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Re: Issuer Warrant Transaction

Warrant Agreement

Re:        Issuer Warrant Transaction | Document Parties: SBA COMMUNICATIONS CORP You are currently viewing:
This Warrant Agreement involves

SBA COMMUNICATIONS CORP

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Title: Re: Issuer Warrant Transaction
Date: 5/8/2009
Industry: Communications Services     Sector: Services

Re:        Issuer Warrant Transaction, Parties: sba communications corp
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Exhibit 10.80

[Bank Name and Address]

April 20, 2009

To: SBA Communications Corporation

5900 Broken Sound Parkway NW

Boca Raton, Florida 33487

Attention: Tom Hunt

Telephone No.:

Facsimile No.:

Re:        Issuer Warrant Transaction

The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the Warrants issued by SBA Communications Corporation (the “ Company ”) to [Bank Name] (“ Bank ”) on the Trade Date specified below (the “ Transaction ”). This letter agreement constitutes a “Confirmation” as referred to in the ISDA Master Agreement specified below. This Confirmation shall replace any previous agreements and serve as the final documentation for the Transaction.

The definitions and provisions contained in the 1996 ISDA Equity Derivatives Definitions (the “ Equity Definitions ”), as published by the International Swaps and Derivatives Association, Inc. (“ ISDA ”), are incorporated into this Confirmation. In the event of any inconsistency between the Equity Definitions and this Confirmation, this Confirmation shall govern. The Transaction shall be deemed to be a Share Option Transaction within the meaning set forth in the Equity Definitions.

Each party is hereby advised, and each such party acknowledges, that the other party has engaged in, or refrained from engaging in, substantial financial transactions and has taken other material actions in reliance upon the parties’ entry into the Transaction to which this Confirmation relates on the terms and conditions set forth below.

1. This Confirmation evidences a complete and binding agreement between Bank and the Company as to the terms of the Transaction to which this Confirmation relates. This Confirmation shall supplement, form a part of, and be subject to an agreement in the form of the 2002 ISDA Master Agreement (the “Agreement ”) as if Bank and the Company had executed an agreement in such form (but without any Schedule except for the election of United States dollars as the Termination Currency) on the Trade Date. In the event of any inconsistency between provisions of that Agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction to which this Confirmation relates. The parties hereby agree that no Transaction other than the Transaction to which this Confirmation relates shall be governed by the Agreement.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:

 

Trade Date:

  

April 20, 2009

Warrants:

  

Equity call warrants, each giving the holder the right to purchase one Share at the Strike Price, subject to the Settlement Terms set forth below. For the purposes of the Equity Definitions, each reference to a Warrant herein shall be deemed to be a reference to a Call Option.

Warrant Style:

  

American

Buyer:

  

Bank

Seller:

  

The Company

Shares:

  

The Class A common stock of Company, par value USD 0.01 per Share (Exchange symbol “ SBAC ”)

 

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Number of Warrants:

  

[ Barclays Bank PLC – 6,665,571; Citibank, N.A. - 4,443,714; Deutsche Bank AG London – 1,851,548; JPMorgan Chase Bank, National Association – 1,110,929; Wachovia Capital Markets LLC – 740,619] subject to adjustments provided herein

Daily Number of Warrants:

  

For any Expiration Date, as provided in Schedule A to this Confirmation, subject to adjustment pursuant to the provisos to “Expiration Date(s)”; provided that upon the exercise of any Warrants on a date preceding the first Expiration Date, the Daily Number of Warrants for each Expiration Date (other than the final Expiration Date) shall be reduced by a number of Warrants equal to the quotient obtained by dividing the total number of Warrants so exercised by 60 (rounded down to the nearest whole number) (such quotient, the “ Daily Reduction Amount ”) and the Daily Number of Warrants for the final Expiration Date shall be reduced by a number of Warrants equal to the excess of the total number of Warrants so exercised over the sum of the Daily Reduction Amount for all preceding Expiration Dates.

Warrant Entitlement:

  

One Share per Warrant

Number of Shares:

  

The product of the Number of Warrants and the Warrant Entitlement.

Multiple Exercise:

  

Applicable

Minimum Number of Warrants:

  

1

Maximum Number of Warrants:

  

All Warrants remaining unexercised as of the remaining Exercise Date(s).

Integral Multiple:

  

1

Strike Price:

  

USD 44.6400

Premium:

  

[Barclays Bank PLC - USD 40,178,025.00; Citibank, N.A. - USD 26,785,350.00; Deutsche Bank AG London – USD 10,839,375.00; JPMorgan Chase Bank, National Association – USD 6,503,625.00; Wachovia Capital Markets LLC – USD 4,335,750.00]

Premium Payment Date:

  

April 24, 2009

Exchange:

  

The NASDAQ Global Select Market

Related Exchange(s):

  

The principal exchange(s) for options contracts or futures contracts, if any, with respect to the Shares.

Exercise and Valuation:

 

Expiration Time:

  

The Valuation Time

Expiration Date(s):

  

Each Exchange Business Day during the period from and including the First Expiration Date to and including the 60 th Exchange Business Day following the First Expiration Date shall be an “Expiration Date” for a number of Warrants equal to the Daily Number of Warrants on such date; provided that, notwithstanding the foregoing and anything to the contrary in the Equity Definitions, if a Market Disruption Event occurs on any Expiration Date (including the First Expiration Date), the Calculation Agent shall make adjustments, if applicable, to the Daily Number of Warrants or shall reduce such Daily Number of Warrants to zero for which such day shall be an Expiration Date and shall designate an Exchange Business Day or a number of Exchange Business Days as the Expiration Date(s) for the remaining Daily Number of Warrants or a portion thereof for the originally scheduled Expiration Date; and provided further that if such Expiration Date has not

 

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occurred pursuant to this clause as of the eighth Exchange Business Day following the last scheduled Expiration Date under the Transaction, the Calculation Agent shall have the right to declare such Exchange Business Day to be the final Expiration Date and the Calculation Agent shall determine its good faith estimate of the fair market value for the Shares as of the Valuation Time on that eighth Exchange Business Day or on any subsequent Exchange Business Day, as the Calculation Agent shall determine using commercially reasonable means.

First Expiration Date:

  

January 2, 2015, subject to Market Disruption Event below.

Consequences of a Disrupted Day:

  

Notwithstanding the foregoing and anything to the contrary in the Equity Definitions and not limiting anything set forth under “Expiration Date(s)” above, if any Exercise Date occurring prior to the First Expiration Date is a Disrupted Day, the Calculation Agent may reduce the number of Warrants (including reducing the number to zero) for which such day shall be an Exercise Date.

Automatic Exercise:

  

Applicable; and means that, unless all Warrants have been previously exercised hereunder, a number of Warrants for each Expiration Date equal to the Daily Number of Warrants (as adjusted pursuant to the terms hereof) for such Expiration Date will be deemed to be automatically exercised.

Market Disruption Event:

  

Section 4.3(a)(ii) is hereby amended by adding after the words “or Share Basket Transaction” in the first line thereof a phrase “a failure by the Exchange or Related Exchange to open for trading during its regular trading session or” and replacing the phrase “during the one-half hour period that ends at the relevant Valuation Time” with the phrase “at any time during the regular trading session on the Exchange or any Related Exchange, without regard to after hours or any other trading outside of the regular trading session hours”.

Valuation applicable to each Warrant:

 

Valuation Time:

  

At the close of trading of the regular trading session on the Exchange; provided that if the principal trading session is extended, the Calculation Agent shall determine the Valuation Time in its reasonable discretion.

Valuation Date:

  

Each Exercise Date. Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.

Settlement Terms applicable to the Transaction:

 

Method of Settlement:

  

Net Share Settlement; provided that, with respect to any Warrants exercised on the Expiration Dates (and only such Warrants), Cash Settlement shall apply if the Company validly elects Cash Settlement pursuant to the provisions of “Cash Settlement Election” below.

Net Share Settlement:

  

On the relevant Settlement Date, Company shall deliver to Bank, the Share Delivery Quantity of Shares for such Settlement Date to the account specified hereto free of payment through the Clearance System.

Share Delivery Quantity:

  

For any Settlement Date, a number of Shares, as calculated by the Calculation Agent, equal to the Net Share Settlement Amount for such Settlement Date divided by the Settlement Price on the Valuation Date in respect of such Settlement Date rounded down to the nearest whole number, plus cash in lieu of any fractional Shares (based on such Settlement Price).

 

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Net Share Settlement Amount:

  

For any Settlement Date, an amount equal to the product of (i) the Number of Warrants exercised or deemed exercised on the relevant Exercise Date (or in the case of any exercise (including any Automatic Exercise) on an Expiration Date, the Daily Number of Warrants for such Expiration Date), (ii) the Strike Price Differential for such Settlement Date and (iii) the Warrant Entitlement. For avoidance of doubt, if any Warrants are exercised prior to the first Expiration Date, the Calculation Agent will proportionately adjust each Daily Number of Warrants to reflect such exercise.

Strike Price Differential:

  

(a) If the Settlement Price for any Valuation Date is greater than the Strike Price, an amount equal to the excess of such Settlement Price over the Strike Price; or

  

(b) If such Settlement Price is less than or equal to the Strike Price, zero.

Settlement Price:

  

For any Valuation Date, the per Share volume-weighted average price for such Valuation Date as displayed under the heading “Bloomberg VWAP” on Bloomberg page SBAC.UQ <equity> AQR (or any successor thereto) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such Valuation Date or if such price is unavailable, the market value of one Share on such Valuation Date, as determined by the Calculation Agent in its reasonable discretion (in each case, without regard to pre-open or after hours trading outside of any regular trading session for such Valuation Date). Notwithstanding anything to the contrary in the Equity Definitions, if there is a Market Disruption Event on any Valuation Date, then the Calculation Agent shall determine the Settlement Price for such Valuation Date on the basis of its good faith estimate of the market value for the relevant Shares on such Valuation Date.

Settlement Date:

  

For any Exercise Date, the date defined as such in Section 6.2 of the Equity Definitions, subject to Section 9(p)(i) hereof.

Cash Settlement Election:

  

With respect to all Warrants to be exercised on the Expiration Dates, the Company can elect Cash Settlement by delivering a written notice to Bank (the “ Cash Settlement Notice ”) on or prior to the fifth (5 th ) scheduled Exchange Business Day immediately preceding the First Expiration Date, which Cash Settlement Notice shall contain:

  

(i) a representation that (x) on the date of such Cash Settlement Notice, neither the Company nor any of its affiliates is in possession of any material non-public information with respect to the Company or its Shares, (y) the Company is electing Cash Settlement in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act ”) and (z) the Company has not entered into or altered any hedging transaction relating to the Shares corresponding to or offsetting the Transaction;

  

(ii) a representation that the Company is not electing Cash Settlement to create actual or apparent trading activity in the Shares (or any security convertible into or exchangeable for the Shares) or to raise or depress or otherwise manipulate the price of the Shares (or any security convertible into or exchangeable for the Shares);

  

(iii) an acknowledgment by the Company that (A) any transaction by Bank following the Company’s election of Cash Settlement shall be made at Bank’s sole discretion and for Bank’s own account and (B) the Company does not have, and shall not attempt to exercise, any influence over how, when, whether or at what price to effect such transactions, including, without limitation, the price paid or received per Share pursuant to such transactions, or whether such transactions are made on any securities exchange or privately; and

 

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(iv) an agreement by the Company that, during the period commencing on the date of such Cash Settlement Notice and ending on the second Exchange Business Day following the last Settlement Date hereunder, without the prior written consent of Bank, the Company shall not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18 under the Exchange Act) not to, directly or indirectly (including, without limitation, by means of a derivative instrument), purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares or any security convertible into or exchangeable for the Shares in the public markets.

Cash Settlement:

  

If Cash Settlement is applicable, on each Settlement Date, the Company shall deliver to Bank (to an account specified by Bank) the Net Share Settlement Amount for such Settlement Date.

  

In addition to any other requirements set forth herein, the Company agrees that it shall not have the right to elect Cash Settlement if Bank notifies the Company that, in the reasonable judgment of Bank the election of Cash Settlement or any purchases of Shares that Bank (or its affiliates) might make in connection therewith based upon the advice of counsel and as a result of events occurring after the Trade Date, would raise material risks under applicable securities laws.

Failure to Deliver:

  

Inapplicable

Other Applicable Provisions:

  

The provisions of Sections 6.6, 6.7, 6.8, 6.9 and 6.10 of the Equity Definitions will be applicable, except that all references in such provisions to “Physically-Settled” shall be read as references to “Net Share Settled”. “Net Share Settled” in relation to any Warrant means that Net Share Settlement is applicable to that Warrant.

3. Additional Terms applicable to the Transaction:

 

Adjustments applicable to the Warrants:

  

Method of Adjustment:

  

Calculation Agent Adjustment. For the avoidance of doubt, in making any adjustments under the Equity Definitions, the Calculation Agent may adjust the Strike Price, the Number of Warrants, the Daily Number of Warrants and the Warrant Entitlement. Notwithstanding the foregoing, any cash dividends or distributions on the Shares, whether or not extraordinary, shall be governed by Section 9(k) of this Confirmation and not by Section 9.1(c) of the Equity Definitions.

Extraordinary Events applicable to the Transaction:

  

Consequence of Merger Events

  

(a) Share-for-Share:

  

Alternative Obligation; provided that the Calculation Agent will determine if the Merger Event affects the theoretical value of the Transaction and if so Bank in its sole discretion may elect to make adjustments to any of the Strike Price, the Number of Warrants, the Daily Number of Warrants, the Warrant Entitlement and any other term necessary to reflect the characteristics (including volatility, dividend practice, borrow cost and liquidity) of the New Shares. Notwithstanding the foregoing, Cancellation and Payment shall apply in the event the New Shares are not publicly traded on a United States national securities exchange or quoted on The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors).

 

5


Share-for-Other:

  

Cancellation and Payment

(c) Share-for-Combined:

  

Cancellation and Payment; provided that on or prior to the Merger Date the Bank may elect, in its sole discretion, to apply the consequence specified opposite “Share for Share” to that portion of the consideration that consists of New Shares (as determined by the Calculation Agent) and the consequence specified opposite “Share for-Other” to that portion of the consideration that consists of Other Consideration (as determined by the Calculation Agent).

In the event of any “Tender Offers” (as defined in the 2002 ISDA Equity Derivatives Definitions (the “ 2002 Definitions ”)) , the following consequences, each as defined in the 2002 Definitions and including any relevant cross references, shall apply to such Tender Offers:

 

(a) Share-for-Share:

  

Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)

(b) Share-for-Other:

  

Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)

(c) Share-for-Combined:

  

Modified Calculation Agent Adjustment (as defined in the 2002 Definitions and including any relevant cross references)

Nationalization or Insolvency:

  

Cancellation and Payment

 

4. Calculation Agent:

 

Bank, acting in its capacity as Calculation Agent

5. Account Details:

 

 

(a)

Account for payments to Company:

To be provided by Company

Account for delivery of Shares from Company:

To be provided by Company

 

 

(b)

Account for payments to Bank:

[                    ]

Account for delivery of Shares to Bank:

[                    ]

6. Offices:

The Office of Company for the Transaction is: Inapplicable, Company is not a Multibranch Party.

The Office of Bank for the Transaction is: [                    ]

[                    ]

 

6


7. Notices: For purposes of this Confirmation:

 

 

(a)

Address for notices or communications to Company:

SBA Communications Corporation

5900 Broken Sound Parkway NW

Boca Raton, Florida 33487

Attention: Tom Hunt

Telephone No.:

Facsimile No.:

Address for notices or communications to Bank:

[                    ]

8. Representations and Warranties of the Company

The representations and warranties of the Company set forth in Section 3 of the Purchase Agreement (the “ Purchase Agreement ”) dated as of the Trade Date and relating to the issuance of USD 450,000,000 principal amount of 4.00% Convertible Senior Notes due 2014, (the “ Convertible Notes ”) between the Company and Citigroup Global Markets Inc., Barclays Capital Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Wachovia Capital Markets, LLC (collectively, the “ Initial Purchasers ”) are true and correct and are hereby deemed to be repeated to Bank as if set forth herein. The Company hereby further represents and warrants to Bank that:

 

 

(a)

The Company has all necessary corporate power and authority to execute, deliver and perform its obligations in respect of the Transaction; such execution, delivery and performance have been duly authorized by all necessary corporate action on the Company’s part; and this Confirmation has been duly and validly executed and delivered by the Company and constitutes its valid and binding obligation, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity) and except that rights to indemnification and contribution hereunder may be limited by federal or state securities laws or public policy relating thereto.

 

 

(b)

Neither the execution and delivery of this Confirmation nor the incurrence or performance of obligations of the Company hereunder will conflict with or result in a breach of the certificate of incorporation or by-laws (or any equivalent documents) of the Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which the Company or any of its subsidiaries is subject, or constitute a default under, or result in the creation of any lien under, any such agreement or instrument, or breach or constitute a default under any agreements and contracts of the Company and the significant subsidiaries filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, as updated by any subsequent filings.

 

 

(c)

No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required in connection with the execution, delivery or performance by the Company of this Confirmation, except such as have been obtained or made and such as may be required under the Securities Act of 1933, as amended (the “ Securities Act ”) or state securities laws.

 

 

(d)

The Shares initially issuable upon exercise of the Warrant by the net share settlement method (the “ Warrant Shares ”) have been reserved for issuance by all required corporate action of the Company. The Warrant Shares have been duly authorized and, when delivered against payment therefor (which may include Net Share Settlement in lieu of cash) and otherwise as contemplated by the terms of the Warrant following the exercise of the Warrant in accordance with the terms and conditions of the Warrant, will be validly issued, fully-paid and non-assessable, and the issuance of the Warrant Shares will not be subject to any preemptive or similar rights.

 

7


 

(e)

The Company is an “eligible contract participant” (as such term is defined in Section 1(a)(12) of the Commodity Exchange Act, as amended.

 

 

(f)

The Company and each of its affiliates is not, on the date hereof, in possession of any material non-public information with respect to Company.

 

 

(g)

The Company is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

 

 

(h)

The assets used by the Company for its obligations under the Transaction (1) are not assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code (the “Code”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) subject to Title I of ERISA, and (2) do not constitute “plan assets” within the meaning of Department of Labor Regulation 2510.3-101, 29 CFR Section 2510-3-101.

9. Other Provisions:

 

 

(a)

Opinions . The Company shall deliver an opinion of counsel, dated as of the Trade Date, to Bank with respect to the matters set forth in Sections 8(a) through (e) of this Confirmation.

 

 

(b)

Amendment . If the Initial Purchasers exercise their right to receive additional Convertible Notes (the “ Additional Convertible Notes ”) as set forth in the Purchase Agreement, then on the Additional Premium Payment Date (as defined below), the Number of Warrants will be automatically increased by additional Warrants (the “ Additional Warrants ”) in proportion to such Additional Convertible Notes and an additional premium equal to the product


 
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