UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO
FILED PURSUANT TO RULE 13d-2(1)
(Amendment No.)*
Williams Communications Group, Inc.
------------------------------------------
(Name of Issuer)
Class A Common Stock, $0.01 par value
------------------------------------------
(Title of Class of Securities)
969455104
------------------------------------------
(CUSIP Number)
F. Thomas Dunlap
Vice President, General Counsel and Secretary
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Telephone: (408) 765-8080
------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 7, 1999
------------------------------------------
(Date of Event which Requires Filing of this Statement
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D and is filing this schedule because of Rule 13d-
1 (e), 13d-1 (f) or 13d-1 (g), check the following box [ ].
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 13 Pages
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 2 of 13
1. NAME OF REPORTING PERSON: INTEL CORPORATION
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 94-
1672743
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP** (a)[]
(b)[]
3. SEC USE ONLY
4. SOURCE OF FUNDS:
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS []
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
DELAWARE
7. SOLE VOTING POWER:
NUMBER OF 9,225,093
SHARES 8. SHARED VOTING POWER:
BENEFICIALLY 0
OWNED BY EACH 9. SOLE DISPOSITIVE POWER:
REPORTING 9,225,093
PERSON WITH 10. SHARED DISPOSITIVE POWER:
0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 9,225,093
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES** []
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
14.6% (based on outstanding Class A Common Stock only). The
Issuer also has outstanding 395,434,965 shares of Class B
Common Stock held by its parent and which is convertible
into Class A Common Stock. The percentage interest of the
Reporting Person assuming conversion of all Class B Common
Stock into Class A Common Stock is approximately 2.01%. The
filing of this Schedule 13D shall not be construed as an
admission that the Reporting Person is the beneficial owner
of more than approximately 2.01% of the outstanding Common
Stock of the Issuer.
TYPE OF REPORTING PERSON:**
CO
**SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 3 of 13
ITEM 1. Security and Issuer.
(a) Name of Principal Executive Offices of Issuer:
Williams Communications Group, Inc. (the
"Issuer")
One Williams Center
Tulsa, Oklahoma 74172
(b) Title of Class of Equity Securities:
Class A Common Stock, $0.01 par value
ITEM 2. Identity and Background.
(a) Name of Person Filing:
Intel Corporation (the "Reporting Person")
(b) Address of Principal Business Office:
2200 Mission College Boulevard
Santa Clara, CA 95052-8119
(c) Principal Business:
Manufacturer of microcomputer components,
modules and systems.
(d) Criminal Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been
convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been party
to any civil proceeding of a judicial or
administrative body of competent jurisdiction
as a result of which such person was or is
subject to any judgment, decree or final order
enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or
State securities laws or finding any violation
with respect to such laws.
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 4 of 13
(f) Place of Organization:
Delaware
Attached hereto as Appendix A is information required
by this Item 2 with respect to the executive officers
and directors of the Reporting Person. All such
individuals are U.S. citizens, except as otherwise
indicated on Appendix A.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Source of Funds:
Funds for the purchase of the Securities (as
defined in Item 4) were derived from the
Reporting Person's working capital.
(b) Amount of Funds:
$200 million was paid to acquire the
Securities.
ITEM 4. Purpose of the Transaction.
On October 7, 1999, the Reporting Person acquired the
Class A Common Stock for $200 million pursuant to a
Securities Purchase Agreement dated May 24, 1999 (the
"Securities Purchase Agreement").
The Reporting Person presently holds the Class A
Common Stock as an investment. As part of the
Securities Purchase Agreement, the Reporting Person
has agreed not to transfer any of its shares of Class
A Common Stock to anyone except affiliates for a
period of 18 months, provided that this transfer
provision terminates upon a change of control of the
Issuer and provided, further, that the transfer
restriction does not prohibit the Reporting Person
from engaging in certain types of hedging activities
with respect to the Class A Common Stock on or after
April 7, 2000. Subject to aforementioned 18 month
restriction on transfer, the Reporting Person will
from time to time explore opportunities for
liquidating all or a portion of the Class A Common
Stock, through one or more sales pursuant to public or
private offerings or otherwise depending upon the
Reporting Person's evaluation of market conditions,
market price, alternative investment opportunities,
liquidity needs and other factors. The Reporting
Person may determine to retain some portion of the
Class A Common Stock as an investment.
In addition, an affiliate of the Reporting Person and
the Issuer have entered into a long-term master
alliance agreement. Pursuant to that agreement, the
affiliate of the Reporting Person and the Issuer will
purchase services from each other
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 5 of 13
and enter into a co-marketing arrangement under which
the affiliate of the Reporting Person will provide
Internet hosting services.
ITEM 5. Interest in Securities of the Issuer.
(a) Number of Shares 9,225,093 shares of
Beneficially Owned: Class A Common Stock
Right to Acquire: None
Percent of Class: 14.6% of the Issuer's
outstanding Class A
Common Stock (based upon
63,040,959 shares of
Class A Common Stock
outstanding, determined
from representations
made by the Issuer to
the Reporting Person in
the Securities Purchase
Agreement (as defined in
Item 4). See Cover Page
Item 13.
(b) Sole Power to Vote,
Direct the Vote of,
Dispose of, or Direct 9,225,093
the Disposition of
Shares:
(c) Recent Transactions: As described more fully
in Item 4, on October
7, 1999, the Reporting
Person acquired
9,225,093 shares of
Class A Common Stock at
a price of $21.68 per
share.
(d) Rights with Respect to
Dividends or Sales N/A
Proceeds:
(e) Date of Cessation of
Five Percent N/A
Beneficial Ownership:
ITEM 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 6 of 13
Pursuant to the Securities Purchase Agreement, the
Reporting Person has agreed not to transfer any of the
Class A Common Stock to anyone except affiliates for a
period of eighteen (18) months. This restriction will
be terminated upon Issuer's change in control. In
addition, the transfer restriction does not prohibit
the Reporting Person from participating in future
registered offerings initiated by Issuer or from
engaging in hedging transactions commencing April 7,
2000. The Reporting Person also has registration
rights in connection with its holdings. The
Securities Purchase Agreement also contains standstill
provisions prohibiting the Reporting Person from
acquiring additional securities of the Issuer or
participating in certain takeover activities for a
five (5) year period, subject to certain exceptions.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 Securities Purchase Agreement between the
Issuer and the Reporting Person dated May
24, 1999
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 7 of 13
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated as of October 15, 1999.
INTEL CORPORATION
By: /s/F. Thomas Dunlap, Jr.
-------------------------
F. Thomas Dunlap, Jr.
Vice President, General
Counsel and Secretary
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 8 of 13
APPENDIX A
DIRECTORS
The following is a list of all Directors of Intel Corporation and
certain other information with respect to each Director. All
Directors are United States citizens except as indicated below.
Name: Craig R. Barrett
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal President and Chief Executive Officer
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: John Browne
Business BP Amoco p.l.c., Britannic House, 1 Finsbury
Address: Circus, London EC2M 7BA
Principal Group Chief Executive
Occupation:
Name, principal The BP Amoco p.l.c., an integrated oil
business and company.
address of Britannic House, 1 Finsbury Circus
corporation or London EC2M 7BA
other
organization in
which employment
is conducted:
Citizenship: British
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 9 of 13
Name: Winston H. Chen
Business Paramitas Foundation, 3945 Freedom Circle,
Address: Suite 760, Santa Clara, CA 95054
Principal Chairman
Occupation:
Name, principal Paramitas Foundation, a charitable foundation.
business and 3945 Freedom Circle, Suite 760
address of Santa Clara, CA 95054
corporation or
other
organization in
which employment
is conducted:
Name: Andrew S. Grove
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman of the Board of Directors
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: D. James Guzy
Business 1340 Arbor Road, Menlo Park, CA 94025
Address:
Principal Chairman
Occupation:
Name, principal The Arbor Company, a limited partnership
business and engaged in the electronics and computer
address of industry.
corporation or 1340 Arbor Road
other Menlo Park, CA 94025
organization in
which employment
is conducted:
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 10 of 13
Name: Gordon E. Moore
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Chairman Emeritus of the Board of Directors
Occupation:
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David S. Pottruck
Business 101 Montgomery Street, San Francisco, CA 94104
Address:
Principal President and Co-Chief Executive Officer
Occupation:
Name, principal The Charles Schwab Corporation, an investment
business and company
address of 101 Montgomery Street
corporation or San Francisco, CA 94104
other
organization in
which employment
is conducted:
Name: Jane E. Shaw
Business 1310 Orleans Drive, Sunnyvale, CA 94089
Address:
Principal Chairman and Chief Executive Officer
Occupation:
Name, principal AeroGen, Inc., a private company specializing
business and in controlled delivery of drugs to the lungs
address of 1310 Orleans Drive
corporation or Sunnyvale, CA 94089
other
organization in
which employment
is conducted:
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 11 of 13
Name: Leslie L. Vadasz
Business 2200 Mission College Boulevard, Santa Clara,
Address: CA 95052
Principal Senior Vice President, Director, Corporate
Occupation: Business Development
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and systems.
address of 2200 Mission College Boulevard
corporation or Santa Clara, CA 95052
other
organization in
which employment
is conducted:
Name: David B. Yoffie
Business Harvard Business School, Morgan Hall 215,
Address: Soldiers Field Road, Boston, MA 02163
Principal Max and Doris Starr Professor of International
Occupation: Business Administration
Name, principal Harvard Business School, an educational
business and institution.
address of Harvard Business School
corporation or Morgan Hall 215,Soldiers Field Road
other Boston, MA 02163
organization in
which employment
is conducted:
Name: Charles E. Young
Business 10920 Wilshire Boulevard, Suite 1835, Los
Address: Angeles, CA 90024
Principal Chancellor Emeritus
Occupation:
Name, principal University of California at Los Angeles, an
business and educational institution.
address of 10920 Wilshire Boulevard, Suite 1835
corporation or Los Angeles, CA 90024
other
organization in
which employment
is conducted:
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 12 of 13
EXECUTIVE OFFICERS
The following is a list of all executive officers of Intel
Corporation excluding executive officers who are also directors.
Unless otherwise indicated, each officer's business address is
2200 Mission College Boulevard, Santa Clara, California 95052-
8119, which address is Intel Corporation's business address.
Name: Paul S. Otellini
Title: Executive Vice President, General Manager, Intel
Architecture Business Group
Name: Gerhard H. Parker
Title: Executive Vice President, General Manager, New
Business Group
Name: Andy D. Bryant
Title: Senior Vice President and Chief Financial Officer
Name: Sean M. Maloney
Title: Senior Vice President, Director, Sales and Marketing
Group
Name: Michael R. Splinter
Title: Senior Vice President, General Manager, Technology
and Manufacturing Group
Name: Albert Y. C. Yu
Title: Senior Vice President, General Manager,
Microprocessor Products Group
Name: F. Thomas Dunlap, Jr.
Title: Vice President, General Counsel and Secretary
Name: Arvind Sodhani
Title: Vice President, Treasurer
<PAGE>
CUSIP No. 969455104 Schedule 13D Page 13 of 13
EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Document Page
- ----------- -------- ----
Exhibit 1 Securities Purchase Agreement
between the Issuer and the Reporting
Person dated May 24, 1999
<PAGE>
EXHIBIT 1
WILLIAMS COMMUNICATIONS GROUP, INC.
SECURITIES PURCHASE AGREEMENT
<PAGE>
SECURITIES PURCHASE AGREEMENT
dated as of May 24, 1999
by and among
WILLIAMS COMMUNICATIONS GROUP, INC.
(the "Company"),
THE WILLIAMS COMPANIES, INC.
("TWC")
and
INTEL CORPORATION
(the "Investor")
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINED TERMS...................................................1
ARTICLE II
PURCHASE AND SALE TERMS; CLOSING................................6
2.1 Purchase and Sale.....................................6
2.2 Payment...............................................6
2.3 Closing...............................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................6
3.1 Delivery of Underwriting Agreement....................6
3.2 Delivery of Articles..................................6
3.3 Underwriting Agreement Representations and Warranties.6
3.4 Power and Authority...................................7
3.5 Non-Contravention.....................................7
3.6 Valid Issuance........................................7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR..................7
4.1 Existence.............................................7
4.2 Power and Authority...................................8
4.3 Purchase for Investment...............................8
4.4 Non-Contravention.....................................8
4.5 Financial Matters.....................................8
4.6 Restricted Securities.................................9
4.7 Further Limitations on Disposition....................9
ARTICLE V
COVENANTS OR THE COMPANY AND THE INVESTOR.......................9
5.1 Covenants of the Company Only.........................9
5.2 Further Assurances...................................10
5.3 Filings and Consents.................................10
5.4 Covenant to Satisfy Conditions.......................10
5.5 Notification of Change in Control Event..............10
5.6 Information Rights...................................11
ARTICLE VI
CLOSING CONDITIONS.............................................11
6.1 Conditions of Investor's Obligations at Closing......11
6.2 Conditions of the Company's Obligations at Closing...12
6.3 Conditions to Each Party's Obligation................13
ARTICLE VII
TRANSFER RESTRICTIONS..........................................13
7.1 Restrictions on Transfer: the 33 Act................13
<PAGE>
ARTICLE VIII
VOTING RIGHTS..................................................15
8.1 Voting Rights........................................15
ARTICLE IX
TERMINATION....................................................15
9.1 Termination..........................................15
9.2 Effect of Termination................................15
ARTICLE X
INDEMNIFICATION................................................16
10.1 Indemnification......................................16
10.2 Terms of Indemnification.............................16
ARTICLE XI
REGISTRATION RIGHTS............................................17
11.1 Registration Rights..................................17
ARTICLE XII
STANDSTILL.....................................................23
12.1 Standstill Provision.................................23
12.2 Notice of Proposed Transfer..........................24
ARTICLE XII
MISCELLANEOUS..................................................24
13.1 Governing Law.......................................24
13.2 Remedies Cumulative.................................24
13.3 Brokerage...........................................24
l3.4 Severability........................................24
13.5 Notices.............................................24
13.6 No Waiver...........................................25
13.7 Amendments and Waivers..............................25
13.8 Rights of the Investor..............................25
13.9 Survival............................................25
13.10 Entire Understanding................................25
13.11 Expenses............................................26
13.12 Counterparts........................................26
13.13 Assignment; No Third -Party Beneficiaries...........26
13.14 Confidentiality/Publicity...........................26
13.15 Titles and Subtitles................................27
13.16 Aggregation of Stock................................27
Exhibits
Exhibit 1.1 Form of Articles
Exhibit 1.2 Form of Underwriting Agreement
Exhibit 13.5 Notices
<PAGE> Confidential and Proprietary
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT dated as of May 24, 1999,
among Williams Communications Group, Inc., a Delaware corporation
(the "Company"), The Williams Companies, Inc., a Delaware
corporation ("TWC"), and Intel Corporation, a Delaware
corporation ("Intel" and together with any assignee thereof
pursuant to Section 13.13 hereof, the "Investor").
PREAMBLE
The Company wishes to obtain equity financing. The Investor
is willing, on the terms contained in this Agreement, to purchase
Class A common stock, par value $0.01 per share (the "Class A
Common Stock"), of the Company having the characteristics set
forth in the Restated Articles of Incorporation of the Company
(the "Articles"). The Company and Intel or certain of their
Affiliates (as defined below) are entering into other agreements,
which include that certain Master Alliance Agreement ("Alliance
Agreement"), under which the parties are setting forth their
agreement to work together with Intel building Internet data
center facilities, management and hosting platform systems and
Williams providing highly reliable network facilities. Certain
capitalized terms are defined in Article I. Exhibits are
incorporated by reference into this Agreement as though such
exhibits were set forth at the point of such reference.
ARTICLE I
DEFINED TERMS
The following terms, when used in this Agreement, have the
following meanings, unless the context otherwise indicates:
"33 Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"34 Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Affiliate" has the meaning ascribed to it in Rule 12b-2
under the 34 Act. Notwithstanding the foregoing, unless
expressly provided to the contrary herein, the term Affiliate
shall exclude officers, directors and any employee benefit plan
or pension plan of a Person.
"Alliance Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Articles" shall have the meaning set forth in the preamble
to this Agreement. A draft of the Articles is attached as
Exhibit 1.1.
"Beneficially Own" means having the right to vote or dispose
of, or "beneficially own" as determined pursuant to Rule 13d-3
under the 34 Act as in effect on the date of this Agreement,
including pursuant to any agreement, arrangement or
understanding.
<PAGE> Confidential and Proprietary
"Board of Directors" means the board of directors of the
Company.
"Business Day" means a day other than a Saturday or Sunday
or a day on which banking institutions are authorized or required
by law or executive order to remain closed in New York, New York,
Tulsa, Oklahoma or San Francisco, California.
"Change in Control Event" shall be deemed to have occurred
with respect to the Investor or the Company if (i) there shall be
consummated (x) any consolidation or merger of the Investor or
the Company, as the case may be, in which the Investor or the
Company, as the case may be, is not the continuing or surviving
corporation or pursuant to which shares of the common stock of
the Investor or the Company, as the case may be, would be
converted into cash, securities or other property (provided, that
a merger of the Investor or the Company, as the case may be, in
which the holders of such common stock immediately prior to the
merger hold at least 70% of the common stock of the surviving
corporation immediately after the merger shall not constitute a
Change in Control Event), or (y) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the
investor or the Company, as the case may be, or (ii) the
stockholders of the Investor or the Company, as the case may be,
approved any plan or proposal for the liquidation or dissolution
of the Investor or the Company, as the case may be, or (iii) any
Person (other than TWC or any Subsidiary of TWC in the case of
the Company) shall Beneficially Own 30% or more of the
outstanding common stock of the Company or the Investor, as the
case may be (or, in the case of the Company, 50% of the
outstanding Common Stock if and so long as TWC Beneficially Owns
30% or more of the outstanding Common Stock of the Company), or
(iv) during any period of two consecutive years, individuals who
at the beginning of such period constitute the entire board of
directors of the Investor or the Company, as the case may be,
shall cease for any reason to constitute a majority thereof
unless the election, or the nomination for election by such
company's stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
"Claims" shall have the meaning set forth in Section 10.1(a)
to this Agreement.
"Class A Common Stock" shall mean the Class A common stock,
par value $0.01 per share, of the Company and any Common Stock of
the Company received in exchange for the Class A Common Stock.
"Class B Common Stock" shall mean the Class B common stock,
par value $0.01 per share, of the Company.
"Closing" and "C1osing Date" shall mean the consummation of
the Company's sale and the Investor's purchase of Class A Common
Stock pursuant to this Agreement, and the date or dates on which
the same occurs or occurred, respectively.
"Code" means the Internal Revenue Code of 1986, as amended,
or any similar federal law then in force.
<PAGE> Confidential and Proprietary
"Common Stock" shall mean the Class A Common Stock and the
Class B Common Stock and any other series of common stock of the
Company hereafter issued. The term "Common Stock" shall include,
except as otherwise provided herein, any and all shares of common
stock or other securities of the Company or any successor or
assign of the Company (whether by merger, consolidation, sale of
assets or otherwise), which may be issued in respect of, in
exchange for, or in substitution for any shares of Common Stock,
by reason of any stock dividend, split, reverse split,
combination, recapitalization, reclassification, merger,
consolidation, partial or complete liquidation, sale of assets,
spin-off, distribution to stockholders or combination of the
shares of Common Stock or any other change in the Company's
capital structure, in order to preserve fairly and equitably as
far as practicable, the original rights and obligations of the
parties hereto under this Agreement.
"Company Control Person" shall have the meaning set forth in
Section 11.l(f)(ii) to this Agreement.
"Control Person" shall have the meaning set forth in Section
11.1(f)(i) to this Agreement.
"Employee Benefit Plan" means any plan regulated under
ERISA.
"ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time
to time.
"Form S-3" means such form under the 33 Act as in effect on
the date hereof or any successor registration form under the 33
Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government
(including, without limitation, the Federal Communications
Commission (or any successor thereto) and each applicable public
utilities commission).
"Hedging Transactions" means engaging in short sales and the
purchase and sale of puts and calls and other derivative
securities, so long as Intel retains Beneficial Ownership of the
underlying shares and any and all such transactions are made in
accordance with all applicable law.
"HSR Act" shall have the meaning set forth in Section 5.3(a)
to this Agreement.
"IPO" means the initial public offering of the Company
pursuant to a registration statement filed by the Company under
the 33 Act covering an offering of at least $500 million of Class
A Common Stock to the public.
"IPO Price" means the per share offering price for Class A
Common Stock stated on the face of the final prospectus relating
to the IPO.
<PAGE> Confidential and Proprietary
"Net IPO Price" means the IPO Price less any discounts or
commissions per share from the IPO Price to the underwriter or
underwriters.
"Plan" means an employee benefit plan, as defined in Section
3(3) of ERISA, which the Company maintains, contributes to or has
an obligation to contribute to on behalf of participants who are
or were employed by the Company.
"Permitted Transfer Date" shall have the meaning set forth
in Section 7.1(a) to this Agreement.
"Person" means any individual, corporation, partnership,
limited liability company or partnership, joint venture,
association, governmental entity, or any other entity.
"Potential Change in Control Event" means any one of the
following events: (a) the commencement of a tender offer or
exchange offer (as such terms are defined in the rules and
regulations under the 34 Act) by any Person that would, if
consummated, constitute a Change in Control Event involving the
Company; (b) the solicitation of proxies by any Person for the
purpose of effecting a Change in Control Event involving the
Company; (c) the disclosure by the Company of any material non-
public information to any Person for the purpose of assisting
such Person in evaluating whether to effect a Change in Control
Event involving the Company; (d) the commencement of substantive
discussions or negotiations (involving more than the Company
responding to inquiries) between the Company and any Person
contemplating a Change in Control Event involving the Company; or
(e) the agreement by the Company, whether or not in writing, to
facilitate a Change in Control Event involving the Company. For
purposes of the above, in no event shall the term "Person"
include the Investor or any of its Affiliates.
"Purchase Price" shall have the meaning set fort in Section
2.1(c) to this Agreement.
"Registrable Securities" shall mean: (a) all the shares of
Class A Common Stock issued or issuable under this Agreement and
(b) any shares of Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, any such shares of
Class A Common Stock described in clause (a) of this definition.
Notwithstanding the foregoing, "Registrable Securities" shall
exclude any otherwise registrable securities sold by a Person in
a transaction in which rights under Article XI hereof are not
assigned in accordance with this Agreement or any otherwise
registrable securities sold in a public offering, whether sold
pursuant to Rule 144 promulgated under the 33 Act, in a
registered offering, or otherwise.
"Restricted Securities" shall have the meaning set forth in
Section 7.1(b) to this Agreement.
"SEC" means the Securities and Exchange Commission.
"Selling Stockholder(s)" shall mean any person owning of
record Registrable Securities or any permitted assignee of record
of such Registrable Securities to whom rights under Article XI
hereof have been duly assigned in accordance with this Agreement.
<PAGE> Confidential and Proprietary
"Standstill Percentage" shall have the meaning set forth in
Section 12.1 of this Agreement.
"Subsidiary" or "Subsidiaries" of any Person means any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other Persons performing
similar functions are at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such
Person.
"Super Voting Rights" shall have the meaning set forth in
Section 8.1 to this Agreement.
"Third Party" means, with respect to the Company or the
Investor any Person other than the Company's or the Investor's
Affiliates, respectively; provided further, that the Transfer to
any such Person is in compliance with all applicable federal,
state and foreign securities laws.
"Transfer" means any direct or indirect sale, assignment,
mortgage, transfer, pledge, gift, hypothecation or other
disposition of or transfer of Common Stock, but excludes Hedging
Transactions.
"TWC" means The Williams Companies, Inc., a Delaware
corporation.
"Underwriting Agreement" means the underwriting agreement
among the Company and Lehman Brothers Inc., Salomon Smith Barney
and certain other underwriters to be named therein, in connection
with the IPO. A draft of the Underwriting Agreement is attached
as Exhibit 1.2.
"Volume-Weighted Average Trading Price" shall mean, for any
day on which the New York Stock Exchange is open for trading, an
amount equal to (a) the cumulative sum, for each trade of Class A
Common Stock (or other class or series of capital stock) during
such trading day on the New York Stock Exchange (or, if such
security is not listed on the New York Stock Exchange, such other
principal exchange or over-the-counter market on which such
security is listed), of the product of: (i) the sale price times
(ii) the number of shares of Class A Common Stock (or such other
class or series of capital stock) sold at such price, divided by
(b) the total number of shares of Class A Common Stock (or such
other class or series of capital stock) so traded during the
trading day.
Additional defined terms are found in the body of the
following text.
The masculine form of words includes the feminine and the
neuter and vice versa, and, unless the context otherwise
requires, the singular form of words includes the plural and vice
versa. The words "herein," "hereof," "hereunder," and other
words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular section or
subsection.
<PAGE> Confidential and Proprietary
ARTICLE II
PURCHASE AND SALE TERMS; CLOSING
2.1 Purchase and Sale.
(a) Before the Closing Date, the Company will have adopted
and filed the Articles with the Delaware Secretary of State.
(b) Subject to the terms and conditions of this Agreement,
at the Closing, the Company shall issue and sell to the Investor,
and the Investor shall purchase from the Company, the number of
shares of Class A Common Stock (rounded up to the next whole
share) equal to Two Hundred Million Dollars ($200,000,000)
divided by the Net IPO Price.
(c) The aggregate purchase price (the "Purchase Price") for
the shares of Class A Common Stock to be purchased by the
Investor shall be Two Hundred Million Dollars ($200,000,000).
2.2 Payment. At the Closing, the Company shall deliver to the
Investor a certificate (registered in the name of the Investor)
representing the appropriate number of shares of Class A Common
Stock which the Investor is purchasing against delivery to the
Company by the Investor by wire transfer in immediately available
funds in U.S. dollars in the amount of the Purchase Price
therefor payable to the Company's order.
2.3 Closing. The purchase and sale of the Class A Common Stock
to take place at the Closing shall be held at the offices of
Davis, Polk & Wardwell, New York, New York, or such other place
as the parties may agree. The Closing shall occur on the date of
and simultaneously with, or no later than two Business Days
after, the consummation of the transactions contemplated by the
Underwriting Agreement relating to the IPO (the "Closing Date").
The Closing shall be conditioned upon the closing of the
transactions contemplated by the Underwriting Agreement relating
to the IPO.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Delivery of Underwriting Agreement. The Company has
delivered to the Investor a substantially completed draft
Underwriting Agreement in the form set forth in Exhibit 1.2.
3.2 Delivery of Articles. The Company has delivered to the
Investor a substantially completed draft of the Articles in the
form set forth in Exhibit 1.1.
3.3 Underwriting Agreement Representations and Warranties. In
connection with the sale of the Class A Common Stock to the
Investor, the Company will hereby be deemed to make each of the
representations and warranties to, and agreements with, the
Investor that are made for the benefit of the underwriters as set
forth in the Underwriting Agreement.
<PAGE> Confidential and Proprietary
3.4 Power and Authority. The Company has the requisite
corporate power and authority and has taken all required action
necessary to authorize the execution and delivery by it of this
Agreement and all other documents or instruments required by this
Agreement, and to carry out the terms of this Agreement and of
all such other documents or instruments. This Agreement has been
duly executed and delivered by the Company and (assuming the due
authorization, execution and delivery hereof by the Investor)
constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
3.5 Non-Contravention. The execution, delivery and performance
of this Agreement by the Company and the consummation of any of
the transactions contemplated hereby by the Company will not (a)
conflict with or result in a breach of any of the terms arid
provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company
pursuant to any agreement, instrument, franchise, license or
permit to which the Company is a party or by which any of its
properties or assets may be bound or (b) violate or conflict with
any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body
applicable to the Company or any of its properties or assets,
other than such breaches, defaults or violations that are not
reasonably expected to impair the ability of the Company to
consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated
hereby by the Company do not and will not violate or conflict
with any provision of the Articles or by-laws of the Company, as
currently in effect. Except for filings under the HSR Act and
with respect to the IPO, no consent, approval, authorization,
order, registration, filing, qualification, license or permit of
or with any court or any government agency or body applicable to
the Company is required for the execution, delivery and
performance of this Agreement or the consummation of the
transactions contemplated hereby.
3.6 Valid Issuance. The Class A Common Stock, when issued, sold
and delivered in accordance with the terms of this Agreement for
the consideration provided for herein, will be duly and validly
issued, fully paid and nonassessable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company, as of
the date hereof and as of the date of the Closing, that:
4.1 Existence. The Investor is a company duly organized,
validly existing and current in payment of all taxes properly
payable pursuant to the laws of the jurisdiction of its
organization. The Investor has the requisite corporate power and
authority to own and operate its properties and assets and to
carry on its business as presently conducted.
4.2 Power and Authority. The Investor has the requisite
corporate power and authority and has taken all required action
necessary to authorize the execution and delivery by it of this
<PAGE> Confidential and Proprietary
Agreement and all other documents or instruments required by this
Agreement, and to carry out the terms of this Agreement and of
all such other documents or instruments. This Agreement has been
duly executed and delivered by the Investor and (assuming the due
authorization, execution and delivery hereof by the Company and
the other parties thereto other than the Investor) constitutes
the valid and binding obligation of the Investor, enforceable
against the Investor in accordance with its terms.
4.3 Purchase for Investment. The Investor is purchasing its
shares of Class A Common Stock for investment, for its own
account (not as a nominee or agent) and not for the account of
any Employee Benefit Plan (or, if being acquired for the account
of any such Plan, such acquisition does not involve a nonexempt
prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code) and not with a view to the resale or
distribution of any part thereof, except for transfers permitted
hereunder, and the Investor has no present intention of selling,
granting any participation in or otherwise distributing the same.
By executing this Agreement, the Investor further represents that
it does not have any contract, undertaking, agreement or
arrangement with any Person to sell, Transfer or grant
participation to such Person or to any third person with respect
to the Class A Common Stock.
4.4 Non-Contravention. The execution, delivery and performance
of this Agreement by the Investor and the consideration of any of
the transactions contemplated hereby by the Investor will not (a)
conflict with or result in a breach of any of the terms and
provisions of, or constitute a default (or an event which with
notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Investor
pursuant to any agreement, instrument, franchise, license or
permit to which the Investor is a party or by which any of its
properties or assets may be bound or (b) violate or conflict with
any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body
applicable to the Investor or any of its properties or assets,
other than such breaches, defaults or violations that are not
reasonably expected to impair the ability of the Investor to
consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by the
Investor and the consummation of the transactions contemplated
hereby by the Investor do not and will not violate or conflict
with any provision of the organizational documents of the
Investor, as currently in effect. Except for filings under the
HSR Act, no consent, approval, authorization, order,
registration, filing, qualification, license or permit of or with
any court or any government agency or body applicable to the
Investor is required for the execution, delivery and performance
of this Agreement or the consummation of the transactions
contemplated hereby.
4.5 Financial Matters. The Investor, either alone or with its
financial advisor, has such knowledge and experience in financial
and business matters that it is capable of evaluating the merits
and risks of the investment to be made by it hereunder. The
Investor represents that it is an "accredited investor" as that
term is defined in Regulation D promulgated under the 33 Act.
4.6 Restricted Securities. The Investor understands that its
shares of Class A Common Stock must be held indefinitely unless
they are registered under the 33 Act or an exemption from such
registration becomes available, and that its shares of Class A
Common Stock may only be Transferred as provided in Article VII
of this Agreement. The Investor acknowledges and agrees
<PAGE> Confidential and Proprietary
to abide by the restrictions on transfer set forth in Article VII
of this Agreement. The Investor understands that the shares of
Class A Common Stock it is purchasing are characterized as
"restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold
without registration under the 33 Act only in certain limited
circumstances. In this connection, the Investor represents that
it is familiar with Rule l44 promulgated under the 33 Act, as
presently in effect, and understands the resale limitations
imposed thereby and by the 33 Act.
4.7 Further Limitations on Disposition. Without in any way
limiting the representations set fort above, the Investor further
agrees that, in connection with any proposed Transfer involving a
private sale, the Investor shall notify the Company of the
proposed disposition and shall furnish the Company with a
detailed statement of the circumstances surrounding the proposed
disposition and, if reasonably requested by the Company, the
Investor shall have furnished the Company with an opinion of
counsel reasonably satisfactory to the Company, that such
disposition will not require registration of such shares under
the 33 Act.
ARTICLE V
COVENANTS OR THE COMPANY AND THE INVESTOR
5.1 Covenants of the Company Only.
(a) The Company will hereby be deemed to covenant and agree
with the Investor and to its benefit to comply with all
agreements made for the benefit of the underwriters as set forth
in the Underwriting Agreement.
(b) The Company shall promptly notify the Investor of any
material developments in connection with the IPO, and provide
copies of any and all filings, notices and other communications
with the SEC relating thereto, including copies of the
registration statement filed with the SEC, and with any
Governmental Authority relating to the filings under the HSR Act
as described in Section 5.3(a) below. The Company shall also
provide to the Investor any such filings, notices and other
communications sufficiently in advance of their being filed or
provided to the SEC or such Governmental Authorities as described
above so as to permit the Investor sufficient opportunity to
review and comment on such drafts.
(c) The Company shall provide to the Investor copies of any
notices, correspondence or other written communication from the
SEC relating to the IPO or from any Governmental Authority
relating to the filings under the HSR Act as described in Section
5.3(a) below promptly following receipt thereof.
5.2 Further Assurances. Subject to the terms and conditions
provided herein, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or
cause to be done as promptly as practicable, all things
necessary, proper or advisable under applicable laws and
regulations or otherwise to consummate and make effective the
transactions contemplated by this Agreement. The Company, at its
expense, will promptly execute and
<PAGE> Confidential and Proprietary
deliver to the Investor, and the Investor will, at its expense,
promptly execute and deliver to the Company, upon the other's
reasonable request, all such other and further documents,
agreements and instruments in compliance with or pursuant to its
covenants and agreements herein, and will make any recordings,
file any notices, and obtain any consents as may be necessary or
appropriate in connection therewith, including without
limitation, applications under the HSR Act.
5.3 Filings and Consents.
(a) As soon as practicable after execution and delivery of
this Agreement, the Investor and the Company shall make all
filings required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), relating to
the transactions contemplated hereby. In addition, the Investor
and the Company will each promptly furnish all information as may
be required by the Federal Trade Commission and the Department of
Justice under the HSR Act in order for the requisite approvals
for the purchase and sale of the Class A Common Stock, and the
transactions contemplated hereby, to be obtained or any
applicable waiting periods to expire. Each of the parties hereto
will cooperate with each other with respect to obtaining, as
promptly as practicable, all necessary consents, approvals
authorizations and agreements of, and the giving of all notices
and making of all other filings with, any third parties,
including Governmental Authorities, necessary to authorize,
approve or permit the consummation of the Transactions
contemplated hereby.
(b) The Investor and the Company will provide such
information and communications to the Persons requiring such
approvals, authorizations and consents as reasonably required by
such Person.
5.4 Covenant to Satisfy Conditions. Each party agrees to use
all reasonable efforts to insure that the conditions to the other
party's obligations hereunder set forth in Article VI, insofar as
such matters are within the control of such party, are satisfied.
The Investor acknowledges receipt of drafts of the Underwriting
Agreement and Articles (attached as exhibits hereto) and is
satisfied with the content thereof.
5.5 Notification of Change in Control Event. Each party shall
promptly notify the other party of any Change in Control Event
affecting the Company or the Investor, as the case may be, and
the Company shall promptly notify the Investor of a Potential
Change in Control Event of which it becomes actually aware.
5.6 Information Rights. The Company covenants and agrees that,
commencing on the Closing and continuing for so long as the
Investor owns at least 50% of the shares initially purchased
hereunder (as adjusted for stock splits, stock dividends, and
similar events), the Company shall:
(a) Annual Reports. Furnish to the Investor promptly
following the filing of such report with the SEC a copy of the
Company's Annual Report on Form 10-K for each fiscal year. In
the event the Company shall no longer be required to file Annual
Reports on Form 10-K, the Company shall, within ninety (90) days
following the end of each respective fiscal year, deliver
<PAGE> Confidential and Proprietary
to the Investor a copy of a consolidated balance sheet as of the
end of such fiscal year, a consolidated statement of income and a
consolidated statement of cash flows of the Company and its
subsidiaries for such year, setting forth in each case in
comparative form the figures from the Company's previous fiscal
year, all prepared in accordance with generally accepted
accounting principles arid practices and audited by nationally
recognized independent certified public accountants.
(b) Quarterly Reports. Furnish to the Investor promptly
following the filing of such report with the SEC, a copy of each
of the Company's Quarterly Reports on Form 10-Q. In the event
the Company shall no longer be required to file Quarterly Reports
on Form 10-Q, the Company shall, within forty-five (45) days
following the end of each of the first three (3) fiscal quarters
of each fiscal year, deliver to the Investor a copy of a
consolidated balance sheet as of the end of the respective fiscal
quarter, consolidated statements of income and consolidated
statements of cash flows of the Company and its subsidiaries for
the respective fiscal quarter and for the year to-date, setting
forth in each case in comparative form the figures from the
comparable periods in the Company's immediately preceding fiscal
year, all prepared in accordance with generally accepted
accounting principles and practices, but all of which may be
unaudited.
(c) Other SEC Filings. Furnish to the Investor promptly
following the filing of such documents with the SEC, copies of
each proxy statement and Report on Form 8-K filed with the SEC on
a non-confidential basis.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions of Investor's Obligations at Closing. The
Investor's obligation to purchase and pay for the Class A Common
Stock to be purchased by it hereunder is subject to satisfaction
of the following conditions:
(a) Underwriting Agreement. (i) the Investor's
determination that there has not been any material revision to
the Underwriting Agreement that is adverse to the Investor as it
has been executed by the Underwriters and the Company since the
draft delivered to the Investor pursuant to Section 3.1 hereof,
and (ii) the receipt by the Investor of all letters, opinions and
certificates that the Underwriters are entitled to receive from
the Company in connection with the closing of the IPO. Investor
shall be entitled to rely upon such letters, opinions and
certificates.
(b) Receipt of Articles. The Investor shall have received
from the Company the Articles pursuant to Section 3.2 in form and
substance reasonably satisfactory to the Investor.
(c) Board Approval. The board of directors of Intel shall
have approved and authorized the execution, delivery and
performance of this Agreement and the Alliance Agreement.
<PAGE> Confidential and Proprietary
(d) Representations and Warranties. The representations
and warranties of the Company contained in Article III shall be
true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the
Closing.
(e) Legal Opinion. Investor shall have received a legal
opinion from in-house counsel to the Company to the effect that
the issuance of the Class A Common Stock being purchased by it
has been duly authorized, and when issued in accordance with the
terms of this Agreement, will be validly issued, fully paid and
non-assessable.
(f) Stock Certificate. The Company shall have delivered
the stock certificate representing the Class A Common Stock being
purchased by the Investor.
6.2 Conditions of the Company's Obligations at Closing. The
obligations of the Company to the Investor under this Agreement
are subject to the fulfillment on or before the Closing of each
of the following conditions:
(a) Representations and Warranties. The representations
and warranties of the Investor contained in Article IV shall be
true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the
Closing.
(b) Payment of Purchase Price. The Investor shall have
delivered the Purchase Price.
(c) Performance of Obligations. The Investor shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing.
(d) Legal Matters. The Company shall have received from
the Investor such legal opinions as shall be reasonably agreed
upon by the Company and the Investor and such other letters,
opinions and certificates as the Company shall reasonably
request.
(e) Board Approval. The boards of directors of the Company
and TWC shall have approved and authorized the execution,
delivery and performance of this Agreement and (if necessary) the
Alliance Agreement.
6.3 Conditions to Each Party's Obligation. The respective
obligation of each party to consummate the transactions
contemplated hereby shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions:
(a) HSR Approval. The applicable waiting period (and any
extension thereof) under the HSR Act relating to the transactions
contemplated by this Agreement shall have been terminated or
shall have expired.
(b) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint
or prohibition preventing consummation of the transactions
contemplated hereby shall be in effect.
<PAGE> Confidential and Proprietary
(c) Alliance Agreement. The Alliance Agreement shall have
been executed and remain in full force and effect.
(d) Consummation of IPO. The closing of the IPO as
contemplated by the Underwriting Agreement shall be consummated
simultaneously with or prior to the Closing.
ARTICLE VII
TRANSFER RESTRICTIONS
7.1 Restrictions on Transfer: the 33 Act.
(a) Restrictions on Transfer: Restrictive Legends. The
Class A Common Stock owned by the Investor shall not be
transferable except upon the conditions specified in this Article
VII, which conditions are intended to insure compliance with the
provisions of the 33 Act in respect of the Transfer of any such
Class A Common Stock.
The Investor (including each assignee) hereby acknowledges
and agrees that it is acquiring the shares of Class A Common
Stock in a transaction exempt from registration under the 33 Act,
and that no shares of Class A Common Stock may be Transferred in
the absence of registration under the 33 Act or an applicable
exemption therefrom. The Investor also hereby agrees that it
will, if requested by an underwriter in connection with a public
offering of securities (including the IPO), enter into a standard
lock-up agreement for a period of up to 180 days preventing it
from offering, selling or granting any option for the sale of or
disposing of any of its shares of Common Stock for the same time
period to which the Company or TWC and the Company's executive
officers and directors would be subject under the underwriting
agreement in connection with such public offering, which period
the Company shall use reasonable efforts to limit to a period of
not more than 90 days (except in the case of the IPO) and which
shall in no event be in excess of 180 days; provided, however,
that (except in the case of the IPO) Intel is participating in
such offering, and provided further, that, following the 180-day
lock-up period in connection with the IPO (during and prior to
which Intel will not be permitted to engage in Hedging
Transactions), Intel and its Affiliates are permitted to enter
into Hedging Transactions. In addition, during any lock-up
period in connection with a secondary offering, Intel and its
Affiliates shall be permitted to enter into transactions that
have the effect of maintaining or continuing pre-existing (as of
the time Investor is notified of the offering) Hedging
Transaction positions by continuing, renewing or replacing any
such positions on substantially equivalent terms. The Investor
also hereby acknowledges and agrees that it shall not Transfer
(other than to an Affiliate) such shares of Class A Common Stock
for a period of eighteen (18) months from the Closing Date (the
"Permitted Transfer Date") except as permitted in Section
11.1(b). Each certificate representing the Investor's shares of
Class A Common Stock shall (unless otherwise permitted by the
provisions of this Article VII) be stamped or otherwise imprinted
with a legend in substantially the following form:
"THE SHARES OF COMMON STOCK OF THE ISSUER REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED
FOR
<PAGE> Confidential and Proprietary
SALE, SOLD, OR TRANSFERRED WITHOUT (1) REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW OR (2) AN
OPINION OF COUNSEL SATISFACTORY TO WILLIAMS COMMUNICATIONS GROUP,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED BECAUSE OF AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933 AND ANY APPLICABLE STATE LAW. THE SHARES REPRESENTED
BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS
ON TRANSFER AS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT
DATED AS OF MAY __ 1999, AS AMENDED FROM TIME TO TIME, WHICH
PROVIDES THAT SUCH SHARES MAY NOT BE TRANSFERRED UNTIL NOVEMBER
__, 2000 (WHICH DATE IS EIGHTEEN MONTHS FROM THE DATE HEREOF).
COPIES OF THE SECURITIES PURCHASE AGREEMENT MAY BE OBTAINED UPON
REQUEST FROM WILLIAMS COMMUNICATIONS GROUP, INC. AND ANY
SUCCESSOR THERETO."
(b) Non-Applicability of Transfer Restrictions: Removal of
Legends. The restrictions imposed by Section 7.1(a) above upon
the transferability of any shares of Class A Common Stock
represented by a certificate bearing the restrictive legends set
forth in such Section 7.1(a) (a "Restricted Security") shall
cease and terminate when such Restricted Security has been sold
pursuant to an effective registration statement under the 33 Act
or transferred pursuant to Rule 144 (or any similar or successor
rule thereto) promulgated under the 33 Act unless the holder
thereof is an Affiliate of the Company. Upon a Change in Control
Event of the Company, the restriction on the Investor prohibiting
the Transfer of shares of Class A Common Stock prior to the
Permitted Transfer Date shall cease and terminate. The holder of
any Restricted Security as to which such restrictions shall have
terminated shall be entitled to receive from the Company, without
expense, a new certificate of the same type but not bearing the
restrictive legend set forth above and not containing any other
reference to the restrictions imposed by Section 7.1(a) above,
provided that a holder's right to receive, and the Company's
obligation to issue, a new certificate not bearing such
restrictive legends and not containing any other reference to the
restrictions imposed by Section 7.1(a) above shall be subject, in
the Company's discretion, to the delivery to the Company of an
opinion of counsel of the transferor (which may include in-house
counsel to the Investor) that subsequent transfers of such
Restricted Security by the proposed transferee will not require
registration under the 33 Act.
ARTICLE VIII
VOTING RIGHTS
8.1 Voting Rights. The Investor acknowledges that the Articles
provide that Class A Shares shall have one-tenth the voting power
as Class B Shares. If at any time after the date hereof the
Company issues to any Person other than the Company or any
Affiliate of the Company in a private or public sale Common Stock
with voting rights ("Super Voting Rights") that are greater in
any material respect than those the Investor has in its Class A
Common Stock, other than in connection with one or more employee
or director related plans or arrangements or in connection with a
spin-off by the Company of the Common Stock to its shareholders,
the Investor will have the right at its option to convert its
shares of Class A Common Stock to new shares of Common Stock with
such Super Voting Rights. If such conversion occurs, all
references in this
<PAGE> Confidential and Proprietary
Agreement to Class A Common Stock shall be deemed to refer to the
Common Stock with Super Voting Rights.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual consent of the Investor and the Company;
(b) by either the Company or the Investor if the Closing
shall not have occurred by December 31, 1999, and this Agreement
has not previously been terminated; provided, however, that the
failure to consummate the Closing by such date is not a result of
either the failure by the party so electing to terminate this
Agreement to perform any of its obligations hereunder or the
breach by the party so electing of its representations and
warranties;
(c) if either the Investor or the Company terminates the
Alliance Agreement;
(d) by either the Company or the Investor in the event any
court or governmental agency of competent jurisdiction shall have
issued an order, decree or ruling or taken any other action
restricting, enjoining or otherwise prohibiting the transactions
contemplated hereby and such order, decree, ruling or other
action shall have become final and unappealable.
9.2 Effect of Termination. In the event that this Agreement
shall be terminated pursuant to this Article IX, all further
obligations of the parties under this Agreement other than the
obligations set forth in this Section 9.2 and Sections 13.11 and
13.14 shall terminate and there shall be no liability of any
party to another party except for a party's breach of any of its
obligations, representations or warranties under this Agreement
prior to such termination.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification.
(a) The Company hereby agrees to indemnify, defend and hold
harmless the Investor and each of its directors, officers and
each Person, if any, who controls (within the meaning of Section
15 of the 33 Act and Section 20 of the 34 Act) the Investor from
and against all actual demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and
expenses (collectively, "Claims"), including without limitation
interest, penalties and reasonable attorneys' fees and expenses,
asserted against, resulting to, or imposed upon or incurred by
the Investor, directly or indirectly, by reason of or resulting
from a breach of any covenant, representation, warranty or
agreement of the Company contained in or made pursuant to this
Agreement or otherwise in connection with the transactions
contemplated hereby.
<PAGE> Confidential and Proprietary
(b) The Investor hereby agrees to indemnify, defend and
hold harmless the Company and each Company Control Person from
and against all Claims, including without limitation interest,
penalties and reasonable attorneys' fees and expenses, asserted
against, resulting to, or imposed upon or incurred by the Company
and each Company Control Person, directly or indirectly, by
reason of or resulting from a breach of any covenant,
representation, warranty or agreement of the Investor contained
in or made pursuant to this Agreement or otherwise in connection
with the transactions contemplated hereby.
10.2 Terms of Indemnification. The obligations and liabilities
of the parties with respect to Claims by third parties will be
subject to the following terms and conditions:
(a) the indemnified party will give the indemnifying party
prompt written notice of any Claims asserted against, resulting
to, imposed upon or incurred by the indemnified party, directly
or indirectly, and the indemnifying party will undertake the
defense thereof by representatives of their own choosing which
are reasonably satisfactory to the indemnified party; provided
that the failure of the indemnified party to give notice as
provided in this Section 10.2 shall not relieve the indemnifying
party of its obligations under this Article X, except to the
extent that such failure has materially and adversely affected
the rights of the indemnifying party;
(b) if within a reasonable time after notice of any Claim,
the indemnifying party fails to defend such Claim, the
indemnified party will have the right to undertake the defense,
compromise or settlement of such Claim on behalf of and for the
account and at the risk of the indemnifying party, subject to the
right of the indemnifying party to assume the defense of such
Claim at any time prior to settlement, compromise or final
determination thereof;
(c) if there is a reasonable probability that a Claim may
materially and adversely affect the indemnified party other than
as a result of money damages or other money payments, the
indemnified party will have the right at its own expense to
defend (provided that the indemnifying party shall continue to
control the defense and the indemnified party shall have the
right to participate in such defense), or co-defend, such Claim;
(d) the indemnifying party on one hand and the indemnified
party on the other hand will not, without the prior written
consent of the other, settle or compromise any Claim or consent
to entry of any judgment relating to any such Claim;
(e) with respect to any Claims asserted against the
indemnified party, the indemnified party will have the right to
employ one counsel of its choice in each applicable jurisdiction
(if more than one jurisdiction is involved) to represent the
indemnified party if, in the indemnified party's reasonable
judgment, a conflict of interest between the indemnified party
and the indemnifying party exists in respect of such Claims, and
in that event the fees and expenses of such separate counsel
shall be paid by such indemnifying party; and
(f) the indemnifying party will provide the indemnified
party reasonable access to all records and documents of the
indemnifying party relating to any Claim.
<PAGE> Confidential and Proprietary
ARTICLE XI
REGISTRATION RIGHTS
11.1 Registration Rights.
(a) Form S-3 Registration. In the event, at any time
within ninety (90) days prior to the Permitted Transfer Date, the
Company shall receive from any holder or holders of a majority of
all Registrable Securities then outstanding a written request or
requests that the Company effect a registration on Form S-3 and
any related qualification or compliance with respect to all or a
part of the Registrable Securities owned by such Selling
Stockholders, then the Company shall:
(i) Notice. Promptly give written notice of the
proposed registration and the Selling Stockholders' request
therefor, and any related qualification or compliance, to all
other holders of Registrable Securities; and
(ii) Registration. As soon as reasonably practicable
(but in no event prior to the Permitted Transfer Date), effect
such registration and all such qualifications and compliances as
may be so requested and as would permit or facilitate the sale
and distribution of all or such portion of such Selling
Stockholders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable
Securities of any other holder joining in such request as are
specified in a written request given within twenty (20) days
after the Company provides the notice contemplated by Section
11.1(a)(i); provided, however, that the Company shall not be
obligated to effect any such registration, qualification or
compliance pursuant to this Section 11.1(a):
(A) if the Selling Stockholders, together with
the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) representing less
than the larger of (I) 50% of the aggregate Registrable
Securities and such other securities then held by all Selling
Stockholders and such other holders, or (II) $50,000,000 of
shares (determined using the Volume-Weighted Average Trading
Price); or
(B) if the Company has, within the six (6) month
period preceding the date of such request, already effected a
registration under the 33 Act other than a registration from
which the Registrable Securities of Selling Stockholders have
been excluded (with respect to all or any portion of the
Registrable Securities the Selling Stockholders requested be
included in such registration) pursuant to the provisions of
Section 11.1(b).
(iii) Unavailability of Form S-3. If the Company
is not eligible to use Form S-3, it shall file a Form S-1 in lieu
of a Form S-3.
(b) Piggyback Registrations.
(i) Notice. The Company shall notify all holders of
Registrable Securities in writing at least twenty (20) or, in
case of a registration statement proposed to be filed pursuant to
<PAGE> Confidential and Proprietary
Rule 415 of the 33 Act, ten (10) Business Days prior to filing
any registration statement under the 33 Act (including but not
limited to registration statements relating to secondary
offerings of securities of the Company before or after the
Permitted Transfer Date, but excluding registration statements
relating to any registration under subsection (a) of this Section
11.1, any employee benefit plan or any merger or other corporate
reorganization) for purposes of effecting a public offering of
securities of the Company in which the Investor is entitled to
participate and, if other stockholders of the Company also are
participating in the registration statement as selling
stockholders (except in connection with an acquisition by the
Company), will afford each such holder an opportunity to include
in such registration statement all or any part of the Registrable
Securities then held by such holder. Each holder desiring to
include in any such registration statement all or any part of the
Registrable Securities held by such holder shall within ten (10)
or, in the case of a registration statement proposed to be filed
pursuant to Rule 415 of the 33 Act, five (5) Business Days after
receipt of the above-described notice from the Company, so notify
the Company in writing, and in such notice shall inform the
Company of the number of Registrable Securities such holder
wishes to include in such registration statement. If a holder
decides not to include all of its Registrable Securities in any
registration statement thereafter filed by the Company, such
holder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the
Company with respect to offerings of its securities, all upon the
terms and conditions set fort herein.
(ii) Underwriting. If a registration statement under
which the Company gives notice under this Section 11.1(b) is for
an underwritten offering, then the Company shall so advise the
Selling Stockholders. In such event, the right of any such
Selling Stockholder to include its Registrable Securities in a
registration pursuant to this Section 11.1(b) shall be
conditioned upon such Selling Stockholder's participation in such
underwriting and the inclusion of such Selling Stockholder's
Registrable Securities in the underwriting to the extent provided
herein. All Selling Stockholders proposing to distribute their
Registrable Securities through such underwriting shall enter into
an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing
factors require a limitation of the number of shares to be
underwritten, then the managing underwriter(s) may exclude shares
from the registration and the underwriting, and the number of
shares that may be included in the registration and the
underwriting shall be allocated, first to the Company, and
second, to each of the Selling Stockholders and other holders of
registration rights on a parity with the Selling Stockholders
requesting inclusion of their Registrable Securities in such
registration statement on a pro rata basis based on the total
number of Registrable Securities and other securities entitled to
registration then held by each such holder or other holder;
provided, however, that the right of the underwriters to exclude
shares (including Registrable Securities) from the registration
and underwriting as described above shall be restricted so that
all shares that are not Registrable Securities and are held by
any other Person, including, without limitation, any Person who
is an employee, officer or director of the Company (or any
subsidiary of the Company) shall first be excluded from such
registration and underwriting before any Registrable Securities
are so excluded (other than to the extent that such Persons are
non-employee directors or other non-employees of the Company who
hold registration rights on a parity with the Selling
<PAGE> Confidential and Proprietary
Stockholders, such non-employee directors and other non-employees
being entitled to participate with the participating Selling
Stockholders on the basis described under "second" above). If
any Selling Stockholder disapproves of the terms of any such
underwriting, such Selling Stockholder may elect to withdraw
therefrom by written notice to the Company and the underwriter
delivered at least ten (10) Business Days prior to the effective
date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded
and withdrawn from the registration.
(c) Registration Obligations. With respect to any
registration statement contemplated in this Section 11.1, the
Company will:
(i) prepare and file with the SEC the registration
statement within 90 days after a Selling Stockholders' notice
requesting registration or inclusion in a proposed registration,
and use its reasonable efforts to cause the Registrable
Securities covered by such registration statement to become
registered and such registration statement to be declared
effective as expeditiously as possible under the 33 Act or other
applicable federal law and regulations (and cause to be prepared
and file any amendments or supplements thereto as may be
necessary to comply with applicable federal law and regulations);
provided, however, that the Company may be allowed to defer
filing of the registration statement: (A) if the president or
general counsel of the Company reasonably determines in good
faith that it is in the best interests of the Company not to
disclose the existence of or facts surrounding any proposed or
pending material developments; (B) if the underwriters have
notified the Company that market conditions are such as to
recommend deferral; (C) pending the completion of year-end
financial statements or quarterly earnings releases; or (D) if an
offering by the Company of any securities is pending; provided,
however, that any deferral pursuant to clauses (A)-(D) of this
paragraph shall not in the aggregate be for more than 60 days.
(ii) use its reasonable efforts to cause to be
registered or qualified the Registrable Securities covered by
such registration statement under such securities or "blue sky"
laws in such jurisdictions within the United States as any
Selling Stockholder may reasonably request; provided, however,
that the Company reserves the right, in its sole discretion, not
to cause to be registered or qualified such Registrable
Securities in any jurisdiction where the Company would be
required in connection therewith to execute a general consent to
service or to qualify as a foreign corporation or to subject
itself to taxation;
(iii) maintain the effectiveness of any
registration statement hereunder for 90 days or such longer
period as may be required by the 33 Act to enable any Selling
Stockholder and the underwriters, if any to complete such
offering;
(iv) promptly notify each Selling Stockholder of the
happening of any event as a result of which any preliminary
prospectus or prospectuses included in any registration statement
hereunder includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements not misleading in light of the
circumstances then existing (in such event, the Company shall
prepare a supplement or post-effective amendment to such
registration statement or related prospectus or file any other
required document so that, as thereafter delivered to the
purchasers of Registrable Securities sold
<PAGE> Confidential and Proprietary
thereunder, the prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading);
(v) have the right to reasonably approve the choice of
lead underwriter for the offering, if an underwritten offering;
(vi) furnish, at the request of any Selling
Stockholder, an opinion, dated the date the registration
statement becomes effective, of counsel representing the Company
(which may be in-house counsel) for the purposes of such
registration, addressed to the underwriters, if any, and to such
Selling Stockholder as to such legal matters as such Selling
Stockholder shall reasonably request; and
(vii) furnish, at the request of any Selling
Stockholder, a letter, dated the date the registration Statement
becomes effective, of independent certified public accountants of
the Company, addressed to the underwriters, if any, and to such
Selling Stockholder as to such accounting matters as such Selling
Stockholder shall reasonably request.
(d) Conditions to Obligations. The obligations of the
Company to cause a registration statement to be prepared pursuant
to the provisions of this Section 11.1 and each Selling
Stockholder's right to have Registrable Securities included in
any registration statement pursuant to the provisions of this
Section 11.1 shall be subject to the following conditions:
(i) Each Selling Stockholder shall furnish to the
Company in writing such information arid documents as, in the
opinion of the Company's counsel, may be reasonably required to
properly cause to be prepared such registration statement in
accordance with applicable provisions of the 33 Act and the SEC's
regulations thereunder or federal or state securities or blue sky
laws and regulations then in effect; and
(ii) If a Selling Stockholder desires to sell and
distribute such Registrable Securities over a period of time or
from time to time, pursuant to a registration statement prepared
pursuant to the provisions of this Section 11.1 then such Selling
Stockholder shall execute and deliver to the Company such written
undertakings as the Company and its counsel may reasonably
require in order to assure full compliance with the relevant
provisions of the 33 Act and the SEC's regulations thereunder or
other federal or state securities or blue sky laws and
regulations as then in effect.
(e) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 11.l (excluding
underwriters' and brokers' discounts and commissions relating to
shares sold by the Selling Stockholders and legal fees of counsel
for the Selling Stockholders), including, without limitation all
federal and "blue sky" registration, filing and qualification
fees, printers' and accounting fees, and fees and disbursements
of counsel for the Company, shall be borne by the Company.
(f) Indemnity.
<PAGE> Confidential and Proprietary
(i) The Company agrees to indemnity and hold harmless
each Selling Stockholder and each Person, if any, who controls
(within the meaning of Section 15 of the 33 Act and Section 20 of
the 34 Act) such Selling Stockholder (a "Control Person") against
any losses, claims, damages or liabilities, joint or several, to
which such Selling Stockholder or any such Control Person may
become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in any preliminary or final
registration statement or prospectus with respect thereto, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and the Company will reimburse
each Selling Stockholder and each Control Person for any legal or
other expenses reasonably incurred by such Selling Stockholder or
such Control Person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission from any of such
documents in reliance upon and in conformity with written
information furnished by or on behalf of such Selling Stockholder
or any such Control Person specifically for use in the
preparation thereof.
(ii) Each Selling Stockholder will, severally and not
jointly, indemnify and hold harmless the Company and each of its
directors, officers and each Person, if any, who controls (within
the meaning of Section 15 of the 33 Act and Section 20 of the 34
Act) the Company (a "Company Control Person") to the same extent
as set forth in the foregoing indemnity from the Company to each
Selling Stockholder but only with reference to written
information included in any preliminary or final registration
statement or prospectus with respect thereto, or amendment or
supplement thereto, furnished by or on behalf of such Selling
Stockholder specifically for use in the preparation of such
documents; and will reimburse the Company or any such Company
Control Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending
any loss, claim, damage, liability or action for which such
Selling Stockholder is obligated to indemnify the Company or any
Company Control Person.
(iii) Promptly after receipt by an indemnified
party under this Section l1.l(f) of notice of any claim or the
commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying
party under Section l1.1(f)(i) or (ii) above, notify the
indemnifying party of any claim or the commencement thereof; but
the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party
otherwise than under Section 11.1(f)(i) or (ii) above. In case
any such action is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and,
to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party in connection with
the defense thereof other than reasonable costs of investigation.
No
<PAGE> Confidential and Proprietary
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such
action.
(iv) If the indemnification provided for in paragraphs
(i) or (ii) of this Section 11.1(f) is unavailable or
insufficient in accordance with its terms in respect of any
losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits as well as the
relative fault of the Company on the one hand and the Selling
Stockholder on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant equitable consideration. The relative benefits received
by the Company on the one hand and the Selling Stockholder on the
other shall be deemed to be in the same proportion as (i) the
total purchase price received by the Company from the Investor
(based on the average purchase price paid by the Investor times
the number of shares purchased) for the securities to be
reoffered by the Selling Stockholder in such offering bears to
(ii) the total net proceeds received by the Selling Stockholder
in such offering. The relative fault 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 on the one hand or the Selling Stockholder on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission.
ARTICLE XII
STANDSTILL
12.1 Standstill Provision.
(a) The Investor agrees that for a period of five (5) years
from the Closing Date, it shall not, and shall cause each of its
Affiliates not to, without the prior written consent of the Board
of Directors specifically expressed in a resolution approved by a
majority of the directors of the Company, directly or indirectly,
through one or more intermediaries or otherwise, (i) acquire,
agree to acquire or make any proposal to acquire any securities
of the Company or any of its Subsidiaries, any warrant or option
to acquire any such securities, any security convertible into or
exchangeable for any such securities or any other right to
acquire any such securities if the effect of such acquisition
would be to increase the beneficial ownership (as defined in Rule
13d-3 promulgated under the 34 Act) of the Investor to a
percentage greater than five percent (5%) (the "Standstill
Percentage") of the then issued and outstanding shares of Common
Stock; (ii) seek or propose any merger, consolidation, business
combination, tender or exchange offer, sale or purchase of assets
or securities, dissolution, liquidation, restructuring,
recapitalization or similar transaction of or involving the
Company or any of its Subsidiaries; (iii) make, or in any way
participate in, any "solicitation" of proxies or consents
(whether or not relating to the election or
<PAGE> Confidential and Proprietary
removal of directors) within the meaning of Rule 14a-l under the
34 Act with respect to any securities of the Company or any of
its Subsidiaries, or demand a copy of the stock ledger, list of
stockholders, or any other books and records of the Company or
any of its Subsidiaries; (iv) form, join or in any way
participate in a "group" (within the meaning of Section 1 3(d)(3)
of the 34 Act), with respect to any securities of the Company or
any of its Subsidiaries; (v) otherwise act, alone or in concert
with others, to seek to control the management, Board of
Directors or policies of the Company or any of its Subsidiaries;
(vi) deposit any Common Stock in any voting trust or subject any
Common Stock to any arrangement or agreement with respect to the
voting of such shares; (vii) call, seek to have called or execute
any written consent calling for any meeting of the stockholders
of the Company; (viii) seek, alone or in concert with others,
representation on the Board of Directors or seek the removal of
any member of such Board or a change in the composition or size
of such Board; (ix) enter into any agreements (whether written or
oral) with, or finance or assist, any other persons in connection
with any of the foregoing, or (x) make any publicly disclosed
proposal regarding any of the foregoing. The provisions in this
Article XII shall not apply in the event of a Potential Change in
Control Event, unless the activities defined in (a) or (b) of the
definition of "Potential Change in Control Event" which gave rise
to the Potential Change in Control Event are discontinued and
remain so for one year without the occurrence of a Potential
Change in Control Event. In such event, the provisions of this
Article XII shall be reinstated and remain in full force and
effect thereafter.
(b) The Investor will not be obliged to dispose of any
Common Stock to the extent that the aggregate percentage of the
Common Stock represented by the Common Stock Beneficially Owned
by the Investor or which the Investor has a right to acquire is
increased beyond the Standstill Percentage (i) as a result of a
recapitalization of the Company or a repurchase or exchange of
securities by the Company or any other action taken by the
Company or its Affiliates; (ii) as a result of any investment in
any equity index (e.g., the S&P 500), provided that Investor
shall not vote such shares; (iii) by way of stock dividends or
other distributions or rights or offerings made available to
holders of shares of Common Stock generally; (iv) with the
consent of a simple majority of the members of the Company's
Board of Directors; or (v) as part of a transaction on behalf of
Investor's Defined Benefit Pension Plan, Profit Sharing
Retirement Plan, 401(k) Savings Plan, Sheltered Employee
Retirement Plan and Sheltered Employee Retirement Plan Plus, or
any successor or additional retirement plans thereto
(collectively, the "Retirement Plans") where the Company's shares
in such Retirement Plans are voted by a trustee for the benefit
of Investor employees or, for those Retirement Plans where
investor controls voting, where Investor agrees not to vote any
shares of such Retirement Plan Common Stock that would cause
Investor to exceed the Standstill Percentage.
12.2 Notice of Proposed Transfer. If, at any time after the
Permitted Transfer Date, the Investor intends to sell more than
one percent (1%) of the issued and outstanding shares of Class A
Common Stock to a Third Party other than pursuant to a
Registration Statement, the Investor shall provide a written
notice of such intent to the Company at least two (2) Business
Days prior to offering any such shares to any Third Party.
<PAGE> Confidential and Proprietary
ARTICLE XII
MISCELLANEOUS
13.1 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York
(without giving effect to conflicts of law principles thereof).
13.2 Remedies Cumulative. Except as herein provided, the
remedies provided herein shall be cumulative and shall not
preclude assertion by any party hereto of any other rights or the
seeking of any other remedies against the other party hereto.
13.3 Brokerage. Each party hereto will indemnify and hold
harmless the other against and in respect of any claim for
brokerage or other commission relative to this Agreement or to
the transactions contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to
have been made by such party with any third party.
l3.4 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under applicable
law, such provisions shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
13.5 Notices. Notices required under this Agreement shall be
deemed to have been adequately given if delivered in person or
sent to the recipient at its address (or facsimile number, as the
case may be) set forth in Exhibit 13.5 (with copies to the
persons specified in Exhibit 13.5 at the respective addresses for
such persons specified in such Exhibit 13.5) or such other
address as such party may from time to time designate in writing
by certified mail (return receipt requested), facsimile or
overnight courier.
13.6 No Waiver. No failure to exercise and no delay in
exercising any right, power or privilege granted under this
Agreement shall operate as a waiver of such right, power or
privilege. No single or partial exercise of any right, power or
privilege granted under this Agreement shall preclude any other
or further exercise thereof or the exercise of any other right,
power or privilege.
13.7 Amendments and Waivers. This Agreement may be modified or
amended only by a writing signed by the Company and by the
Investor. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any shares of
Class A Common Stock purchased under this Agreement at the time
outstanding, each future holder of all such shares, and the
Company.
13.8 Rights of the Investor. Subject to the terms and conditions
of this Agreement, the Investor shall have the absolute right to
exercise or refrain from exercising any right or rights that such
holder may have by reason of this Agreement, including without
limitation the right to consent to the waiver of any obligation
of the Company under this Agreement and to enter into an
agreement with the Company for the purpose of modifying this
Agreement or any agreement
<PAGE> Confidential and Proprietary
effecting any such modification, and such holder shall not incur
any liability to any other holder or holders of Class A Common
Stock with respect to exercising or refraining from exercising
any such right or rights.
13.9 Survival. All representations and warranties made by the
Company and the Investor contained in this Agreement, and the
obligation of the parties to indemnify each other pursuant to
Section 10.1 hereof, shall survive the execution and delivery of
this Agreement, any examination or due diligence inquiry by a
party and the Closing until the date which is one year after the
Closing Date. All covenants and agreements of the Company and
the Investor contained in this Agreement (which terms do not
include representations and warranties) shall, except as provided
in such covenant or agreement, survive the Closing and shall
remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Investor or any
controlling Person thereof or by or on behalf of the Company, any
of its officers and directors or any controlling Person thereof.
The obligations to indemnity and hold harmless a party hereto,
pursuant to Article X hereof, shall survive only until the
expiration of the applicable survival period for the
representation and warranty under which the claim for
indemnification is being made; provided, however, that such
obligations to indemnify and hold harmless shall not terminate
with respect to any such item as to which the Person to be
indemnified shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice (stating
in reasonable detail the basis of such claim) to the party to be
providing the indemnification.
13.10 Entire Understanding. This Agreement and the
agreements to be executed in connection therewith on the Closing
Date express the entire understanding of the parties and
supersede all prior and contemporaneous agreements and
undertakings of the parties with respect to the subject matter
hereof and thereof. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
13.11 Expenses. Each party will pay all of its own expenses,
including attorney's fees incurred in connection with the
negotiation of this Agreement, the performance of its obligations
hereunder and the consummation of transactions contemplated by
this Agreement.
13.12 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but
which taken together shall constitute one agreement.
13.13 Assignment; No Third-Party Beneficiaries.
(a) Except as otherwise expressly provided herein, this
Agreement and the rights hereunder shall not be assignable or
transferable by either party without the prior written consent of
the other; provided that, if such assignment or transfer is
consented to, such assignee or transferee expressly assumes in
writing all of the such party's obligations hereunder. Subject
to the preceding sentence, this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto
and their respective successors and permitted assigns.
<PAGE> Confidential and Proprietary
(b) This Agreement is for the sole benefit of the parties
hereto and their respective successors and permitted assigns and
nothing herein expressed or implied shall give or be construed to
give to any Person, other than the parties hereto and such
successors and permitted assigns, any legal or equitable rights
hereunder.
(c) Intel and the Investor shall be permitted, without the
consent of the Company, to transfer Class A Common Stock (subject
to applicable federal and state securities laws) and to assign
all its rights and obligations under this Agreement, including
without limitation the right to purchase Class A Common Stock and
common equity securities under Article II and registration rights
under Article XI, to any of its Affiliates; provided, however,
that such assignee expressly assumes in writing all of Intel or
the Investor's, as the case may be, obligations hereunder; and
provided, further that in the event of such assignment Intel or
the Investor, as the case may be, shall notify the Company in
writing of such assignment, and for all purposes of this
Agreement all references to Intel or the Investor shall mean such
Affiliate.
13.14 Confidentiality/Publicity. Confidential or proprietary
information disclosed by either party under this Agreement shall
be considered confidential information (the "Confidential
Information") and shall not be disclosed by the Company or the
Investor to any third party, except as permitted hereunder.
(a) All press releases and announcements concerning the
investment contemplated by this Agreement shall be mutually
agreed to by the Company and the Investor except as otherwise
provided in this Section.
(b) The Company may disclose the terms of the investment
contemplated by this Agreement and the terms of the Alliance
Agreement in its registration statement with respect to the IPO.
Intel shall cooperate with the Company in good faith in reviewing
such disclosure; provided that Intel shall have the right to
approve such disclosure prior to the filing of any amendment to
the registration statement or prospectus that includes disclosure
of the relationship between the Company and Intel (such approval
not to be unreasonably delayed). The Company will provide Intel
drafts of any such disclosure at least two (2) Business Days
prior to the filing of any amendment to the registration
statement or prospectus. The Company may file this Agreement or
the Alliance Agreement as exhibits to the registration statement,
but Intel shall have the right to request that the Company seek
confidential treatment of specified information in the Alliance
Agreement
(c) In the event that the Company or the Investor is
requested or becomes legally compelled (by statute or regulation
or by oral questions, interrogatories, request for information or
documents, subpoena, criminal or civil investigative demand or
similar process (including in connection with a public offering
of the Company's securities), to disclose any Confidential
Information not previously publicly disclosed, such party (the
"Disclosing Party") shall provide the other party (the "Non-
Disclosing Party") with prompt written notice of that fact so
that the other party may seek (with the cooperation and
reasonable efforts or the Disclosing Party) a protective order,
confidential treatment or other appropriate remedy. In such
event, the Disclosing Party shall furnish only that portion of
the Confidential Information which is legally required and shall
exercise reasonable efforts to obtain reliable assurance that
confidential
<PAGE> Confidential and Proprietary
treatment will be accorded the Confidential Information to the
extent reasonably requested by the Non-Disclosing Party.
(d) The provisions of this Section 13.14 shall not prohibit
or restrict in any way disclosure by a party with respect to this
Agreement in connection with any financing, strategic
transaction, acquisition or disposition involving such party or
any of its Affiliates, provided that such disclosure shall be
first approved by the other party, which approval shall not be
unreasonably withheld or delayed.
(e) The provisions of this Section 13.14 shall be in
addition to, and not in substitution for, the provisions of any
separate nondisclosure agreement executed by the parties hereto
with respect to the transactions contemplated hereby, except
that, in the event of any contradiction between this Section and
any such agreement, this Section shall prevail.
13.15 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.
13.16 Aggregation of Stock. All shares of the Class A Common
Stock held or acquired by Affiliates or Persons shall be
aggregated together for the purpose of determining the
availability of any rights under this Agreement.
<PAGE> Confidential and Proprietary
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
WILLIAMS COMMUNICATIONS GROUP, INC.
By: ------------------------------
THE WILLIAMS COMPANIES, INC.
By: ------------------------------
INTEL CORPORATION
By: /s/Arvind Sodhani
------------------------------
Arvind Sodhani, Treasurer and
Vice President
