WARRANT AGREEMENT

Exhibit 10.3

Execution Version

                    WARRANT AGREEMENT (this “ Agreement ”), dated as of December 9, 2005 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, (i) at any time or from time to time after the date hereof until 5:00 P.M., New York time, on January 20, 2014 (the “ Expiration Date ”), up to 1,893,940 shares (the “ Initial 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 $1.32 per share, subject to adjustment as provided in Section 6 (the “ Exercise Price ”) and (ii) at any time or from time to time beginning at 12:01 A.M., New York time, on June 9, 2007 until the Expiration Date, up to 1,893,939 shares (the “ Second Warrant Shares ” and, together with the Initial Warrant Shares, the “ Warrant Shares ”) of Common Stock, subject to adjustment as provided in Section 6, at the Exercise Price, all subject to the terms and upon the conditions set forth herein.  Notwithstanding the foregoing, upon a Change in Control (as defined in the Company’s Senior Subordinated Note due 2010, dated the date hereof (the “ Note ”)), the Warrant to purchase the Second Warrant Shares shall become immediately exercisable.  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 Certificate ”) 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 Hart-Scott-Rodino 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

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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.

                    (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) through a reduction in the aggregate principal amount of the Note, such that without the exchange of any funds, such holder receives (a) that number of Warrant Shares determined by dividing (x) the aggregate principal reduction of the Note (which amount shall not exceed the amount that would result in the issuance of that number of Warrant Shares that remain available for exercise pursuant to this Warrant Agreement) by (y) the Exercise Price, together with a replacement note having equivalent terms as the Note but having a principal amount equal to the principal amount plus accrued interest outstanding under the Note prior to such exchange minus the dollar amount 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.

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                    (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 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:

                    (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.

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                    (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 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.

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                    (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 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 forego