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EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is dated as of the 7th day of August, 1998, by and among
Private Business, Inc., a Tennessee corporation (the "Company"), the current
stockholders of the Company designated as Founding Stockholders on the signature
pages hereto (each, a "Founding Stockholder" and collectively, the "Founding
Stockholders") and the persons designated as Investors on the signature pages
hereto (each, an "Investor" and collectively, the "Investors").
WHEREAS, the parties to this Agreement are simultaneously entering into
a certain Stock Purchase Agreement, dated as of July 24, 1998 (the "Purchase
Agreement"), whereby the Investors have agreed to purchase shares of Convertible
Preferred Stock, par value $.01 per share, of the Company ("Convertible
Preferred Stock"), which are convertible into shares of Common Stock, without
par value, of the Company ("Common Stock"); and
WHEREAS, the execution of this Agreement is an inducement and a
condition precedent to the purchase by the Investors of the Series A Convertible
Preferred Stock under the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises, as an inducement to
the Investors to consummate the transactions contemplated by the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company, the Founding
Stockholders and the Investors hereby covenant and agree with each other as
follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
An "AFFILIATE" of any Person means a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is
under common control with the first mentioned Person. A Person shall be deemed
to control another Person if such first Person possesses directly or indirectly
the power to direct, or cause the direction of, the management and policies of
the second Person, whether through the ownership of voting securities, by
contract or otherwise.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"COMMISSION" shall mean the United States Securities and
Exchange Commission, or any other federal agency at the time administering the
Securities Act and the Exchange Act.
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"COMMON STOCK" shall mean Common Stock, without par value, of
the Company, and any other securities into which or for which any of the
securities described above may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
"COMPANY" shall refer to the Company and any successor or
successors thereto.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, or any similar successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"PERMITTED TRANSFEREE" shall mean any Permitted Transferee of
Registrable Securities from the Founding Stockholders as defined in the
Stockholders Agreement of even date among the parties hereto.
"PERSON" shall mean an individual, a corporation, a
partnership, a joint venture, a trust, an unincorporated organization, a limited
liability company or partnership, a government and any agency or political
subdivision thereof.
"REGISTRABLE SECURITIES" shall mean (i) any shares of Common
Stock held by the Investors or subject to acquisition by any Investor upon
conversion of the Convertible Preferred Stock (it being understood that for
purposes of this Agreement, a Person will be deemed to be a holder of
Registrable Securities whenever such Person has the right to then acquire or
obtain from the Company any Registrable Securities, whether or not such
acquisition has actually been effected), (ii) any shares of Common Stock held by
the Founding Stockholders and any Permitted Transferees, and (iii) any other
securities issued and issuable with respect to any such shares described in
clause (i) or (ii) above by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization; provided, however, that notwithstanding anything to the
contrary contained herein, "Registrable Securities" shall not at any time
include any securities (i) registered and sold pursuant to the Securities Act,
(ii) sold to the public pursuant to Rule 144 promulgated under the Securities
Act, (iii) which could then be sold pursuant to Rule 144(k) or, with regard to
Registrable Securities held by Investors or Founding Stockholders who hold in
the aggregate less than one percent (1%) of the Company's outstanding Common
Stock, Rule 144 (or any successor provision) or (iv) that have ceased to be
outstanding.
"REGISTRATION EXPENSES" shall mean the expenses so described
in Section 6 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, or any similar successor federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
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"TWO-THIRDS INTEREST" means the Investors holding not less
than two-thirds in interest (by number of shares) in all outstanding Registrable
Securities held by all Investors.
2. DEMAND REGISTRATIONS.
(a) At any time after the earlier of (i) the second
anniversary of the date hereof or (ii) the date that is ninety (90) days after
the initial public offering of the Common Stock pursuant to an effective
registration under the Securities Act, at least a Two-Thirds Interest may notify
the Company in writing (which request shall specify the number of Registrable
Securities intended to be disposed of by such holder and the manner of such
disposition) that they intend to offer or cause to be offered for public sale
all or any portion of their Common Stock which is Registrable Securities in the
manner specified in such request. Upon receipt of such request, the Company
shall promptly deliver notice of such request to all Persons holding Registrable
Securities who shall then have thirty (30) days to notify the Company in writing
of their desire to be included in such registration. If the request for
registration contemplates an underwritten public offering, the Company shall
state such in the written notice and in such event the right of any Person to
participate in such registration shall be conditioned upon their participation
in such underwritten public offering and the inclusion of their Registrable
Securities in the underwritten public offering to the extent provided herein.
The Company will use, subject to the limits contained in this Section 2 and in
Sections 5 and 6, its reasonable best efforts to expeditiously effect the
registration of all Registrable Securities whose holders request participation
in such registration under the Securities Act and qualify such Registrable
Securities for sale under any state blue sky law; provided, however, that the
Company shall not be required to effect registration pursuant to a request under
this Section 2(i) after the Company has caused two (2) such registrations
pursuant to this Section to become effective or (ii) within 90 days following
the effective date of any registered offering by the Company to the general
public of its securities for its own account. The Company may postpone the
filing or the effectiveness of any registration statement pursuant to this
Section 2 for a reasonable time period, provided that such postponements shall
not exceed ninety (90) days in the aggregate during any twelve (12) month
period, if (i) the Company has been advised by legal counsel that such filing or
effectiveness would require disclosure of a material financing, acquisition or
other corporate transaction, and the Board of Directors of the Company
determines in good faith that such disclosure is not in the best interests of
the Company and its stockholders or (ii) the Board of Directors of the Company
determines in good faith that there is a valid business purpose or reason for
delaying filing or effectiveness. A registration will not count as a requested
registration under this Section 2(a) until the registration statement relating
to such registration has been declared effective by the Commission; provided,
however, that if a Two Thirds Interest shall request, in writing, that the
Company either withdraw a registration statement which has been filed under this
Section 2(a) but not yet been declared effective or delay the effectiveness of
such a registration statement for up to four (4) months, a Two Thirds Interest
may thereafter request the Company to reinstate such Registration Statement, if
permitted under the Securities Act, or to file another registration statement,
in accordance with the procedures set forth herein, provided
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that the Company shall only be required to refile a registration statement once
with respect to each such registration statement filed under this Section 2(a).
(b) If a requested registration involves an underwritten
public offering and the managing underwriter of such offering determines in good
faith that the number of securities sought to be offered should be limited due
to market conditions (including interference with successful marketing of
securities of the Company), then the number of securities to be included in such
underwritten public offering shall be reduced to a number deemed satisfactory by
such managing underwriter, provided that the Company shall be entitled to
participate and the shares to be excluded shall be determined in the following
sequence: (i) first, securities held by any other Persons (other than the
Investors holding Registrable Securities) having a contractual, incidental
"piggy back" right to include such securities in the registration statement,
(ii) second, shares sought to be registered by the Company, (iii) third,
Registrable Securities of holders other than Investors who did not make the
original request for registration, and (iv) fourth, Registrable Securities of
holders who requested such registration pursuant to Section 2(a) and any other
Investors that have elected to be included in such registration, it being
understood that no shares shall be registered for the account of the Company or
any shareholder other than the Investors unless all Registrable Securities for
which Investors have requested registration have been registered. If there is a
reduction of the number of Registrable Securities pursuant to clauses (i), (iii)
or (iv), such reduction shall be made on a pro rata basis within such tranche
(based upon the aggregate number of shares of Common Stock or Registrable
Securities held by the holders in each tranche and subject to the priorities set
forth in the preceding sentence).
(c) With respect to a request for registration pursuant to
Section 2(a) which is for an underwritten public offering, the managing
underwriter shall be chosen by the Investors holding not less than Two-Thirds
Interest to be sold in such offering, subject to the Company's consent, which
such consent shall not be unreasonably withheld. The Company may not cause any
other registration of securities for sale for its own account (other than a
registration effected solely to implement an employee benefit plan or a
transaction to which Rule 145 of the Securities Act is applicable) to become
effective within one hundred eighty (180) days following the effective date of
any registration required pursuant to this Section 2.
3. FORM S-3. After the first public offering of its securities
registered under the Securities Act, the Company shall use its reasonable best
efforts to qualify and remain qualified to register securities on Form S-3 (or
any successor form) under the Securities Act. The holders of Registrable
Securities anticipated to have an aggregate sale price (net of underwriting
discounts and commissions, if any) in excess of $1.5 million shall have the
right, subject to the limits contained in Sections 3, 5 and 6, to request
registration on Form S-3 (or any successor form) for the Registrable Securities
held by such requesting holders. Such requests shall be in writing and shall
state the number of shares of Registrable Securities to be disposed of and the
intended method of disposition of such shares by such holder or holders. The
Company shall give notice to all other holders of the Registrable Securities of
the receipt of a request for registration pursuant to this Section 3 and such
holders of Registrable
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Securities shall then have thirty (30) days to notify the Company in writing of
their desire to participate in the registration.
4. PIGGYBACK REGISTRATION.
(a) If the Company at any time proposes to register any of its
Common Stock under the Securities Act for sale to the public (including pursuant
to a demand under Section 2 hereof as provided therein and except with respect
to registration statements on Forms ▇-▇, ▇-▇ or any successor or similar forms
or another form not available for registering the Registrable Securities for
sale to the public or in connection with a tender offer, merger or other
acquisition, and other than pursuant to Section 3 herein), each such time it
will give written notice at the applicable address of record to each Person
holding Registrable Securities of its intention to do so. Upon the written
request of any of such Person holding Registrable Securities, given within
fifteen (15) days after receipt by such Person of such notice, the Company will,
subject to the limits contained in this Section 4 and Sections 5 and 6, use its
reasonable best efforts to cause all such Registrable Securities of said
requesting holders to be registered under the Securities Act and qualified for
sale under any state blue sky law, all to the extent required to permit such
sale or other disposition of said Registrable Securities; provided, however,
that if the Company is advised in good faith by any managing underwriter of the
Company's securities being offered in a public offering pursuant to such
registration statement that the amount to be sold by persons other than the
Company (collectively, "Selling Stockholders") is greater than the amount which
can be offered without adversely affecting the offering (including an adverse
effect on the marketing of the securities to be sold by the Company or an
opinion that the number of securities requested to be included in such
registration exceeds the number which can be sold in or during the time of the
offering), the Company shall include in such registration all securities
proposed by the Company to be sold for its own account and the Company may
reduce the amount offered for the accounts of Selling Stockholders (including
such holders of shares of Registrable Securities) to a number deemed
satisfactory by such managing underwriter; and provided further, that the shares
to be excluded shall be determined in the following sequence: (i) first,
securities held by any Persons not having any such contractual, incidental
registration rights, (ii) second, securities held by any Persons having
contractual, incidental registration rights pursuant to an agreement which is
not this Agreement and (iii) third, the Registrable Securities sought to be
included by the holders thereof as determined on a pro rata basis (based upon
the aggregate holdings of Registrable Shares of the holders requesting
registration).
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Company may delay the filing or effectiveness of, or may
withdraw, any registration statement referred to under this Section 4 at any
time for any reason whatsoever without thereby incurring any liability or
obligation of any kind whatsoever to any selling holder of Registrable
Securities or other shares.
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5. LIMITATIONS ON REGISTRATION RIGHTS.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Company may delay the filing or effectiveness of a registration
statement under Section 3 for such time as may reasonably be required by the
Company (i) to obtain such audited and unaudited financial statements as may be
required by law to be included in the registration statement, (ii) if the
Company's Board of Directors believes that the offering of Registrable
Securities pursuant thereto would interfere with or be detrimental to a planned
offering by the Company of any of the Company's securities, whether debt or
equity, or (iii) if the Company's Board of Directors believes that an offering
of Registrable Securities thereunder would have a material adverse effect on the
business, operations, results of operations, assets, liabilities, or condition
(financial or otherwise) of the Company. The Company may postpone the filing or
the effectiveness of any registration statement pursuant to Section 3 for a
reasonable period of time, provided that such postponements shall not exceed 180
days in the aggregate during any twelve (12) month period, if (i) the Company
has been advised by legal counsel that such filing or effectiveness would
require disclosure of a material financing, acquisition or other corporate
transaction, and the Board of Directors of the Company determines in good faith
that such disclosure is not in the best interests of the Company and its
stockholders or (ii) the Board of Directors determines in good faith that there
is a valid business purpose or reason for delaying filing or effectiveness.
(b) If during any period when a registration statement
covering Registrable Securities filed pursuant to Section 3 is effective, the
Company proposes to file a registration statement of Forms S-1 or S-4 (or any of
their respective successor forms), then the Company shall have the right to
terminate the effectiveness of the registration statement covering such
Registrable Securities for a period of not more than three hundred sixty (360)
days. During such three hundred sixty (360) day period the Company shall use
reasonable efforts to prepare and file a registration statement (the "Company
Registration Statement") covering the shares of Common Stock sought to be
registered by the Company and the Registrable Securities for which such
effective registration statement was filed. In any such event, the selling
holders of Registrable Securities shall include such Registrable Securities in
the Company Registration Statement.
6. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Agreement to use its reasonable best efforts to effect
the registration of any of its securities under the Securities Act, the Company
will, as expeditiously as possible:
(a) use its reasonable best efforts diligently to prepare and
file with the Commission a registration statement on the appropriate form under
the Securities Act with respect to such securities as reasonably selected by the
Company, which form shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the Commission to be filed therewith, and use its reasonable best
efforts to cause such registration statement to become and remain effective
until completion of the proposed offering (but not for more than one hundred
eighty (180) days); provided, however, that the Company may discontinue any
registration of its securities which
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are not Registrable Securities at any time prior to the effective date of such
Registration Statement relating thereto.
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective (but
not for more than one hundred eighty (180) days) and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement whenever the seller or
sellers of such securities shall desire to sell or otherwise dispose of the
same, but only to the extent provided in this Agreement;
(c) furnish to each selling holder and the underwriters, if
any, such number of copies of such registration statement, any amendments
thereto, any documents incorporated by reference therein, the prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as such selling holder may reasonably
request in order to facilitate the public sale or other disposition of the
securities owned by such selling holder;
(d) use its reasonable best efforts to register or qualify the
securities covered by such registration statement under such other securities or
state blue sky laws of such jurisdictions as each selling holder shall
reasonably request, and do any and all other acts and things which may be
necessary under such securities or blue sky laws to enable such selling holder
to consummate the public sale or other disposition in such jurisdictions of the
securities owned by such selling holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified and (notwithstanding anything
to the contrary in this Agreement) the Company shall not be required to (i)
consent to general service of process in any such jurisdiction or submit to
liability for state or local taxes where it is then not otherwise liable for
such taxes;
(e) within a reasonable time before each filing of the
registration statement or prospectus or amendments or supplements thereto with
the Commission, furnish to one counsel for the selling stockholders as a group
(selected by a majority in interest of the holders of Registrable Securities who
participate in the registration) copies of such documents proposed to be filed,
which documents shall be subject to the reasonable approval of such counsel;
(f) promptly notify each selling holder of Registrable
Securities, such selling holders' counsel and any underwriter and (if requested
by any such Person) confirm such notice in writing, of the happening of any
event which makes any statement made in the registration statement or related
prospectus untrue or which requires the making of any changes in such
registration statement or prospectus so that they will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading; and, as promptly as
practicable thereafter, use reasonable best efforts to prepare and file with the
Commission and furnish a supplement or amendment to
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such prospectus so that, as thereafter deliverable to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(g) use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a registration statement, and if one
is issued use its reasonable best efforts to obtain the withdrawal of any order
suspending the effectiveness of a registration statement at the earliest
possible moment;
(h) if requested by the managing underwriter or underwriters
(if any), any selling holder, or selling holders' counsel, use reasonable best
efforts to promptly incorporate in a prospectus supplement or post-effective
amendment such information as such Person reasonably requests to be included
therein with respect to the selling holder or the securities being sold,
including, without limitation, with respect to the securities being sold by such
selling holder to such underwriter or underwriters, the purchase price being
paid therefor by such underwriter or underwriters and with respect to any other
terms of an underwritten offering of the securities to be sold in such offering,
and promptly make all required filings of such prospectus supplement or
post-effective amendment;
(i) make available during normal business hours (at the
reasonable expense of the Company) to each selling holder, any underwriter
participating in any disposition pursuant to a registration statement, and any
attorney, accountant or other agent or representative retained by any such
selling holder or underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and properties of the Company
(collectively, the "Records"), as shall be reasonably necessary to enable them
to exercise their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information requested by any
such Inspector in connection with such registration statement subject, in each
case, to such confidentiality agreements as the Company shall reasonably
request;
(j) enter into any reasonable underwriting agreement required
by the proposed underwriter(s) for the selling holders, if any, and use its
reasonable best efforts to facilitate the public offering of the securities;
(k) use its reasonable best efforts to cause the securities
covered by such registration statement to be listed on the securities exchange
or quoted on the quotation system on which the Common Stock is then listed or
quoted;
(l) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission and make generally
available to its security holders, in each case as soon as practicable, but not
later than 45 days after the close of the period covered thereby, an earnings
statement of the Company which will satisfy the provisions of
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Section 11(a) of the Securities Act and Rule 158 thereunder (or any comparable
successor provisions); and
(m) otherwise reasonably cooperate with the underwriter(s),
the Commission and other regulatory agencies and take all reasonable actions and
execute and deliver or cause to be executed and delivered all documents
reasonably necessary to effect the registration of any securities under this
Agreement.
7. INFORMATION BY HOLDERS. In connection with each registration under
this Agreement, the selling holders of Registrable Securities shall furnish to
the Company and the managing underwriter(s) such information with respect to
themselves and the proposed distribution, and fill out such questionnaires, as
the Company or the managing underwriter(s) shall deem reasonably necessary or
desirable in connection with registrations pursuant to this Agreement.
8. EXPENSES. All reasonable expenses incurred by the Company and the
Selling Stockholders in effecting the registrations provided for in Sections 2,
3 and 4, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company and one
counsel for the selling stockholders as a group (selected by a majority in
interest of the holders of Registrable Securities who participate in the
registration and not to exceed $100,000 with respect to any single registration
pursuant to Section 2 hereof and $5,000 with respect to any single registration
pursuant to Sections 3 or 4 hereof), expenses of any audits of the Company
incident to or required by any such registration and expenses of complying with
the securities or blue sky laws of any jurisdictions pursuant to Section 6(d)
hereof (all of such expenses referred to as "Registration Expenses"), but
specifically excluding transfer taxes and any fees, commissions, discounts and
disbursements of underwriters or their counsel (other than those related to blue
sky matters) in connection with any registration under Sections 2 and 3 herein,
shall be paid by the Company.
9. INDEMNIFICATION.
(a) The Company shall indemnify and hold harmless the selling
holder of Registrable Securities, each underwriter (as defined in the Securities
Act), and each other Person who participates in the offering of such securities
and each other Person, if any, who controls (within the meaning of the
Securities Act) such seller, underwriter or participating Person (individually
and collectively, the "Indemnified Person") against any losses, claims, damages
or liabilities (collectively, the "liability"), joint or several, to which such
Indemnified Person may become subject under the Securities Act or any other
statute or at common law, insofar as such liability (or action in respect
thereof) arises out of or is based upon (i) any untrue statement or alleged
untrue statement of any material fact contained, on the effective date thereof,
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not
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misleading. Except as otherwise provided in Section 9(d), the Company shall
reimburse each such Indemnified Person in connection with investigating or
defending any such liability as expenses in connection with the same are
incurred; provided, however, that the Company shall not be liable to any
Indemnified Person in any such case to the extent that any such liability arises
out of or is based upon any untrue or misleading statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary or final prospectus, or amendment or supplement thereto in reliance
upon and in conformity with information furnished in writing to the Company by
such Person specifically for use therein; and provided further, that the Company
shall not be required to indemnify any Person against any liability arising from
any untrue or misleading statement or omission contained in any preliminary
prospectus if such deficiency is corrected in the final prospectus or for any
liability which arises out of the failure of any Person to deliver a prospectus
as required by the Securities Act.
(b) Each selling holder of any securities included in such
registration being effected shall indemnify and hold harmless each other selling
holder of any securities, the Company, its directors and officers, each
underwriter and each other Person, if any, who controls the Company or such
underwriter and their respective directors, officers, partners, agents and
affiliates (individually and collectively also the "Indemnified Person"),
against any liability, joint or several, to which any such Indemnified Person
may become subject under the Securities Act or any other statute or at common
law, insofar as such liability (or actions in respect thereof) arises out of or
is based upon (i) any untrue statement or alleged untrue statement of any
material fact contained, on the effective date thereof, in any registration
statement under which securities were registered under the Securities Act at the
request of such selling holder, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or (ii) any omission
or alleged omission by such selling holder to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in the case of (i) and (ii) to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such registration statement, preliminary or final
prospectus, amendment or supplement thereto in reliance upon and in conformity
with information furnished in writing to the Company by such selling holder
specifically for use therein. Such selling holder shall reimburse any
Indemnified Person for any legal fees or other costs incurred in investigating
or defending any such liability; provided, however, that such selling holder's
obligations hereunder shall be limited to an amount equal to the proceeds to
such selling holder of the securities sold in any such registration.
(c) Indemnification similar to that specified in Sections 9(a)
and (b) shall be given by the Company and each selling holder (with such
modifications as may be appropriate) with respect to any required registration
or other qualification of their securities under any federal or state law or
regulation of governmental authority other than the Securities Act.
(d) If the indemnification provided for in this Section 9 for
any reason is held by a court of competent jurisdiction to be unavailable to an
indemnified party in respect of
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any losses, claims, damages, expenses or liabilities referred to therein, then
each indemnifying party under this Section 9, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages, expenses or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, the selling holders and the underwriters from
the offering of the Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, the other selling holders and
the underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages, expenses or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the selling holders and the underwriters shall be deemed to be in the
same respective proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and the selling holders and the
underwriting discount received by the underwriters, in each case as set forth in
the table on the cover page of the applicable prospectus, bear to the aggregate
public offering price of the Registrable Securities. The relative fault of the
Company, the selling holders and the underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, the selling holders or the
underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the selling holders and the underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
9 were determined by pro rata or per capita allocation or by any other method of
allocation which does not take account of the equitable considerations referred
to in the immediately preceding paragraph. In no event, however, shall a selling
holder be required to contribute any amount under this Section 9(d) in excess of
the lesser of (i) that proportion of the total of such losses, claims, damages
or liabilities indemnified against equal to the proportion of the total
Registrable Securities sold under such registration statement which are being
sold by such selling holder or (ii) the proceeds received by such selling holder
from its sale of Registrable Securities under such registration statement. No
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not found guilty of such fraudulent misrepresentation.
10. COMPLIANCE WITH RULE 144. In the event that the Company (i)
registers a class of securities under Section 12 of the Exchange Act or (ii)
shall commence to file reports under Section 13 or 15(d) of the Exchange Act,
the Company will use its reasonable best efforts thereafter to file with the
Commission such information as is required under the Exchange Act for so long as
there are holders of Registrable Securities; and in such event, the Company
shall use its reasonable best efforts to take all action as may be required as a
condition to the availability of Rule 144 under the Securities Act (or any
comparable successor rules). The Company shall furnish to any holder of
Registrable Securities upon request a written statement executed by the Company
as to the steps it has taken to comply with the current public
11
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information requirement of Rule 144 (or such comparable successor rules). The
holders of Registrable Securities shall have no rights under Sections 2 or 3
herein at any time during which (i) they may utilize Rule 144 to dispose of the
number of Registrable Securities which they could have requested to be
registered but for this sentence, or (ii) Rule 144(e) does not prevent such
holders from selling all such Registrable Securities within a 90 day period, in
each case only as to the securities which may then be fully sold thereunder.
After the occurrence of the first underwritten public offering of Common Stock
pursuant to an offering registered under the Securities Act on Form S-1 or Form
SB-1 (or any comparable successor forms), subject to the limitations on
transfers imposed by this Agreement, the Company shall use its reasonable best
efforts to facilitate and expedite transfers of Registrable Securities pursuant
to Rule 144 under the Securities Act, which efforts shall include timely notice
to its transfer agent to expedite such transfers of Registrable Securities.
11. AMENDMENTS. The provisions of this Agreement may be amended, and
the Company may take any action herein prohibited or omit to perform any act
herein required to be performed by it, only with the written consent of the
Company, Two-Thirds Interest of the Investors and a majority in interest of the
Founding Stockholders; provided, however, that any such amendment shall also
require the approval of Cendant Corporation unless (x) such amendment does not
impose any additional obligations on Cendant to pay any amounts or assume
financial liabilities and (y) in connection with such amendment Cendant would
not get treated any less favorably than any of the other Investors or any of
their respective Affiliates.
12. MARKET STAND-OFF. Each Investor and Founding Stockholder agrees, if
requested by the Company and an underwriter of Registrable Securities of the
Company in connection with any public offering of the Company, not to sell or
otherwise transfer or dispose of any shares held by it for such period, not to
exceed (a) one hundred eighty (180) days following the effective date of the
relevant registration statement filed under the Securities Act in connection
with the Company's initial public offering of Registrable Securities, or (b)
ninety (90) days following the effective date of the relevant registration
statement in connection with any other public offering of Registrable
Securities, as such underwriter shall specify reasonably and in good faith.
13. TRANSFERABILITY OF REGISTRATION RIGHTS. The registration rights set
forth in this Agreement are transferable to each permitted transferee of
Registrable Securities, and any such transferee of an Investor shall be deemed
an "Investor" hereunder. Each subsequent holder of Registrable Securities must
consent in writing to be bound by the terms and conditions of this Agreement in
order to acquire the rights granted pursuant to this Agreement.
14. RIGHTS WHICH MAY BE GRANTED TO SUBSEQUENT INVESTORS. Other than
permitted transferees of Registrable Securities under Section 13 hereof, the
Company shall not, without the prior written consent of a Two-Thirds Interest of
the Investors, (a) allow purchasers of the Company's securities to become a
party to this Agreement or (b) grant any other registration rights to any third
parties other than subordinate piggyback registration rights.
12
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15. DAMAGES. The Company recognizes and agrees that each holder of
Registrable Securities will not have an adequate remedy if the Company fails to
comply with the terms and provisions of this Agreement and that damages will not
be readily ascertainable.
16. MISCELLANEOUS.
(a) All notices, requests, demands and other communications
provided for hereunder shall be in writing and mailed (by first class registered
or certified mail, postage prepaid), telegraphed, sent by express overnight
courier service or electronic facsimile transmission (with a copy by mail), or
delivered to the applicable party at the addresses indicated below:
If to the Company:
Private Business, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & Manner, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Investors:
TA Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Summit Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
13
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and
Cendant Corporation
▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other holder of Registrable Securities:
At such Person's address for notice as set forth in the books
and records of the Company.
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to other parties complying as to delivery with
the terms of this subsection (a). All such notices, requests, demands and other
communications shall, when mailed, telegraphed or sent, respectively, be
effective (i) two days after being deposited in the mails or (ii) one day after
being delivered to the telegraph company, deposited with the express overnight
courier service or sent by electronic facsimile transmission, respectively,
addressed as aforesaid.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, without giving effect to
conflict of laws principles thereof.
(c) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(d) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
17. DISPUTE RESOLUTION. Except as provided below, any dispute arising
out of or relating to this Agreement or the breach, termination or validity
hereof shall be finally settled by binding arbitration conducted expeditiously
in accordance with the J.A.M.S./Endispute Comprehensive Arbitration Rules and
Procedures (the "J.A.M.S. Rules"). The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. ss. ss.1-16, and judgment upon the award
rendered by the arbitrators may be entered by any court having jurisdiction
thereof. The place of arbitration shall be Baltimore, Maryland.
Such proceedings shall be administered by the neutral arbitrator in
accordance with the J.A.M.S. Rules as he/she deems appropriate, however, such
proceedings shall be guided by the following agreed upon procedures:
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15
(i) mandatory exchange of all relevant
documents, to be accomplished within
forty-five (45) days of the initiation of
the procedure;
(ii) no other discovery;
(iii) hearings before the neutral arbitrator which
shall consist of a summary presentation by
each side of not more than three (3) hours;
such hearings to take place on one or two
days at a maximum; and
(iv) decision to be rendered not more than ten
(10) days following such hearings.
Notwithstanding anything to the contrary contained herein, the
provisions of this Section 15 shall not apply with regard to any equitable
remedies to which any party may be entitled hereunder.
Each of the parties hereto (a) hereby irrevocably submits to the
jurisdiction of any United States District Court of competent jurisdiction for
the purpose of enforcing the award or decision in any such proceeding, (b)
hereby waives, and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution (except as protected
by applicable law), that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or that this Agreement or the subject matter hereof may not be enforced in or by
such court, and hereby waives and agrees not to seek any review by any court of
any other jurisdiction which may be called upon to grant an enforcement of the
judgment of any such court. Each of the parties hereto hereby consents to
service of process by registered mail at the address to which notices are to be
given. Each of the parties hereto agrees that its or his submission to
jurisdiction and its or his consent to service of process by mail is made for
the express benefit of the other parties hereto. Final judgment against any
party hereto in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first set forth above.
THE COMPANY:
PRIVATE BUSINESS, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Chairman
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
17
FOUNDING STOCKHOLDERS:
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. ANNUITY TRUST -
1997
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇., Trustee
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, individually
THE ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ANNUITY TRUST - 1997
By:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individually
THE ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ANNUITY TRUST - 1997
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individually
--------------------------------------------
▇▇▇ ▇▇▇▇▇, individually
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
18
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, individually
--------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, individually
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
19
INVESTORS:
TA/ADVENT VIII, L.P.
By: TA Associates VIII, LLC
Its: General Partner
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
ADVENT ATLANTIC AND PACIFIC III, L.P.
By: TA Associates AAP III Partners, L.P.
Its: General Partner
By: TA Associates, Inc.
Its: General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
TA INVESTORS LLC
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
20
TA EXECUTIVES LLC
By: TA Associates, Inc.
Its: Manager
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
21
SUMMIT VENTURES V, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member
SUMMIT V ADVISORS FUND (QP), L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member
SUMMIT V ADVISORS FUND, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
22
SUMMIT INVESTORS III, L.P.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Partner
SUMMIT V COMPANION FUND, L.P.
By: Summit Partners V, L.P.
Its: General Partner
By: Summit Partners, LLC
Its: General Partner
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
23
CENDANT CORPORATION
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
24
BT INVESTMENT PARTNERS, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Title: Principal
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
25
THE ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ TRUST
By:
---------------------------------------
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, III
Title: Trustee
--------------------------------------------
W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, III
THE ▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ JOINT
REVOCABLE TRUST
By:
---------------------------------------
Name:
Title: Trustee
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ MANAGEMENT TRUST
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Trustee
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
26
SUNAPEE SECURITIES, INC.
By:
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
SQUAM LAKE INVESTORS III, L.P.
By:
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
[SIGNATURE PAGE TO REGISTRATION RIGHTS ▇▇▇▇▇▇▇▇▇]
▇▇
▇▇▇▇ ▇▇▇ FUND, LLC
By:
---------------------------------------
Name: H. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Member
GPH PB FUND, LLC
By:
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Member
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]