<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE 14D-9
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 3)
---------------
TRANSCO ENERGY COMPANY
(Name of Subject Company)
TRANSCO ENERGY COMPANY
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.50 Per Share
(and Associated Common Stock Purchase Rights)
(Title of Class of Securities)
89353210
(CUSIP Number of Class of Securities)
David E. Varner, Esq.
Senior Vice President, General Counsel and Secretary
Transco Energy Company
P.O. Box 1396
2800 Post Oak Blvd.
Houston, Texas 77251
(713) 439-2388
(Name, Address and Telephone Number of Person Authorized to Receive
Notice and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Eric S. Robinson, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
(212) 403-1000
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<PAGE>
This Amendment No. 3 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 of Transco Energy
Company, a Delaware corporation (the "Company"), filed with the Securities and
Exchange Commission on December 16, 1994, as amended (as amended, the "Schedule
14D-9"), relating to the tender offer made by The Williams Companies, Inc., a
Delaware corporation, disclosed in a Tender Offer Statement on Schedule 14D-1
dated December 16, 1994, as amended, to purchase up to 24,600,000 shares of the
Company's common stock, par value $.50 per share, and the associated common
stock purchase rights.
1. Item 8(e) is hereby amended by adding the following:
On or about December 27, 1994, a complaint was filed in the Court of
Chancery, in and for New Castle County, State of Delaware, entitled
Diovanni v. Desbarres, et al., C.A. No. 13941. The complaint in Diovanni
--------------------- -- -- --------
names as defendants the Company and its directors, and makes allegations
that are, in substance, similar to those made in the other complaints
described herein. The Diovanni complaint seeks substantially the same
--------
relief sought in the other actions described herein. Defendants expect that
the Diovanni action will be consolidated with such actions.
--------
2. Item 8 is hereby amended by adding the following:
(f) Regulatory Matters.
At 11:59 P.M., New York City time, on January 3, 1995, the waiting
period required under the HSR Act expired.
(g) Amendments to Credit Agreements.
The Company and the banks parties thereto have executed amendments
dated as of December 12, 1994 to each of the Amended and Restated Credit
Agreement dated as of December 31, 1993, as amended, among the Company, the
Banks named therein, Citibank, N.A. as Agent and Bank of Montreal as Co-
Agent, and the Reimbursement Agreement dated as of December 31, 1993, as
amended, among the Company, the Banks named therein and Bank of Montreal as
Agent and Issuing Bank, relating to the Merger Agreement and the Stock
Option Agreement and the transactions contemplated thereby. Copies of each
of the amendments are attached hereto as Exhibits 30 to 33 and incorporated
-- --
herein by reference.
<PAGE>
3. Item 9 is hereby amended and supplemented by adding the following exhibits:
(29) Anthony Diovanni v. DesBarres, et al., (Del. Ch.)(C.A. No.
13941).
(30) Second Amendment Agreement dated as of December 12, 1994
among the Company, Citibank, N.A. and the lenders parties
to the Amended and Restated Credit Agreement dated as of
December 31, 1993, as amended, among the Company, the Banks
named therein, Citibank, N.A. as Agent and Bank of Montreal
as Co-Agent
(31) Third Amendment Agreement dated as of December 12, 1994
among the Company, Citibank, N.A. and the lenders parties
to the Amended and Restated Credit Agreement dated as of
December 31, 1993, as amended, among the Company, the Banks
named therein, Citibank, N.A. as Agent and Bank of Montreal
as Co-Agent
(32) Second Amendment to Reimbursement Agreement dated as of
December 12, 1994 among the Company, Bank of Montreal and
the lenders parties to the Reimbursement Agreement dated as
of December 31, 1993, as amended, among the Company, the
Banks named therein and Bank of Montreal as Agent and
Issuing Bank
(33) Third Amendment to Reimbursement Agreement dated as of
December 12, 1994 among the Company, Bank of Montreal and
the lenders parties to the Reimbursement Agreement dated as
of December 31, 1993, as amended, among the Company, the
Banks named therein and Bank of Montreal as Agent and
Issuing Bank
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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.
TRANSCO ENERGY COMPANY
By: /s/ David E. Varner
---------------------
Name: David E. Varner
Title: Senior Vice President,
General Counsel and Secretary
Date: January 6, 1995
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<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- ---------------------------------X
:
ANTHONY DIOVANNI, :
:
Plaintiff, : Civil Action No. 13941
:
-against- :
: CLASS ACTION
JOHN P. DESBARRES, WILLIAM H. : COMPLAINT
LUERS, FREDERICK H. SCHULTZ, : ------------
GORDON F. AHALT, BENJAMIN F. :
BAILAR, ROBERT W. FRI, DAVID J. :
GRISSOM and TRANSCO ENERGY CO., :
:
Defendants. :
:
- ---------------------------------X
Plaintiff, by his attorneys, alleges upon information and belief (said
information and belief being based, in part, upon the investigation conducted by
and through his counsel), except with respect to his ownership of Transco Energy
Co. ("Transco" or the "Company") common stock, which is alleged upon his
personal knowledge as follows:
THE PARTIES
-----------
1. Plaintiff is the owner of 550 shares of Transco common stock.
2. Defendant Transco is a corporation organized and existing under
the laws of the State of Delaware. Transco maintains its principal offices at
2800 Post Oak Boulevard,
<PAGE>
P.O. Box 1396, Houston, Texas. Transco transports natural gas through its two
interstate pipeline systems, 10,500-mile Transcontinental Gas Pipe Line
Corporation and 6,050-mile Texas Gas Transmission Corporation, to markets in the
eastern and midwestern United States, respectively. Transco also buys, sells
and arranges for the transportation of natural gas throughout the United States
and Canada through its marketing subsidiary, Transco Gas Marketing Company.
Transco, through Interstate Coal Company, also mines coal in eastern Kentucky
and Tennessee.
3. Defendant John P. Desbarres is the Chairman of the Board,
President and Chief Executive Officer of Transco.
4. Defendants William H. Luers, Frederick H. Schultz, Gordon F.
Ahalt, Benjamin F. Bailar, Robert W. Fri and David J. Grissom are directors of
Transco.
5. The foregoing individual defendants (collectively referred to
herein as the "Director Defendants") are in a fiduciary relationship with
plaintiff and the public stockholders of Transco, and owe plaintiff and the
other Transco public stockholders the highest obligations of good faith, fair
dealing, due care, loyalty and full and candid disclosure.
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<PAGE>
CLASS ACTION ALLEGATIONS
------------------------
6. Plaintiff brings this action on his own behalf and as a class
action on behalf of all shareholders of defendant Transco (except defendants
herein and any person, firm, trust, corporation or other entity related to or
affiliated with any of the defendants) or their successors in interest, who have
been or will be adversely affected by the conduct of defendants alleged herein.
7. This action is properly maintainable as a class action for the
following reasons:
(a) the class of shareholders for whose benefit this action is
brought is so numerous that joinder of all Class members is impracticable. As of
June 30, 1994, there were over 40 million shares of Transco common stock
outstanding, owned by over 15,000 shareholders of record scattered throughout
the United States.
(b) there are questions of law and fact which are common to
members of the class and which include, inter alia, the following:
----- ----
(i) whether the Director Defendants have breached their
fiduciary duties owed by them to plaintiff and members of the class
and/or have aided and abetted in such breach, by virtue of their
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participation and/or acquiescence and by their other conduct
complained of herein;
(ii) whether defendants have failed to fully disclose the
true value of defendant Transco's assets and earnings power;
(iii) whether the Director Defendants have wrongfully failed
and refused to seek a purchaser of Transco and/or any and all of its
various assets or divisions at the highest possible price;
(iv) whether plaintiff and the other members of the Class
will be irreparably damaged by defendants' failure to conduct an
active auction of Transco; and
(v) whether defendants have breached or aided and abetted
the breaches of the fiduciary and other common law duties owed by them
to plaintiff and the other members of the Class.
8. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interest as the other members of the Class. Accordingly,
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plaintiff is an adequate representative of the Class and will fairly and
adequately protect the interests of the Class.
9. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substantially
impair or impede their ability to protect their interests.
10. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf of the Class as a whole is appropriate.
SUBSTANTIVE ALLEGATIONS
-----------------------
11. On May 2, 1994, Smith Barney Shearson raised Transco to "buy" from
"outperform."
12. On May 17, 1994, Desbarres stated at Transco's 46th Annual Meeting
that Transco "is well on its way to achieving its vision of being the premier
transporter and marketer in the eastern half of the United States." He further
stated that, "Demand is growing in Transco's markets, and we
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are not only keeping pace, but actually outdoing our competition in meeting
customer needs. And I can not think of a better way for our company to achieve
success."
13. On July 20, 1994, Transco announced its second quarter improved
operating income which was the seventh consecutive quarter of improved operating
results.
14. On August 4, 1994, Transco announced organizational changes to
better pursue development of new business and expand the reliance, quality
services provided to its current customers. These changes refined the
organization and increased the value of Transco.
15. On October 26, 1994, Transco announced its third quarter improved
operating income. This was its eighth consecutive quarter of improved operating
results.
16. Transco was on its way to becoming the premier transporter and
marketer in the eastern half of the U.S. before its public announcement on
December 12, 1994.
17. On December 12, 1994, it was publicly announced that Transco
approved a merger between Transco and Williams Cos. ("Williams"). Under the
terms of the merger agreement, Williams will pay $17.50 cash a share for up to
24.6 million Transco shares or 60% of Transco common stock and related
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<PAGE>
common stock purchase rights. The tender offer will be conditioned on, among
other things, the tender of no fewer than 20.9 million shares, or 51% of
Transco's common stock. After the tender offer, a newly formed Williams unit
will be merged into Transco, with Transco continuing as a wholly owned
subsidiary of Williams. The outstanding shares of Transco $4.75 cumulative
convertible preferred stock will be converted into the right to receive an equal
number of shares of a new series of Williams $4.75 cumulative convertible
preferred stock convertible into 0.5588 Williams common shares. The Transco
$3.50 cumulative convertible preferred stock will be converted into the right to
receive an equal number of shares of a new series of Williams $3.50 cumulative
convertible preferred stock convertible into 1.5625 Williams common shares and
otherwise having substantially equivalent rights.
18. In addition, Williams and Transco signed a stock option agreement
providing for Williams to buy up to 7.5 million additional Transco common shares
at $17.50 each. If Williams exercises the stock option, Transco has the right to
cancel the option for a cash payment not to exceed $2 per option share.
19. The total value of the cash tender offer and merger, including the
exchange of new series of Williams convertible preferred stock for Transco's two
outstanding series
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of convertible preferred stock and including Transco's outstanding indebtedness,
is $3 billion. The cash tender offer will be followed by a stock merger in
which Transco common shares not purchased in the tender offer will be exchanged
for 0.625 of a Williams common share.
20. Under the circumstances, the Director Defendants are obligated to
explore all alternatives to maximize shareholder value. The Director Defendants
will be in breach of their fiduciary duties owed to Transco's public
shareholders if they fail to fully explore bona fide offers by potential
---- ----
acquirors for the purchase of the Company.
21. The Williams proposal constitutes a change of control of Transco,
its business and affairs.
22. The Director Defendants agreed to the merger in order to advance
their own interests, including their interests in obtaining lucrative positions
in the new combined company, at the expense and to the detriment of the
stockholders of Transco.
23. The Director Defendants have violated fiduciary and other common
law duties which they owe to plaintiff and the other members of the Class in
that they are not exercising informed independent business judgment, have acted
and are acting to the detriment of the members of the Class in order to
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<PAGE>
benefit themselves, and have participated in and substantially and knowingly
aided and abetted the above breaches of fiduciary duty and the plan to dilute
the public stockholders' interest on unfair and inadequate terms.
24. The Director Defendants are liable as direct participants and as
aider and abettors of the wrongs complained of herein. Because of their
positions of control and authority as officers and directors of Transco, they
were able to and did, directly or indirectly, control the actions of Transco in
agreeing to a merger on terms which benefit themselves but are unfair to the
shareholders of Transco. In violation of the fiduciary duties owed Transco's
shareholders, the Directors Defendants are causing, or are substantially and
knowingly aiding and abetting in, the plan to enable Williams to acquire Transco
for their own and William to acquire Transco for their own and William's
benefit, and to the detriment of plaintiff, the plaintiff class and Transco
public stockholders.
25. Plaintiff and the Class will suffer irreparable damage unless
defendants are enjoined from breaching their fiduciary duties to maximize
shareholder value.
26. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
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A. Declaring this to be a proper class action;
B. Ordering defendants to carry out their fiduciary duties to
plaintiff and the other members of the Class by announcing their intention to:
(i) undertake an appropriate evaluation of alternatives
designed to maximize value for Transco's public stockholder;
(ii) adequately ensure that no conflicts of interests exist
between defendants' own interests and their fiduciary obligation to
the public stockholders or, if such conflicts exist, to ensure that
all of the conflicts would be resolved in the best interests of
Transco's public stockholders; and
(iii) act independently, by, among other things, appointing a
disinterested committee so that the interests of Transco's public
stockholders would be protected, or alternatively, appointing a
shareholder committee to review all bona fide offers.
---- ----
C. Enjoining the consummation of the merger agreement;
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D. Directing that defendants pay to plaintiff and the Class all
damages caused to them and account for all profits and any special benefits
obtained as a result of their unlawful conduct;
E. Awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and expert; and
F. Granting such other and further relief as may be just and proper
in the premises.
Dated: December 27, 1994
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
By: /s/ Norman Monhait
---------------------------
Norman Monhait
First Federal Plaza
Suite 214
Wilmington, Delaware 19899
Telephone: (302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
LAW OFFICES OF CURTIS V. TRINKO
310 Madison Avenue
14th Floor
New York, New York 10017
(212) 490-9550
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<PAGE>
SECOND AMENDMENT AGREEMENT
This Second Amendment Agreement dated as of December 12, 1994 (this
"Second Amendment") is by and among (i) Transco Energy Company, a Delaware
corporation (the "Borrower"), (ii) the undersigned lenders (the "Banks") which
are parties to that certain Amended and Restated Credit Agreement dated as of
December 31, 1993, as amended by the First Amendment dated as of June 30, 1994,
among the Borrower, the lenders party thereto, Bank of Montreal, as Co-Agent
thereunder and Citibank, N.A., as agent (the "Agent") for such lenders (as so
amended, the "Credit Agreement"), and (iii) the Agent.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
Section 1. Amendments to Credit Agreement.
------------------------------
Section 1.1 Section 2.13. Section 2.13 of the Credit Agreement is
------------
hereby amended to read in its entirety as follows:
Section 2.13 Optional Termination. Notwithstanding anything to
--------------------
the contrary in this Agreement, if (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors,
other than securities having such power only by reason of the happening of
a contingency; provided, however, that for purposes only of clauses (b) and
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(c) of this sentence, the acquisition by The Williams Companies, Inc., a
Delaware corporation, or any of its wholly-owned Subsidiaries ("Permitted
Purchaser") of any common stock of the Borrower pursuant to the Offer (as
defined in the Agreement and Plan of Merger dated as of December 12, 1994
among WC Acquisition Corp., the Permitted Purchaser and the Borrower
("Merger Agreement")) or the Merger Agreement shall not constitute an event
covered by this clause (i) until the earlier of March 31, 1995 or 15 days
following any such acquisition; or (ii) during any period of up to 24
consecutive months, commencing on, before or after the date of this
Agreement, individuals who at the beginning of such 24-month period were
directors of the Borrower (or who were appointed or nominated for election
by individuals who at the beginning of such period were a majority of such
directors or, for purposes only of clauses (b) and (c) of this sentence and
only until the earlier of March 31, 1995 or 15 days following the
acquisition by the Permitted Purchaser of any common stock of the Borrower
pursuant to such Offer, who were appointed or nominated for election
pursuant to the written request of the
<PAGE>
Permitted Purchaser following its acquisition of a majority of the common
stock of the Borrower pursuant to the Merger Agreement, but excluding any
such Person originally proposed for election in opposition to the board of
directors of the Borrower in office on the date hereof in an actual or
threatened election contest relating to the election of the directors of
the Borrower (as such terms are used in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended) and whose initial assumption of office
resulted from such contest or the settlement thereof) shall cease for any
reason to constitute a majority of the board of directors of the Borrower;
or (iii) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement which upon consummation will result in its or their acquisition
of, the power to exercise, directly or indirectly, a controlling influence
over the management or policies of the Borrower; provided, however, that
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for purposes only of clauses (b) and (c) of this sentence, the entering
into of the Merger Agreement or the Stock Option Agreement (as defined in
the Merger Agreement) shall not constitute an event covered by this clause
(iii); or (iv) any condition or event constituting a change of control of
the Borrower for purposes of permitting any holder of Preferred Stock of
the Borrower to exercise a right of redemption or other retirement
(including pursuant to an offer to purchase made by the Borrower) or
conversion (other than conversion to common stock), in whole or in part, of
such Preferred Stock; then, in such event, (a) the rate of interest with
respect to each Advance then outstanding or which thereafter becomes
outstanding shall immediately and automatically increase by one-half of one
percent (1/2%), (b) the Agent shall at the request, or may with the
consent, of the Required Banks, by telephonic, telex or other notice to the
Borrower, declare the Notes payable to the Banks, all interest thereon and
all other amounts payable under this Agreement to the Banks to be due and
payable, whereupon such Notes, interest and other amounts shall become
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, and (c) the
Agent shall at the request, or may with the consent, of the Required Banks,
by telephonic, telex or other notice to the Borrower, declare the
Commitments and the obligations of the Banks to make Advances hereunder to
be immediately terminated (whereupon the same shall immediately terminate),
in the case of each of the matters described in clauses (a)-(c) above,
without presentment, demand, protest or further notice (including, without
limitation, notice of intent to accelerate and notice of acceleration) of
any kind, all of which are hereby expressly waived by the Borrower.
Section 1.2 Section 5.01. Section 5.01(f) of the Credit Agreement is
------------
hereby amended by adding, immediately prior to the period at the end thereof,
the following:
; or (iii) to purchase, redeem or otherwise acquire or retire for value, or
pay the principal of, any of the 11- 1/4% Notes due July 1, 1999 issued
pursuant to the
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<PAGE>
Indenture dated July 1, 1992 between the Borrower and the Bank of New York,
as Trustee.
Section 2. Conditions of Effectiveness. This Second Amendment shall
---------------------------
become effective as of the date hereof when, and only when, the Agent shall have
received counterparts of, or telecopied signature pages of, this Second
Amendment executed by the Borrower and the Required Banks.
Section 3. Reference to and Effect on the Loan Documents. (a) Upon the
---------------------------------------------
effectiveness of this Second Amendment on and after the date hereof, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement and each
reference in the Notes to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby. Unless otherwise defined
herein, the terms defined in the Credit Agreement shall be used herein as
therein defined.
(b) The Credit Agreement, as amended by this Second Amendment, is and shall
remain in full force and effect and is hereby ratified and confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Second Amendment shall not operate as a waiver of any
right, power or remedy of any Bank or the Agent under the Credit Agreement, nor
constitute a waiver of any provision of the Credit Agreement.
Section 4. Costs, Expenses and Taxes. The Borrower agrees to pay on
-------------------------
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Second Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable out-of-pocket expenses of the Agent and the reasonable fees and out-
of-pocket expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities hereunder
and under the Loan Documents. In addition, the Borrower shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Second Amendment and the other instruments and
documents to be delivered hereunder, and agree to save the Agent and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
Section 5. Execution in Counterparts. This Second Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 6. Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent or any other Bank and based on
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<PAGE>
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Second Amendment and to agree to the
various matters set forth herein. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under the Credit Agreement as amended hereby.
Section 7. Authority, etc. The Borrower hereby represents and warrants to
--------------
the Agent and the Banks that (i) the Borrower and each Restricted Subsidiary is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) the execution, delivery and performance of
this Second Amendment, and the performance of the Credit Agreement, as amended
hereby, by the Borrower are within the power of the Borrower, have been duly
authorized by all necessary corporate action and do not contravene (A) the
Borrower's certificate of incorporation or by-laws, (B) any applicable rule,
regulation, order, writ, injunction or decree, or (C) law or any contractual
restriction binding on or affecting the Borrower, and will not result in or
require the creation or imposition of any Lien prohibited by the Credit
Agreement, as amended hereby, (iii) this Second Amendment has been duly executed
and delivered by the Borrower, (iv) this Second Amendment and the Credit
Agreement, as amended hereby, constitute legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally, and (v) no authorization, consent or approval of,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person not a party hereto is required for the due
execution, delivery and performance of this Second Amendment or the performance
of the Credit Agreement, as amended hereby.
Section 8. Default. Without limiting any other event which may constitute
-------
an Event of Default, in the event any representation or warranty set forth
herein shall be incorrect or misleading in any material respect when made, such
event shall constitute an "Event of Default" under the Credit Agreement, as
amended hereby.
Section 9. Governing Law. This Second Amendment and the Credit Agreement,
-------------
as amended hereby, shall be governed by and construed in accordance with the law
of the State of New York.
Section 10. Headings. Section headings in this Second Amendment are
--------
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
TRANSCO ENERGY COMPANY
By: /s/
-----------------------------
Authorized Officer
AGENT:
CITIBANK, N.A., as Agent
By: /s/
-----------------------------
Authorized Officer
BANKS:
CITIBANK, N.A.
By: /s/
-----------------------------
Authorized Officer
BANK OF MONTREAL
By: /s/
-----------------------------
Authorized Officer
THE BANK OF NOVA SCOTIA
By: /s/
-----------------------------
Authorized Officer
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BARCLAYS BANK, PLC
By: /s/
-----------------------------
Authorized Officer
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/
-----------------------------
Authorized Officer
CHEMICAL BANK
By: /s/
-----------------------------
Authorized Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/
-----------------------------
Authorized Officer
THE BANK OF NEW YORK
By: /s/
-----------------------------
Authorized Officer
THE FIRST NATIONAL BANK OF
BOSTON
By: /s/
-----------------------------
Authorized Officer
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NATIONSBANK OF TEXAS, N.A.
By: /s/
-----------------------------
Authorized Officer
CIBC INC.
By: /s/
-----------------------------
Authorized Officer
BANK OF AMERICA ILLINOIS (formerly
known as CONTINENTAL BANK N.A.)
By: /s/
-----------------------------
Authorized Officer
THE NIPPON CREDIT BANK, LTD.
By: /s/
-----------------------------
Authorized Officer
SOCIETE GENERALE, SOUTHWEST
AGENCY
By: /s/
-----------------------------
Authorized Officer
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SWISS BANK CORPORATION,
NEW YORK BRANCH
By: /s/
-----------------------------
Authorized Officer
By: /s/
-----------------------------
Authorized Officer
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By: /s/
-----------------------------
Authorized Officer
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ACKNOWLEDGEMENT AND CONSENT
(Second Amendment Agreement)
December 12, 1994
To induce various Banks and Citibank, N.A., as Agent (the "Agent"), to
execute the Second Amendment Agreement dated as of December 12, 1994 (the
"Second Amendment") among Transco Energy Company (the "Borrower"), the Banks
party thereto and the Agent, each of the undersigned hereby (a) consents to and
agrees to the terms of the Second Amendment, (b) agrees that (i) none of its
obligations and none of the Banks' or the Agent's rights and remedies with
respect to the undersigned is released, impaired or affected thereby, (ii) no
guaranty, undertaking or agreement provided by it is released, impaired or
affected thereby, and (iii) this acknowledgment shall not be construed as
requiring the consent or agreement of the undersigned in any circumstance, (c)
ratifies and confirms all provisions of all Loan Documents executed by it and
all documents pertaining thereto or referred to therein, and (d) agrees that
none of its obligations, none of the Banks' or the Agent's rights and remedies
and no guaranty, undertaking or agreement provided by it would be released,
impaired or affected if it had not executed this acknowledgement.
Terms used herein which are not defined herein and are defined in the
Amended and Restated Credit Agreement dated as of December 31, 1993, as amended
by the First Amendment dated as of June 30, 1994, among the Borrower, the Banks
and Co-Agent parties thereto and the Agent (as so amended and as further amended
by the Second Amendment, the "Credit Agreement") are used herein as defined in
the Credit Agreement.
TRANSCONTINENTAL GAS PIPE
LINE CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
TEXAS GAS TRANSMISSION
CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
<PAGE>
THIRD AMENDMENT AGREEMENT
This Third Amendment Agreement dated as of December 12, 1994 (this "Third
Amendment") is by and among (i) Transco Energy Company, a Delaware corporation
(the "Borrower"), (ii) the undersigned lenders (the "Banks") which are parties
to that certain Amended and Restated Credit Agreement dated as of December 31,
1993, as amended by the First Amendment dated as of June 30, 1994 and by the
Second Amendment Agreement dated as of December 12, 1994, among the Borrower,
the lenders party thereto, Bank of Montreal, as Co-Agent thereunder and
Citibank, N.A., as agent (the "Agent") for such lenders (as so amended, the
"Credit Agreement"), and (iii) the Agent.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
Section 1. Amendment to Credit Agreement. Section 2.13 of the Credit
-----------------------------
Agreement is hereby amended to read in its entirety as follows:
Section 2.13 Optional Termination. Notwithstanding anything
--------------------
to the contrary in this Agreement, if (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors,
other than securities having such power only by reason of the happening of
a contingency; provided, however, that for purposes of clauses (a), (b) and
-------- -------
(c) of this sentence, the acquisition by The Williams Companies, Inc., a
Delaware corporation, or any of its wholly-owned Subsidiaries ("Permitted
Purchaser") of any common stock of the Borrower pursuant to the Offer (as
defined in the Agreement and Plan of Merger dated as of December 12, 1994
among WC Acquisition Corp., the Permitted Purchaser and the Borrower
("Merger Agreement")) or the Merger Agreement shall not constitute an event
covered by this clause (i) until the earlier of March 31, 1995 or 15 days
following any such acquisition; or (ii) during any period of up to 24
consecutive months, commencing on, before or after the date of this
Agreement, individuals who at the beginning of such 24-month period were
directors of the Borrower (or who were appointed or nominated for election
by individuals who at the beginning of such period were a majority of such
directors or, for purposes of clauses (a), (b) and (c) of this sentence and
only until the earlier of March 31, 1995 or 15 days following the
acquisition by the Permitted Purchaser of any common stock of the Borrower
pursuant to such Offer, who were appointed or nominated for election
pursuant to the written request of the Permitted Purchaser following its
acquisition of a majority of the common stock
<PAGE>
of the Borrower pursuant to the Merger Agreement, but excluding any such
Person originally proposed for election in opposition to the board of
directors of the Borrower in office on the date hereof in an actual or
threatened election contest relating to the election of the directors of
the Borrower (as such terms are used in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended) and whose initial assumption of office
resulted from such contest or the settlement thereof) shall cease for any
reason to constitute a majority of the board of directors of the Borrower;
or (iii) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement which upon consummation will result in its or their acquisition
of, the power to exercise, directly or indirectly, a controlling influence
over the management or policies of the Borrower; provided, however, that
-------- -------
for purposes of clauses (a), (b) and (c) of this sentence, the entering
into of the Merger Agreement or the Stock Option Agreement (as defined in
the Merger Agreement) shall not constitute an event covered by this clause
(iii); or (iv) any condition or event constituting a change of control of
the Borrower for purposes of permitting any holder of Preferred Stock of
the Borrower to exercise a right of redemption or other retirement
(including pursuant to an offer to purchase made by the Borrower) or
conversion (other than conversion to common stock), in whole or in part, of
such Preferred Stock; then, in such event, (a) the rate of interest with
respect to each Advance then outstanding or which thereafter becomes
outstanding shall immediately and automatically increase by one-half of one
percent (1/2%), (b) the Agent shall at the request, or may with the
consent, of the Required Banks, by telephonic, telex or other notice to the
Borrower, declare the Notes payable to the Banks, all interest thereon and
all other amounts payable under this Agreement to the Banks to be due and
payable, whereupon such Notes, interest and other amounts shall become
immediately due and payable without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or any other notice of any
kind, all of which are hereby expressly waived by the Borrower, and (c) the
Agent shall at the request, or may with the consent, of the Required Banks,
by telephonic, telex or other notice to the Borrower, declare the
Commitments and the obligations of the Banks to make Advances hereunder to
be immediately terminated (whereupon the same shall immediately terminate),
in the case of each of the matters described in clauses (a)-(c) above,
without presentment, demand, protest or further notice (including, without
limitation, notice of intent to accelerate and notice of acceleration) of
any kind, all of which are hereby expressly waived by the Borrower.
Section 2. Conditions of Effectiveness. This Third Amendment shall become
---------------------------
effective as of the date hereof when, and only when, the Agent shall have
received counterparts of, or telecopied signature pages of, this Third Amendment
executed by the Borrower and all of the Banks.
-2-
<PAGE>
Section 3. Reference to and Effect on the Loan Documents. (a) Upon the
---------------------------------------------
effectiveness of this Third Amendment on and after the date hereof, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement and each
reference in the Notes to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby. Unless otherwise defined
herein, the terms defined in the Credit Agreement shall be used herein as
therein defined.
(b) The Credit Agreement, as amended by this Third Amendment, is and shall
remain in full force and effect and is hereby ratified and confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Third Amendment shall not operate as a waiver of any
right, power or remedy of any Bank or the Agent under the Credit Agreement, nor
constitute a waiver of any provision of the Credit Agreement.
Section 4. Costs, Expenses and Taxes. The Borrower agrees to pay on
-------------------------
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Third Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable out-of-pocket expenses of the Agent and the reasonable fees and out-
of-pocket expenses of counsel for the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities hereunder
and under the Loan Documents. In addition, the Borrower shall pay any and all
stamp and other taxes payable or determined to be payable in connection with the
execution and delivery of this Third Amendment and the other instruments and
documents to be delivered hereunder, and agree to save the Agent and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
Section 5. Execution in Counterparts. This Third Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 6. Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Third Amendment and to agree to the
various matters set forth herein. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action
under the Credit Agreement as amended hereby.
-3-
<PAGE>
Section 7. Authority, etc. The Borrower hereby represents and warrants to
--------------
the Agent and the Banks that (i) the Borrower and each Restricted Subsidiary is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) the execution, delivery and performance of
this Third Amendment, and the performance of the Credit Agreement, as amended
hereby, by the Borrower are within the power of the Borrower, have been duly
authorized by all necessary corporate action and do not contravene (A) the
Borrower's certificate of incorporation or by-laws, (B) any applicable rule,
regulation, order, writ, injunction or decree, or (C) law or any contractual
restriction binding on or affecting the Borrower, and will not result in or
require the creation or imposition of any Lien prohibited by the Credit
Agreement, as amended hereby, (iii) this Third Amendment has been duly executed
and delivered by the Borrower, (iv) this Third Amendment and the Credit
Agreement, as amended hereby, constitute legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally, and (v) no authorization, consent or approval of,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person not a party hereto is required for the due
execution, delivery and performance of this Third Amendment or the performance
of the Credit Agreement, as amended hereby.
Section 8. Default. Without limiting any other event which may constitute
-------
an Event of Default, in the event any representation or warranty set forth
herein shall be incorrect or misleading in any material respect when made, such
event shall constitute an "Event of Default" under the Credit Agreement, as
amended hereby.
Section 9. Governing Law. This Third Amendment and the Credit Agreement,
-------------
as amended hereby, shall be governed by and construed in accordance with the law
of the State of New York.
Section 10. Headings. Section headings in this Third Amendment are
--------
included herein for convenience of reference only and shall not constitute a
part of this Third Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
TRANSCO ENERGY COMPANY
By: /s/
------------------------
Authorized Officer
-4-
<PAGE>
AGENT:
CITIBANK, N.A., as Agent
By: /s/
------------------------
Authorized Officer
BANKS:
CITIBANK, N.A.
By: /s/
------------------------
Authorized Officer
BANK OF MONTREAL
By: /s/
------------------------
Authorized Officer
THE BANK OF NOVA SCOTIA
By: /s/
------------------------
Authorized Officer
BARCLAYS BANK, PLC
By: /s/
------------------------
Authorized Officer
-5-
<PAGE>
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/
------------------------
Authorized Officer
CHEMICAL BANK
By: /s/
------------------------
Authorized Officer
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/
------------------------
Authorized Officer
THE BANK OF NEW YORK
By: /s/
------------------------
Authorized Officer
THE FIRST NATIONAL BANK OF
BOSTON
By: /s/
------------------------
Authorized Officer
NATIONSBANK OF TEXAS, N.A.
By: /s/
------------------------
Authorized Officer
-6-
<PAGE>
CIBC INC.
By: /s/
------------------------
Authorized Officer
BANK OF AMERICA ILLINOIS (formerly
known as CONTINENTAL BANK N.A.)
By: /s/
------------------------
Authorized Officer
THE NIPPON CREDIT BANK, LTD.
By: /s/
------------------------
Authorized Officer
SOCIETE GENERALE, SOUTHWEST
AGENCY
By: /s/
------------------------
Authorized Officer
SWISS BANK CORPORATION,
NEW YORK BRANCH
By: /s/
------------------------
Authorized Officer
By: /s/
------------------------
Authorized Officer
-7-
<PAGE>
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By: /s/
------------------------
Authorized Officer
-8-
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
(Third Amendment Agreement)
December 12, 1994
To induce various Banks and Citibank, N.A., as Agent (the "Agent"), to
execute the Third Amendment Agreement dated as of December 12, 1994 (the
"Third Amendment") among Transco Energy Company (the "Borrower"), the Banks
party thereto and the Agent, each of the undersigned hereby (a) consents to and
agrees to the terms of the Third Amendment, (b) agrees that (i) none of its
obligations and none of the Banks' or the Agent's rights and remedies with
respect to the undersigned is released, impaired or affected thereby, (ii) no
guaranty, undertaking or agreement provided by it is released, impaired or
affected thereby, and (iii) this acknowledgment shall not be construed as
requiring the consent or agreement of the undersigned in any circumstance, (c)
ratifies and confirms all provisions of all Loan Documents executed by it and
all documents pertaining thereto or referred to therein, and (d) agrees that
none of its obligations, none of the Banks' or the Agent's rights and remedies
and no guaranty, undertaking or agreement provided by it would be released,
impaired or affected if it had not executed this acknowledgement.
Terms used herein which are not defined herein and are defined in the
Amended and Restated Credit Agreement dated as of December 31, 1993, as amended
by the First Amendment dated as of June 30, 1994 and the Second Amendment
Agreement dated as of December 12, 1994, among the Borrower, the Banks and Co-
Agent parties thereto and the Agent (as so amended and as further amended by the
Third Amendment, the "Credit Agreement") are used herein as defined in the
Credit Agreement.
TRANSCONTINENTAL GAS PIPE
LINE CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
TEXAS GAS TRANSMISSION
CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
<PAGE>
SECOND AMENDMENT TO REIMBURSEMENT AGREEMENT
This Second Amendment to Reimbursement Agreement dated as of December
12, 1994 (this "Second Amendment") is by and among (i) Transco Energy Company, a
Delaware corporation (the "Borrower"), (ii) the undersigned lenders (the
"Banks") which are parties to that certain Reimbursement Agreement dated as of
December 31, 1993, as amended by the First Amendment to Reimbursement Agreement
dated as of June 30, 1994, among the Borrower, the lenders party thereto and
Bank of Montreal, as agent (the "Agent") for such lenders (as so amended, the
"Reimbursement Agreement"), and (iii) the Agent.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
Section 1. Amendment to Reimbursement Agreement. Section 2.09 of the
------------------------------------
Reimbursement Agreement is hereby amended to read in its entirety as follows:
Section 2.09 Optional Termination. Notwithstanding anything to
--------------------
the contrary in this Agreement, if (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
securities of the Borrower (or other securities convertible into such
securities) representing 30% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors,
other than securities having such power only by reason of the happening of
a contingency; provided, however, that for purposes only of clauses (b),
-------- -------
(c) and (d) of this sentence, the acquisition by The Williams Companies,
Inc., a Delaware corporation, or any of its wholly-owned Subsidiaries
("Permitted Purchaser") of any common stock of the Borrower pursuant to the
---------------------
Offer (as defined in the Agreement and Plan of Merger dated as of December
12, 1994 among WC Acquisition Corp., the Permitted Purchaser and the
Borrower ("Merger Agreement")) or the Merger Agreement shall not constitute
----------------
an event covered by this clause (i) until the earlier of March 31, 1995 or
15 days following any such acquisition; or (ii) during any period of up to
24 consecutive months, commencing on, before or after the date of this
Agreement, individuals who at the beginning of such 24-month period were
directors of the Borrower (or who were appointed or nominated for election
by individuals who at the beginning of such period were a majority of such
directors or, for purposes only of clauses (b), (c) and (d) of this
sentence and only until the earlier of March 31, 1995 or 15 days following
the acquisition by the Permitted Purchaser of any common stock of the
Borrower pursuant to such Offer, who were appointed or nominated for
election pursuant to the written request of the Permitted Purchaser
following its acquisition of a majority of the common stock
<PAGE>
of the Borrower pursuant to the Merger Agreement, but excluding any such
Person originally proposed for election in opposition to the board of
directors of the Borrower in office on the date hereof in an actual or
threatened election contest relating to the election of the directors of
the Borrower (as such terms are used in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended) and whose initial assumption of office
resulted from such contest or the settlement thereof) shall cease for any
reason to constitute a majority of the board of directors of the Borrower;
or (iii) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement which upon consummation will result in its or their acquisition
of, the power to exercise, directly or indirectly, a controlling influence
over the management or policies of the Borrower; provided, however, that
-------- -------
for purposes only of clauses (b), (c) and (d) of this sentence, the
entering into of the Merger Agreement or the Stock Option Agreement (as
defined in the Merger Agreement) shall not constitute an event covered by
this clause (iii); or (iv) any condition or event constituting a change of
control of the Borrower for purposes of permitting any holder of Preferred
Stock of the Borrower to exercise a right of redemption or other retirement
(including pursuant to an offer to purchase made by the Borrower) or
conversion (other than conversion to common stock), in whole or in part, of
such Preferred Stock; or (v) the commitments of the lenders party to the
Revolver Credit Agreement to make Advances (as defined in the Revolver
Credit Agreement) shall be reduced to an amount less than $225,000,000 or
totally terminated; then, in any such event, (a) all fees payable hereunder
pursuant to Section 2.04 shall immediately and automatically increase by
one-half of one percent (1/2%), (b) the Issuing Bank may (without the
consent of any Bank), or shall at the request of the Required Banks, by
telephonic, telex or other notice to the Borrower, declare the Commitments
and the obligation of Issuing Bank to issue Letters of Credit to be
immediately terminated (whereupon the same shall immediately terminate),
without presentment, demand, protest or further notice (including, without
limitation, notice of intent to accelerate and notice of acceleration) of
any kind, all of which are hereby expressly waived by Borrower, (c) the
Issuing Bank may (without the consent of any Bank), or shall at the request
of the Required Banks, by telephonic, telex or other notice to Borrower,
declare all Obligations (whether contingent or otherwise) due and payable,
whereupon such Obligations shall become immediately due and payable,
without presentment, demand, protest or further notice (including, without
limitation, notice of intent to accelerate and notice of acceleration) of
any kind, all of which are hereby expressly waived by Borrower, and (d) the
Issuing Bank may (without the consent of any Bank), or shall at the request
of the Required Banks, by telephonic, telex or other notice to Borrower,
demand that Borrower deposit with the Agent into the Cash Collateral
Account the Cash Collateral Amount as security for the Obligations.
-2-
<PAGE>
Section 2. Conditions of Effectiveness. This Second Amendment shall
---------------------------
become effective as of the date hereof when, and only when, the Agent shall have
received counterparts of, or telecopied signature pages of, this Second
Amendment executed by the Borrower and the Required Banks in accordance with
Section 9.01 of the Reimbursement Agreement.
Section 3. Reference to and Effect on the Loan Documents. (a) Upon the
---------------------------------------------
effectiveness of this Second Amendment on and after the date hereof, each
reference in the Reimbursement Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Reimbursement
Agreement and each reference in the Notes to the "Reimbursement Agreement",
"thereunder", "thereof" or words of like import referring to the Reimbursement
Agreement shall mean and be a reference to the Reimbursement Agreement as
amended hereby. Unless otherwise defined herein, the terms defined in the
Reimbursement Agreement shall be used herein as therein defined.
(b) The Reimbursement Agreement, as amended by this Second Amendment, is
and shall remain in full force and effect and is hereby ratified and confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Second Amendment shall not operate as a waiver of any
right, power or remedy of any Bank or the Agent under the Reimbursement
Agreement, nor constitute a waiver of any provision of the Reimbursement
Agreement.
Section 4. Costs, Expenses and Taxes. The Borrower agrees to pay on
-------------------------
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Second Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable out-of-pocket expenses of the Agent and the Issuing Bank and the
reasonable fees and out-of-pocket expenses of counsel for the Agent and the
Issuing Bank with respect thereto and with respect to advising the Agent and the
Issuing Bank as to its rights and responsibilities hereunder and under the Loan
Documents. In addition, the Borrower shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Second Amendment and the other instruments and documents to be
delivered hereunder, and agree to save the Agent and Issuing Bank and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
Section 5. Execution in Counterparts. This Second Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 6. Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent, the Issuing Bank or any other
Bank
-3-
<PAGE>
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Second Amendment and to
agree to the various matters set forth herein. Each Bank also acknowledges that
it will, independently and without reliance upon the Agent, the Issuing Bank or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under the Reimbursement Agreement as amended hereby.
Section 7. Authority, etc. The Borrower hereby represents and warrants to
--------------
the Agent and the Banks that (i) the Borrower and each Restricted Subsidiary is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (ii) the execution, delivery and performance of
this Second Amendment, and the performance of the Reimbursement Agreement, as
amended hereby, by the Borrower are within the power of the Borrower, have been
duly authorized by all necessary corporate action and do not contravene (A) the
Borrower's certificate of incorporation or by-laws, (B) any applicable rule,
regulation, order, writ, injunction or decree, or (C) law or any contractual
restriction binding on or affecting the Borrower, and will not result in or
require the creation or imposition of any Lien prohibited by the Reimbursement
Agreement, as amended hereby, (iii) this Second Amendment has been duly executed
and delivered by the Borrower, (iv) this Second Amendment and the Reimbursement
Agreement, as amended hereby, constitute legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally, and (v) no authorization, consent or approval of,
or other action by, and no notice to or filing with, any governmental authority,
regulatory body or other Person not a party hereto is required for the due
execution, delivery and performance of this Second Amendment or the performance
of the Reimbursement Agreement, as amended hereby.
Section 8. Default. Without limiting any other event which may constitute
-------
an Event of Default, in the event any representation or warranty set forth
herein shall be incorrect or misleading in any material respect when made, such
event shall constitute an "Event of Default" under the Reimbursement Agreement,
as amended hereby.
Section 9. Governing Law. This Second Amendment and the Reimbursement
-------------
Agreement, as amended hereby, shall be governed by and construed in accordance
with the law of the State of New York.
Section 10. Headings. Section headings in this Second Amendment are
--------
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
TRANSCO ENERGY COMPANY
By: /s/
-----------------------------
Authorized Officer
AGENT:
BANK OF MONTREAL, as Agent
By: /s/
-----------------------------
Authorized Officer
BANKS:
BANK OF MONTREAL
By: /s/
-----------------------------
Authorized Officer
THE BANK OF NOVA SCOTIA
By: /s/
-----------------------------
Authorized Officer
CIBC INC.
By: /s/
-----------------------------
Authorized Officer
-5-
<PAGE>
BANK OF AMERICA ILLINOIS (formerly
known as CONTINENTAL BANK N.A.)
By: /s/
-----------------------------
Authorized Officer
SWISS BANK CORPORATION, NEW YORK BRANCH
By: /s/
-----------------------------
Authorized Officer
By: /s/
-----------------------------
Authorized Officer
-6-
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
(Second Amendment Agreement)
December 12, 1994
To induce the Banks and Bank of Montreal, as Agent (the "Agent"), to
execute the Second Amendment to Reimbursement Agreement dated as of December 12,
1994 (the "Second Amendment") among Transco Energy Company (the "Borrower"), the
Banks party thereto and the Agent, each of the undersigned hereby (a) consents
to and agrees to the terms of the Second Amendment, (b) agrees that (i) none of
its obligations and none of the Banks' or the Agent's rights and remedies with
respect to the undersigned is released, impaired or affected thereby, (ii) no
guaranty, undertaking or agreement provided by it is released, impaired or
affected thereby, and (iii) this acknowledgment shall not be construed as
requiring the consent or agreement of the undersigned in any circumstance, (c)
ratifies and confirms all provisions of all Loan Documents executed by it and
all documents pertaining thereto or referred to therein, and (d) agrees that
none of its obligations, none of the Banks' or the Agent's rights and remedies
and no guaranty, undertaking or agreement provided by it would be released,
impaired or affected if it had not executed this acknowledgement.
Terms used herein which are not defined herein and are defined in the
Reimbursement Agreement dated as of December 31, 1993, as amended by the First
Amendment to Reimbursement Agreement dated as of June 30, 1994, among the
Borrower, the Banks parties thereto and the Agent (as so amended and as further
amended by the Second Amendment, the "Agreement") are used herein as defined in
the Reimbursement Agreement.
TRANSCONTINENTAL GAS PIPE
LINE CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
TEXAS GAS TRANSMISSION
CORPORATION
By:/s/ Larry J. Dagley
-------------------------
Name: Larry J. Dagley
-----------------------
Title: Senior Vice President
----------------------
and Chief Financial Officer
<PAGE>
THIRD AMENDMENT TO REIMBURSEMENT AGREEMENT
This Third Amendment to Reimbursement Agreement dated as of December
12, 1994 (this "Third Amendment") is by and among (i) Transco Energy Company, a
Delaware corporation (the "Borrower"), (ii) the undersigned lenders (the
"Banks") which are parties to that certain Reimbursement Agreement dated as of
December 31, 1993, as amended by the First Amendment to Reimbursement Agreement
dated as of June 30, 1994 and by the Second Amendment to Reimbursement Agreement
dated as of December 12, 1994, among the Borrower, the lenders party thereto and
Bank of Montreal, as agent (the "Agent") for such lenders (as so amended, the
"Reimbursement Agreement"), and (iii) the Agent.
In consideration of the mutual promises contained herein, the parties hereto
agree as follows:
Section 1. Amendment to Reimbursement Agreement. Section 2.09 of the
------------------------------------
Reimbursement Agreement is hereby amended to read in its entirety as follows:
Section 2.09 Optional Termination. Notwithstanding anything to
--------------------
the contrary in this Agreement, if (i) any Person or two or more
Persons acting in concert shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing 30% or more
of the combined voting power of all securities of the Borrower
entitled to vote in the election of directors, other than securities
having such power only by reason of the happening of a contingency;
provided, however, that for purposes of clauses (a), (b), (c)
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and (d) of this sentence, the acquisition by The Williams Companies,
Inc., a Delaware corporation, or any of its wholly-owned Subsidiaries
("Permitted Purchaser") of any common stock of the Borrower pursuant
-------------------
to the Offer (as defined in the Agreement and Plan of Merger dated as
of December 12, 1994 among WC Acquisition Corp., the Permitted
Purchaser and the Borrower ("Merger Agreement")) or the Merger
------------------
Agreement shall not constitute an event covered by this clause (i)
until the earlier of March 31, 1995 or 15 days following any such
acquisition; or (ii) during any period of up to 24 consecutive months,
commencing on, before or after the date of this Agreement, individuals
who at the beginning of such 24-month period were directors of the
Borrower (or who were appointed or nominated for election by
individuals who at the beginning of such period were a majority of
such directors or, for purposes of clauses (a), (b), (c) and (d) of
this sentence and only until the earlier of March 31, 1995 or 15 days
following the acquisition by the Permitted Purchaser of any common
stock of the Borrower pursuant to such Offer, who were appointed or
nominated for election pursuant to the written request of the
Permitted Purchaser following its acquisition of a majority of the
common stock
<PAGE>
of the Borrower pursuant to the Merger Agreement, but excluding any
such Person originally proposed for election in opposition to the
board of directors of the Borrower in office on the date hereof in an
actual or threatened election contest relating to the election of the
directors of the Borrower (as such terms are used in Rule 14a-11 under
the Securities Exchange Act of 1934, as amended) and whose initial
assumption of office resulted from such contest or the settlement
thereof) shall cease for any reason to constitute a majority of the
board of directors of the Borrower; or (iii) any Person or two or more
Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement which
upon consummation will result in its or their acquisition of, the
power to exercise, directly or indirectly, a controlling influence
over the management or policies of the Borrower; provided, however,
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that for purposes of clauses (a), (b), (c) and (d) of this sentence,
the entering into of the Merger Agreement or the Stock Option
Agreement (as defined in the Merger Agreement) shall not constitute an
event covered by this clause (iii); or (iv) any condition or event
constituting a change of control of the Borrower for purposes of
permitting any holder of Preferred Stock of the Borrower to exercise a
right of redemption or other retirement (including pursuant to an
offer to purchase made by the Borrower) or conversion (other than
conversion to common stock), in whole or in part, of such Preferred
Stock; or (v) the commitments of the lenders party to the Revolver
Credit Agreement to make Advances (as defined in the Revolver Credit
Agreement) shall be reduced to an amount less than $225,000,000 or
totally terminated; then, in any such event, (a) all fees payable
hereunder pursuant to Section 2.04 shall immediately and automatically
increase by one-half of one percent (1/2%), (b) the Issuing Bank may
(without the consent of any Bank), or shall at the request of the
Required Banks, by telephonic, telex or other notice to the Borrower,
declare the Commitments and the obligation of Issuing Bank to issue
Letters of Credit to be immediately terminated (whereupon the same
shall immediately terminate), without presentment, demand, protest or
further notice (including, without limitation, notice of intent to
accelerate and notice of acceleration) of any kind, all of which are
hereby expressly waived by Borrower, (c) the Issuing Bank may (without
the consent of any Bank), or shall at the request of the Required
Banks, by telephonic, telex or other notice to Borrower, declare all
Obligations (whether contingent or otherwise) due and payable,
whereupon such Obligations shall become immediately due and payable,
without presentment, demand, protest or further notice (including,
without limitation, notice of intent to accelerate and notice of
acceleration) of any kind, all of which are hereby expressly waived by
Borrower, and (d) the Issuing Bank may (without the consent of any
Bank), or shall at the request of the Required Banks, by telephonic,
telex or other notice to Borrower, demand that Borrower deposit with
the Agent into the Cash Collateral Account the Cash Collateral Amount
as security for the Obligations.
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<PAGE>
Section 2. Conditions of Effectiveness. This Third Amendment shall
---------------------------
become effective as of the date hereof when, and only when, the Agent shall have
received counterparts of, or telecopied signature pages of, this Third Amendment
executed by the Borrower and all of the Banks in accordance with Section 9.01 of
the Reimbursement Agreement.
Section 3. Reference to and Effect on the Loan Documents. (a) Upon
---------------------------------------------
the effectiveness of this Third Amendment on and after the date hereof, each
reference in the Reimbursement Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Reimbursement
Agreement and each reference in the Notes to the "Reimbursement Agreement",
"thereunder", "thereof" or words of like import referring to the Reimbursement
Agreement shall mean and be a reference to the Reimbursement Agreement as
amended hereby. Unless otherwise defined herein, the terms defined in the
Reimbursement Agreement shall be used herein as therein defined.
(b) The Reimbursement Agreement, as amended by this Third Amendment,
is and shall remain in full force and effect and is hereby ratified and
confirmed.
(c) Except as expressly provided herein, the execution, delivery and
effectiveness of this Third Amendment shall not operate as a waiver of any
right, power or remedy of any Bank or the Agent under the Reimbursement
Agreement, nor constitute a waiver of any provision of the Reimbursement
Agreement.
Section 4. Costs, Expenses and Taxes. The Borrower agrees to pay on
-------------------------
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Third Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable out-of-pocket expenses of the Agent and the Issuing Bank and the
reasonable fees and out-of-pocket expenses of counsel for the Agent and the
Issuing Bank with respect thereto and with respect to advising the Agent and the
Issuing Bank as to its rights and responsibilities hereunder and under the Loan
Documents. In addition, the Borrower shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Third Amendment and the other instruments and documents to be
delivered hereunder, and agree to save the Agent and Issuing Bank and each Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
Section 5. Execution in Counterparts. This Third Amendment may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 6. Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent, the Issuing Bank or any other
Bank and based on such documents and information as it has deemed appropriate,
made its
-3-
<PAGE>
own credit analysis and decision to enter into this Third Amendment and to agree
to the various matters set forth herein. Each Bank also acknowledges that it
will, independently and without reliance upon the Agent, the Issuing Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under the Reimbursement Agreement as amended hereby.
Section 7. Authority, etc. The Borrower hereby represents and
--------------
warrants to the Agent and the Banks that (i) the Borrower and each Restricted
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) the execution, delivery
and performance of this Third Amendment, and the performance of the
Reimbursement Agreement, as amended hereby, by the Borrower are within the power
of the Borrower, have been duly authorized by all necessary corporate action and
do not contravene (A) the Borrower's certificate of incorporation or by-laws,
(B) any applicable rule, regulation, order, writ, injunction or decree, or (C)
law or any contractual restriction binding on or affecting the Borrower, and
will not result in or require the creation or imposition of any Lien prohibited
by the Reimbursement Agreement, as amended hereby, (iii) this Third Amendment
has been duly executed and delivered by the Borrower, (iv) this Third Amendment
and the Reimbursement Agreement, as amended hereby, constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally, and (v) no authorization,
consent or approval of, or other action by, and no notice to or filing with, any
governmental authority, regulatory body or other Person not a party hereto is
required for the due execution, delivery and performance of this Third Amendment
or the performance of the Reimbursement Agreement, as amended hereby.
Section 8. Default. Without limiting any other event which may
-------
constitute an Event of Default, in the event any representation or warranty set
forth herein shall be incorrect or misleading in any material respect when made,
such event shall constitute an "Event of Default" under the Reimbursement
Agreement, as amended hereby.
Section 9. Governing Law. This Third Amendment and the Reimbursement
-------------
Agreement, as amended hereby, shall be governed by and construed in accordance
with the law of the State of New York.
Section 10. Headings. Section headings in this Third Amendment are
--------
included herein for convenience of reference only and shall not constitute a
part of this Third Amendment for any other purpose.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
TRANSCO ENERGY COMPANY
By: /s/
-----------------------------
Authorized Officer
AGENT:
BANK OF MONTREAL, as Agent
By: /s/
-----------------------------
Authorized Officer
BANKS:
BANK OF MONTREAL
By: /s/
-----------------------------
Authorized Officer
THE BANK OF NOVA SCOTIA
By: /s/
-----------------------------
Authorized Officer
CIBC INC.
By: /s/
-----------------------------
Authorized Officer
-5-
<PAGE>
BANK OF AMERICA ILLINOIS (formerly
known as CONTINENTAL BANK N.A.)
By: /s/
-----------------------------
Authorized Officer
SWISS BANK CORPORATION, NEW YORK BRANCH
By: /s/
-----------------------------
Authorized Officer
By: /s/
-----------------------------
Authorized Officer
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<PAGE>
ACKNOWLEDGEMENT AND CONSENT
(Third Amendment to Reimbursement Agreement)
December 12, 1994
To induce the Banks and Bank of Montreal, as Agent (the "Agent"), to
execute the Third Amendment to Reimbursement Agreement dated as of December 12,
1994 (the "Third Amendment") among Transco Energy Company (the "Borrower"), the
Banks party thereto and the Agent, each of the undersigned hereby (a) consents
to and agrees to the terms of the Third Amendment, (b) agrees that (i) none of
its obligations and none of the Banks' or the Agent's rights and remedies with
respect to the undersigned is released, impaired or affected thereby, (ii) no
guaranty, undertaking or agreement provided by it is released, impaired or
affected thereby, and (iii) this acknowledgment shall not be construed as
requiring the consent or agreement of the undersigned in any circumstance, (c)
ratifies and confirms all provisions of all Loan Documents executed by it and
all documents pertaining thereto or referred to therein, and (d) agrees that
none of its obligations, none of the Banks' or the Agent's rights and remedies
and no guaranty, undertaking or agreement provided by it would be released,
impaired or affected if it had not executed this acknowledgement.
Terms used herein which are not defined herein and are defined in the
Reimbursement Agreement dated as of December 31, 1993, as amended by the First
Amendment to Reimbursement Agreement dated as of June 30, 1994 and by the Second
Amendment to Reimbursement Agreement dated as of December 12, 1994, among the
Borrower, the Banks parties thereto and the Agent (as so amended and as further
amended by the Third Amendment, the "Reimbursement Agreement") are used herein
as defined in the Reimbursement Agreement.
TRANSCONTINENTAL GAS PIPE
LINE CORPORATION
By:/s/ Larry J. Dagley
-------------------------------
Name: Larry J. Dagley
-----------------------------
Title: Senior Vice President
----------------------------
and Chief Financial Officer
TEXAS GAS TRANSMISSION
CORPORATION
By:/s/ Larry J. Dagley
-------------------------------
Name: Larry J. Dagley
-----------------------------
Title: Senior Vice President
----------------------------
and Chief Financial Officer
