EXHIBIT 10.3
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SBA COMMUNICATIONS CORPORATION
SHAREHOLDERS AGREEMENT
This Shareholders Agreement (this "Agreement") is made and entered into
as of the date set forth below by and among Steven E. Bernstein, SBA
Communications Corporation, a Florida corporation (the "Company"), and the
purchasers of shares of Series A Convertible Preferred Stock.
WHEREAS, Mr. Bernstein holds an aggregate of 8,075,000 shares of the
Company's Class B Common Stock; and
WHEREAS, the Company is as of this date consummating the Closing under
a Series A Preferred Stock Purchase Agreement (the "Stock Purchase Agreement")
pursuant to which the Company is issuing to certain purchasers shares of Series
A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred
Stock") and the Company is issuing to Alex. Brown & Sons Incorporated a warrant
(the "Agent's Warrant") to purchase shares of Class A Common Stock (each Person
(defined below), who acquires any such shares of Class A Common Stock or holds a
warrant to purchase shares of Series A Preferred Stock or the shares acquired
upon the exercise of such warrant, being herein referred to as a "Preferred
Shareholder" and collectively with Mr. Bernstein, the "Shareholders"); and
WHEREAS, the Stock Purchase Agreement provides that the Preferred
Shareholders shall become parties to this Agreement by executing and delivering
a signature page to this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the agreements
set forth below, the parties hereby agree as follows:
1. CERTAIN DEFINED TERMS
As used in this Agreement, the following terms shall have the
following respective meanings:
"Affiliate" shall mean (a) any Person directly or indirectly
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controlling, controlled by or under common control with another Person; (b) any
Person owning or controlling ten percent (10%) or more of the outstanding voting
securities of such other Person; (c) any officer, director or partner of such
Person; (d) any liquidating trust, trustee or other similar Person or entity for
any Person; or (e) in case of an individual, any family member to whom such
individual may transfer his or her shares pursuant to Section 2 hereof.
"Charter" shall mean the Articles of Incorporation of the
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Company, as amended from time to time.
"Class B Common Stock" shall mean and include the Company's
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Class B Common Stock, par value $.01 per share, as authorized on the date of
this Agreement and any other securities into which or for which the Company's
Class B Common Stock is converted or exchanged pursuant to a plan of
reorganization, recapitalization, merger, sale of assets, the provisions of the
Charter or otherwise.
"Common Stock Conversion Shares" shall mean (a) those shares
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of Class A Common Stock, par value $.01 per share, of the Company issued or
issuable upon the conversion of the Series A
Preferred Stock or Class B Common Stock, as adjusted from time to time and (b)
those shares of Class A Common Stock issuable upon the exercise of the Agent's
Warrant.
"Conversion Price" shall mean the price, as in effect from
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time to time, at which shares of Series A Preferred Stock are convertible into
Common Stock Conversion Shares as defined in, and pursuant to, the Charter.
"Eligible Class B Stockholder" shall mean members of Steven E.
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Bernstein's Immediate Family or their lineal descendants, spouses of lineal
descendants or lineal descendants of spouses, whether alive as of the date
hereof or born subsequently, any trusts or other estate planning vehicles for
the benefit of any of the foregoing, whether existing as of the date hereof or
created subsequently. "Immediate Family" of Mr. Bernstein shall include his
spouse, parents, children, siblings, mother and father-in-law, sons and
daughters-in-laws and brothers and sisters-in-law.
"Person" shall mean any natural person, partnership,
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corporation or other legal entity.
"Qualified Public Offering" shall mean and include the closing
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of a firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
covering the offer and sale of Common Stock for the account of the Company from
which the aggregate gross proceeds to the Company equal or exceed $20,000,000 at
a per share issue price of at least 150% of the then applicable Conversion Price
of Conversion Shares if such public offering occurs before June 30, 1998 or at a
price share of at least 200% of the then applicable Conversion Price and
Conversion Shares if such public offering occurs on or after June 30, 1998.
"Shares" of a Shareholder shall mean and include all Stock now
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owned or hereafter acquired by such Shareholder.
"Stock" shall mean and include all shares of Class B Common
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Stock, Conversion Shares, or Series A Preferred Stock, and all other securities
of the Company that may be issued in exchange for or in respect of shares of
Class B Common Stock, Conversion Shares, or Series A Preferred Stock,
respectively (whether by way of stock split, stock dividend, combination,
reclassification, reorganization or any other means).
2. PROHIBITED TRANSFERS
Mr. Bernstein may not sell or transfer all or any of his
shares of Class B Common Stock except to an Eligible Class B Stockholder or
except in accordance with this Agreement, and no attempted transfer of any Class
B Common Stock in violation of any provision of this Agreement shall be
effective to pass any title or interest therein.
3. RIGHT OF PARTICIPATION IN SALES
(a) If at any time Mr. Bernstein desires to sell or transfer
all or any part of his shares of Class B Common Stock or Common Stock Conversion
Shares to a Person (a "Purchaser"), Mr. Bernstein (the "Selling Shareholder")
shall promptly give written notice (the "Offer" for the purposes of this Section
3) to the Preferred Shareholders. The Offer shall disclose the identity of the
Purchaser, the
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number of shares of Class B Common Stock or Common Stock Conversion Shares to be
sold or transferred, the total number of shares of Class B Common Stock and
Common Stock Conversion Shares owned by the Selling Shareholder, the terms and
conditions, including price, (calculated in the case of shares of Class B Common
Stock by treating such shares as then converted to Common Stock Conversion
Shares) of the proposed sale, and any other material facts relating to the
proposed sale.
(b) Each Preferred Shareholder shall have the right to sell to
the Purchaser, as a condition to such sale by such Selling Shareholder desiring
to sell, at the same price per share (calculated in the case of shares of Series
A Preferred Stock by treating such shares as then converted to Common Stock
Conversion Shares and shares of the Company's Series B Preferred Stock, $.01 par
value, per share (the "Series B Preferred Stock")) and on the same terms and
conditions as involved in such sale by the Selling Shareholder, all or any part
of that number of Common Stock Conversion Shares equal to the product obtained
by multiplying (i) the aggregate number of Common Stock Conversion Shares
covered by the Offer by (ii) a fraction the numerator of which is the number of
Common Stock Conversion Shares held by such Preferred Shareholder at the time of
the sale or transfer and the denominator of which is the total number of Common
Stock Conversion Shares (calculated by treating such shares as then converted to
Common Stock Conversion Shares) held at the time of the sale or transfer by the
Selling Shareholder and all the Preferred Shareholders exercising their rights
of participation hereunder (such Preferred Shareholder being herein called a
"Participating Shareholder"); provided, however, that any Participating
Shareholder shall not be required to deliver to the Purchaser any Series B
Preferred Stock or any other property other than the Common Stock Conversion
Shares in connection with the proposed purchase by the Purchaser.
(c) If a Participating Shareholder wishes to so participate in
any sale under this Section 3, he, she or it shall notify the Selling
Shareholder in writing of such intention as soon as practicable after the
Participating Shareholder's receipt of the Offer, and in any event within 30
days after the date the notice of the Offer was given. Such notification shall
be delivered to the Selling Shareholder (with copies to the Company and the
Preferred Shareholders).
(d) The Selling Shareholder and other Participating
Shareholders shall sell to the Purchaser all, or at the option of the Purchaser,
any part of the Common Stock Conversion Shares proposed to be sold by them at
not more than the price and upon other terms and conditions, if any, not more
favorable to the Purchaser than those in the Offer; provided, however, that any
purchase of less than all of such Shares by the Purchaser shall require the
consent of each Participating Shareholder and shall be made from the Selling
Shareholder and the Participating Shareholders pro rata based upon the relative
amount of the Shares that the Selling Shareholder and the Participating
Shareholders are otherwise entitled to sell pursuant to Section 3(b) hereof.
(e) Each Participating Shareholder who is a holder of Series A
Preferred Stock shall effect its participation in the sale by converting its
Series A Preferred Stock into Series B Preferred Stock and Class A Common Stock
and then promptly delivering to the Selling Shareholder for transfer to the
prospective purchaser one or more certificates, properly endorsed for transfer,
which represent the number of shares of Class A Common Stock which such
Participating Shareholder elects to sell. The Company agrees to make any such
conversion concurrent with the actual transfer of such shares to the Purchaser.
The Participating Shareholders shall be under no obligation to transfer any
shares of Series B Preferred Stock received upon such conversion as a result of
the operation of this Section 3.
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(f) The rights afforded by this Section 3 shall be
inapplicable where Mr. Bernstein elects to transfer any or all of his Class B
Common Stock to an Eligible Class B Stockholder.
4. EXPIRATION OF AGREEMENT
Notwithstanding Section 8 hereof to the contrary, this
Agreement shall expire and terminate on the consummation of a Qualified Public
Offering.
5. SPECIFIC ENFORCEMENT
Each Shareholder expressly agrees that he, she or it and the
Company will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants and/or
conditions of this Agreement by a Shareholder, the other Shareholders and the
Company shall, in addition to all other remedies, each be entitled to a
temporary or permanent injunction, without showing any actual damage, and/or a
decree for specific performance, in accordance with the provisions hereof.
6. LEGEND
Each certificate evidencing any of the shares of Class B
Common Stock shall bear a legend substantially as follows:
The shares represented by this certificate are subject to
restrictions on transfer and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of
except in accordance with and subject to all the terms and
conditions of a certain Shareholders Agreement dated as of
March 6, 1997, as amended from time to time, a copy of which
the Company will furnish to the holder of this certificate
upon request and without charge.
7. NOTICE
Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to be properly given when sent by registered
or certified mail, return receipt requested, by guaranteed overnight delivery
service or by facsimile transmission, addressed as follows:
If to the Company: SBA Communications Corporation
6001 Broken Sound Parkway
Boca Raton, Florida 33487
Attention: Steven E. Bernstein, President
If to the Shareholders: At their respective addresses set forth on
their signature pages hereto;
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or, as to any of the foregoing, to such other address as any such party may give
the others notice of pursuant to this Section 7, provided, however, that a
change of address shall only be effective upon receipt.
8. BOARD OF DIRECTORS AND AUTHORITY OF THE BOARD
(a) The Board of Directors of the Corporation (the "Board")
shall be comprised initially of five (5) directors. The holders of the Series A
Preferred Stock shall be entitled to designate two (2) directors as follows: ABS
Capital Partners II, L.P. shall be entitled to designate one director and Advent
VII, L.P. shall be entitled to designate one director. Steven E. Bernstein shall
be entitled to designate two directors, one of which may be himself. The final
director shall be an independent director designated by Mr. Bernstein who is
reasonably acceptable to the directors designated by the holders of the Series A
Preferred Stock. In the event of any vacancy on the Board arising for any
reason, the Shareholders or class of Shareholders who designated the director
whose office has become vacant shall be entitled to designate a successor
director. If any Shareholder or class of Shareholders notifies the other
stockholder(s) in writing that he wishes to remove a director whom he has
designated, the other stockholders shall cooperate in taking all action
necessary to effect the removal of such director as promptly as practicable.
(b) All proposed acquisitions of stock or assets by the
Company or any of its subsidiaries with a purchase price in excess of $1,000,000
must be approved by the Board.
(c) The Board shall establish a Compensation Committee of
three (3) members, consisting of the two (2) directors designated by the holders
of the Series A Preferred Stock and one (1) director designated by Steven E.
Bernstein, which may be himself.
(d) Shareholders shall vote all of their Stock, execute and
deliver such further documents, take such further action and use their best
efforts to cause their representatives on the Board to vote in such a manner, as
may be necessary or desirable to carry out the purpose and intent of this
Section 8 and the other provisions of this Agreement.
(e) If a Shareholder shall at any time fail or refuse to vote
his Stock as provided in paragraphs (b) through (d) above, thereupon without
further action by any person, such Shareholders shall be deemed to have
irrevocably appointed, and hereby does irrevocably appoint, the other
stockholders who are a party to this Agreement as his or her attorney and proxy
to vote his Stock as provided in this Section 8.
9. GOVERNING LAW; SUCCESSORS AND ASSIGNS
This Agreement shall be governed by the laws of the State of
Florida and except as expressly provided herein shall be binding upon the heirs,
personal representatives, executors, administrators, successors and assigns of
the parties. The rights of the Preferred Shareholders hereunder are assignable
to any assignee or transferee of all or a portion of the Shares held by such
Preferred Shareholders.
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10. RIGHTS AND OBLIGATIONS OF CERTAIN TRANSFEREES OF SHARES
If Mr. Bernstein transfers any of his shares of Class B Common
Stock to any Eligible Class B Stockholder, such transferee shall agree in
writing, as a condition to such transfer, that any future sales or transfers of
such shares of Class B Common Stock by the holder thereof (the "Transferring
Holder") shall be subject to the restrictions on transfer set forth in Sections
2 and 3 hereof.
11. SEVERABILITY
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.
12. HEADINGS
Headings in this Agreement are included for reference only and
shall have no effect upon the construction or interpretation of any part of this
Agreement.
13. COUNTERPARTS
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.
14. REPORTING REQUIREMENTS
The Company will furnish the following to each Shareholder
which is a holder of any Series A Preferred Stock, Series B Preferred Stock or
any Common Stock Conversion Shares:
a. as soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Company, a copy of the annual
audit report for such year for the Company, including therein a balance sheet of
the Company as of the end of such fiscal year and statements of operations,
shareholders' equity and cash flows of the Company for such fiscal year, setting
forth in each case in comparative form the corresponding figures for the
preceding fiscal year, if any, together with supporting notes thereto, all
audited by the Company's Auditors, together with a summary prepared by
Management concerning the Company's operations and financial condition;
b. as soon as available and in any event within forty-five
(45) days after the end of each fiscal quarter of the Company, an unaudited
balance sheet of the Company as of the end of such quarter and unaudited
statements of operations, shareholders' equity and cash flows of the Company for
the period ending with such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the prior fiscal
year duly certified by the chief financial officer of the Company as having been
prepared in accordance with GAAP applied on a consistent basis (provided that
such unaudited statements need not contain footnotes and will be subject to
normal year-end adjustments);
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c. promptly after sending, making available, or filing the
same, all reports and financial statements that the Company sends or makes
available to the Shareholders of the Company; and
d. to each holder of at least 5.0% of the Series A Preferred
Stock, Series B Preferred Stock and any Common Stock Conversion Shares (based on
the total number of Series A Preferred Stock, Series B Preferred Stock and
Common Stock Conversion Shares then outstanding), any other information
respecting the business, properties or the condition or operations, financial or
otherwise, of the Company that any Purchaser may from time to time reasonably
request, including, but not limited to, (i) monthly unaudited financial
statements; (ii) an annual operating plan and budget (including cash flow data)
for the Company for each fiscal year, prepared in reasonable detail, as such
operating plan and budget has been approved by the Board of Directors of the
Company, and (iii) comparative information for any month, quarter or fiscal year
relating to the Company's actual performance against the operating plan and
budget for the corresponding period.
15. CONFIDENTIALITY
Any confidential information obtained by any holder of the
Purchased Shares pursuant to the Series A Convertible Preferred Stock Purchase
Agreement of even date hereof, or any other information of a confidential nature
(including, without limitation, the Company's business plans, intellectual
property and other proprietary rights or information of the Company) or
otherwise identified to such holder as being of a confidential nature, shall be
treated as confidential and shall not be disclosed to a third party or used for
any purpose other than evaluating such holder's investment in the Company
without the prior written consent of the Company, except as required by
applicable law or regulation; provided that any such confidential information
may be disclosed to the beneficial owner of any equity or partnership interest
in such holder, it being understood that such beneficial owner shall be informed
of the confidential nature of such information. In the event of any breach of
this Section 15, irreparable damage would occur to the Company and, accordingly,
the Company shall be entitled to injunctive relief and the right to have
specifically enforced the provisions hereof.
16. KEY MAN LIFE INSURANCE
The Company will maintain key man life insurance in the
following amounts:
Steven E. Bernstein $3,000,000
Ronald G. Bizick, II $2,000,000
17. ENTIRE AGREEMENT AND AMENDMENTS
This Agreement, together with the Stock Purchase Agreement,
constitutes the entire agreement of the parties with respect to the subject
matter hereof. Neither this Agreement nor any provision hereof may be waived,
modified, amended or terminated except by a written agreement signed by (a) the
Company, (b) Mr. Bernstein, and (c) the holders of not less than 662/3% percent
of the Shares then held by the Preferred Shareholders (based on the number of
shares of Common Stock Conversion Shares issued or issuable upon conversion of
the Series A Preferred Stock). To the extent any term or other provision of any
other agreement or instrument by which any party hereto is bound conflicts with
this Agreement, this Agreement shall have precedence over such conflicting term
or provision.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal as of the 6th day of March, 1997.
SBA COMMUNICATIONS CORPORATION
/s/ Steven E. Bernstein
By:_______________________________
Steven E. Bernstein, President
Address: SBA Communications Corporation
6001 Broken Sound Parkway
Fourth Floor
Boca Raton, FL 33487
/s/ Steven E. Bernstein
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Steven E. Bernstein, individually
PURCHASERS
[See Counterpart Signature Pages
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