Exhibit 99.3
EXHIBIT E
NEITHER THIS WARRANT NOR ANY SHARES ACQUIRED UNDER EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER ANY STATE SECURITIES LAWS. NEITHER THIS WARRANT NOR ANY SUCH
SHARES UNDERLYING THIS WARRANT MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT AND STATE SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM SUCH
REGISTRATION.
APRIL __, 2000 2,500,000 WARRANT SHARES
LIBERTY LIVEWIRE CORPORATION
(FORMERLY KNOWN AS THE XXXX-XX CORPORATION)
COMMON STOCK SUBSCRIPTION WARRANT
THIS CERTIFIES THAT, for value received, HYPERTV NETWORKS, INC., its
legal successors and permitted assigns (the "Warrant Holder"), is entitled to
purchase from LIBERTY LIVEWIRE LLC, a Delaware limited liability company
("Company"), at an exercise price of $30.00 per share (the "Exercise Price"),
2,500,000 shares (the "Warrant Shares") of the Class A Common Stock (as
defined in Section 8(a)) of The Xxxx-XX Corporation, a Delaware corporation
that intends to change its name to Liberty Livewire Corporation ("Livewire").
The number of Warrant Shares and the Exercise Price shall be adjusted and
readjusted or changed from time to time in accordance with paragraph 4
hereof. This Warrant is the Warrant delivered by the Company pursuant to the
Cooperative Venture Agreement dated as of April __, 2000 (the "Venture
Agreement"), among the Company, the initial Warrant Holder, and HyperTV with
Livewire, LLC, and the Warrant Holder shall be bound by, and entitled to the
benefits of, the terms and provisions of the Venture Agreement applicable to
holders of this Warrant, to the same extent as if the Warrant Holder were the
original signatory thereto.
This Warrant shall vest as to 20% of the Warrant Shares on the first
anniversary of the date first written above, and as to an additional 20% of
the Warrant Shares on each of the second through fifth anniversaries of this
date, unless accelerated in accordance with the terms hereof. This Warrant
may be exercised by the Warrant Holder in accordance with the terms hereof,
to the extent vested, at any time and from time to time on or prior to March
31, 2015 (the "Termination Date"). The unvested portion of this Warrant shall
not be exercisable. At 2:00 p.m., Eastern time, on the Termination Date, this
Warrant shall automatically terminate to the extent not theretofore
exercised, and shall thereafter by null and void.
1. EXERCISE OF WARRANT.
(a) The rights represented by this Warrant may be exercised by
the Warrant Holder, in whole or in part, by delivering to the Company (i) this
Warrant, (ii) a duly executed notice of
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exercise in the form of Annex A hereto, and (iii) payment in the amount equal
to the product of (x) the Exercise Price times (y) the number of Warrant
Shares as to which this Warrant is being exercised (such product, the
"Aggregate Exercise Price"), by wire transfer of immediately available funds,
or as provided in Section 1(b). This Warrant shall be deemed to have been
exercised at the close of business on the date the above deliveries are made
(provided that any delivery made on a day that is not a Business Day (as
defined in Section 8(a)), or after 2:00 p.m., Eastern time, shall be deemed
to have been made on the next Business Day) and as of such moment the Warrant
Holder shall be deemed to be the record holder of the shares of Common Stock
issuable upon such exercise (and the rights of the Warrant Holder, as such,
with respect to the number of Warrant Shares as to which this Warrant is
being exercised shall cease). As soon as practicable after the exercise, in
whole or in part, of this Warrant, and in any event within 5 Business Days
thereafter, the Company at its expense (including the payment by it of any
applicable issuance or stamp taxes) will cause to be issued in the name of
and delivered to the Warrant Holder, or, subject to the terms and provisions
of the Venture Agreement, as the Warrant Holder (upon payment of any
applicable transfer taxes) may direct, a certificate or certificates for the
number of fully paid and nonassessable shares of Common Stock to which the
Warrant Holder shall be entitled upon such exercise. In the event of partial
exercise of this Warrant, the Company shall issue and deliver to the Warrant
Holder a new Warrant evidencing the rights to purchase any remaining Warrant
Shares, which new Warrant shall in all other respects be identical to this
Warrant.
(b) As an alternative to the method of payment set forth in
Section 1(a) and in lieu of any cash payment required thereunder, the Warrant
Holder shall have the right at any time and from time to time during the term
of this Warrant to exercise this Warrant in whole or in part by surrendering
its right to purchase a certain number of Warrant Shares hereunder (the right
to purchase a Warrant Share hereunder being called herein a "Share Purchase
Right") as payment of the Aggregate Exercise Price due upon such exercise (a
"Cashless Exercise"). A Cashless Exercise may be effected pursuant to this
Section 1(b) by surrender of this Warrant with a duly executed notice of
exercise in the form of Annex B hereto. The number of Share Purchase Rights
to be surrendered in payment of the Aggregate Exercise Price for any Cashless
Exercise hereunder shall be determined by dividing the Aggregate Exercise
Price by an amount equal to the excess of (i) the Market Price per share of
Common Stock on the date of such exercise (as defined in Section 8(a)) OVER
(ii) the Exercise Price per Share.
2. INVESTMENT REPRESENTATION.
The Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account for investment
purposes and not with the view to any offering or distribution and that the
Warrant Holder will not sell or otherwise dispose of this Warrant or the
underlying Warrant Shares in violation of applicable securities laws. The
Warrant Holder acknowledges that the certificates representing any Warrant
Shares will bear a legend indicating that they have not been registered under
the Act, and may not be sold by the Warrant Holder except pursuant to an
effective registration statement or pursuant to an exemption from
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registration.
3. VALIDITY OF WARRANT.
The Company represents and warrants that all shares of Common Stock
that may be delivered upon the exercise of the rights represented by this
Warrant will, when delivered upon such exercise, be duly authorized, validly
issued, fully paid and nonassessable.
4. ANTIDILUTION PROVISIONS.
The terms of this Warrant shall be subject to adjustment as follows:
(a) If Livewire shall (i) pay a stock dividend or make a
distribution to holders of Common Stock in shares of its Common Stock, (ii)
subdivide its outstanding shares of Common Stock, through a stock split or
otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, through a reverse stock split or otherwise, or (iv)
issue by reclassification of its shares of Common Stock any shares of capital
stock of Livewire, (A) the Exercise Price shall be increased or decreased, as
the case may be, to an amount which shall bear the same relation to the
Exercise Price in effect immediately prior to such action as the total number
of shares outstanding immediately prior to such action shall bear to the
total number of shares outstanding immediately after such action and (B) this
Warrant automatically shall be adjusted so that it shall thereafter evidence
the right to purchase the kind and number of Warrant Shares or other
securities which the Warrant Holder would have owned and would have been
entitled to receive after such action if this Warrant had been exercised
immediately prior to such action or any record date with respect thereto. An
adjustment made pursuant to this subparagraph (a) shall become effective
retroactively immediately after the record date in the case of a dividend or
distribution of Common Stock and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
(b) If Livewire shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of (i) assets (other than cash dividends or cash
distributions payable out of consolidated net income or retained earnings or
dividends payable in Common Stock), (ii) evidences of indebtedness or other
debt or equity securities of Livewire, or of any corporation other than
Livewire (except for the Common Stock) or (iii) subscription rights, options
or warrants to purchase any of the foregoing assets or securities, whether or
not such rights, options or warrants are immediately exercisable (hereinafter
collectively called "Distributions on Common Stock"), the Company shall make
provisions for the Warrant Holder to receive upon exercise of this Warrant, a
proportional amount (depending upon the extent to which this Warrant is
exercised) of such assets, evidences of indebtedness, securities or such
other rights, as if such Warrant Holder had exercised this Warrant on or
before such record date.
(c) In the case of any consolidation or merger of Livewire with
or into another
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corporation or the sale of all or substantially all the assets of Livewire to
another person or entity, this Warrant thereafter shall be exercisable for
the kind and amount of shares of stock or other securities or property of
such person or entity to which a holder of the number of shares of Common
Stock deliverable upon exercise of this Warrant would have been entitled upon
such consolidation, merger or sale; and, in such case, appropriate adjustment
shall be made in the application of the provisions in this paragraph 4, to
the end that the provisions set forth in this paragraph 4 (including
provisions with respect to changes in and adjustments of the Exercise Price)
shall thereafter be applicable, as nearly as reasonably may be, in relation
to any shares of stock or other securities or property thereafter deliverable
upon the exercise of this Warrant.
(d) Upon the occurrence of each adjustment or readjustment of
the Exercise Price or any change in the number of Warrant Shares or in the
shares of stock or other securities or property deliverable upon exercise of
this Warrant pursuant to this paragraph 4, the Company at its expense shall
promptly compute such adjustment or readjustment and change in accordance
with the terms hereof and furnish to each holder hereof a certificate signed
by the chief financial officer of the Company, setting forth such adjustment
or readjustment and change and showing in detail the facts upon which such
adjustment or readjustment and change is based. The Company shall, upon the
written request at any time of the Warrant Holder, furnish or cause to be
furnished to such Holder, a similar certificate setting forth (i) such
adjustment or readjustment and change, (ii) the Exercise Price then in
effect, and (iii) the number of Warrant Shares and the amount, if any, of
other shares of stock and other securities and property that would be
received upon the exercise of the Warrant.
(e) The Company shall not be required upon the exercise of
this Warrant to deliver any fraction of shares, but shall make any adjustment
therefor by rounding the number of shares obtainable upon exercise to the
nearest whole number of shares.
5. LOST, MUTILATED OR MISSING WARRANT.
Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like denomination and date.
6. RIGHTS OF WARRANT HOLDER.
The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a shareholder of Livewire or the Company, either at
law or equity, and the rights of the Warrant Holder are limited to those
expressed in this Warrant.
7. SUCCESSORS AND ASSIGNMENT
The provisions of this Warrant shall be binding upon the Company and
its successors and assigns and shall inure to the benefit of the Warrant
Holder, its legal successors and its permitted assigns. The Warrant Holder
agrees (a) that it shall not transfer or assign this Warrant to any
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person or entity without the prior written consent of the Company, other than
(i) any affiliate of the Warrant Holder, and (ii) with the prior written
consent of the Company, which shall not be unreasonably withheld or delayed,
any person or entity to which the Warrant Holder (if an entity) transfers all
or substantially all the assets of the Warrant Holder as a going concern, (b)
that it shall not transfer or assign this Warrant to any person or entity
whatsoever, unless such person or entity executes and delivers to the Company
a counterpart of the Venture Agreement and agrees to be bound by the terms
and provisions thereof to the same extent as if such proposed transferee were
an original party thereto. The Company is expressly authorized to assign and
delegate its rights and obligations under this Warrant, in full, to Livewire,
by operation of law or otherwise, and upon the effective assumption by
Livewire of all obligations of the Company under this Warrant, (i) the
Company shall be effectively released from such obligations for all purposes
and (ii) all references herein to the Company (other than the reference in
clause (i) of this sentence) shall mean and refer to Livewire, unless the
context otherwise requires. Effective concurrently with, or as soon as
practicable after, the consummation of the Xxxx Xxxxxx, the Company shall use
commercially reasonable efforts to (i) assign and delegate this Warrant to
Livewire, by operation of law or otherwise, and (ii) cause Livewire to assume
all obligations of the Company hereunder, pursuant to a written instrument of
assumption. In the event that, after the Xxxx Xxxxxx and during the term of
this Warrant, any person or entity, other than Liberty Media Corporation or
any direct or indirect affiliate of Liberty Media Corporation, shall become
the owner of equity securities of Livewire representing a majority of the
outstanding equity and a majority of the outstanding voting power of
Livewire, this Warrant shall become immediately vested, notwithstanding the
vesting schedule provided for in the second unnumbered paragraph of this
Warrant.
8. MISCELLANEOUS
(a) As used herein, the following terms have the corresponding
meanings:
"BUSINESS DAY" means a day other than (i) a Saturday or Sunday or
(ii) a day on which banks in New York, New York are authorized to be closed.
"COMMON STOCK" means the Class A Common Stock, $.01 par value per
share, of Livewire, as in effect after the reclassification provided for in
the Merger Agreement, and, subject to paragraph 4 hereof, stock of any other
class or other consideration into which such Class A Common Stock may
hereafter have been changed.
"MARKET PRICE" per share of Common Stock at any date shall be the
average of the daily reported closing prices for the Common Stock for the 5
consecutive trading days prior to such date or, if the Common Stock is not
then publicly traded, as determined in good faith by resolution of the Board
of Directors of the Company, based on the best information available to it.
The closing price for each trading day shall be the last reported sale price
as of 4:00 p.m. Eastern Time as reported by The Nasdaq
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Stock Market or the principal securities exchange on which the Common Stock
is listed or admitted to trading.
"MERGER AGREEMENT" means the Agreement and Plan of Merger dated as
of December 10, 1999, among AT&T Corp., B-Group Merger Corp., Liberty Media
Corporation and Livewire.
"XXXX MERGER" means the merger of B-Group Merger Corp. into Livewire
pursuant to the Merger Agreement.
(b) This Warrant shall be construed in accordance with and
governed by the laws of the State of New York, without reference to the rules
of such State as to conflicts of law. Any judicial proceeding brought against
the Company to enforce, or otherwise in connection with, this Warrant shall
be brought in any court of competent jurisdiction in the City of New York,
and, by acceptance of this Warrant, the Warrant Holder (i) accepts, generally
and unconditionally, the exclusive jurisdiction of such courts and any
appellate court therefrom and irrevocably agrees to be bound by any final
judgment rendered thereby in connection with this Warrant and (ii)
irrevocably waives any objection it may now or hereafter have as to the venue
of any such proceeding brought in such a court or that such a court is an
inconvenient forum.
(c) The caption headings used in this Warrant are for
convenience of reference only and shall not be construed in any way to affect
the interpretation of any provisions of this Warrant.
9. NOTICES.
Any notice pursuant to this Warrant shall be effective if sent by
first class mail, postage prepaid, or delivered by facsimile transmission,
addressed as follows: If to the Company, to Liberty Livewire LLC, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: General Counsel, Facsimile
No.: 720/875-5382 (or to such other address as the Company may have furnished
in writing to the Warrant Holder for this purpose); and if to the Warrant
Holder, to such address as such Warrant Holder may have furnished in writing
to the Company for this purpose.
10. RESTRICTIONS ON TRANSFER.
By its acceptance of this Warrant, the Warrant Holder acknowledges
that the issuance of shares of Common Stock upon exercise of this Warrant has
not been registered under the Securities Act of 1933, as amended, and that
accordingly no such shares of Common Stock may be sold or transferred without
compliance with such Act and the rules and regulations of the Commission
promulgated thereunder, and all certificates representing such shares of
Common Stock shall bear an appropriate legend to such effect.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed and delivered as of the date set forth below.
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LIBERTY LIVEWIRE LLC
By:
Its duly authorized agent
Attest:
---------------------------
Name:
Title:
ISSUANCE DATE: APRIL ___, 2000
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ANNEX A
COMMON STOCK SUBSCRIPTION WARRANT
NOTICE OF EXERCISE
[date]
To: LIBERTY LIVEWIRE LLC
The undersigned, pursuant to the provisions set forth in the Common Stock
Subscription Warrant dated as of April ___, 2000, hereby irrevocably elects
and agrees to purchase ___________________ of the Warrant Shares covered by
such Warrant, and herewith makes payment therefor in full of the Aggregate
Exercise Price of $________________.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account and will not sell or otherwise dispose of the
underlying Warrant Shares in violation of applicable securities laws. If said
number of shares is less than all of the shares purchasable hereunder the
undersigned requests that a new Warrant evidencing the rights to purchase the
remaining Warrant Shares (which new Warrant shall in all other respects be
identical to the Warrant exercised hereby) be registered in the name of the
undersigned.
Signature:
Printed Name:
Address:
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ANNEX B
COMMON STOCK SUBSCRIPTION WARRANT
NOTICE OF CASHLESS EXERCISE
[date]
To: LIBERTY LIVEWIRE LLC
The undersigned, pursuant to the provisions set forth in the Common Stock
Subscription Warrant dated as of April ___, 2000, hereby irrevocably elects
and agrees to purchase ___________________ [OR the maximum available number]
of the Warrant Shares covered by such Warrant, by Cashless Exercise, and
hereby surrenders that number of Share Purchase Rights as necessary to
constitute payment in full of the Aggregate Exercise Price therefor.
The undersigned hereby represents that the undersigned is exercising such
Warrant for its own account and will not sell or otherwise dispose of the
underlying Warrant Shares in violation of applicable securities laws. If said
number of shares is less than all of the shares purchasable hereunder the
undersigned requests that a new Warrant evidencing the rights to purchase the
remaining Warrant Shares (which new Warrant shall in all other respects be
identical to the Warrant exercised hereby) be registered in the name of the
undersigned.
Signature:
Printed Name:
Address:
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