paragraph 6 are not strictly applicable or, if strictly applicable,
would not, in the good faith judgment of the Board, fairly and adequately
protect the purchase rights of the Warrants in accordance with the essential
intent and principles of such provisions, then the Board shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board, to protect such purchase rights as aforesaid.
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(o) As soon as practicable after any adjustment of the
Exercise Price, the number or type of shares issuable upon exercise of the
Warrants or otherwise pursuant to this paragraph 6, the Company will give
written notice thereof to the registered holders of the Warrants setting forth
such adjustment and showing in detail the facts upon which such adjustment is
based; provided that this provision shall not be construed to create a
presumption that the registered holder has conceded its right to challenge the
Company's adjustment if it believes it was not done in accordance with the
terms of this Agreement.
7. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the surrender
thereof by the registered holder thereof at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of Warrant Shares in
such denominations as shall be designated by the registered holder thereof at
the time of such surrender. Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of any
Warrant Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to it, and reimbursement to the Company of
all reasonable expenses incidental thereto, and upon surrender and
cancellation of such Warrant Certificate, if mutilated, the Company will make
and deliver a new Warrant Certificate of like tenor, in lieu thereof.
8. Payment of Taxes. The Company will pay all documentary
stamp taxes attributable to the initial issuance of the Warrants and of the
Warrant Shares upon the exercise of Warrants; provided, however, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance of any Warrant Certificates
or any certificates for Warrant Shares in a name other than that of the
registered holder of such Warrant Certificate, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to the reasonable
satisfaction of the Company that such tax has been paid.
9. Statement on Warrants. Irrespective of any adjustment in
the number or kind of shares issuable upon the exercise of the Warrants or the
Exercise Price, Warrant Certificates theretofore or thereafter issued may
continue to express the same number and kind of shares and the same Exercise
Price as are stated in the Warrant Certificates initially issuable pursuant to
this Agreement.
10. Registration. The Company acknowledges that registered
holders shall have the registration rights as provided in the Securityholders
Agreement, dated as of January 20, 2003, between the Company and the Initial
Holder.
11. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly made when delivered by hand or sent by facsimile transmission (with
receipt confirmed), or, if timely delivered to an air courier guaranteeing
overnight delivery service, on the next business day, or five business days
after being deposited in the mail, first class, certified or registered,
postage prepaid, return receipt requested, in each case addressed as follows
(or to such other place or places as either of the parties shall designate by
written notice to the other):
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(i) if to registered holder, to the address set forth
on the Warrant Register maintained by the Company;
with copies to:
The Lightyear Fund, L.P.
00 Xxxx 00xx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
and
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000; and
(ii) if to the Company, to:
Private Business, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
with copies to:
Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxx
Facsimile: (000) 000-0000
12. Amendment. The Company, with the consent of the
registered holders of the unexercised Warrants evidencing at least a majority
of the Warrant Shares underlying the unexercised Warrants, may amend or
supplement this Agreement or waive compliance by the Company in a particular
instance with any provision of this Agreement; provided that without the
consent of each registered holder affected, no such amendment shall (with
respect to Warrants held by a non-consenting registered holder) increase the
Exercise Price or decrease the number of Warrant Shares issuable upon exercise
of any Warrant.
13. Successors. Except as otherwise provided herein, all the
covenants and provisions of this Agreement by or for the benefit of the
Company and the registered holders of the Warrants shall inure to the benefit
of their respective successors and assigns hereunder.
10
14. Governing Law. This Agreement and each Warrant
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Tennessee and for all purposes shall be construed in
accordance with the laws of such State (without regard to the conflicts of law
principles thereof).
15. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person other than the Company and the
registered holders of the unexercised Warrant Certificates (which shall
include any transferee of all or any portion of the Warrants) any legal or
equitable right, remedy or claim under this Agreement, and this Agreement
shall be for the sole and exclusive benefit of the Company and such registered
holders. Prior to the exercise of the Warrants, no holder of a Warrant
Certificate, as such, shall be entitled to any rights of a stockholder of the
Company, including, without limitation, the right to receive dividends or
subscription rights, the right to vote, to consent, to exercise any preemptive
right, to receive any notice of meetings of stockholders for the election of
directors of the Company or any other matter or to receive any notice of any
proceedings of the Company, except as may be specifically provided for herein.
The holders of the Warrants are not entitled to share in the assets of the
Company in the event of the liquidation, dissolution or winding up of the
Company's affairs.
16. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and such counterparts shall together constitute one
and the same instrument.
17. Headings. The headings in this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
18. Remedies. The Company and the holder hereof each
stipulates that the remedies at law of each party hereto in the event of any
default or threatened default by the other party in the performance or
compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.
19. Severability. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
20. Limitation of Liability; Not Stockholders. No provision
of this Agreement shall be construed as conferring upon a registered holder of
Warrants the right to vote, consent, receive dividends or receive notice,
other than as herein expressly provided, in respect of meetings of
stockholders for the election of directors of the Company or any other matter
whatsoever as a stockholder of the Company. No provision hereof, in the
absence of affirmative action by a registered holder of Warrants to purchase
shares of Common Stock, and no mere enumeration herein of the rights or
privileges of a registered holder of Warrants, shall give rise to
11
any liability of such registered holder for the purchase price of any Common
Stock issued upon exercise of the Warrant or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.
[Signature Page Follows]
12
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
PRIVATE BUSINESS, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
LIGHTYEAR PBI HOLDING, LLC
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Manager
13
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THIS WARRANT HAS OR AS APPLICABLE, THE SHARES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED, NOR WILL ANY ASSIGNEE OR ENDORSEE HEREOF
BE RECOGNIZED AS AN OWNER OR HOLDER HEREOF BY THE COMPANY FOR ANY PURPOSE,
UNLESS AND UNTIL THIS WARRANT IS REGISTERED UNDER SUCH ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY IS OBTAINED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, on
___________, 2014
No. W-
WARRANT CERTIFICATE
This Warrant Certificate certifies that, for value received,
_________________ having an address at ______________ ("Holder"), is the
registered holder of warrants (the "Warrants") to purchase, at any time and
from time to time after the date hereof until 5:00 P.M. New York time, on
________, 2014, up to 16,000,000 fully-paid and non-assessable shares (subject
to adjustment in certain events) of Common Stock, no par value ("Common
Stock"), of PRIVATE BUSINESS, INC., a Tennessee corporation (the "Company"),
at the exercise price per share of $1.25, subject to adjustment in certain
events (the "Exercise Price"), upon surrender of this Warrant Certificate,
together with the attached Form of Election to Purchase duly executed, and
payment of the Exercise Price at the principal office of the Company, but
subject to the terms and conditions set forth herein and in the Warrant
Agreement dated as of _________, 2004 between the Company and the Initial
Holder (the "Warrant Agreement"). Payment of the Exercise Price shall be made,
at the option of the Holder (i) in cash, (ii) by wire transfer payable to the
order of the Company, (iii) on a net basis, such that without the exchange of
any funds, the Holder receives that number of Warrant Shares that would
otherwise be issuable upon a cash exercise of this Warrant less that number of
Warrant Shares having a current market price (as defined in paragraph 3(b) of
the Warrant Agreement) equal to the aggregate Exercise Price that would
otherwise have been paid by such holder for the number of Warrant Shares with
respect to which this Warrant is being exercised or (iv) in shares of Series A
Preferred Stock of the Company (the "Series A Preferred Stock"), such that
without the exchange of any funds, such holder receives that number of Warrant
Shares issuable upon a cash exercise of such Warrants upon surrender to the
Company of that number of shares of Series A Preferred Stock having an
aggregate Series A Liquidation Payment (as defined in the Designation of
Preferences of the Series A Preferred Stock) equal to the aggregate Exercise
Price that would otherwise have been paid by such holder for the number of
Warrant Shares with respect to which such Warrant is being exercised.
i
This Warrant may be exercised at such times and in such
amounts as are provided for in the Warrant Agreement. Each Warrant not
exercised on or prior to _________, 2014 shall become invalid and all rights
hereunder, and all rights in respect thereof under the Warrant Agreement,
shall cease as of that time.
The Warrants evidenced by this Warrant Certificate are
issued pursuant to the Warrant Agreement, which Warrant Agreement is hereby
incorporated by reference in and made a part of this instrument and is hereby
referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or registered
holder) of the Warrants. A copy of the Warrant Agreement may be obtained by
the holder(s) hereof upon written request directed to the Company.
The Warrant Agreement provides that upon the occurrence of
certain events, the Exercise Price and the type and/or number of the Company's
securities issuable upon exercise of the Warrants may, subject to certain
conditions, be adjusted.
Upon due presentment for registration of transfer of this
Warrant Certificate at the principal office of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection therewith which is not payable
by the Company pursuant to paragraph 9 of the Warrant Agreement.
Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such numbered of unexercised Warrants.
The Company may deem and treat the registered holder(s)
hereof as the absolute owner(s) of this Warrant Certificate (notwithstanding
any notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof and of any distribution to the holder(s) hereof
and for all other purposes, and the Company shall not be affected by any
notice to the contrary.
All terms used in this Warrant Certificate which are not
defined herein and are defined in the Warrant Agreement shall have the
meanings assigned to them in the Warrant Agreement.
ii
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.
Dated: ___________, 2004
PRIVATE BUSINESS, INC.
By:
---------------------------------
Name:
Title:
iii
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED, ________________________ hereby sells,
assigns and transfers unto ________________________________, whose address is
__________________________, this Warrant Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
___________________________, Attorney to transfer the within Warrant
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: Signature:
--------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant Certificate.)
-------------------------
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase ________________
shares of Common Stock and herewith: (choose one by marking "X" in the space
provided)
/_/ tenders payment for such shares, to the order of PRIVATE
BUSINESS, INC., in the amount of $________ in accordance with the terms of the
Warrant Agreement.
/_/ requests that such exercise be on a net basis in
accordance with the terms of the Warrant Agreement.
/_/ tenders _____ shares of Series A Preferred Stock, having
an aggregate Series A Liquidation Payment in the amount of $______, as payment
for such shares, in accordance with the terms of the Warrant Agreement.
The undersigned requests that a certificate for such shares
of Common Stock be registered in the name of _________________________________,
whose address is _____________________________________________ and that such
certificate be delivered to _______________________________________ whose
address is __________________________________________________.
Dated: Signature: ___________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
-------------------------
(Insert Social Security or Other
Identifying Number of Holder)
